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)						51
			Consolidated Financial Statements:
			Consolidated Balance Sheets						53
			Consolidated Statements of Income						54
			Consolidated Statements of Comprehensive Income (Loss)						55
			Consolidated Statements of Cash Flows						56
			Consolidated Statements of Shareholder's Equity						57
			Notes to Consolidated Financial Statements						58
			Financial Statement Schedule:
			Schedule II - Valuation of Qualifying Accounts						97

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, 2025 and 2024, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2025, 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, 2025, 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, 2025 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 Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Description of the Matter			Uncertain Tax Positions As discussed in Note 10 to the consolidated financial statements, the Company received two notices of deficiency 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.

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

/s/ Ernst & Young LLP

Cleveland, Ohio

May 29, 2025

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

March 31,						2025						2024
Assets
Current assets:
Cash and cash equivalents						$	171,701					$	207,020
Accounts receivable (net of allowances of $24,354 and $22,984, respectively)						1,043,961						1,008,315
Inventories, net						581,329						674,535
Prepaid expenses and other current assets						203,774						174,349
Current assets held for sale						—						804,904
Total current assets						2,000,765						2,869,123
Property, plant, and equipment, net						1,956,544						1,765,180
Lease right-of-use assets, net						156,388						173,201
Goodwill						4,095,678						4,070,712
Intangibles, net						1,854,390						2,119,282
Other assets						83,046						66,199
Total assets						$	10,146,811					$	11,063,697
Liabilities and equity
Current liabilities:
Accounts payable						$	280,770					$	251,723
Accrued income taxes						21,456						13,640
Accrued payroll and other related liabilities						192,677						164,831
Short-term lease obligations						34,202						31,239
Short term indebtedness						125,000						85,938
Accrued expenses and other						368,068						319,744
Current liabilities held for sale						—						64,012
Total current liabilities						1,022,173						931,127
Long-term indebtedness						1,918,701						3,120,162
Deferred income taxes, net						403,654						479,688
Long-term lease obligations						124,637						145,828
Other liabilities						61,889						71,546
Total liabilities						$	3,531,054					$	4,748,351
Commitments and contingencies (see Note 12)
Ordinary shares, with $0.001 par value; 500,000 shares authorized; 98,301 and 98,883 ordinary shares issued and outstanding, respectively						4,420,413						4,543,176
Retained earnings						2,475,330						2,087,645
Accumulated other comprehensive loss						(292,338)						(328,657)
Total shareholders’ equity						6,603,405						6,302,164
Noncontrolling interests						12,352						13,182
Total equity						6,615,757						6,315,346
Total liabilities and equity						$	10,146,811					$	11,063,697

See notes to consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share amounts)

Years Ended March 31,						2025						2024						2023
Revenues:
Product						$	2,871,604					$	2,763,954					$	2,363,754
Service						2,587,911						2,374,747						2,172,512
Total revenues						5,459,515						5,138,701						4,536,266
Cost of revenues:
Product						1,514,275						1,516,082						1,271,363
Service						1,542,476						1,404,459						1,284,177
Total cost of revenues						3,056,751						2,920,541						2,555,540
Gross profit						2,402,764						2,218,160						1,980,726
Operating expenses:
Selling, general, and administrative						1,334,276						1,252,318						1,090,663
Research and development						107,648						103,679						98,477
Illinois EO litigation settlement						48,150						—						—
Restructuring expenses						46,049						26,045						485
Total operating expenses						1,536,123						1,382,042						1,189,625
Income from operations						866,641						836,118						791,101
Non-operating expenses, net:
Interest expense						86,261						144,351						107,956
Interest and miscellaneous (income) expense						(8,402)						(11,043)						2,879
Gain on sale of businesses and equity investment, net						(7,425)						—						—
Total non-operating expenses, net						70,434						133,308						110,835
Income from continuing operations before income tax expense						796,207						702,810						680,266
Income tax expense						184,650						149,530						124,069
Income from continuing operations, net of income tax						611,557						553,280						556,197
Income (loss) from discontinued operations, net of income tax						4,517						(173,201)						(450,384)
Net income						616,074						380,079						105,813
Less: Net income (loss) attributable to noncontrolling interests						1,433						1,840						(1,217)
Net income attributable to shareholders						$	614,641					$	378,239					$	107,030
Net income (loss) per share attributable to shareholders - Basic:
Continuing Operations						$	6.19					$	5.58					$	5.59
Discontinued Operations						$	0.05					$	(1.75)					$	(4.52)
Total						$	6.24					$	3.83					$	1.07
Net income (loss) per share attributable to shareholders - Diluted:
Continuing Operations						$	6.16					$	5.55					$	5.56
Discontinued Operations						$	0.05					$	(1.74)					$	(4.49)
Total						$	6.20					$	3.81					$	1.07
Cash dividends declared per ordinary share outstanding						$	2.23					$	2.03					$	1.84

See notes to consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

Years Ended March 31,						2025						2024						2023
Net income						$	616,074					$	380,079					$	105,813
Less: Net income (loss) attributable to noncontrolling interests						1,433						1,840						(1,217)
Net income attributable to shareholders						$	614,641					$	378,239					$	107,030
Other comprehensive income (loss)
Defined benefit plan changes (net of taxes of $(144), $(155), and $521, respectively)						149						(736)						(1,264)
Change in cumulative foreign currency translation adjustment						36,170						(7,211)						(109,638)
Total other comprehensive income (loss) attributable to shareholders						36,319						(7,947)						(110,902)
Comprehensive income (loss) attributable to shareholders						$	650,960					$	370,292					$	(3,872)

See notes to consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

Years Ended March 31,						2025						2024						2023
Operating activities:
Net income						$	616,074					$	380,079					$	105,813
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, and amortization						476,215						565,244						552,897
Deferred income taxes						(76,546)						(131,412)						(185,913)
Share-based compensation expense						57,397						56,535						38,951
Loss on the disposal of property, plant, equipment, and intangibles, net						5,735						24,997						22,193
Loss on classification as held for sale						—						206,444						—
Loss (gain) on sale of businesses and investments, net						6,444						327						(67)
Amortization of inventory fair value adjustments						—						4,822						7,363
Goodwill impairment loss						—						—						490,565
Other items						(3,745)						12,316						(24,832)
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable, net						(28,815)						(128,069)						(133,304)
Inventories, net						73,072						(37,450)						(123,921)
Other current assets						(50,272)						(1,552)						(24,086)
Accounts payable						33,589						(18,962)						53,342
Accruals and other, net						38,939						39,955						(22,054)
Net cash provided by operating activities						1,148,087						973,274						756,947
Investing activities:
Purchases of property, plant, equipment, and intangibles, net						(370,091)						(360,326)						(361,969)
Proceeds from the sale of property, plant, equipment, and intangibles						9,195						7,381						14,587
Proceeds from the sale of businesses						814,558						9,458						6,624
Proceeds from the sale of investments						—						3,882						—
Purchases of equity investments and convertible notes						(10,750)						(1,500)						—
Acquisition of businesses, net of cash acquired						(54,139)						(546,256)						(42,572)
Net cash provided by (used in) investing activities						388,773						(887,361)						(383,330)
Financing activities:
Payments on term loans						(638,125)						(60,000)						(156,875)
Payments on Private Placement Senior Notes						(80,000)						—						(91,000)
(Payments) proceeds under credit facilities, net						(446,304)						181,486						241,657
Deferred financing fees and debt issuance costs						(2,316)						—						—
Acquisition related deferred or contingent consideration						(355)						(6,242)						(1,471)
Repurchases of ordinary shares						(211,321)						(11,765)						(308,565)
Cash dividends paid to ordinary shareholders						(219,875)						(200,570)						(183,498)
Distributions to noncontrolling interest holders						(2,069)						(1,561)						(794)
Contributions from noncontrolling interest holders						2,532						2,994						—
Stock option and other equity transactions, net						25,469						10,472						1,828
Net cash used in financing activities						(1,572,364)						(85,186)						(498,718)
Effect of exchange rate changes on cash and cash equivalents						185						(2,064)						(14,862)
Decrease in cash and cash equivalents						(35,319)						(1,337)						(139,963)
Cash and cash equivalents at beginning of period						207,020						208,357						348,320
Cash and cash equivalents at end of period						$	171,701					$	207,020					$	208,357

See notes to consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(dollars 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, 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
Comprehensive income:
Net income			—			—			614,641			—			1,433			616,074
Other comprehensive income			—			—			—			36,319			—			36,319
Repurchases of ordinary shares			(1,002)			(205,633)			(7,081)			—			—			(212,714)
Equity compensation programs and other			420			82,870			—			—			—			82,870
Cash dividends – $2.23 per ordinary share			—			—			(219,875)			—			—			(219,875)
Distributions to noncontrolling interest holders			—			—			—			—			(2,069)			(2,069)
Contributions from noncontrolling interest holders			—			—			—			—			2,532			2,532
Divestiture of joint venture interest			—			—			—			—			(2,639)			(2,639)
Other changes in noncontrolling interest			—			—			—			—			(87)			(87)
Balance at March 31, 2025			98,301			$	4,420,413		$	2,475,330		$	(292,338)		$	12,352		$	6,615,757

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; services, including equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair, laboratory testing, and outsourced reprocessing; 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 divestiture of 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 financial statements of the Company and its wholly-owned and majority-owned subsidiaries. We eliminate intercompany accounts and transactions when we consolidate these financial statements. 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. Our reporting currency is United States Dollars (USD).

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 $12,500 in contingent payment should the Dental business achieve certain revenue targets in fiscal 2025. The transaction was structured as an equity sale and closed on May 31, 2024. 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 as income (loss) from discontinued operations in the Consolidated Statements of Income for all periods presented, and we classified the Dental segment's assets and liabilities as held for sale for the year ended March 31, 2024 in the accompanying Consolidated Balance Sheets. Due to the transaction closing in the first quarter of fiscal 2025, the held for sale assets and liabilities were classified as current as of March 31, 2024. Our Consolidated Statements of Cash Flows include the financial results of the Dental segment through the date of sale on May 31, 2024. 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,						2025						2024						2023
Cash paid during the year for:
Interest						$	89,401					$	142,167					$	108,470
Income taxes						273,611						271,274						254,661
Cash received during the year for income tax refunds						9,514						19,175						2,315

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, 2025, 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 2025, we recognized revenue of $65,056 that was included in our contract liability balance at the beginning of the period. During fiscal 2024, we recognized revenue of $66,690 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, 2025, the transaction price allocated to remaining performance obligations was approximately $1,658,025. We expect to recognize approximately 51% of the transaction price within one year and approximately 40% 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, 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
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 $7,160 and $7,094 for the years ended March 31, 2025 and 2024, respectively. Total interest expense for the years ended March 31, 2025, 2024, and 2023 was $86,261, $144,351, and $107,956, 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. Changes in the fair value of these investments are recorded in the Interest and miscellaneous (income) expense line of the Consolidated Statements of Income. Investments without readily determinable fair values are measured at cost, less any impairment, adjusted for changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. These investments are included in Other assets on our Consolidated Balance Sheets.

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.”

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

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.”

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 foreign currency forward 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 $19,949, $25,474, and $21,668 of advertising costs during the years ended March 31, 2025, 2024, and 2023, 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 2025
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.						Fourth Quarter Fiscal 2025						We adopted this standard in fiscal 2025. Refer to Note 13 titled, "Business Segment Information" for enhanced disclosures.
Standards that have not yet been adopted.
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.
ASU 2024-03 "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses."						November 2024						The standard provides guidance to enhance disclosures related to the disaggregation of income statement expenses. The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses which includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. The standard also requires amounts that are already required to be disclosed under U.S. GAAP in the same disclosure as the other disaggregation requirements, disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and disclosure of the total amount of selling expenses and, in annual reporting periods, an entity's definition of selling expenses. The amendments in this standard are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.						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

In May 2024, 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. Approximately 300 positions have been eliminated. These restructuring actions are designed to enhance profitability and improve efficiency.

The following table summarizes our total pre-tax restructuring expenses recorded in fiscal 2025 and 2024 related to the Restructuring Plan:

Restructuring Plan
Years Ended March 31,																		2025						2024
Severance and other compensation related costs																		$	29,030					$	678
Lease and other contract termination and other costs																		12,358						—
Product rationalization (1)																		16,232						18,320
Accelerated depreciation and amortization and asset impairment																		4,655						25,392
Total Restructuring Expense																		$	62,275					$	44,390

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

The Restructuring Plan expenses incurred during fiscal 2025 and 2024 primarily related to actions taken in our Healthcare and AST segments. Total pre-tax restructuring expense of $106,665 has been recorded relating to the Restructuring Plan since inception, of which $34,552 has been recorded in Cost of revenues. Additional costs with respect to our Restructuring Plan in fiscal 2026 are not expected to be significant.

Liabilities related to restructuring activities are recorded as current liabilities in the accompanying Consolidated Balance Sheets within "Accrued payroll and other related liabilities" and "Accrued expenses and other." The following table summarizes our restructuring liability balances:

						Restructuring Plan
Balance at March 31, 2024						$	678
Fiscal 2025 charges						41,388
Payments						(23,695)
Balance at March 31, 2025						$	18,371

3. BUSINESS ACQUISITIONS AND DIVESTITURES

Fiscal 2025 Acquisitions

During fiscal 2025, we completed several tuck-in acquisitions which continued to expand our product and service offerings in the Healthcare and AST segments. Total aggregate consideration was approximately $54,139.

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 2024 Acquisitions

On August 2, 2023 we purchased the surgical instrumentation, laparoscopic instrumentation and sterilization container assets from Becton, Dickinson and Company (NYSE: BDX) ("BD"). The acquired assets from BD were integrated into our Healthcare segment. The acquisition was 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."

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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 (2)						Final
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 trade names (15 years estimated useful life) as of the acquisition date.

(2) No additional adjustments made during fiscal 2025.

In addition to the acquisition of assets from BD, we completed two 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.

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.

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 2025, 2024, and 2023 acquisitions.

			Fiscal Year 2025 (1)						Fiscal Year 2024						Fiscal Year 2023
			All Acquisitions						Other Acquisitions (Excluding BD)						All Acquisitions
Cash			$	—					$	417					$	—
Accounts receivable			1,299						1,537						2,405
Inventory			1,228						654						12,342
Property, plant, and equipment			21,240						153						2,131
Lease right-of-use assets, net			4,571						—						667
Other assets			4,341						5						177
Intangible assets			15,913						2,940						30,185
Goodwill			10,610						2,503						4,863
Total assets			59,202						8,209						52,770
Current liabilities			(2,118)						(643)						(2,170)
Non-current liabilities			(2,945)						(651)						(473)
Total liabilities			(5,063)						(1,294)						(2,643)
Net assets			$	54,139					$	6,915					$	50,127

(1) Purchase price allocation is preliminary as of March 31, 2025, as valuations have not been finalized.

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 2025, 2024 and fiscal 2023 acquisitions was $425, $195,667 and $4,863, respectively.

Acquisition related transaction and integration costs totaled $11,159, $25,526, and $23,486 for the fiscal years ended March 31, 2025, 2024, and 2023, respectively. Acquisition and integration expenses declined in fiscal 2025 as we completed the integration work associated with the fiscal 2024 acquisition of assets from BD and the fiscal 2023 acquisition of Cantel Medical which drove the higher level of spending in prior years. These costs are included in Selling, general, and administrative expenses in the Consolidated Statements of Income and include, but are not limited to, investment banker, advisory, legal and other professional fees, and certain employee-related expenses.

Divestitures

Fiscal 2025

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 was structured as an equity sale and closed on May 31, 2024. The disposal of the Dental segment met the criteria to be presented as a discontinued operation. 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. We recorded net proceeds of $41,894 and recognized a pre-tax gain on the sale of $19,263 in fiscal 2025. The business generated approximately $35,000 in revenues in 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.

4. 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 $12,500 in contingent payment should the Dental business achieve certain revenue targets in fiscal 2025. The transaction was structured as an equity sale and closed on May 31, 2024. 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 as income (loss) from discontinued operations in the Consolidated Statements of Income for all periods presented, and we classified the Dental segment's assets and liabilities as held for sale as of March 31, 2024 in the accompanying Consolidated Balance Sheets. Due to the transaction closing in the first quarter of fiscal 2025, the held for sale assets and liabilities were classified as current as of March 31, 2024. Our Consolidated Statements of Cash Flows include the financial results of the Dental segment through the date of sale on May 31, 2024. A majority of the proceeds received from the sale were utilized 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:

												2024
Assets
Assets held for sale:
Accounts receivable, net												$	48,590
Inventories, net												89,345
Property, plant, and equipment, net												73,395
Lease right-of-use assets, net												22,822
Intangibles, net												770,731
Prepaid expenses and other assets												2,953
Loss accrued on classification as held for sale												(202,932)
Total assets held for sale												$	804,904
Liabilities
Liabilities held for sale:
Accounts payable												$	10,580
Accrued income taxes												433
Accrued payroll and other related liabilities												13,683
Lease obligations												23,722
Accrued expenses and other												15,594
Total liabilities held for sale												$	64,012

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, 2025, 2024, and 2023:

Years Ended March 31,						2025						2024						2023
Revenues:
Product						$	63,936					$	407,027					$	421,573
Cost of revenues:
Product						35,146						226,934						242,607
Gross profit:						28,790						180,093						178,966
Operating expenses:
Selling, general, and administrative						13,466						199,511						208,213
Goodwill impairment loss						—						—						490,565
Research and development						369						2,960						3,104
Income (loss) from operations (1)						14,955						(22,378)						(522,916)
Non-operating expenses (income), net						1						(10)						2
Pre-tax loss on sale (2)						(13,995)						(206,444)						—
Income (loss) before income tax expense						959						(228,812)						(522,918)
Income tax benefit						(3,558)						(55,611)						(72,534)
Income (loss) from discontinued operations, net of income tax						$	4,517					$	(173,201)					$	(450,384)

(1) Income from operations for the year ended March 31, 2025 includes two months of operating results prior to the transaction close on May 31, 2024 and excludes depreciation and amortization of property, plant, equipment, and intangible assets subsequent to the held for sale classification as of March 2, 2024.

(2) Fiscal 2025 pre-tax loss on sale driven by sale price adjustments relating to working capital. Fiscal 2024 amount relates to accrued transaction costs and the estimated accrued loss included in held for sale as of March 31, 2024.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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, 2025, 2024, and 2023 were (371.0)%, 24.3%, and 13.9%, respectively. Our fiscal 2025 tax rate was driven by favorable discrete items. 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:

						2025						2024						2023
Operating activities of discontinued operations:
Depreciation, depletion, and amortization (1)						$	—					$	115,177					$	130,367
Goodwill impairment loss						—						—						490,565
Investing activities of discontinued operations:
Purchases of property, plant, equipment, and intangibles, net						$	(433)					$	(9,150)					$	(9,470)

(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.

5. GOODWILL AND INTANGIBLE ASSETS

Changes to the carrying amount of goodwill for the years ended March 31, 2025 and 2024 were as follows:

						Healthcare Segment						AST Segment						Life Sciences Segment												Total
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
Goodwill acquired						2,135						8,475						—												10,610
Measurement period adjustments to acquired goodwill						—						(517)						—												(517)
Divestiture						—						—						(11,560)												(11,560)
Foreign currency translation adjustments and other						6,263						19,855						315												26,433
Balance at March 31, 2025						$	2,509,308					$	1,415,442					$	170,928											$	4,095,678

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.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

During our annual reviews for fiscal 2025, 2024, and 2023, 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.

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:

						2025												2024
March 31,						Gross Carrying Amount						Accumulated Amortization						Gross Carrying Amount						Accumulated Amortization
Customer relationships						$	2,564,289					$	1,067,385					$	2,552,913					$	863,662
Non-compete agreements						15,064						14,984						15,511						15,234
Patents and technology						480,303						294,059						516,457						278,492
Trademarks and tradenames						247,902						105,053						251,098						90,362
Supplier relationships						54,800						26,487						54,800						23,747
Total						$	3,362,358					$	1,507,968					$	3,390,779					$	1,271,497

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, 2025 and March 31, 2024 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 2025, 2024 or 2023.

Total amortization expense for intangible assets was $276,192, $268,319, and $259,676 for the years ended March 31, 2025, 2024, and 2023, 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:

						2026						2027						2028						2029						2030
Estimated amortization expense						$	259,211					$	253,126					$	248,088					$	245,921					$	243,486

The estimated annual amortization expense presented in the preceding table has been calculated based upon March 31, 2025 currency exchange rates.

6. INVENTORIES, NET

Components of our inventories are presented in the following table.

March 31,						2025						2024
Raw materials						$	213,095					$	245,942
Work in process						83,079						98,304
Finished goods						334,928						374,182
Reserve for excess and obsolete inventory						(49,773)						(43,893)
Inventories, net						$	581,329					$	674,535

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,						2025						2024
Land and land improvements (1)						$	106,136					$	90,134
Buildings and leasehold improvements						832,121						724,492
Machinery and equipment						1,205,410						1,075,082
Information systems						282,068						256,671
Radioisotope						749,780						692,642
Construction in progress (1)						512,142						500,106
Total property, plant, and equipment						3,687,657						3,339,127
Less: accumulated depreciation and depletion						(1,731,113)						(1,573,947)
Property, plant, and equipment, net						$	1,956,544					$	1,765,180

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

Depreciation and depletion expense were $199,740, $181,722 and $165,019, for the years ended March 31, 2025, 2024, and 2023, 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, 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
Liabilities incurred during the period			627
Liabilities settled during the period			(92)
Accretion expense and change in estimate			324
Foreign currency and other			(145)
Balance at March 31, 2025			$	14,372

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, 2025 and 2024 was as follows:

						March 31, 2025						March 31, 2024
Short-term debt
Term loan, current portion						$	—					$	41,250
Delayed draw term loan, current portion						—						44,688
Private Placement Senior Notes						125,000						—
Total short-term debt						$	125,000					$	85,938
Long-term debt
Private Placement Senior Notes						$	549,215					$	751,433
Revolving Credit Facility						34,750						484,529
Deferred financing costs						(15,264)						(17,988)
Term loan						—						3,750
Delayed draw term loan						—						548,438
Senior Public Notes						1,350,000						1,350,000
Total long-term debt						$	1,918,701					$	3,120,162
Total debt						$	2,043,701					$	3,206,100

Revolving Credit Facility

On October 7, 2024, STERIS plc (“Parent”), STERIS Corporation, STERIS Limited ("Limited"), and STERIS Irish FinCo Unlimited Company (“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 $1,100,000 revolving credit facility (the “Revolving Credit Facility”), which replaced a prior credit agreement, dated as of March 19, 2021.

The Revolving Credit Agreement provides for revolving credit borrowings, swing line borrowings and letters of credit, with sublimits for swing line borrowings and letters of credit. The Revolving Credit Agreement may be increased in specified circumstances by up to $625,000 in the discretion of the lenders. The Revolving Credit Agreement matures on the date that is five years after October 7, 2024, and all unpaid borrowings, together with accrued and unpaid interest thereon, are repayable on that date. The Revolving Credit Facility bears interest from time to time, at either the Base Rate or the Relevant Rate, 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 Parent, as defined in the Revolving Credit Agreement. Base Rate Advances are payable quarterly in arrears and Term Benchmark Advances are payable at the end of the relevant interest period therefor, but in no event less frequently than every three months. Swingline borrowings bear interest at a rate to be agreed by the applicable swingline lender and the applicable borrower, subject to a cap in the case of swingline borrowings denominated in U.S. Dollars equal to the Base Rate plus the Applicable Margin for Base Rate Advances plus the Facility Fee. There is no premium or penalty for prepayment of Base Rate Advances, but prepayments of Term Benchmark Advances are generally subject to a breakage fee. Advances may be extended in U.S. Dollars or in specified alternative currencies (“Alternative Currency Advances”). Alternative Currency Advances are limited in the aggregate to the equivalent of $625,000.

As of March 31, 2025 a total of $34,750 of borrowings were outstanding under the Revolving Credit Facility, based on currency exchange rates as of March 31, 2025.

Term Loan and Delayed Draw Term Loan

On March 19, 2021, Parent, 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, which replaced an existing term loan agreement, dated as of November 18, 2020. Also on March 19, 2021, Parent, 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 in connection with STERIS’s acquisition of Cantel Medical. The Company used the proceeds

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

from the divestiture of the Dental segment to repay all outstanding amounts under the Term Loan Agreement and Delayed Draw Term Loan Agreement and such agreements expired on their terms.

Senior Public Notes

On April 1, 2021, FinCo 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 FinCo’s 2.700% Senior Notes due 2031 (the “2031 Notes”) and (ii) $675,000 aggregate principal amount of FinCo’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, among FinCo, as the issuer, Parent, STERIS Corporation and Limited (together Parent, STERIS Corporation and 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. Each of the Guarantors guaranteed the Senior Public Notes jointly and severally on a senior unsecured basis. The 2031 Notes will mature on March 15, 2031 and the 2051 Notes will mature on March 15, 2051. The Senior Public Notes will bear interest at the rates set forth above. Interest on the Senior Public Notes is payable on March 15 and September 15 of each year until their respective maturities.

Private Placement Senior Notes

Our outstanding Private Placement Senior Notes at March 31, 2025 and 2024 were as follows:

						Applicable Note Purchase Agreement						Maturity Date						U.S. Dollar Value at March 31, 2025						U.S. Dollar Value at March 31, 2024
$80,000 Senior notes at 3.35%						2012 Private Placement						December 2024						—						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						64,967						64,708
$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						21,656						21,569
£45,000 Senior notes at 3.04%						2017 Private Placement						February 2029						58,212						56,799
€19,000 Senior notes at 2.30%						2017 Private Placement						February 2032						20,573						20,491
£30,000 Senior notes at 3.17%						2017 Private Placement						February 2032						38,807						37,866
Total Senior Notes																		$	674,215					$	751,433

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 Parent, 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

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

“2015 Amendment”). Also on March 19, 2021, Limited, as issuer, and Parent, 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, 2025, we were in compliance with all financial covenants associated with our indebtedness.

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

2026			$	125,000
2027			114,967
2028			150,000
2029			124,867
2030 and thereafter			1,544,131
Total			$	2,058,965

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,						2025						2024
Accrued payroll and other related liabilities:
Compensation and related items						$	69,752					$	48,152
Accrued vacation/paid time off						16,214						16,140
Accrued bonuses						66,499						61,669
Accrued employee commissions						37,435						35,980
Other post-retirement benefits obligations-current portion						950						994
Other employee benefit plans' obligations-current portion						1,827						1,896
Total accrued payroll and other related liabilities						$	192,677					$	164,831
Accrued expenses and other:
Deferred revenues						$	57,502					$	70,460
Service liabilities						107,755						92,590
Self-insured and related risk reserves-current portion						15,055						13,303
Illinois EO litigation settlement(1)						48,150						—
Accrued dealer commissions						32,074						33,277
Accrued warranty						16,340						15,388
Asset retirement obligation-current portion						559						510
Accrued interest						7,814						11,109
Other						82,819						83,107
Total accrued expenses and other						$	368,068					$	319,744
Other liabilities:
Self-insured risk reserves-long-term portion						$	24,015					$	21,646
Other post-retirement benefits obligations-long-term portion						4,828						5,159
Defined benefit pension plans obligations-long-term portion						3,313						2,727
Other employee benefit plans obligations-long-term portion						1,328						1,321
Accrued long-term income taxes						1,880						6,508
Asset retirement obligation-long-term portion						13,813						13,148
Other						12,712						21,037
Total other liabilities						$	61,889					$	71,546

(1) Pursuant to the terms of our settlement agreement, settlement funds have been deposited into escrow. The corresponding escrow asset is included in the Prepaid expenses and other current assets line of our Consolidated Balance Sheets.

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,						2025						2024						2023
National statutory tax rate						12.5		%				12.5		%				12.5		%
Change in accruals for uncertain tax positions						(0.1)		%				—		%				—		%
U.S. state and local taxes, net of federal income tax expense (benefit)						2.8		%				2.2		%				(1.1)		%
Change in valuation allowances						0.7		%				0.9		%				—		%
U.S. research and development credit						(0.6)		%				(0.7)		%				(0.4)		%
U.S. foreign income tax credit						(0.7)		%				(0.9)		%				(0.8)		%
Difference in non-Ireland tax rates						9.9		%				8.5		%				8.9		%
U.S. federal audit adjustments						(0.3)		%				0.1		%				—		%
Excess tax benefit for equity compensation						(0.8)		%				(0.7)		%				(0.6)		%
Tax rate changes on deferred tax assets and liabilities						—		%				(0.3)		%				—		%
U.S. tax reform impact, GILTI and FDII						(0.3)		%				(0.2)		%				(0.3)		%
All other, net						0.1		%				(0.1)		%				—		%
Total Provision for Income Taxes						23.2		%				21.3		%				18.2		%

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, FinCo, which has a material impact on the relative amount of income before income taxes by geography. In each of the years presented, 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 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 2025, income from continuing operations before income taxes, in the United States and Other locations, was impacted by $62,275 of expenses associated with restructuring. This resulted in approximately $6,049 of an increase to our valuation allowance in Other locations.

• 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.

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,						2025						2024						2023
United States operations						$	559,498					$	491,890					$	451,901
Ireland operations						62,515						51,510						62,664
Other locations operations						174,194						159,410						165,701
						$	796,207					$	702,810					$	680,266

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

Years Ended March 31,						2025						2024						2023
Current:
United States federal						$	145,178					$	133,498					$	128,793
United States state and local						32,359						26,230						31,073
Ireland						12,885						7,639						8,837
Other locations						51,280						51,283						59,422
						241,702						218,650						228,125
Deferred:
United States federal						(43,096)						(43,484)						(39,030)
United States state and local						(5,036)						(11,222)						(43,843)
Ireland						(588)						(923)						(864)
Other locations						(8,332)						(13,491)						(20,319)
						(57,052)						(69,120)						(104,056)
Total Provision for Income Taxes						$	184,650					$	149,530					$	124,069

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:

						2025						2024
Unrecognized Tax Benefits Balance at April 1						$	2,150					$	2,230
Increases for tax provisions of current year						—						—
Decreases for tax provisions of prior year						(339)						(80)
Unrecognized Tax Benefits Balance at March 31						$	1,811					$	2,150

We recognized interest and penalties related to uncertain tax positions in the provision for income taxes. As of March 31, 2025 and 2024, we had $70 and $143 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 $1,880. 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, 2025.

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 Rica Tax Holiday is $5,300 (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, 2025 and 2024 were as follows:

March 31,						2025						2024
Deferred Tax Assets:
Post-retirement benefit accrual						$	1,388					$	1,480
Compensation						29,684						19,582
Net operating loss carryforwards						35,546						37,096
Accrued expenses						13,768						13,667
Insurance						2,126						2,817
Illinois EO Litigation Settlement						12,022						—
Deferred income						24,092						20,393
Bad debt						3,764						3,868
Research & experimental expenditures						40,476						28,347
Operating leases (1)						37,583						47,625
Foreign tax credit carryforwards						8,144						32,137
Other						16,037						21,258
Deferred Tax Assets						224,630						228,270
Less: Valuation allowance						30,607						26,374
Total Deferred Tax Assets						194,023						201,896
Deferred Tax Liabilities:
Depreciation and depletion						96,995						92,358
Operating leases (1)						36,610						46,657
Intangibles						440,988						518,814
Pension						3,795						3,889
Other						2,563						2,559
Total Deferred Tax Liabilities						580,951						664,277
Net Deferred Tax Liabilities						$	(386,928)					$	(462,381)

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

At March 31, 2025, we had U.S. federal operating loss carryforwards of $7,179, which remain subject to a 20 year carryforward period. Additionally, we had non-U.S. operating loss carry forwards of $124,540. Although the majority of the

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

non-U.S. carryforwards have indefinite expiration periods, those carryforwards that have definite expiration periods will expire if unused between fiscal years 2026 and 2046. In addition, we have recorded pre-valuation allowance tax benefits of $2,211 related to U.S. state operating loss carryforwards. If unused, these state operating loss carryforwards will expire between fiscal years 2026 and 2046. At March 31, 2025, we had $10,462 of pre-valuation allowance tax credit carryforwards of which there are no offsets of deferred tax liabilities related to German branches of a U.S. subsidiary remaining. 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 $30,607 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 2025 by $4,233.

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 $2,400,000 at March 31, 2025. 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 OECD announced the OECD/G20 Inclusive Framework on BEPS, 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 (GloBE), which calls for the taxation of large corporations at a minimum rate of 15%. The OECD continues to release additional guidance on the global minimum tax. The global minimum tax rules were effective from our fiscal year beginning April 1, 2024. We do not expect the impact to be material to the Company's consolidated financial statements.

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, 2025 and 2024, 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
			2025						2024						2025						2024
Change in Benefit Obligations:
Benefit Obligations at Beginning of Year			$	96,375					$	93,640					$	6,153					$	7,191
Service cost			719						659						—						—
Interest cost			4,239						4,120						281						313
Actuarial gain			(9,119)						(140)						(578)						(441)
Benefits and expenses			(4,602)						(4,327)						(78)						(910)
Employee contributions			961						1,028						—						—
Curtailments/settlements			4						(355)						—						—
Impact of foreign currency exchange rate changes			2,099						1,750						—						—
Benefit Obligations at End of Year			90,676						96,375						5,778						6,153
Change in Plan Assets:
Fair Value of Plan Assets at Beginning of Year			113,913						107,089						—						—
Actual return on plan assets			(4,876)						3,043						—						—
Employer contributions			1,227						5,253						78						910
Employee contributions			961						1,028						—						—
Benefits and expenses paid			(4,498)						(4,280)						(78)						(910)
Curtailments/settlements			—						(324)						—						—
Impact of foreign currency exchange rate changes			2,565						2,104						—						—
Fair Value of Plan Assets at End of Year			109,292						113,913						—						—
Funded Status of the Plans			$	18,616					$	17,538					$	(5,778)					$	(6,153)

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

						Defined Benefit Pension Plans												Other Post-Retirement Benefits Plan
						2025						2024						2025						2024
Non-current assets						$	21,929					$	20,265					$	—					$	—
Current liabilities						—						—						(950)						(994)
Non-current liabilities						(3,313)						(2,727)						(4,828)						(5,159)
Net assets (liabilities)						$	18,616					$	17,538					$	(5,778)					$	(6,153)

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, 2025, was approximately $4,007 and $(599), 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, 2025 and 2024:

						Defined Benefit Pension Plans
						2025						2024
Aggregate fair value of plan assets						$	109,292					$	113,913
Aggregate accumulated benefit obligations						90,676						96,375
Aggregate projected benefit obligations						90,676						96,375

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
						2025						2024						2023						2025						2024						2023
Service cost						$	719					$	659					$	1,276					$	—					$	—					$	—
Interest cost						4,239						4,120						3,054						281						313						256
Expected return on plan assets						(4,911)						(6,051)						(3,817)						—						—						—
Prior service cost recognition						44						47						48						—						—						—
Net amortization and deferral						33						15						19						132						209						329
Curtailments/settlements						—						(1)						(49)						—						—						—
Net periodic benefit (credit) cost						$	124					$	(1,211)					$	531					$	413					$	522					$	585
Recognized in other comprehensive loss (income) before tax:
Net loss (gain) occurring during year						$	552					$	2,562					$	1,716					$	578					$	441					$	807
Amortization of prior service credit						(93)						(102)						(263)						—						—						—
Amortization of net loss						34						10						—						(132)						(209)						(329)
Total recognized in other comprehensive loss (income)						493						2,470						1,453						446						232						478
Total recognized in total benefits cost and other comprehensive loss (income)						$	617					$	1,259					$	1,984					$	859					$	754					$	1,063

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:

						2025						2024
Discount Rate:
Synergy Health plc Retirement Benefits Scheme						4.80		%				4.80		%
Isotron BV Pension Plan						3.80		%				3.40		%
Synergy Health Daniken AG						1.10		%				1.50		%
Synergy Health Radeberg						3.80		%				3.80		%
Synergy Health Allershausen						2.82		%				3.50		%
Harwell Dosimeters Ltd Retirement Benefits Scheme						5.65		%				4.80		%
Other post-retirement plan						5.00		%				5.00		%

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

						2025						2024						2023
Discount Rate:
Synergy Health plc Retirement Benefits Scheme						5.80		%				4.70		%				2.80		%
Isotron BV Pension Plan						3.40		%				3.70		%				1.80		%
Synergy Health Daniken AG						1.10		%				1.50		%				2.05		%
Synergy Health Radeberg						2.00		%				2.00		%				2.00		%
Synergy Health Allershausen						2.20		%				2.20		%				2.20		%
Harwell Dosimeters Ltd Retirement Benefits Scheme						5.65		%				4.85		%				4.80		%
Other post-retirement plan						5.00		%				4.75		%				3.25		%
Expected Return on Plan Assets:
Synergy Health plc Retirement Benefits Scheme						5.30		%				6.10		%				3.20		%
Isotron BV Pension Plan						3.40		%				3.70		%				1.80		%
Synergy Health Daniken AG						1.10		%				1.50		%				1.95		%

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.

						2025						2024						2023
Healthcare cost trend rate – medical						8.50		%				7.50		%				7.50		%
Healthcare cost trend rate – prescription drug						8.50		%				7.50		%				7.50		%
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, 2025, the targeted allocation for the plans were approximately 30% equity investments and 70% 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, 2025 and 2024 by asset category is as follows:

						Fair Value Measurements at March 31, 2025
						Total						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Other Unobservable Inputs (Level 3)
Cash						$	376					$	376					$	—					$	—
Insured annuities						9,934						—						9,934						—
Insurance contracts						6,931						—						—						6,931
Common and collective trusts valued at net asset value:
Equity security trusts						39,764						—						—						—
Debt security trusts						52,287						—						—						—
Total Plan Assets						$	109,292					$	376					$	9,934					$	6,931

						Fair Value Measurements at March 31, 2024
						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

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 2025 due to the following:

						Insurance contracts
Balance at March 31, 2023						$	5,387
Gains (losses) related to assets still held at year-end						28
Transfers into Level 3						631
Foreign currency						64
Balance at March 31, 2024						$	6,110
Gains (losses) related to assets still held at year-end						100
Transfers into Level 3						607
Foreign currency						114
Balance at March 31, 2025						$	6,931

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. We anticipate fiscal 2026 contributions to approximate those of fiscal 2025.

Based upon the actuarial assumptions utilized to develop our benefit obligations at March 31, 2025, the following benefit payments are expected to be made to plan participants:

						Other Defined Benefit Pension Plans						Other Post-Retirement Benefits Plan
2026						$	4,838					$	950
2027						4,734						858
2028						4,849						760
2029						5,032						680
2030						5,275						606
2031 and thereafter						28,017						2,123

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 $270 and $339, during fiscal 2025 and fiscal 2024, 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 $1,406,483 at March 31, 2025. At March 31, 2025, the U.S. plan held 380,895 STERIS ordinary shares with a fair value of $86,330. We paid dividends of $897, $915, and $886 to the plan and participants on STERIS shares held by the plan for the years ended March 31, 2025, 2024, and 2023, respectively. We contributed approximately $44,676, $39,600, and $36,564, to the defined contribution plans for the years ended March 31, 2025, 2024, and 2023, 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 $1,120 and $1,129 at March 31, 2025 and March 31, 2024, 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 record a liability for such contingencies to the extent we conclude that their occurrence is both probable and estimable and believe we have adequately reserved for our current litigation and claims that are probable and estimable. In the event that the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. We consider many factors in making these assessments, including the professional judgment of experienced members of management and our legal counsel. We have made estimates as to the likelihood of unfavorable outcomes and the amounts of such potential losses. Further, we believe that the ultimate outcome of 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. For certain types of claims, we presently maintain insurance coverage for bodily injury and third party property damage and other liability coverages in amounts and with retentions and deductibles that we believe are prudent, and we may also have contractual indemnification rights against certain liabilities, but there can be no assurance that either will be applicable or adequate to cover adverse outcomes of claims or legal proceedings against us. We record expected recoveries under applicable contracts when we are assured of recovery.

Civil, criminal, regulatory or other proceedings involving our products or services, including the matters discussed herein, 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. Further, the Company may incur material defense costs as a result of such proceedings, which may also divert management attention from other priorities.

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.

Illinois EO Litigation Settlement

A subsidiary of the Company has been sued in Illinois state court by individual plaintiffs who work or reside near a facility in Lake County, Illinois, where the subsidiary provided sterilization services using ethylene oxide (“EO”) from January 2005 to September 2008. The plaintiffs have filed separate suits in which each alleges that they have been diagnosed with one or more types of cancer, allegedly resulting from exposure to EO emissions from the facility into the ambient air.

On March 3, 2025, the Company entered into binding confidential Term Sheets with plaintiffs’ counsel, as well as settlement agreements with several plaintiffs which were at the time scheduled for trial in fiscal 2026. The Term Sheets and the

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

settlement agreements are expected to lead to resolution of substantially all of the claims for personal injury related to EO that are currently pending in the Circuit Court of Cook County, Illinois.

Pursuant to the Term Sheets, the Company has entered into and expects to enter into additional settlement agreements to pay up to $48,150 to settle claims. We recorded a charge for this amount, the liability for which is included in the Accrued expenses and other line within our Consolidated Balance Sheets. None of the Term Sheets nor any such settlement agreements are an admission of liability or that emissions from the Waukegan, Illinois facility ever posed a safety hazard to the people who live or work in the surrounding areas. The Term Sheets call for establishment of a claims administration process that includes guidelines and procedures for administering individual settlements, which process is expected to continue through the fourth quarter of fiscal 2026.

The Company may exercise walkaway rights with respect to the claims covered by the Term Sheets if certain agreed terms are not fulfilled, including if a substantial majority of plaintiffs in such cases do not agree to settle or are disqualified under the applicable terms or the resulting settlements are ultimately not approved by the court. In the event it exercises its walkaway rights, the Company is prepared to continue to defend itself in the litigation and reserves all legal and factual defenses against such claims.

Additional Information

For additional information regarding these matters, see the risks and uncertainties described under the titles "product and service related regulations and claims" and "business and operational risks" in Item 1A. of this Annual Report on Form 10-K.

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, 2025 and 2024, our commercial commitments totaled $127,396 and $110,402, 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 $10,875 and $9,975 of the March 31, 2025 and 2024 totals, respectively, relate to letters of credit required as security under our self-insured risk retention policies.

As of March 31, 2025, we had minimum purchase commitments with suppliers for raw material purchases totaling $64,263. As of March 31, 2025, we also had commitments of $77,927 for long term construction contracts.

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, 2025 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.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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, 2025						March 31, 2024						March 31, 2023
Fixed operating lease expense			$	46,482					$	41,330					$	39,473
Variable operating lease expense			21,299						24,441						18,581
Total operating lease expense			$	67,781					$	65,771					$	58,054

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

			Year Ended						Year Ended						Year Ended
			March 31, 2025						March 31, 2024						March 31, 2023
Cash paid for amounts included in the measurement of operating lease liabilities			$	46,541					$	46,946					$	45,249
Right-of-use assets obtained in exchange for operating lease obligations, net			$	29,821					$	24,668					$	53,099

Maturities of lease liabilities at March 31, 2025 are as follows:

			March 31, 2025
2026			$	41,391
2027			32,753
2028			32,753
2029			17,533
2030 and thereafter			82,663
Total operating lease payments			207,093
Less imputed interest			48,254
Total operating lease liabilities			$	158,839

In the preceding table, the future minimum annual rentals payable under noncancelable leases denominated in foreign currencies have been calculated using March 31, 2025 foreign currency exchange rates.

Supplemental information related to operating leases is as follows:

			March 31,						March 31,
			2025						2024
Weighted-average remaining lease term of operating leases			9.1 years						9.9 years
Weighted-average discount rate of operating leases			4.5		%				4.4		%

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 divestiture of 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 products also

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

Our chief operating decision maker ("CODM") is our President and Chief Executive Officer ("CEO"). The CEO is responsible for performance assessment and resource allocation. The CEO regularly receives discrete financial information about each reportable segment and uses this information to assess performance and allocate resources. This information includes Revenues and Cost of revenues; Selling, general, and administrative expenses; and Research and development expenses for each reportable segment.

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, 2025, revenues from a single Customer did not represent ten percent or more of the Healthcare, AST or Life Sciences segment revenues.

Information regarding our segments is presented in the following tables.

Year Ended March 31, 2025
						Healthcare						AST						Life Sciences						Corporate						Company
Revenues						$	3,878,671					$	1,038,573					$	542,271					$	—					$	5,459,515
Segment expenses
Cost of revenues						2,204,084						516,704						243,714
Selling, general, and administrative						609,974						52,485						59,755
Research and development						93,092						3,808						9,361
Total income from operations before adjustments						$	971,521					$	465,576					$	229,441					$	(399,033)					$	1,267,505
Less: Adjustments
Amortization of acquired intangible assets (1)																														273,784
Acquisition and integration related charges (2)																														11,159
Tax restructuring costs (3)																														54
Amortization of inventory and property "step up" to fair value (1)																														5,442
Restructuring charges (4)																														62,275
Illinois EO litigation settlement (5)																														48,150
Total income from operations																														$	866,641

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Year Ended March 31, 2024
						Healthcare						AST						Life Sciences						Corporate						Company
Revenues						$	3,613,019					$	953,980					$	571,702					$	—					$	5,138,701
Segment expenses
Cost of revenues						2,083,850						458,397						283,880
Selling, general, and administrative						568,040						51,698						58,218
Research and development						89,771						4,141						8,255
Total income from operations before adjustments						$	871,358					$	439,744					$	221,349					$	(348,497)					$	1,183,954
Less: Adjustments
Amortization of acquired intangible assets (1)																														266,420
Acquisition and integration related charges (2)																														25,526
Tax restructuring costs (3)																														620
Net loss on divestiture of businesses (1)																														873
Amortization of inventory and property "step up" to fair value (1)																														10,032
Restructuring charges (4)																														44,365
Total income from operations																														$	836,118

Year Ended March 31, 2023
						Healthcare						AST						Life Sciences						Corporate						Company
Revenues						$	3,085,131					$	914,431					$	536,704					$	—					$	4,536,266
Segment expenses
Cost of revenues						1,788,174						436,682						266,458
Selling, general, and administrative						506,262						43,804						52,608
Research and development						84,675						4,925						7,413
Total income from operations before adjustments						$	706,020					$	429,020					$	210,225					$	(264,974)					$	1,080,291
Less: Adjustments
Amortization of acquired intangible assets (1)																														256,355
Acquisition and integration related charges (2)																														23,486
Tax restructuring costs (3)																														661
Gain on fair value adjustment of acquisition related contingent consideration (1)																														(3,100)
Net loss on divestiture of businesses (1)																														(67)
Amortization of inventory and property "step up" to fair value (1)																														11,370
Restructuring charges (4)																														485
Total income from operations																														$	791,101

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(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".

(5) For more information regarding our Illinois EO litigation settlement, refer to Note 12 titled, "Commitments and Contingencies".

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 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,						2025						2024
Assets
Healthcare and Life Sciences						$	6,806,442					$	7,055,576
AST						3,340,369						3,203,217
Assets excluding assets held for sale						$	10,146,811					$	10,258,793

Years Ended March 31,						2025						2024						2023
Capital Expenditures
Healthcare and Life Sciences						$	142,845					$	114,164					$	98,585
AST						227,246						237,012						253,914
Total Capital Expenditures						$	370,091					$	351,176					$	352,499
Depreciation, Depletion, and Amortization
Healthcare and Life Sciences						$	334,212					$	322,244					$	306,377
AST						142,003						127,823						116,153
Total Depreciation, Depletion, and Amortization						$	476,215					$	450,067					$	422,530

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,						2025						2024
Property, Plant, and Equipment, Net
Ireland						$	74,901					$	68,603
United States						1,008,712						1,009,979
Other locations						872,931						686,598
Property, Plant, and Equipment, Net						$	1,956,544					$	1,765,180

Years Ended March 31,						2025						2024						2023
Revenues:
Ireland						$	107,321					$	82,695					$	74,292
United States						4,007,622						3,751,437						3,254,373
Other locations						1,344,572						1,304,569						1,207,601
Total Revenues						$	5,459,515					$	5,138,701					$	4,536,266

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Years Ended March 31,						2025						2024						2023
Healthcare:
Capital equipment						$	1,037,200					$	1,091,537					$	896,590
Consumables						1,396,031						1,248,424						1,050,316
Service						1,445,440						1,273,058						1,138,225
Total Healthcare Revenues						$	3,878,671					$	3,613,019					$	3,085,131
AST:
Capital equipment						$	30,946					$	14,519					$	26,460
Service						1,007,627						939,461						887,971
Total AST Revenues						$	1,038,573					$	953,980					$	914,431
Life Sciences:
Capital equipment						$	117,534					$	155,520					$	147,420
Consumables						286,656						251,580						241,114
Service						138,081						164,602						148,170
Total Life Sciences Revenues						$	542,271					571,702						536,704
Total Revenues						$	5,459,515					$	5,138,701					$	4,536,266

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,						2025						2024						2023
Denominator (shares in thousands):
Weighted average shares outstanding—basic						98,575						98,787						99,706
Dilutive effect of share equivalents						494						572						540
Weighted average shares outstanding and share equivalents—diluted						99,069						99,359						100,246

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,						2025						2024						2023
Number of ordinary share options (shares in thousands)						671						606						578

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 (exclusive of fees, commissions, and other charges). As of March 31, 2025, there was $300,000 (exclusive of fees, commissions, and other charges) 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.

During fiscal 2025, we repurchased 907,158 of our ordinary shares for the aggregate amount of $200,000 (exclusive of fees, commissions, and other charges) pursuant to authorizations under the share repurchase program. 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 the authorizations under the share repurchase program.

During fiscal 2025, we obtained 94,577 of our ordinary shares in the aggregate amount of $11,303 in connection with share-based compensation award programs. 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.

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. In recent years, grants have been limited to stock options, restricted shares, and restricted share units.

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 five 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, 2025, 2,647,200 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 2025, fiscal 2024 and fiscal 2023:

						Fiscal 2025						Fiscal 2024						Fiscal 2023
Risk-free interest rate						4.21		%				3.59		%				2.44		%
Expected life of options						6.1 years						6.0 years						5.9 years
Expected dividend yield of stock						0.94		%				1.08		%				0.80		%
Expected volatility of stock						28.42		%				27.92		%				24.49		%

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 2.07%, 2.22% and 2.54% was applied in fiscal 2025, 2024 and 2023 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, 2024						1,869,871						$	168.22
Granted						217,426						250.76
Exercised						(248,263)						109.27
Forfeited						(13,815)						236.93
Outstanding at March 31, 2025						1,823,883						$	185.51					5.8 years						$	85,349
Exercisable at March 31, 2025						1,276,312						$	163.48					4.7 years						$	83,402

We estimate that 540,180 of the non-vested stock options outstanding at March 31, 2025 will ultimately vest.

The aggregate intrinsic value in the table above represents the total pre-tax difference between the $226.65 closing price of our ordinary shares on March 31, 2025 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, 2025, 2024 and 2023 was $30,731, $18,177 and $6,502, respectively. Net cash proceeds from the exercise of stock options were $25,469, $10,472 and $1,828 for the years ended March 31, 2025, 2024 and 2023, respectively. The tax benefit from stock option exercises was $7,581, $5,470 and $4,945 for the years ended March 31, 2025, 2024 and 2023, respectively.

The weighted average grant date fair value of stock option grants was $67.81, $54.60 and $50.72 for the years ended March 31, 2025, 2024 and 2023, 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, 2024						463,381						28,348						$	200.04
Granted						164,530						17,159						228.38
Vested						(134,383)						(13,375)						186.50
Forfeited						(44,397)						(2,577)						208.82
Non-vested at March 31, 2025						449,131						29,555						$	214.21

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 2025 was $27,728.

As of March 31, 2025, there was a total of $51,059 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 1.6 years.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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,						2025						2024						2023
Balance, Beginning of Year						$	15,388					$	13,394					$	13,892
Warranties issued during the period						19,175						18,051						13,195
Settlements made during the period						(18,223)						(16,057)						(13,693)
Balance, End of Year						$	16,340					$	15,388					$	13,394

18. DERIVATIVES AND HEDGING

We utilize foreign currency forward contracts to hedge a portion of our monetary assets and liabilities denominated in foreign currencies, including intercompany transactions. Within each fiscal year, we also utilize foreign currency forward contracts to hedge a portion of our expected non-U.S. dollar-denominated earnings against our reporting currency, the U.S. dollar. Further, we utilize commodity swap contracts to hedge price changes in nickel that impact raw materials included in our Cost of revenues.

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. We do not use derivative financial instruments for speculative purposes.

At March 31, 2025, we held foreign currency forward contracts to buy 44.0 million British pounds sterling and 15.0 million euros; and to sell 13.0 million Australian dollars. At March 31, 2025, we held commodity swap contracts to buy 592.4 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, 2025						March 31, 2024						March 31, 2025						March 31, 2024
Prepaid & Other						$	90					$	208					$	—					$	—
Accrued expenses and other						—						—						566						1,014

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,
2025						2024						2023
Foreign currency forward contracts						Selling, general, and administrative						$	1,979					$	1,272					$	5,036
Commodity swap contracts						Cost of revenues						(200)						(1,611)						(3,630)

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, 2025 and March 31, 2024:

															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
			2025			2024						2025			2024						2025			2024						2025			2024
Assets:
Cash and cash equivalents						$	171,701		$	207,020					$	171,701		$	207,020					$	—		$	—					$	—		$	—
Forward and swap contracts (1)						90			208						—			—						90			208						—			—
Equity investments (2)						1,120			4,767						1,120			4,767						—			—						—			—
Other investments						2,977			2,902						2,977			2,902						—			—						—			—
Liabilities:
Forward and swap contracts (1)						$	566		$	1,014					$	—		$	—					$	566		$	1,014					$	—		$	—
Deferred compensation plans (2)						1,194			1,186						1,194			1,186						—			—						—			—
Total debt (3)						2,043,701			3,206,100						—			—						1,756,530			2,895,784						—			—
Contingent consideration obligations (4)						3,182			11,000						—			—						—			—						3,182			11,000

(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 Statements of Income. During fiscal 2025 and fiscal 2024, we recorded gains (losses) of $906 and $1,060, respectively, related to these investments.

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

(4) As of March 31, 2025 and 2024, we had contingent consideration obligations of $3.2 million and $11.0 million arising from prior year acquisitions, respectively. During fiscal 2025, we recorded an adjustment to reduce the fair value of contingent consideration liabilities based on a change in the likelihood of payment. This amount was offset by the impairment of related Patents and Technology intangibles assets and recorded net in the Selling, general, and administrative expenses line of the Consolidated Statements of Income.

As of March 31, 2025, we also held $14.3 million of other investments without readily determinable fair values measured at cost and classified as level 3. These investments are included in Other assets on the Consolidated Balance Sheets.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

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, 2025, 2024 and 2023 were as follows:

			Defined Benefit Plans (1)									Foreign Currency Translation									Total Accumulated Other Comprehensive Loss
			2025			2024			2023			2025			2024			2023			2025			2024			2023
Beginning Balance			$	(724)		$	12		$	1,276		$	(327,933)		$	(320,722)		$	(211,084)		$	(328,657)		$	(320,710)		$	(209,808)
Other Comprehensive Income (Loss) before reclassifications			447			615			(799)			9,153			(7,211)			(109,638)			9,600			(6,596)			(110,437)
Amounts reclassified from Accumulated Other Comprehensive Income (Loss)			(298)			(1,351)			(465)			27,017			—			—			26,719			(1,351)			(465)
Net current-period Other Comprehensive Income (Loss)			149			(736)			(1,264)			36,170			(7,211)			(109,638)			36,319			(7,947)			(110,902)
Ending Balance			$	(575)		$	(724)		$	12		$	(291,763)		$	(327,933)		$	(320,722)		$	(292,338)		$	(328,657)		$	(320,710)

(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.

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
Year ended March 31, 2025
Deducted from asset accounts:
Allowance for credit losses (1)						$	22,984					$	9,109								$	(140)		(3)						$	(7,599)		(4)						$	24,354
Inventory valuation reserve						43,893						5,566			(2)						314			(3)						—									49,773
Deferred tax asset valuation allowance						26,374						7,537									(425)			(3)						(2,879)									30,607
Recorded within liabilities:
Casualty loss reserves						$	30,736					$	8,400								$	427								$	(4,622)								$	34,941
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 trade accounts receivable (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

(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.