Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

									Page
			Report of Independent Registered Public Accounting Firm (PCAOB ID:42)						54
			Consolidated Financial Statements:
			Consolidated Balance Sheets						57
			Consolidated Statements of Income						58
			Consolidated Statements of Comprehensive Income (Loss)						59
			Consolidated Statements of Cash Flows						60
			Consolidated Statements of Shareholder's Equity						61
			Notes to Consolidated Financial Statements						62
			Financial Statement Schedule:
			Schedule II - Valuation of Qualifying Accounts						106

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

STERIS plc

Opinion on the 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. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated May 29, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Description of the Matter			Uncertain Tax Positions
			As discussed in Note 10 to the consolidated financial statements, the Company received two notices of proposed tax adjustments from the U.S. Internal Revenue Service (the “IRS”) regarding deemed dividend inclusions and associated withholding tax for fiscal year 2018. The IRS adjustments would result in a cumulative tax liability of approximately $50 million. The Company believes it is more-likely-than-not that they will be able to sustain the tax benefit recognized in the U.S. and has not recorded a liability for an uncertain tax position related to this matter.
			Auditing management’s analysis of tax positions related to the lack of deemed dividend inclusions and associated withholding tax was challenging as the analysis is highly judgmental due to complex interpretations of tax laws and legal rulings. This tax position must be evaluated, and there may be uncertainties around initial recognition and de-recognition of tax positions, including regulatory changes, litigation and examination activity.
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 uncertain tax positions. For example, we tested controls over management’s identification of uncertain tax positions and its application of the recognition and measurement principles, including management’s review of the facts and circumstances and the corresponding tax laws relied upon to conclude that it is currently more-likely-than-not that they will realize the benefit recorded.
			Our audit procedures included, among others, involving income tax subject matter resources to assess the technical merits of the Company’s tax positions related to the deemed dividend inclusions and associated withholding tax. We assessed the Company’s correspondence with the relevant tax authorities and evaluated income tax opinions and other third-party advice obtained by the Company. We analyzed the Company’s assumptions and data used to determine the amount of tax benefit to recognize and we tested the accuracy of the calculations performed. 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			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.

/s/ Ernst & Young LLP

Cleveland, Ohio

May 29, 2024

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

March 31,						2024						2023
Assets
Current assets:
Cash and cash equivalents						$	207,020					$	208,357
Accounts receivable (net of allowances of $22,984 and $19,284, respectively)						1,008,315						864,988
Inventories, net						674,535						604,410
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
Property, plant, and equipment, net						1,765,180						1,632,775
Lease right-of-use assets, net						173,201						166,553
Goodwill						4,070,712						3,879,219
Intangibles, net						2,119,282						2,076,699
Other assets						66,199						77,892
Non-current assets held for sale						—						977,259
Total assets						$	11,063,697					$	10,821,839
Liabilities and equity
Current liabilities:
Accounts payable						$	251,723					$	264,165
Accrued income taxes						13,640						40,477
Accrued payroll and other related liabilities						164,831						118,463
Short-term lease obligations						31,239						30,065
Short term indebtedness						85,938						60,000
Accrued expenses and other						319,744						298,032
Current liabilities held for sale						64,012						50,642
Total current liabilities						931,127						861,844
Long-term indebtedness						3,120,162						3,018,655
Deferred income taxes, net						479,688						617,538
Long-term lease obligations						145,828						139,557
Other liabilities						71,546						76,137
Non-current liabilities held for sale						—						20,936
Total liabilities						$	4,748,351					$	4,734,667
Commitments and contingencies (see Note 12)
Ordinary shares, with $0.001 par value; 500,000 shares authorized; 98,883 and 98,629 ordinary shares issued and outstanding, respectively						4,543,176						4,486,375
Retained earnings						2,087,645						1,911,533
Accumulated other comprehensive loss						(328,657)						(320,710)
Total shareholders’ equity						6,302,164						6,077,198
Noncontrolling interests						13,182						9,974
Total equity						6,315,346						6,087,172
Total liabilities and equity						$	11,063,697					$	10,821,839

See notes to consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

Years Ended March 31,						2024						2023						2022
Revenues:
Product						$	2,763,954					$	2,363,754					$	2,194,620
Service						2,374,747						2,172,512						2,028,783
Total revenues						5,138,701						4,536,266						4,223,403
Cost of revenues:
Product						1,516,082						1,271,363						1,191,619
Service						1,404,459						1,284,177						1,148,777
Total cost of revenues						2,920,541						2,555,540						2,340,396
Gross profit						2,218,160						1,980,726						1,883,007
Operating expenses:
Selling, general, and administrative						1,252,318						1,090,663						1,318,481
Research and development						103,679						98,477						86,663
Restructuring expenses						26,045						485						48
Total operating expenses						1,382,042						1,189,625						1,405,192
Income from operations						836,118						791,101						477,815
Non-operating expenses, net:
Interest expense						144,351						107,956						89,490
Fair value adjustment related to convertible debt, premium liability						—						—						27,806
Interest and miscellaneous (income) expense						(11,043)						2,879						(6,284)
Total non-operating expenses, net						133,308						110,835						111,012
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
Less: 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 (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

See notes to consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

Years Ended March 31,						2024						2023						2022
Net income						$	380,079					$	105,813					$	242,870
Less: 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
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						(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.

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Years Ended March 31,						2024						2023						2022
Operating activities:
Net income						$	380,079					$	105,813					$	242,870
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, and amortization						565,244						552,897						553,104
Deferred income taxes						(131,412)						(185,913)						(106,620)
Share-based compensation expense						56,535						38,951						57,660
Loss on the disposal of property, plant, equipment, and intangibles, net						24,997						22,193						15,117
Loss on classification as held for sale						206,444						—						—
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
Amortization of inventory fair value adjustments						4,822						7,363						66,663
Goodwill impairment loss						—						490,565						—
Other items						12,316						(24,832)						(21,639)
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable, net						(128,069)						(133,304)						(51,969)
Inventories, net						(37,450)						(123,921)						(102,922)
Other current assets						(1,552)						(24,086)						7,126
Accounts payable						(18,962)						53,342						14,887
Accruals and other, net						39,955						(22,054)						(16,398)
Net cash provided by operating activities						973,274						756,947						684,811
Investing activities:
Purchases of property, plant, equipment, and intangibles, net						(360,326)						(361,969)						(287,563)
Proceeds from the sale of property, plant, equipment, and intangibles						7,381						14,587						1,741
Proceeds from the sale of businesses						9,458						6,624						169,712
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)
Net cash used in investing activities						(887,361)						(383,330)						(666,559)
Financing activities:
Proceeds from issuance of senior public notes						—						—						1,350,000
Proceeds from term loans						—						—						650,000
Payments on term loans						(60,000)						(156,875)						(345,000)
Payments on Private Placement Senior Notes						—						(91,000)						(721,284)
Payments on convertible debt						—						—						(371,361)
Proceeds (payments) under credit facilities, net						181,486						241,657						(190,174)
Deferred financing fees and debt issuance costs						—						—						(17,472)
Acquisition related deferred or contingent consideration						(6,242)						(1,471)						(32,679)
Repurchases of ordinary shares						(11,765)						(308,565)						(55,777)
Cash dividends paid to ordinary shareholders						(200,570)						(183,498)						(163,169)
Distributions to noncontrolling interest holders						(1,561)						(794)						(997)
Contributions from noncontrolling interest holders						2,994						—						3,672
Stock option and other equity transactions, net						10,472						1,828						10,071
Net cash (used in) provided by financing activities						(85,186)						(498,718)						115,830
Effect of exchange rate changes on cash and cash equivalents						(2,064)						(14,862)						(6,293)
(Decrease) increase in cash and cash equivalents						(1,337)						(139,963)						127,789
Cash and cash equivalents at beginning of period						208,357						348,320						220,531
Cash and cash equivalents at end of period						$	207,020					$	208,357					$	348,320

See notes to consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands, except per share amounts)

			Ordinary Shares						Retained Earnings			Accumulated Other Comprehensive Loss			Non-controlling Interest			Total Equity
			Number			Amount
Balance at March 31, 2021			85,353			$	2,002,825		$	1,939,408		$	(61,243)		$	10,478		$	3,891,468
Comprehensive income:
Net income (loss)			—			—			243,888			—			(1,018)			242,870
Other comprehensive loss			—			—			—			(148,565)			—			(148,565)
Repurchases of ordinary shares			(353)			(34,894)			(20,883)			—			—			(55,777)
Equity compensation programs and other			770			67,499			—			—			—			67,499
Cash dividends – $1.69 per ordinary share			—			—			(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)
Contributions from noncontrolling interest holders			—			—			—			—			3,672			3,672
Other changes in noncontrolling interest			—			—			—			—			146			146
Balance at March 31, 2022			100,067			4,742,920			1,999,244			(209,808)			12,281			6,544,637
Comprehensive income:
Net income (loss)			—			—			107,030			—			(1,217)			105,813
Other comprehensive loss			—			—			—			(110,902)			—			(110,902)
Repurchases of ordinary shares			(1,642)			(297,322)			(11,243)			—			—			(308,565)
Equity compensation programs and other			204			40,777			—			—			—			40,777
Cash dividends – $1.84 per ordinary share			—			—			(183,498)			—			—			(183,498)
Distributions to noncontrolling interest holders			—			—			—			—			(794)			(794)
Other changes in noncontrolling interest			—			—			—			—			(296)			(296)
Balance at March 31, 2023			98,629			$	4,486,375		$	1,911,533		$	(320,710)		$	9,974		$	6,087,172
Comprehensive income:
Net income			—			—			378,239			—			1,840			380,079
Other comprehensive loss			—			—			—			(7,947)			—			(7,947)
Repurchases of ordinary shares			(77)			(10,208)			(1,557)			—			—			(11,765)
Equity compensation programs and other			331			67,009			—			—			—			67,009
Cash dividends – $2.03 per ordinary share			—			—			(200,570)			—			—			(200,570)
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)
Balance at March 31, 2024			98,883			$	4,543,176		$	2,087,645		$	(328,657)		$	13,182		$	6,315,346

See notes to consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations. 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 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”) integration.

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."

Our fiscal year ends on March 31. References in this Annual Report to a particular "year," "fiscal," "fiscal year," or "year-end" mean our fiscal year. The significant accounting policies applied in preparing the accompanying consolidated financial statements of the Company are summarized below.

Principles of Consolidation. We use the consolidation method to report our investment in our subsidiaries. Therefore, the accompanying consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. We eliminate intercompany accounts and transactions when we consolidate these accounts. Investments in equity of unconsolidated affiliates, over which the Company has significant influence, but not control, over the financial and operating polices, are accounted for primarily using the equity method. 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 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. These estimates and assumptions involve judgments with respect to many factors that are difficult to predict and are beyond our control. Actual results could be materially different from these estimates. We revise the estimates and assumptions as new information becomes available.

Cash Equivalents and Supplemental Cash Flow Information. Cash equivalents are all highly liquid investments with a maturity of three months or less when purchased. We invest our excess cash in short-term instruments including money market funds, money market deposit accounts, bank savings accounts, and time deposits with major banks and financial institutions. We select investments in accordance with the criteria established in our investment policy. 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:

Years Ended March 31,						2024						2023						2022
Cash paid during the year for:
Interest						$	142,167					$	108,470					$	84,696
Income taxes						271,274						254,661						138,382
Cash received during the year for income tax refunds						19,175						2,315						4,605

Revenue Recognition and Associated Liabilities. Revenue is recognized when obligations under the terms of the contract are satisfied and control of the promised products or services have transferred to the Customer. Revenues are measured at the amount of consideration that we expect to be paid in exchange for the products or services. Product revenue is recognized when control passes to the Customer, which is generally based on contract or shipping terms. Service revenue is recognized when the Customer benefits from the service, which occurs either upon completion of the service or as it is provided to the Customer. Our Customers include end users as well as dealers and distributors who market and sell our products. Our revenue is not contingent upon resale by the dealer or distributor, and we have no further obligations related to bringing about resale. Our standard return and restocking fee policies are applied to sales of products. Shipping and handling costs charged to Customers are included in Product revenues. The associated expenses are treated as fulfillment costs and are included in Cost of revenues. Revenues are reported net of sales and value-added taxes collected from Customers.

We have individual Customer contracts that offer discounted pricing. Dealers and distributors may be offered sales incentives in the form of rebates. We reduce revenue for discounts and estimated returns, rebates, and other similar allowances in the same period the related revenues are recorded. The reduction in revenue for these items is estimated based on historical experience and trend analysis to the extent that it is probable that a significant reversal of revenue will not occur. Estimated returns are recorded gross on the Consolidated Balance Sheets.

In transactions that contain multiple performance obligations, such as when products, maintenance services, and other services are combined, we recognize revenue as each product is delivered or service is provided to the Customer. We allocate the total arrangement consideration to each performance obligation based on its relative standalone selling price, which is the price for the product or service when it is sold separately.

Payment terms vary by the type and location of the Customer and the products or services offered. Generally, the time between when revenue is recognized and when payment is due is not significant. We do not evaluate whether the selling price contains a financing component for contracts that have a duration of less than one year.

We do not capitalize sales commissions as substantially all of our sales commission programs have an amortization period of one year or less.

Certain costs to fulfill a contract are capitalized and amortized over the term of the contract if they are recoverable, directly related to a contract and generate resources that we will use to fulfill the contract in the future. At March 31, 2024, assets related to costs to fulfill a contract were not material to our consolidated financial statements.

Refer to Note 13 titled, "Business Segment Information" for disaggregation of revenue.

Product Revenues

Product revenues consist of revenues generated from sales of consumables and capital equipment. These contracts are primarily based on a Customer’s purchase order and may include a Distributor, Dealer or Group Purchasing Organization ("GPO") agreement. 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.

Service Revenues

Within our Healthcare and Life Sciences segments, service revenues include revenue generated from parts and labor associated with the maintenance, repair and installation of capital equipment. These contracts are primarily based on a Customer’s purchase order and may include a Distributor, Dealer, or GPO agreement. For maintenance, repair and installation of capital equipment, revenue is recognized upon completion of the service. Healthcare service revenues also include outsourced reprocessing services and instrument repairs. 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

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 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 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.

Contract Liabilities

Payments received from Customers are based on invoices or billing schedules as established in contracts with Customers. Deferred revenue is recorded when payment is received in advance of performance under the contract. Deferred revenue is recognized as revenue upon completion of the performance obligation, which generally occurs within one year. During fiscal 2024, we recognized revenue of $66,690 that was included in our contract liability balance at the beginning of the period. During fiscal 2023, we recognized revenue of $72,914 that was included in our contract liability balance at the beginning of the period.

Refer to Note 9 titled, "Additional Consolidated Balance Sheet Information" for deferred revenue balances.

Service Liabilities

Payments received in advance of performance for cancellable preventive maintenance and separately priced extended warranty contracts are recorded as service liabilities. Service liabilities are recognized as revenue as performance is rendered under the contract.

Refer to Note 9 titled, "Additional Consolidated Balance Sheet Information" for service liability balances.

Remaining Performance Obligations

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 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. As of March 31, 2024, the transaction price allocated to remaining performance obligations was approximately $1,419,646. We expect to recognize approximately 56% of the transaction price within one year and approximately 33% beyond one year. The remainder has yet to be scheduled for delivery.

Accounts Receivable. Accounts receivable are presented at their face amount, less allowances for sales returns and uncollectible accounts. Accounts receivable consist of amounts billed and currently due from Customers and amounts earned but unbilled. 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. We estimate the allowance based on analyzing a number of factors, including amounts written off historically, Customer payment practices, and general economic conditions. We also analyze significant Customer accounts on a regular basis and record a specific allowance when we become aware of a specific Customer’s inability to pay. As a result, the related accounts receivable are reduced to an amount that we reasonably believe is collectible.

We maintain an allowance for sales returns based upon known returns and estimated returns for both capital equipment and consumables. We estimate returns of capital equipment and consumables based upon recent historical experience.

Inventories, net. 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. We record an allowance for estimated losses when the facts and circumstances indicate that particular inventories will not be usable. If future market conditions vary from those projected, and our estimates prove to be inaccurate, we may be required to write-down inventory values and record an adjustment to Cost of revenues.

Property, Plant, and Equipment. Our property, plant, and equipment consists of land and land improvements, buildings and leasehold improvements, machinery and equipment, information systems, radioisotope (cobalt-60), and construction in progress. Property, plant, and equipment are presented at cost less accumulated depreciation and depletion. We capitalize additions and improvements. Repairs and maintenance are charged to expense as they are incurred.

Land is not depreciated and construction in progress is not depreciated until placed in service. Depreciation of most assets is computed on the cost less the estimated salvage value by using the straight-line method over the estimated remaining useful lives. Depletion of radioisotope is computed using the annual decay factor of the material, which is similar to the sum-of-the-years-digits method.

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

Asset Type						Useful Life (years)
Land improvements						3-40
Buildings and leasehold improvements						2-50
Machinery and equipment						2-20
Information Systems						2-20
Radioisotope (cobalt-60)						20

When we sell, retire, or dispose of property, plant, and equipment, we remove the asset’s cost and accumulated depreciation from our Consolidated Balance Sheet. We recognize the net gain or loss on the sale or disposition in the Consolidated Statements of Income in the period when the transaction occurs.

Interest. We capitalize interest costs incurred during the construction of long-lived assets. We capitalized interest costs of $7,094 and $6,366 for the years ended March 31, 2024 and 2023, respectively. Total interest expense for the years ended March 31, 2024, 2023, and 2022 was $144,351, $107,956, and $89,490, respectively.

Identifiable Intangible Assets. Our identifiable intangible assets include product technology rights, trademarks, licenses, non-compete agreements, and Customer and vendor relationships. 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 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. Our intangible assets also include indefinite lived assets including certain trademarks and tradenames that were acquired in connection with business combinations. These assets are tested at least annually for impairment.

Investments. 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 and miscellaneous (income) expense line of the Consolidated Statements of Income.

Asset Impairment Losses. Property, plant, equipment, and identifiable intangible assets are reviewed for impairment when indicators of impairment exist 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 monitor for such indicators on an ongoing basis and if an impairment exists, we record the loss in the Consolidated Statements of Income during that period.

Asset Retirement Obligations. We incur retirement obligations for certain assets. 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. We provide additional information about our asset retirement obligations in Note 7 titled, “Property, Plant, and Equipment.”

Acquisitions of Business. Assets acquired and liabilities assumed in a business combination are accounted for at fair value on the date of acquisition. 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)

Goodwill. We perform our annual impairment test for goodwill in the third quarter of each year. We may consider qualitative indicators of the fair value of a reporting unit when it is unlikely that a reporting unit has impaired goodwill. We may also utilize a discounted cash flow analysis that requires certain assumptions and estimates be made regarding market conditions and our future profitability. We review the book value compared to the fair value at the reporting unit level. We calculate the fair value of our reporting units based on the present value of estimated future cash flows. Management's judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate future cash flows to measure fair value. Assumptions used in our impairment evaluations, such as forecasted growth rates and cost of capital, are consistent with internal projections, strategic plans, and operating plans. We believe such assumptions and estimates are also comparable to those that would be used by other marketplace participants.

Self-Insurance Liabilities. We record a liability for self-insured risks that we retain for general and product liabilities, workers’ compensation, and automobile liabilities based on actuarial calculations. We use our historical loss experience and actuarial methods to calculate the liability. 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. We maintain insurance policies to cover losses greater than our estimated liability, which are subject to the terms and conditions of those policies. We are also self-insured for certain employee medical claims. 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. We sponsor defined benefit pension plans. We also sponsor a post-retirement benefits plan for certain former employees. We determine our costs and obligations related to these plans by evaluating input from third-party professional advisers. These costs and obligations are affected by assumptions including the discount rate, expected long-term rate of return on plan assets, the annual rate of change in compensation for eligible employees, estimated changes in costs of healthcare benefits, and other factors. We review the assumptions used on an annual basis.

We recognize an asset for the overfunded status or a liability for the underfunded status of defined benefit pension and post-retirement benefits plans in our Consolidated Balance Sheets. This amount is measured as the difference between the fair value of plan assets and the benefit obligation (the projected benefit obligation for pension plans and the accumulated post-retirement benefit obligation for other post-retirement benefit plans). Changes in the funded status of the plans are recorded in other comprehensive income in the year they occur. We measure plan assets and obligations as of the balance sheet date. We provide additional information about our pension and other post-retirement benefits plans in Note 11 titled, “Benefit Plans.”

Fair Value of Financial Instruments. Except for long-term debt, our financial instruments are highly liquid or have short-term maturities. We provide additional information about the fair value of our financial instruments in Note 19 titled, “Fair Value Measurements.”

Foreign Currency Translation. Most of our operations use their local currency as their functional currency. Financial statements of subsidiaries are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and a weighted average exchange rate for each period for revenues, expenses, gains and losses. Translation adjustments for subsidiaries whose local currency is their functional currency are recorded as a component of accumulated other comprehensive income (loss) within equity. Transaction gains and losses resulting from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized as incurred in the accompanying Consolidated Statements of Income, except for certain intercompany balances designated as long-term in nature.

Forward and Swap Contracts. We enter into foreign currency forward contracts to hedge assets and liabilities denominated in foreign currencies, including 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. dollar denominated earnings against our reporting currency, the U.S. dollar. We do not use derivative financial instruments for speculative purposes. These contracts are marked to market, with gains and losses recognized within Selling, general, and administrative expenses or Cost of revenues in the accompanying Consolidated Statements of Income.

Warranty. Warranties are provided on the sale of certain of our products and services and an accrual for estimated future claims is recorded at the time revenue is recognized. We estimate warranty expense based primarily on historical warranty claim experience.

Shipping and Handling. 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. Costs incurred for communicating, advertising and promoting our products are generally expensed when incurred as a component of Selling, general, and administrative expenses. We incurred $25,474, $21,668, and $15,599 of advertising costs during the years ended March 31, 2024, 2023, and 2022, respectively.

Research and Development. 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 Cost of revenues.

Income Taxes. We defer income taxes for all temporary differences between pre-tax financial and taxable income and between the book and tax basis of assets and liabilities. We record valuation allowances to reduce net deferred tax assets to an amount that we expect will more-likely-than-not be realized. In making such a determination, we consider all available information, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and if applicable, any carryback claims that can be filed. In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance which would reduce the provision for income taxes and the effective tax rate.

We evaluate uncertain tax positions in accordance with a two-step process. The first step is recognition: The determination of whether or not it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, we presume that the position will be examined by the appropriate tax authority and that the tax authority will have full knowledge of all relevant information. The second step is measurement: A tax position that meets the more-likely-than-not threshold is measured to determine the amount of benefit to recognize in the financial statements. The measurement process requires the determination of the range of possible settlement amounts and the probability of achieving each of the possible settlements. The tax position is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. No tax benefits are recognized for positions that do not meet the more-likely-than-not threshold. Tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold are derecognized in the first subsequent financial reporting period in which the threshold is no longer met. We describe income taxes further in Note 10 titled, “Income Taxes.”

Share-Based Compensation. We describe share-based compensation in Note 16 titled, “Share-Based Compensation.” We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. We record liability awards at fair value each reporting period, and the change in fair value is reflected as share-based compensation expense in our Consolidated Statements of Income. The expense is classified as Cost of revenues, Selling, general, and administrative expenses or Research and development expenses in a manner consistent with the employee’s compensation and benefits. These costs are recognized in the Consolidated Statements of Income over the period during which an employee is required to provide service in exchange for the award.

Restructuring. 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Recently Issued Accounting Standards Impacting the Company

Recently Issued Accounting Standards Impacting the Company are presented in the following table:

Standard						Date of Issuance						Description						Date of Adoption						Effect on the financial statements or other significant matters
Standards that have been adopted in fiscal 2024
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.						Fiscal 2024						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)

2. 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																		$	25,392
Product rationalization (1)																		18,320
Severance and other compensation related costs																		678
Total Restructuring Expense																		$	44,390

(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)

3. BUSINESS ACQUISITIONS AND DIVESTITURES

Fiscal 2024 Acquisitions

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

On June 2, 2021, we acquired all outstanding equity interests in Cantel Medical LLC ("Cantel") through a U.S. subsidiary. 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 has strengthened STERIS’s leadership in infection prevention by bringing together two complementary businesses 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.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Total Purchase Consideration

The total consideration for Cantel Common Stock and stock equivalents was $3,599,471. The consideration was comprised of the following:

(shares in thousands)
Cash consideration $16.93 per Cantel share (42,816 shares)			$	716,412
Cash consideration for fractional shares			14
STERIS plc ordinary shares 14,297 shares at ($188.07 per share)			2,689,317
Consideration related to Cantel equity compensation programs			18,173
Consideration related to equity component of Cantel convertible debt			175,555
Total purchase consideration			$	3,599,471

In addition, STERIS assumed and repaid $721,284 of existing Cantel debt obligations and assumed Cantel's obligations associated with convertible senior notes issued on May 15, 2020, which is described in Note 8 titled, "Debt."

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."

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

In addition to the acquisition of Cantel, we completed three other tuck-in acquisitions during fiscal 2022, which continued to expand our product and service offerings in the Healthcare segment. Total aggregate consideration for these transactions was approximately $3,146, net of cash acquired and including deferred consideration of $50.

Fair Value of Assets Acquired and Liabilities Assumed

The table below summarizes the allocation of the purchase price to the net assets acquired based on fair values at the acquisition dates for our fiscal 2024 and 2023 acquisitions.

			Fiscal Year 2024 (1)						Fiscal Year 2023 (2)
(dollars in thousands)			Other Acquisitions (Excluding BD)						All Acquisitions
Cash			$	417					$	—
Accounts receivable			1,497						2,405
Inventory			654						12,342
Property, plant, and equipment			—						2,131
Lease right-of-use assets, net			—						667
Other assets			5						177
Intangible assets			2,602						30,185
Goodwill			2,369						4,863
Total assets			7,544						52,770
Current liabilities			(629)						(2,170)
Non-current liabilities			—						(473)
Total liabilities			(629)						(2,643)
Net assets			$	6,915					$	50,127

(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. The deductible portion of goodwill for tax purposes recognized as a result of the fiscal 2024, 2023 and fiscal 2022 acquisitions was $195,667, $4,863 and $427,035, respectively.

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 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.

Divestitures

Fiscal 2024

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.

Fiscal 2023

In April 2022, we entered into an Asset Purchase Agreement to sell certain assets of our Animal Health business to Veterinary Orthopedic Implants, LLC. We recorded net proceeds of $5,228 and recognized a pre-tax loss on the sale of $4,852 in the Selling, general, and administrative expenses line of the Consolidated Statements of Income. The business generated annual revenues of approximately $12,000.

Fiscal 2022

In December 2021, we entered into an Asset Purchase Agreement to sell our Renal Care business to Evoqua Water Technologies Corp., for cash consideration of approximately $196,000, subject to certain potential adjustments, including a customary working capital adjustment and contingent consideration of $12,300. We recognized a pre-tax gain on the sale of $4,919. The transaction closed on January 3, 2022. We acquired the Renal Care business as part of the Cantel transaction, which closed on June 2, 2021, and had been integrated into STERIS's Healthcare segment. The Renal Care business generated annual revenues of approximately $180,000. The proceeds from the sale received at closing were used to repay outstanding debt. 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 the second quarter of fiscal 2024, we received an additional $9,458 out of escrow.

4. 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. 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 (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:

						2024						2023
Assets
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
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

						2024						2023
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
Revenues:
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)

5. GOODWILL AND INTANGIBLE ASSETS

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

						Healthcare Segment						AST Segment						Life Sciences Segment												Total
Balance at March 31, 2022						2,326,830						1,432,858						179,288												3,938,976
Goodwill acquired						6,221						803						—												7,024
Measurement period adjustments to acquired goodwill						(21,624)						—						3,147												(18,477)
Divestiture						(2,358)						—						—												(2,358)
Foreign currency translation adjustments and other						(7,796)						(37,527)						(623)												(45,946)
Balance at March 31, 2023						$	2,301,273					$	1,396,134					$	181,812											$	3,879,219
Goodwill acquired						199,452						634						—												200,086
Measurement period adjustments to acquired goodwill						(2,573)						—						—												(2,573)
Foreign currency translation adjustments and other						2,758						(9,139)						361												(6,020)
Balance at March 31, 2024						$	2,500,910					$	1,387,629					$	182,173											$	4,070,712

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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:

						2024												2023
March 31,						Gross Carrying Amount						Accumulated Amortization						Gross Carrying Amount						Accumulated Amortization
Customer relationships						$	2,552,913					$	863,662					$	2,313,441					$	658,569
Non-compete agreements						15,511						15,234						15,486						14,202
Patents and technology						516,457						278,492						461,539						237,939
Trademarks and tradenames						251,098						90,362						235,554						72,405
Supplier relationships						54,800						23,747						54,800						21,006
Total						$	3,390,779					$	1,271,497					$	3,080,820					$	1,004,121

Certain trademarks and tradenames obtained as a result of business combinations are indefinite-lived assets. The approximate carrying value of these assets at March 31, 2024 and March 31, 2023 was $14,250. We evaluate our indefinite-lived intangible assets annually during the third quarter or when evidence of potential impairment exists. No impairment was recognized for fiscal years 2024, 2023 or 2022.

Total amortization expense for intangible assets was $268,319, $259,676, and $264,607 for the years ended March 31, 2024, 2023, and 2022, respectively. Based upon the current amount of intangible assets subject to amortization, the amortization expense for each of the five succeeding fiscal years is estimated to be as follows:

						2025						2026						2027						2028						2029
Estimated amortization expense						$	270,365					$	261,498					$	255,383					$	250,617					$	248,061

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

6. INVENTORIES, NET

Components of our inventories are presented in the following table.

March 31,						2024						2023
Raw materials						$	245,942					$	220,431
Work in process						98,304						93,971
Finished goods						374,182						325,609
Reserve for excess and obsolete inventory						(43,893)						(35,601)
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)

7. PROPERTY, PLANT, AND EQUIPMENT

Information related to the major categories of our depreciable assets is as follows:

March 31,						2024						2023
Land and land improvements (1)						$	90,134					$	77,757
Buildings and leasehold improvements						724,492						658,108
Machinery and equipment						1,075,082						959,952
Information systems						256,671						240,933
Radioisotope						692,642						637,920
Construction in progress (1)						500,106						472,206
Total property, plant, and equipment						3,339,127						3,046,876
Less: accumulated depreciation and depletion						(1,573,947)						(1,414,101)
Property, plant, and equipment, net						$	1,765,180					$	1,632,775

(1) Land is not depreciated. Construction in progress is not depreciated until placed in service.

Depreciation and depletion expense were $181,722, $165,019 and $176,298, for the years ended March 31, 2024, 2023, and 2022, respectively.

Asset Retirement Obligations

We provide contract sterilization services including Gamma irradiation which utilizes cobalt-60 in the form of cobalt pencils. We have incurred asset retirement obligations (ARO) associated with the future disposal of these assets once depleted. Recognition of ARO includes: 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.

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

			Asset Retirement Obligations
Balance at March 31, 2022			$	13,543
Liabilities incurred during the period			86
Liabilities settled during the period			(625)
Accretion expense and change in estimate			104
Foreign currency and other			23
Balance at March 31, 2023			$	13,131
Liabilities incurred during the period			253
Liabilities settled during the period			(144)
Accretion expense and change in estimate			311
Foreign currency and other			107
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)

8. DEBT

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

						March 31, 2024						March 31, 2023
Short-term debt
Term loan, current portion						$	41,250					$	27,500
Delayed draw term loan, current portion						44,688						32,500
Total short-term debt						$	85,938					$	60,000
Long-term debt
Private Placement Senior Notes						$	751,433					$	750,302
Revolving Credit Facility						484,529						301,672
Deferred financing costs						(17,988)						(21,444)
Term loan						3,750						45,000
Delayed draw term loan						548,438						593,125
Senior Public Notes						1,350,000						1,350,000
Total long-term debt						$	3,120,162					$	3,018,655
Total debt						$	3,206,100					$	3,078,655

On March 19, 2021, STERIS plc ("the Company"), STERIS Corporation, STERIS Limited (“Limited”), and STERIS Irish FinCo Unlimited Company ("FinCo", "STERIS Irish FinCo"), each as a borrower and guarantor, entered into a credit agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Agreement”) providing for a $1,250,000 revolving credit facility (the “Revolver”), which replaced a prior revolving credit agreement.

The Revolver provides for revolving credit borrowings, swing line borrowings and letters of credit, with sublimits for swing line borrowings and letters of credit. The Revolver may be increased in specified circumstances by up to $625,000 in the discretion of the lenders. The Revolver matures on the date that is five years after March 19, 2021, and all unpaid borrowings, together with accrued and unpaid interest thereon, are repayable on that date. The Revolver bears interest from time to time, at either the Base Rate, the applicable Relevant Rate, or the applicable Adjusted Daily Simple RFR, as defined in and calculated under and as in effect from time to time under the Revolving Credit Agreement, plus the Applicable Margin, as defined in the Revolving Credit Agreement. The Applicable Margin is determined based on the Debt Rating of STERIS, as defined in the Credit Agreement. Interest on Base Rate Advances is payable quarterly in arrears, 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. Dollars equal to the Base Rate plus the Applicable Margin for Base Rate Advances plus the Facility Fee. Advances may be extended in U.S. Dollars or in specified alternative currencies. In connection with the cessation of British Pound Sterling LIBOR and Swiss Franc LIBOR as of December 31, 2021, JPMorgan Chase Bank, N.A. as administrative agent, pursuant to authority contained in the Revolver, amended the Revolver on January 1, 2022 to make Benchmark Replacement Conforming Changes (as defined in the Revolver). The amendment concerns technical, administrative or operational changes related to borrowings in British Pounds Sterling and Swiss Francs.

As of March 31, 2024 a total of $484,529 of Credit Agreement and Swing Line Facility borrowings were outstanding under the Credit Agreement, based on currency exchange rates as of March 31, 2024.

On March 19, 2021, the Company, STERIS Corporation, Limited, and FinCo, each as a borrower and guarantor, entered into a term loan agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Term Loan Agreement”) providing for a $550,000 term loan facility (the “Term Loan”), which replaced an existing term loan agreement, dated as of November 18, 2020 (the “Existing Term Loan Agreement”). The proceeds of the Term Loan were used to refinance the Existing Term Loan Agreement.

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

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. For the period beginning from the thirteenth full fiscal quarter ended after the Term Loan Closing Date through the maturity of the loan, quarterly principal payments, each in the amount of 1.875% of the original principal amount of the Term Loan, are due on the last business day of each fiscal quarter. The remaining unpaid principal is due and payable on the maturity date.

The Term Loan bears interest from time to time, at either the Base Rate or the Adjusted Term SOFR Rate, as defined in and calculated under and as in effect from time to time under the Term Loan Agreement, plus the Applicable Margin, as defined in the Term Loan Agreement. The Applicable Margin is determined based on the Debt Rating of STERIS, as defined in the Term Loan Agreement. Interest on Base Rate Advances is payable quarterly in arrears and interest on Term Benchmark Advances is payable in arrears at the end of the relevant interest period therefor, but in no event less frequently than every three months.

Also on March 19, 2021, the Company, STERIS Corporation, Limited, and FinCo, each as a borrower and guarantor, entered into a delayed draw term loan agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Delayed Draw Term Loan Agreement”) providing for a delayed draw term loan facility of up to $750,000 (the “Delayed Draw Term Loan”) in connection with STERIS’s acquisition of Cantel. During the first quarter of fiscal 2022, we borrowed $650,000 under our Delayed Draw Term Loan Agreement. The Delayed Draw Term Loan was funded by the lenders upon consummation of the Cantel acquisition (the “Acquisition Closing Date”). The proceeds of the Delayed Draw Term Loan were used, together with the proceeds from other new indebtedness, to fund the cash consideration for the acquisition, as well as for various other items.

The Delayed Draw Term Loan matures on the date that is five years after the Acquisition Closing Date. No principal payments are due on the Delayed Draw Term Loan for the period beginning from the first full fiscal quarter ended after the Acquisition Closing Date to and including the fourth full fiscal quarter ended after the Acquisition Closing Date. For the period beginning from the fifth full fiscal quarter ended after the Acquisition Closing Date to and including the twelfth full fiscal quarter ended after the Acquisition Closing Date, quarterly principal payments, each in the amount of 1.25% of the original principal amount of the Delayed Draw Term Loan, are due on the last business day of each fiscal quarter. For the period beginning from the thirteenth full fiscal quarter ended after the Acquisition Closing Date through the maturity of the loan, quarterly principal payments, each in the amount of 1.875% of the original principal amount of the Delayed Draw Term Loan, are due on the last business day of each fiscal quarter. The remaining unpaid principal is due and payable on the maturity date.

The Delayed Draw Term Loan bears interest from time to time, at either the Base Rate or the Adjusted Term SOFR Rate, as defined in and calculated under and as in effect from time to time under the Delayed Draw Term Loan Agreement, plus the Applicable Margin, as defined in the Delayed Draw Term Loan Agreement. The Applicable Margin is determined based on the Debt Rating of STERIS, as defined in the Delayed Draw Term Loan Agreement. Interest on 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. dollar LIBOR with SOFR, the Borrower, Guarantors, Lenders, and JPMorgan Chase Bank, N.A., each as defined in each of the agreements, amended the Revolving Credit Agreement, the Term Loan Agreement, and the Delayed Draw Term Loan Agreement. The amendments concern pricing, technical, administrative, and operational changes related to borrowings in U.S. dollars. The above descriptions reflect those amendments.

Senior Public Notes

On April 1, 2021, STERIS Irish FinCo Unlimited Company ("FinCo," "STERIS Irish FinCo," the "Issuer") completed an offering of $1,350,000 in aggregate principal amount, of its senior notes in two separate tranches: (i) $675,000 aggregate principal amount of the Issuer’s 2.70% Senior Notes due 2031 (the “2031 Notes”) and (ii) $675,000 aggregate principal amount of the Issuer’s 3.750% Senior Notes due 2051 (the “2051 Notes” and, together with the 2031 Notes, the “Senior Public Notes”). The Senior Public Notes were issued pursuant to an Indenture, dated as of April 1, 2021 (the “Base Indenture”), among FinCo, and STERIS plc, STERIS Corporation and STERIS Limited (the “Guarantors”) and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of April 1, 2021, among FinCo, the Guarantors and the Trustee (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). Each of the Guarantors guaranteed the Senior Public Notes jointly and severally on a senior unsecured basis (the “Guarantees”). 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

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.

Cantel's Convertible Debt

On May 15, 2020, Cantel issued $168,000 aggregate principal amount of 3.25% convertible senior notes due 2025 (the “Notes”) in a private placement. 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.

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 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 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 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:

						Applicable Note Purchase Agreement						Maturity Date						U.S. Dollar Value at March 31, 2024						U.S. Dollar Value at March 31, 2023
$80,000 Senior notes at 3.35%						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
$125,000 Senior notes at 3.45%						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
$100,000 Senior notes at 3.70%						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
€60,000 Senior notes at 1.86%						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
€20,000 Senior notes at 2.04%						2017 Private Placement						February 2029						21,569						21,752
£45,000 Senior notes at 3.04%						2017 Private Placement						February 2029						56,799						55,579
€19,000 Senior notes at 2.30%						2017 Private Placement						February 2032						20,491						20,664
£30,000 Senior notes at 3.17%						2017 Private Placement						February 2032						37,866						37,053
Total Senior Notes																		$	751,433					$	750,302

On February 27, 2017, Limited issued and sold an aggregate principal amount of $95,000, €99,000, and £75,000, of senior notes in a private placement to certain institutional investors in an offering that was exempt from the registration requirements of the Securities Act of 1933. These notes have maturities of between 10 years and 15 years from the issue date. The agreement governing these notes contains leverage and interest coverage covenants.

On May 15, 2015, STERIS Corporation issued and sold $350,000 of senior notes, in a private placement to certain institutional investors in an offering that was exempt from the registration requirements of the Securities Act of 1933. These notes have maturities of 10 years to 15 years from the issue date. The agreement governing these notes contains leverage and interest coverage covenants.

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.

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”). Also on March 19, 2021, Limited, as Issuer, and the Company, STERIS Corporation and FinCo, as guarantors, entered into a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated a certain note purchase agreement originally dated January 23, 2017) for the 2017 senior notes (together with the 2012 Amendment and the 2015 Amendment, the “NPA Amendments”). The NPA Amendments provided, among other things, for the waiver of certain repurchase rights of the note holders and increased the size of certain baskets to more closely align with other current credit agreement baskets.

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:

2025			$	165,938
2026			662,029
2027			614,396
2028			150,000
2029 and thereafter			1,631,725
Total			$	3,224,088

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

9. ADDITIONAL CONSOLIDATED BALANCE SHEET INFORMATION

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

March 31,						2024						2023
Accrued payroll and other related liabilities:
Compensation and related items						$	48,152					$	43,960
Accrued vacation/paid time off						16,140						13,348
Accrued bonuses						61,669						31,096
Accrued employee commissions						35,980						26,924
Other post-retirement benefits obligations-current portion						994						1,121
Other employee benefit plans' obligations-current portion						1,896						2,014
Total accrued payroll and other related liabilities						$	164,831					$	118,463
Accrued expenses and other:
Deferred revenues						$	70,460					$	85,727
Service liabilities						92,590						72,033
Self-insured and related risk reserves-current portion						13,303						11,325
Accrued dealer commissions						33,277						27,078
Accrued warranty						15,388						13,394
Asset retirement obligation-current portion						510						543
Accrued interest						11,109						9,243
Other						83,107						78,689
Total accrued expenses and other						$	319,744					$	298,032
Other liabilities:
Self-insured risk reserves-long-term portion						$	21,646					$	22,171
Other post-retirement benefits obligations-long-term portion						5,159						6,070
Defined benefit pension plans obligations-long-term portion						2,727						2,876
Other employee benefit plans obligations-long-term portion						1,321						1,153
Accrued long-term income taxes						6,508						10,082
Asset retirement obligation-long-term portion						13,148						12,588
Other						21,037						21,197
Total other liabilities						$	71,546					$	76,137

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

10. INCOME TAXES

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

Years Ended March 31,						2024						2023						2022
National statutory tax rate						12.5		%				12.5		%				12.5		%
Increase in accruals for uncertain tax positions						—		%				—		%				0.1		%
U.S. 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		%
U.S. research and development credit						(0.7)		%				(0.4)		%				(0.7)		%
U.S. foreign income tax credit						(0.9)		%				(0.8)		%				(1.8)		%
Difference in non-Ireland tax rates						8.5		%				8.9		%				14.2		%
U.S. federal audit adjustments						0.1		%				—		%				—		%
Excess tax benefit for equity compensation						(0.7)		%				(0.6)		%				(4.3)		%
Tax rate changes on deferred tax assets and liabilities						(0.3)		%				—		%				—		%
U.S. tax reform impact, GILTI and FDII						(0.2)		%				(0.3)		%				(0.8)		%
Capitalized acquisition, redomiciliation costs						—		%				—		%				1.5		%
All other, net						(0.1)		%				—		%				(0.6)		%
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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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
Current:
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
Deferred:
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 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:

						2024						2023
Unrecognized Tax Benefits Balance at April 1						$	2,230					$	2,160
Increases for tax provisions of current year						—						70
Decreases for tax provisions of prior year						(80)						—
Unrecognized Tax Benefits Balance at March 31						$	2,150					$	2,230

We recognized interest and penalties related to uncertain tax positions in the provision for income taxes. As of March 31, 2024 and 2023, we had $143 and $140 accrued for interest and penalties, respectively. If all unrecognized tax benefits were recognized, the net impact on the provision for income tax expense would be $2,293. 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 taxing 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

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 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 and have filed petitions with the U.S. Tax Court. We have not established reserves related to these notices. An unfavorable outcome is not expected to have a material adverse impact on our consolidated financial position but could be material to our consolidated results of operations and cash flows for any one period.

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 2031.

Deferred Taxes. The significant components of the deferred tax assets and liabilities recorded in our accompanying balance sheets at March 31, 2024 and 2023 were as follows:

March 31,						2024						2023
Deferred Tax Assets:
Post-retirement benefit accrual						$	1,480					$	1,737
Compensation						19,582						15,858
Net operating loss carryforwards						37,096						37,667
Accrued expenses						13,667						13,150
Insurance						2,817						2,268
Deferred income						20,393						23,967
Bad debt						3,868						3,763
Research & experimental expenditures						28,347						15,382
Operating leases (1)						47,625						46,781
Foreign tax credit carryforwards						32,137						33,559
Other						21,258						11,701
Deferred Tax Assets						228,270						205,833
Less: Valuation allowance						26,374						20,315
Total Deferred Tax Assets						201,896						185,518
Deferred Tax Liabilities:
Depreciation and depletion						92,358						98,601
Operating leases (1)						46,657						45,834
Intangibles						518,814						630,589
Pension						3,889						2,644
Other						2,559						3,186
Total Deferred Tax Liabilities						664,277						780,854
Net Deferred Tax Liabilities						$	(462,381)					$	(595,336)

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

At March 31, 2024, we had U.S. federal operating loss carryforwards of $8,026, which remain subject to a 20 year carryforward period. Additionally, we had non-U.S. operating loss carry forwards of $128,159. Although the majority of the non-U.S. 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 $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. At March 31, 2024, we had $33,297 of pre-valuation allowance tax credit carryforwards of which $23,954 relates to offsets of deferred tax liabilities related to German branches of a U.S. subsidiary. These credit carryforwards can be used through fiscal 2034.

We review the need for a valuation allowance against our deferred tax assets. 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 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. The amount of undistributed earnings of subsidiaries was approximately $2,850,000 at March 31, 2024. 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 from digitalization of the economy. On December 20, 2021, the OECD released Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15%. The OECD continues to release additional guidance on the two-pillar framework with widespread implementation anticipated by 2024. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by individual countries. The legislation is anticipated to be effective for our fiscal year beginning April 1, 2024.

11. BENEFIT PLANS

In the United States, we sponsor an unfunded post-retirement welfare benefits plan for two groups of United States retirees. Benefits under this plan include retiree life insurance and retiree medical insurance, including prescription drug coverage.

We sponsor several defined benefit pension schemes outside the United States: two in the UK, one in the Netherlands, two in Germany, and one in Switzerland. The Synergy Health plc Retirement Benefit Scheme is a defined benefit (final salary) funded pension scheme. In previous years, Synergy sponsored a funded defined benefit arrangement in the Netherlands. This was a separate fund holding the pension scheme assets to meet long-term pension liabilities for past and present employees. Accrual of benefits ceased under the scheme effective January 1, 2013. The Synergy Radeberg and Synergy Allershausen Schemes are unfunded defined pension schemes and are closed to new entrants. The Synergy Daniken Scheme is a defined benefit funded pension scheme. As a result of our fiscal 2018 acquisition of Harwell Dosimeters Ltd, we also sponsor the Harwell Dosimeters Ltd Retirement Benefits Scheme which is a defined benefit funded pension scheme.

We recognize the funded status of our defined benefit pension and post-retirement benefit plans in our Consolidated Balance Sheets, with a corresponding adjustment to accumulated other comprehensive income, net of tax. The funded status is measured as of March 31 each year and is calculated as the difference between the fair value of plan assets and the benefit obligation (which is the projected benefit obligation for pension plans and the accumulated post-retirement benefit obligation for post-retirement benefit plans). Accumulated comprehensive income (loss) represents the net unrecognized actuarial losses and unrecognized prior service cost. These amounts will be recognized in net periodic benefit cost as they are amortized. We will recognize future changes to the funded status of these plans in the year the change occurs, through other comprehensive income.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Obligations and Funded Status. The following table reconciles the funded status of the defined benefit pension plans and the other post-retirement benefits plan to the amounts recorded on our Consolidated Balance Sheets at March 31, 2024 and 2023, respectively. Benefit obligation balances presented in the following table reflect the projected benefit obligations for our defined benefit pension plans and the accumulated other post-retirement benefit obligation for our post-retirement benefits plan. The measurement date of our defined benefit pension plans and other post-retirement benefits plan is March 31, for both periods presented.

			Defined Benefit Pension Plans												Other Post-Retirement Benefits Plan
			2024						2023						2024						2023
Change in Benefit Obligations:
Benefit Obligations at Beginning of Year			$	93,640					$	129,772					$	7,191					$	8,525
Service cost			659						1,276						—						—
Interest cost			4,120						3,054						313						256
Actuarial gain			(140)						(27,046)						(441)						(807)
Benefits and expenses			(4,327)						(5,817)						(910)						(783)
Employee contributions			1,028						501						—						—
Curtailments/settlements			(355)						(421)						—						—
Impact of foreign currency exchange rate changes			1,750						(7,679)						—						—
Benefit Obligations at End of Year			96,375						93,640						6,153						7,191
Change in Plan Assets:
Fair Value of Plan Assets at Beginning of Year			107,089						142,172						—						—
Actual return on plan assets			3,043						(25,828)						—						—
Employer contributions			5,253						4,936						910						783
Employee contributions			1,028						501						—						—
Benefits and expenses paid			(4,280)						(5,772)						(910)						(783)
Curtailments/settlements			(324)						(421)						—						—
Impact of foreign currency exchange rate changes			2,104						(8,499)						—						—
Fair Value of Plan Assets at End of Year			113,913						107,089						—						—
Funded Status of the Plans			$	17,538					$	13,449					$	(6,153)					$	(7,191)

Amounts recognized in the Consolidated Balance Sheets consist of the following:

						Defined Benefit Pension Plans												Other Post-Retirement Benefits Plan
						2024						2023						2024						2023
Non-current assets						$	20,265					$	16,325					$	—					$	—
Current liabilities						—						—						(994)						(1,121)
Non-current liabilities						(2,727)						(2,876)						(5,159)						(6,070)
Net assets (liabilities)						$	17,538					$	13,449					$	(6,153)					$	(7,191)

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The pre-tax amount of unrecognized actuarial net loss and unamortized prior service cost included in accumulated other comprehensive (loss) at March 31, 2024, was approximately $3,982 and $(584), respectively.

Defined benefit plans with an accumulated benefit obligation and projected benefit obligation exceeding the fair value of plan assets had the following plan assets and obligations at March 31, 2024 and 2023:

						Defined Benefit Pension Plans
						2024						2023
Aggregate fair value of plan assets						$	113,913					$	107,089
Aggregate accumulated benefit obligations						96,375						93,640
Aggregate projected benefit obligations						96,375						93,640

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income. Components of the annual net periodic benefit cost of our defined benefit pension plans and our other post-retirement benefits plan were as follows:

						Defined Benefit Pension Plans																		Other Post-Retirement Benefits Plan
						2024						2023						2022						2024						2023						2022
Service cost						$	659					$	1,276					$	1,616					$	—					$	—					$	—
Interest cost						4,120						3,054						2,699						313						256						232
Expected return on plan assets						(6,051)						(3,817)						(4,412)						—						—						—
Prior service cost recognition						47						48						61						—						—						(267)
Net amortization and deferral						15						19						18						209						329						444
Curtailments/settlements						(1)						(49)						(31)						—						—						—
Net periodic benefit (credit) cost						$	(1,211)					$	531					$	(49)					$	522					$	585					$	409
Recognized in other comprehensive loss (income) before tax:
Net loss (gain) occurring during year						$	2,562					$	1,716					$	(11,028)					$	441					$	807					$	640
Amortization of prior service credit						(102)						(263)						(222)						—						—						267
Amortization of net loss						10						—						—						(209)						(329)						(444)
Total recognized in other comprehensive loss (income)						2,470						1,453						(11,250)						232						478						463
Total recognized in total benefits cost and other comprehensive loss (income)						$	1,259					$	1,984					$	(11,299)					$	754					$	1,063					$	872

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Assumptions Used in Calculating Benefit Obligations and Net Periodic Benefit Cost. The following table presents significant assumptions used to determine the projected benefit obligations at March 31:

						2024						2023
Discount Rate:
Synergy Health plc Retirement Benefits Scheme						4.80		%				4.70		%
Isotron BV Pension Plan						3.40		%				3.70		%
Synergy Health Daniken AG						1.50		%				2.05		%
Synergy Health Radeberg						3.80		%				3.80		%
Synergy Health Allershausen						3.50		%				3.70		%
Harwell Dosimeters Ltd Retirement Benefits Scheme						4.80		%				4.80		%
Other post-retirement plan						5.00		%				4.75		%

The following table presents significant assumptions used to determine the net periodic benefit costs for the years ended March 31:

						2024						2023						2022
Discount Rate:
Synergy Health plc Retirement Benefits Scheme						4.70		%				2.80		%				2.10		%
Isotron BV Pension Plan						3.70		%				1.80		%				0.90		%
Synergy Health Daniken AG						1.50		%				2.05		%				1.00		%
Synergy Health Radeberg						2.00		%				2.00		%				1.50		%
Synergy Health Allershausen						2.20		%				2.20		%				2.00		%
Harwell Dosimeters Ltd Retirement Benefits Scheme						4.85		%				4.80		%				2.85		%
Other post-retirement plan						4.75		%				3.25		%				2.50		%
Expected Return on Plan Assets:
Synergy Health plc Retirement Benefits Scheme						6.10		%				3.20		%				3.60		%
Isotron BV Pension Plan						3.70		%				1.80		%				0.90		%
Synergy Health Daniken AG						1.50		%				1.95		%				1.00		%

The net periodic benefit cost and the actuarial present value of projected benefit obligations are based upon assumptions that we review on an annual basis. These assumptions may be revised annually based upon an evaluation of long-term trends, as well as market conditions that may have an impact on the cost of providing benefits.

We develop our expected long-term rate of return on plan assets assumptions by evaluating input from third-party professional advisers, taking into consideration the asset allocation of the portfolios and the long-term asset class return expectations.

We develop our discount rate assumptions by evaluating input from third-party professional advisers, taking into consideration the current yield on country specific investment grade long-term bonds which provide for similar cash flow streams as our projected obligations.

We have made assumptions regarding healthcare costs in computing our other post-retirement benefit obligation. The assumed rates of increase generally decline ratably over a five-year period from the assumed current year healthcare cost trend rate to the assumed long-term healthcare cost trend rate noted below.

						2024						2023						2022
Healthcare cost trend rate – medical						7.50		%				7.50		%				7.00		%
Healthcare cost trend rate – prescription drug						7.50		%				7.50		%				7.00		%
Long-term healthcare cost trend rate						4.50		%				4.50		%				4.50		%

To determine the healthcare cost trend rates, we evaluate a combination of information, including ongoing claims cost monitoring, annual statistical analyses of claims data, reconciliation of forecasted claims against actual claims, review of trend

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

assumptions of other plan sponsors and national health trends, and adjustments for plan design changes, workforce changes, and changes in plan participant behavior.

Plan Assets. The investment policies for our plans are generally established by the local pension plan trustees and seek to maintain the plans' ability to meet liabilities and to comply with local minimum funding requirements. Plan assets are invested in diversified portfolios that provide adequate levels of return at an acceptable level of risk. The investment policies are reviewed at least annually and revised, as deemed appropriate to ensure that the objectives are being met. At March 31, 2024, the targeted allocation for the plans were approximately 75% equity investments and 25% fixed income investments.

Financial instruments included in pension plan assets are categorized into three tiers. These tiers include a fair value hierarchy of three levels, based on the degree of subjectivity inherent in the valuation methodology as follows:

Level 1 - Quoted prices for identical assets in active markets.

Level 2 - Quoted prices for similar assets in active markets with inputs that are observable, either directly or indirectly.

Level 3 - Unobservable prices or inputs in which little or no market data exists.

The fair value of our pension benefits plan assets at March 31, 2024 and 2023 by asset category is as follows:

						Fair Value Measurements at March 31, 2024
(In thousands)						Total						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Other Unobservable Inputs (Level 3)
Cash						$	372					$	372					$	—					$	—
Insured annuities						10,468						—						10,468						—
Insurance contracts						6,110						—						—						6,110
Common and collective trusts valued at net asset value:
Equity security trusts						37,190						—						—						—
Debt security trusts						59,773						—						—						—
Total Plan Assets						$	113,913					$	372					$	10,468					$	6,110

						Fair Value Measurements at March 31, 2023
(In thousands)						Total						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Other Unobservable Inputs (Level 3)
Cash						$	338					$	338					$	—					$	—
Insured annuities						10,285						—						10,285						—
Insurance contracts						5,387						—						—						5,387
Common and collective trusts valued at net asset value:
Equity security trusts						48,137						—						—						—
Debt security trusts						42,942						—						—						—
Total Plan Assets						$	107,089					$	338					$	10,285					$	5,387

Collective investment trusts are measured at fair value using the net asset value per share practical expedient. These trusts have not been categorized in the fair value hierarchy and are being presented in the tables above to permit a reconciliation of the fair value hierarchy to the total plan assets.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during fiscal year 2024 due to the following:

						Insurance contracts
Balance at March 31, 2022						$	5,383
Gains (losses) related to assets still held at year-end						(157)
Transfers out of Level 3						320
Foreign currency						(159)
Balance at March 31, 2023						$	5,387
Gains (losses) related to assets still held at year-end						28
Transfers out of Level 3						631
Foreign currency						64
Balance at March 31, 2024						$	6,110

Cash Flows. 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. 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:

						Other Defined Benefit Pension Plans						Other Post-Retirement Benefits Plan
2025						$	4,842					$	994
2026						4,761						890
2027						4,901						804
2028						5,017						712
2029						5,197						638
2030 and thereafter						28,137						2,268

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) provides a prescription drug benefit for Medicare beneficiaries, a benefit we provide to Medicare eligible retirees covered by our post-retirement benefits plan. We have concluded that the prescription drug benefit provided in our post-retirement benefit plan is considered to be actuarially equivalent to the benefit provided under the Act and thus qualifies for the subsidy under the Act. Benefits are subject to a per capita per month cost cap and any costs above the cap become the responsibility of the retiree. Under the plan, the subsidy is applied to reduce the retiree responsibility. As a result, the expected future subsidy no longer reduces our accumulated post-retirement benefit obligation and net periodic benefit cost. We collected subsidies totaling approximately $339 and $477, during fiscal 2024 and fiscal 2023, respectively, which reduced the retiree responsibility for costs in excess of the caps established in the post-retirement benefit plan.

Defined Contribution Plans. We maintain 401(k) defined contribution plans for eligible U.S. employees, a 401(k) defined contribution plan for eligible Puerto Rico employees and similar savings plans for certain employees in Canada, United Kingdom, Ireland, and Finland. We provide a match on a specified portion of an employee’s contribution. The U.S. plan assets are held in trust and invested as directed by the plan participants. The Canadian plan assets are held by insurance companies. The aggregate fair value of the U.S. plan assets was $1,382,313 at March 31, 2024. At March 31, 2024, the U.S. plan held 446,128 STERIS ordinary shares with a fair value of $97,635. We paid dividends of $915, $886, and $852 to the plan and participants on STERIS shares held by the plan for the years ended March 31, 2024, 2023, and 2022, respectively. We contributed approximately $39,600, $36,564, and $38,600, to the defined contribution plans for the years ended March 31, 2024, 2023, and 2022, respectively.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

We also maintain a domestic non-qualified deferred compensation plan covering certain employees, which formerly allowed for the deferral of compensation for an employee-specified term or until retirement or termination. There have been no employee contributions made to this plan since fiscal 2012. The Plan was amended in fiscal 2012 to disallow deferrals of salary payable in 2012 and subsequent calendar years and of commissions and other incentive compensation payable in respect of the 2013 and subsequent fiscal years. We hold investments in mutual funds to satisfy future obligations of the plan. We account for these assets as available-for-sale securities and they are included in “Other assets” on our accompanying Consolidated Balance Sheets, with a corresponding liability for the plan’s obligation recorded in Accrued expenses and other. The aggregate value of the assets was $1,129 and $938 at March 31, 2024 and March 31, 2023, respectively. Realized gains and losses on these investments are recorded in Interest income and miscellaneous expense (income) within Non-operating expenses, net on our accompanying Consolidated Statements of Income. Changes in the fair value of the assets are recorded in Accumulated other comprehensive income (loss) on our accompanying Consolidated Balance Sheets.

12. COMMITMENTS AND CONTINGENCIES

We are, and will likely continue to be, involved in a number of legal proceedings, government investigations, and claims, which we believe generally arise in the course of our business, given our size, history, complexity, and the nature of our business, products, Customers, regulatory environment, and industries in which we participate. These legal proceedings, investigations and claims generally involve a variety of legal theories and allegations, including, without limitation, personal injury (e.g., slip and falls, burns, vehicle accidents), product liability or regulation (e.g., based on product operation or claimed malfunction, failure to warn, failure to meet specification, or failure to comply with regulatory requirements), product exposure (e.g., claimed exposure to chemicals, gases, asbestos, contaminants, radiation), property damage (e.g., claimed damage due to leaking equipment, fire, vehicles, chemicals), commercial claims (e.g., breach of contract, economic loss, warranty, misrepresentation), financial (e.g., taxes, reporting), employment (e.g., wrongful termination, discrimination, benefits matters), and other claims for damage and relief.

We believe we have adequately reserved for our current litigation and claims that are probable and estimable, and further believe that the ultimate outcome of these pending lawsuits and claims will not have a material adverse effect on our consolidated financial position or results of operations taken as a whole. Due to their inherent uncertainty, however, there can be no assurance of the ultimate outcome or effect of current or future litigation, investigations, claims or other proceedings (including without limitation the matters discussed below). 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 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. of this Annual Report on Form 10-K.

From time to time, STERIS is also involved in legal proceedings as a plaintiff involving contract, patent protection, and other claims asserted by us. Gains, if any, from these proceedings are recognized when they are realized.

We are subject to taxation from United States federal, state and local, and foreign jurisdictions. Tax positions are settled primarily through the completion of audits within each individual jurisdiction or the closing of statutes of limitation. Changes in applicable tax law or other events may also require us to revise past estimates. We describe income taxes further in Note 10 to our consolidated financial statements titled, “Income Taxes” in this Annual Report on Form 10-K.

As of March 31, 2024 and 2023, our commercial commitments totaled $110,402 and $108,370, respectively. Commercial commitments include standby letters of credit, letters of credit required as security under our self-insured risk retention policies, and other potential cash outflows resulting from an event that requires payment by us. Approximately $9,975 and $8,036 of the March 31, 2024 and 2023 totals, respectively, relate to letters of credit required as security under our self-insured risk retention policies.

As of March 31, 2024, we had minimum purchase commitments with suppliers for raw material purchases totaling $61,941. As of March 31, 2024, we also had commitments of $154,125 for long term construction contracts.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Leases

We lease manufacturing, warehouse and office space, service facilities, vehicles, equipment and communication systems. Certain leases contain options that provide us with the ability to extend the lease term. Such options are included in the lease term when it is reasonably certain that the option will be exercised. We made an accounting policy election to not recognize lease assets or lease liabilities for leases with a lease term of twelve months or less.

We determine if an agreement contains a lease and classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. Lease assets arising from finance leases are included in Property, plant, and equipment, net and the liabilities are included in Other liabilities. For finance leases, we recognize interest expense using the effective interest method, and we recognize amortization expense on the lease asset over the shorter of the lease term or the useful life of the asset. Our finance leases are not material as of March 31, 2024 and for the twelve-month period then ended.

Operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. As most leases do not provide an implicit interest rate, we estimate an incremental borrowing rate to determine the present value of lease payments. Our estimated incremental borrowing rate reflects a secured rate based on recent debt issuances, our estimated credit rating, lease term, as well as publicly available data for instruments with similar characteristics. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease. When accounting for leases, we combine payments for leased assets, related services and other components of a lease.

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
Variable operating lease expense			24,441						18,581						12,032
Total operating lease expense			$	65,771					$	58,054					$	52,545

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

			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
Right-of-use assets obtained in exchange for operating lease obligations, net			$	24,668					$	53,099					$	79,241

Maturities of lease liabilities at March 31, 2024 are as follows:

			March 31, 2024
2025			$	37,947
2026			32,598
2027			23,094
2028			18,662
2029 and thereafter			104,609
Total operating lease payments			216,910
Less imputed interest			39,843
Total operating lease liabilities			$	177,067

In the preceding table, the future minimum annual rentals payable under noncancelable leases denominated in foreign currencies have been calculated using March 31, 2024 foreign currency exchange rates.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Supplemental information related to operating leases is as follows:

			March 31,						March 31,
			2024						2023
Weighted-average remaining lease term of operating leases			9.9 years						10.6 years
Weighted-average discount rate of operating leases			4.4		%				3.8		%

13. BUSINESS SEGMENT INFORMATION

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. Our products and services range from infection prevention consumables and capital equipment, as well as services to maintain that equipment; to the repair of re-usable procedural instruments; to outsourced instrument reprocessing services. 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 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 disclose 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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Information regarding our segments is presented in the following tables.

Years Ended March 31,						2024						2023						2022
Revenues:
Healthcare						$	3,613,019					$	3,085,131					$	2,845,467
AST						953,980						914,431						852,972
Life Sciences						571,702						536,704						524,964
Total revenues						$	5,138,701					$	4,536,266					$	4,223,403
Operating income (loss):
Healthcare						871,358						706,020						649,704
AST						439,744						429,020						410,101
Life Sciences						221,349						210,225						216,188
Corporate						(348,497)						(264,974)						(283,665)
Total operating income before adjustments						$	1,183,954					$	1,080,291					$	992,328
Less: Adjustments
Amortization of acquired intangible assets (1)						266,420						256,355						262,344
Acquisition and integration related charges (2)						25,526						23,486						201,905
Tax restructuring costs (3)						620						661						301
Gain on fair value adjustment of acquisition related contingent consideration (1)						—						(3,100)						(2,350)
Net loss (gain) on divestiture of businesses (1)						873						(67)						(874)
Amortization of inventory and property "step up" to fair value (1)						10,032						11,370						53,139
Restructuring charges (4)						44,365						485						48
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."

(2) Acquisition and integration related charges include transaction costs and integration expenses associated with acquisitions.

(3) Costs incurred in tax restructuring.

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

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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. As a result, an allocation of total assets, capital expenditures, and depreciation and amortization is not meaningful to the individual performance of the Healthcare and Life Sciences segments. Therefore, their respective amounts are reported together.

March 31,						2024						2023
Assets
Healthcare and Life Sciences						$	7,055,576					$	6,557,742
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
Capital Expenditures
Healthcare and Life Sciences						$	114,164					$	98,585					$	84,487
AST						237,012						253,914						198,350
Total Capital Expenditures						$	351,176					$	352,499					$	282,837
Depreciation, Depletion, and Amortization (1)
Healthcare and Life Sciences						$	322,244					$	306,377					$	316,222
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 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."

Financial information for each of our United States and international geographic areas is presented in the following table. Revenues are based on the location of these operations and their Customers. Property, plant, and equipment, net are those assets that are identified within the operations in each geographic area.

March 31,						2024						2023
Property, Plant, and Equipment, Net
Ireland						$	68,603					$	60,570
United States						1,009,979						877,950
Other locations						686,598						694,255
Property, Plant, and Equipment, Net						$	1,765,180					$	1,632,775

Years Ended March 31,						2024						2023						2022
Revenues:
Ireland						$	82,695					$	74,292					$	81,864
United States						3,751,437						3,254,373						2,943,950
Other locations						1,304,569						1,207,601						1,197,589
Total Revenues						$	5,138,701					$	4,536,266					$	4,223,403

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Years Ended March 31,						2024						2023						2022
Healthcare:
Capital equipment						1,091,537						$	896,590					$	782,505
Consumables						1,248,424						1,050,316						1,004,605
Service						1,273,058						1,138,225						1,058,357
Total Healthcare Revenues						$	3,613,019					$	3,085,131					$	2,845,467
AST:
Capital equipment						$	14,519					$	26,460					$	24,394
Service						$	939,461					$	887,971					$	828,578
Total AST Revenues						$	953,980					$	914,431					$	852,972
Life Sciences:
Capital equipment						$	155,520					$	147,420					$	142,281
Consumables						251,580						241,114						239,365
Service						164,602						148,170						143,318
Total Life Sciences Revenues						$	571,702					536,704						524,964
Total Revenues						$	5,138,701					$	4,536,266					$	4,223,403

14. SHARES AND PREFERRED SHARES

Ordinary Shares

We calculate basic earnings per share based upon the weighted average number of shares outstanding. 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:

Years ended March 31,						2024						2023						2022
Denominator (shares in thousands):
Weighted average shares outstanding—basic						98,787						99,706						97,535
Dilutive effect of share equivalents						572						540						791
Weighted average shares outstanding and share equivalents—diluted						99,359						100,246						98,326

Options to purchase the following number of shares were outstanding but excluded from the computation of diluted earnings per share because the combined exercise prices, unamortized fair values, and assumed tax benefits upon exercise were greater than the average market price for the shares during the periods, so including these options would be anti-dilutive:

Years ended March 31,						2024						2023						2022
Number of ordinary share options (shares in thousands)						606						578						243

Additional Authorized Shares

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.

15. 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Under the authorization, the Company may repurchase its shares from time to time through open market purchases, including 10b5-1 plans. Any share repurchases may be activated, suspended or discontinued at any time. Due to the uncertainty surrounding the COVID-19 pandemic, share repurchases were suspended on April 9, 2020. The suspension was lifted effective February 10, 2022, enabling the Company to resume stock repurchases pursuant to the prior 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. During fiscal 2023, we obtained 79,169 of our ordinary shares in the aggregate amount of $13,534 in connection with share-based compensation award programs. 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.

16. SHARE-BASED COMPENSATION

We maintain a long-term incentive plan that makes available shares for grants, at the discretion of the Board of Directors or Compensation and Organizational Development Committee of the Board of Directors, to officers, directors, and key employees in the form of stock options, restricted shares, restricted share units, stock appreciation rights and share grants. We satisfy share award incentives through the issuance of new ordinary shares.

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.

The fair value of share-based stock option compensation awards was estimated at their grant date using the Black-Scholes-Merton option pricing model. This model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable, characteristics that are not present in our option grants. If the model permitted consideration of the unique characteristics of employee stock options, the resulting estimate of the fair value of the stock options could be different. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our Consolidated Statements of Income. The expense is classified as Cost of revenues or Selling, general, and administrative expenses in a manner consistent with the employee’s compensation and benefits.

The following weighted-average assumptions were used for options granted during fiscal 2024, fiscal 2023 and fiscal 2022:

						Fiscal 2024						Fiscal 2023						Fiscal 2022
Risk-free interest rate						3.59		%				2.44		%				1.10		%
Expected life of options						6.0 years						5.9 years						5.9 years
Expected dividend yield of stock						1.08		%				0.80		%				0.95		%
Expected volatility of stock						27.92		%				24.49		%				24.27		%

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The risk-free interest rate is based upon the U.S. Treasury yield curve. The expected life of options is reflective of historical experience, vesting schedules and contractual terms. The expected dividend yield of stock represents our best estimate of the expected future dividend yield. The expected volatility of stock is derived by referring to our historical stock prices over a time frame similar to that of the expected life of the grant. An estimated forfeiture rate of 2.22%, 2.54% and 2.85% was applied in fiscal 2024, 2023 and 2022 respectively. This rate is calculated based upon historical activity and represents an estimate of the granted options not expected to vest. If actual forfeitures differ from this calculated rate, we may be required to make additional adjustments to compensation expense in future periods. The assumptions used above are reviewed at the time of each significant option grant, or at least annually.

A summary of share option activity is as follows:

						Number of Options						Weighted Average Exercise Price						Average Remaining Contractual Term						Aggregate Intrinsic Value
Outstanding at March 31, 2023						1,749,729						$	154.60
Granted						253,946						220.24
Exercised						(126,393)						81.27
Forfeited						(7,411)						217.73
Outstanding at March 31, 2024						1,869,871						$	168.22					6.0 years						$	111,633
Exercisable at March 31, 2024						1,270,907						$	142.42					4.9 years						$	106,246

We estimate that 590,113 of the non-vested stock options outstanding at March 31, 2024 will ultimately vest.

The aggregate intrinsic value in the table above represents the total pre-tax difference between the $224.82 closing price of our ordinary shares on March 31, 2024 over the exercise prices of the stock options, multiplied by the number of options outstanding or outstanding and exercisable, as applicable. The aggregate intrinsic value is not recorded for financial accounting purposes, and the value changes daily based on the daily changes in the fair market value of our ordinary shares.

The total intrinsic value of stock options exercised during the years ended March 31, 2024, 2023 and 2022 was $18,177, $6,502 and $52,952, respectively. Net cash proceeds from the exercise of stock options were $10,472, $1,828 and $10,071 for the years ended March 31, 2024, 2023 and 2022, respectively. The tax benefit from stock option exercises was $5,470, $4,945 and $18,143 for the years ended March 31, 2024, 2023 and 2022, respectively.

The weighted average grant date fair value of stock option grants was $54.60, $50.72 and $37.52 for the years ended March 31, 2024, 2023 and 2022, respectively.

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

						Number of Restricted Shares						Number of Restricted Share Units						Weighted-Average Grant Date Fair Value
Non-vested at March 31, 2023						450,793						28,542						$	186.60
Granted						180,529						18,476						202.13
Vested						(148,283)						(17,041)						164.14
Forfeited						(19,658)						(1,629)						196.29
Non-vested at March 31, 2024						463,381						28,348						$	200.04

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 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. We expect to recognize the cost over a weighted average period of 1.7 years.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Cantel Share-Based Compensation Plan

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

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 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:

												Number of Restricted Share Units						Weighted-Average Grant Date Fair Value
Non-vested at March 31, 2023												15,670						$	191.18
Granted												—						—
Vested												(14,763)						191.18
Forfeited												(762)						191.18
Non-vested at March 31, 2024												145						$	191.18

17. FINANCIAL AND OTHER GUARANTEES

We generally offer a limited parts and labor warranty on capital equipment. The specific terms and conditions of those warranties vary depending on the product sold and the countries where we conduct business. We record a liability for the estimated cost of product warranties at the time product revenues are recognized. The amounts we expect to incur on behalf of our Customers for the future estimated cost of these warranties are recorded as a current liability on the accompanying Consolidated Balance Sheets. Factors that affect the amount of our warranty liability include the number and type of installed units, historical and anticipated rates of product failures, and material and service costs per claim. We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary.

Changes in our warranty liability during the periods presented are as follows:

Years Ended March 31,						2024						2023						2022
Balance, Beginning of Year						$	13,394					$	13,892					$	9,406
Liabilities assumed in acquisition of Cantel						—						—						4,553
Warranties issued during the period						18,051						13,195						12,571
Settlements made during the period						(16,057)						(13,693)						(12,638)
Balance, End of Year						$	15,388					$	13,394					$	13,892

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

18. DERIVATIVES AND HEDGING

From time to time, we enter into forward contracts to hedge potential foreign currency gains and losses that arise from transactions denominated in foreign currencies, including 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. During fiscal 2024, we also held forward foreign currency contracts to hedge a portion of our expected non-U.S. dollar-denominated earnings against our reporting currency, the U.S. dollar. These foreign currency exchange contracts matured during fiscal 2024. We did not elect hedge accounting for these forward foreign currency contracts; however, we may seek to apply hedge accounting in future scenarios. We do not use derivative financial instruments for speculative purposes.

These contracts are not designated as hedging instruments and do not receive hedge accounting treatment; therefore, changes in their fair value are not deferred but are recognized immediately in the Consolidated Statements of Income. 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.

						Asset Derivatives												Liability Derivatives
						Fair Value at						Fair Value at						Fair Value at						Fair Value at
Balance Sheet Location						March 31, 2024						March 31, 2023						March 31, 2024						March 31, 2023
Prepaid & Other						$	208					$	378					$	—					$	—
Accrued expenses and other						—						—						1,014						2,054

The following table presents the impact of derivative instruments and their location within the Consolidated Statements of Income:

						Location of (loss) gain recognized in income						Amount of (loss) gain recognized in income
Years Ended March 31,
2024						2023						2022
Foreign currency forward contracts						Selling, general, and administrative						$	1,272					$	5,036					$	4,379
Commodity swap contracts						Cost of revenues						(1,611)						(3,630)						3,921

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

19. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. We estimate the fair value of financial assets and liabilities using available market information and generally accepted valuation methodologies. The inputs used to measure fair value are classified into three tiers. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring the entity to develop its own assumptions. The following table shows the fair value of our financial assets and liabilities at March 31, 2024 and March 31, 2023:

															Fair Value Measurements
At March 31,						Carrying Value									Quoted Prices in Active Markets for Identical Assets									Significant Other Observable Inputs									Significant Unobservable Inputs
												Level 1									Level 2									Level 3
			2024			2023						2024			2023						2024			2023						2024			2023
Assets:
Cash and cash equivalents						$	207,020		$	208,357					$	207,020		$	208,357					$	—		$	—					$	—		$	—
Forward and swap contracts (1)						208			378						—			—						208			378						—			—
Equity investments (2)						4,767			7,069						4,767			7,069						—			—						—			—
Other investments						2,902			2,066						2,902			2,066						—			—						—			—
Liabilities:
Forward and swap contracts (1)						$	1,014		$	2,054					$	—		$	—					$	1,014		$	2,054					$	—		$	—
Deferred compensation plans (2)						1,186			1,022						1,186			1,022						—			—						—			—
Total debt (3)						3,206,100			3,078,655						—			—						2,895,784			2,754,218						—			—
Contingent consideration obligations (4)						11,000			15,678						—			—						—			—						11,000			15,678

(1) The fair values of forward and swap contracts are based on period-end forward rates and reflect the value of the amount that we would pay or receive for the contracts involving the same notional amounts and maturity dates.

(2) We maintain a frozen domestic non-qualified deferred compensation plan covering certain employees, which allowed for the deferral of payment of previously earned compensation for an employee-specified term or until retirement or termination. Amounts deferred can be allocated to various hypothetical investment options (compensation deferrals have been frozen under the plan). We hold investments to satisfy the future obligations of the plan. Employees who made deferrals are entitled to receive distributions of their hypothetical account balances (amounts deferred, together with earnings (losses)). 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 arrangements. The fair values of our Senior Public Notes are estimated using quoted market prices for the publicly registered Senior Notes.

(4) Contingent consideration obligations arise from prior business acquisitions. The fair values are based on discounted cash flow analyses reflecting the possible achievement of specified performance measures or events and captures the contractual nature of the contingencies, commercial risk, and the time value of money. Contingent consideration obligations are classified in the Consolidated Balance Sheets as accrued expense (short-term) and other liabilities (long-term), as appropriate based on the contractual payment dates.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis are summarized as follows:

						Contingent Consideration
Balance at March 31, 2022						$	10,550
Additions						8,302
Payments						(80)
Reductions and adjustments						(3,100)
Foreign currency translation adjustments						6
Balance at March 31, 2023						$	15,678
Additions						1,313
Payments						(5,967)
Foreign currency translation adjustments						(24)
Balance at March 31, 2024						$	11,000

Additions of contingent consideration obligations during fiscal year 2024 and 2023 were primarily related to our fiscal year 2024 and 2023 acquisitions. 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. Refer to Note 3 titled, "Business Acquisitions and Divestitures" for more information.

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

Amounts in Accumulated Other Comprehensive Income (Loss) are presented net of the related tax. Foreign Currency Translation is not adjusted for income taxes. Accumulated other comprehensive income (loss) shown in our Consolidated Statements of Shareholders' Equity and changes in our balances, net of tax, for the years ended March 31, 2024, 2023 and 2022 were as follows:

			Defined Benefit Plans (1)									Foreign Currency Translation (2)									Total Accumulated Other Comprehensive Income (Loss)
			2024			2023			2022			2024			2023			2022			2024			2023			2022
Beginning Balance			$	12		$	1,276		$	(5,519)		$	(320,722)		$	(211,084)		$	(55,724)		$	(320,710)		$	(209,808)		$	(61,243)
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) The amortization (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.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

21. 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,
Fiscal 2024
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
Fiscal 2023
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

Description						Balance at Beginning of Period						Charges to Costs and Expenses									Charges to Other Accounts									Deductions									Balance at End of Period
(in thousands)
Year ended March 31, 2024
Deducted from asset accounts:
Allowance for credit losses (1)						$	19,284					$	11,240								$	(96)		(3)						$	(7,444)		(4)						$	22,984
Inventory valuation reserve						35,601						8,204			(2)						88			(3)						—									43,893
Deferred tax asset valuation allowance						20,315						6,765									52			(3)						(758)									26,374
Recorded within liabilities:
Casualty loss reserves						$	30,437					$	7,884								$	(2,389)								$	(5,196)								$	30,736
Year ended March 31, 2023
Deducted from asset accounts:
Allowance for credit losses (1)						$	19,875					$	6,991								$	247		(3)						$	(7,829)		(4)						$	19,284
Inventory valuation reserve						22,617						12,652			(2)						332			(3)						—									35,601
Deferred tax asset valuation allowance						24,691						1,733									(530)			(3)						(5,579)									20,315
Recorded within liabilities:
Casualty loss reserves						$	26,126					$	7,829								$	2,040								$	(5,558)								$	30,437
Year ended March 31, 2022
Deducted from asset accounts:
Allowance for trade accounts receivable (1)						$	11,355					$	12,962								$	665		(3)						$	(5,107)		(4)						$	19,875
Inventory valuation reserve						19,778						2,611			(2)						228			(3)						—									22,617
Deferred tax asset valuation allowance						14,143						2,888									8,906			(3)						(1,246)									24,691
Recorded within liabilities:
Casualty loss reserves						$	23,283					$	7,069								$	44								$	(4,270)								$	26,126

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

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

(3) Change in foreign currency exchange rates and acquired reserves.

(4) Uncollectible accounts written off, net of recoveries.