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steris-responselettertos

STERIS plc 70 Sir John Rogerson’s Quay Dublin 2 Ireland              May 15, 2024      CORRESPONDENCE FILING VIA EDGAR    U.S. Securities and Exchange Commission  Division of Corporation Finance  Office of Industrial Applications and Services  100 F Street, N.E.  Washington, D.C. 20549    Attention: Nudrat Salik     Al Pavot    Re: STERIS plc   Form 10-K for the Year Ended March 31, 2023  File No. 001-38848  Ladies and Gentlemen:  STERIS plc (the “Company,” “we” or “our”) is submitting this letter in response to the comment  letter from the staff (the “Staff”) of the Securities and Exchange Commission (the  “Commission”), dated April 17, 2024, with respect to the Company’s Annual Report on Form  10-K for the fiscal year ended March 31, 2023, filed May 26, 2023 (“Fiscal 2023 Form 10-K”)  and Correspondence filed April 9, 2024.  Below are the Company’s responses.  For the convenience of the Staff, the Company has  repeated the Staff’s comment before the corresponding response.   Correspondence filed April 9, 2024  Form 10-K for the Year Ended March 31, 2023  Results of Operations, page 31    1. We note your response to comment 1 and reissue in part. Please expand your proposed  disclosure to also clarify the extent to which intercompany net interest income impacted  the reported United States and Other Locations pre-tax income amounts you disclose in  Note 8.  Response:    The Company respectfully acknowledges the Staff’s comment. In the Results of  Operations discussion of consolidated income tax expense and effective tax rate in the

STERIS plc 70 Sir John Rogerson’s Quay Dublin 2 Ireland    Company’s Annual Report on Form 10-K for the year ended March 31, 2024 (“Fiscal  2024 Form 10-K”), we will reference Note 10, Income Taxes, for additional information  as we believe the additional disclosure at the geographic level will be best understood if  presented with the tabular data by geography in that footnote.     In Note 10, Income Taxes, of the Fiscal 2024 Form 10-K, we will enhance our proposed  disclosures that accompany the tabular presentations of income before income taxes by  geography and the components of the provision for income taxes. These enhancements  will provide readers with additional information regarding key drivers of fluctuations in  income before income taxes in the three geographies presented and the resulting tax  provision. We will also clarify that the values include the transfer of income before  income taxes that results from transactions between entities within our group that involve  the sale of goods and services, loans and related interest, intellectual property and related  royalties, and shared costs. The disclosure will specifically highlight the significant  impact of our global financing structure on the results of our Ireland and United States  operations.     For illustrative purposes, following all our responses to the Staff's comments, is the  Company’s proposed disclosure using the above referenced Fiscal 2023 Form 10-K as a  model. Revisions have been marked to facilitate the Staff’s review.     2.  Please expand your discussion of income tax expense variances to also clearly address  any material variances in the effective tax rates within the jurisdictions that you  operate. For example, it is not clear why the Other Locations effective tax rate appeared  to change from 28% in 2022 to 34% in 2023.  Response:    The Company respectfully acknowledges the Staff’s comment. The effective tax rate  variances between Fiscal 2023 and Fiscal 2022 for the United States and Other locations  noted were predominately driven by the impairment of goodwill.  Our consolidated  effective tax rate was also favorably impacted in Fiscal 2023 by changes in U.S. state and  local tax rates applied to existing deferred tax assets and liabilities.    In the Results of Operations discussion of consolidated income tax expense and effective  tax rate in the Fiscal 2024 Form 10-K, we will reference Note 10, Income Taxes, for  additional information as we believe the additional disclosure at the geographic level will  be best understood if presented with the tabular data by geography in that footnote. We  will enhance our disclosures in Note 10, Income Taxes, of the Fiscal 2024 Form 10-K to  give readers insight into the geographies impacted by material drivers of changes in our  consolidated effective tax rate.     For illustrative purposes, following all our responses to the Staff’s comments, is the  Company’s proposed disclosure using the above referenced Fiscal 2023 Form 10-K as a  model. Revisions have been marked to facilitate the Staff’s review.

STERIS plc 70 Sir John Rogerson’s Quay Dublin 2 Ireland      Note 8, page 80  3. We note your response to comment 3 and reissue in part. You state that the amount  reported in your financial statements as pre-tax income attributable to Ireland is the  sum of pre-tax income associated with entities domiciled in Ireland. The instruction to  Article 4-08(h)(1) of Regulation S-X states that the amount of domestic and foreign pre- tax income should be measured based on the geographic location of the operations that  generated the pre-tax income. Please clarify for us the extent to which your reported  amount of 2023 Ireland pre-tax income includes any income that was generated by  operations geographically located outside of Ireland. Also, please clarify for us whether  your commercial operations located in Ireland effectively generated zero pre-tax  income in 2023 given that the $16.3 million of earnings cited in your response was  completely offset by the $16.3 million of pre-tax loss generated by your Irish holding  companies. If the entire $62.3 million of your reported 2023 Ireland pre-tax income is  comprised of intercompany financing income from loans to foreign entities then that  information should be clearly disclosed in MD&A so that readers can fully understand  your reported domestic and foreign pre-tax income amounts and assess any favorable  or adverse trends in the operating results of your domestic and foreign operations.  Response:    The Company respectfully acknowledges the Staff’s comment.  We interpret the  requirement under Article 4-08(h)(1) of Regulation S-X to measure domestic and  foreign pre-tax income based on geographic location of the operations.  The entities,  including branches of entities, are subject to tax in Ireland because the operations of  those entities are located in Ireland. Our reported Ireland pre-tax income does not  include any income generated by operations geographically located outside of Ireland.  In Fiscal 2023, our commercial operations geographically located in Ireland did, in fact,  generate pre-tax income through the delivery of products and services to Customers.  The Fiscal 2023 $16.3 million of pre-tax earnings for the commercial operating entities  cited in our response was offset by the $16.3 million of pre-tax loss from operations of  our Irish holding companies. This is not the case every year.   In Note 10, Income Taxes, of the Fiscal 2024 Form 10-K, we will enhance our proposed  disclosures that accompany the tabular presentations of Income before income taxes by  geography and the components of tax expense. These enhancements will provide  readers with additional information regarding key drivers of fluctuations in income  before income taxes in the three geographies presented and resulting tax provision. We  will also clarify that the values include the transfer of income before income taxes that  results from transactions between entities within our group that involve the sale of  goods and services, loans and related interest, intellectual property and related royalties,  and shared costs. The disclosure will specifically highlight the significant impact of our  global financing structure on our Ireland and United States operations.

STERIS plc 70 Sir John Rogerson’s Quay Dublin 2 Ireland    For illustrative purposes, following all our responses to the Staff’s comments, is the  Company’s proposed disclosure using the above referenced Fiscal 2023 Form 10-K as a  model. Revisions have been marked to facilitate the Staff’s review.   4. Please disclose in the filing what your accounting policy is regarding the measurement  of amounts presented as Ireland, United States, and Other Locations pre-tax income  (loss). Please explain which intercompany items are eliminated and which are not  eliminated i.e. intercompany revenues, expenses, equity investment items, etc.  Response:    The Company respectfully acknowledges the Staff’s comment. We comply with the  requirement under Article 4-08(h)(1) of Regulation S-X by measuring domestic and  foreign income before income taxes based on geographic location of the operations. This  measure is inclusive of the transfer of income that results from transactions between  entities within our group that involve the sale of goods and services, loans and related  interest, intellectual property and related royalties, and shared costs. We will provide this  clarity for readers in our enhanced proposed disclosure.     For illustrative purposes, below is the Company’s proposed disclosure using the above-  referenced Fiscal 2023 Form 10-K as a model. Revisions have been marked to facilitate  the Staff’s review.     As noted in response to each comment above, below are our proposed and enhanced disclosures  to be included in Note 10, Income Taxes, of the consolidated financial statements in our Fiscal  2024 Form 10-K. The proposal is presented using Fiscal 2023 Form 10-K disclosures as a model  with revisions marked to facilitate the Staff’s review.  ILLUSTRATIVE PROPOSED DISCLOSURE  8.  INCOME TAXES  The total provision for income taxes can be reconciled to the tax computed at the Ireland  statutory tax rate as follows:

STERIS plc 70 Sir John Rogerson’s Quay Dublin 2 Ireland      Our effective tax rate is affected by i) the tax rates in Ireland (our country of domicile), the  United States, and other jurisdictions in which we operate, and ii) the relative amount of income  before income taxes by geography.   Income before income taxes by geography are based on the geographic location of our  operations to which such earnings are attributable.  Transactions between two or more of the  entities within our group occur routinely and involve the sale of goods and services, loans and  related interest, intellectual property and related royalties, and shared costs. The pricing used in  these transactions is consistent with the prices that would be charged between unrelated parties in  accordance with our interpretation of current tax regulations. Income before income taxes by  geography includes the transfer of income before income taxes that results from these  transactions.   We operate a global financing structure using a wholly-owned financing company domiciled  in Ireland, STERIS Irish FinCo, which has a material impact on the relative amount of income  before income taxes by geography. In each of the years presented, STERIS Irish FinCo  contributed more than 90% of the pre-tax income of Ireland operations. Its activities are driven  by funding needs for acquisitions, capital investments, and working capital. A significant  majority of STERIS Irish FinCo’s income before income taxes during the years presented was  driven by loans to our operations in the United States in response to such funding needs.   Significant transactions not indicative of operating trends that impacted the amount of  income before income taxes by geography and resulting provision for income tax and effective  tax rate include:     • In fiscal 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.  • In fiscal 2022, income in the United States was affected by costs associated with the  completion of the Cantel Medical acquisition. These include $205,788 of acquisition  and integration related expenses and the negative impact of a fair value adjustment of  $27,806 related to the premium liability associated with the Cantel Medical  convertible debt. Approximately $67,000 of these costs were non-deductible.  • In fiscal 2021, income in the United States was affected by over $35,634 of  acquisition costs incurred in the United States, of which approximately $16,000 were  non-deductible. Additionally, we reached a partial settlement associated with the  United States Internal Revenue Service (“IRS”) related to audits of prior fiscal  years incurring approximately $12,000 in additional tax.  Income before income taxes of our domestic and foreign operations based on the geographic  location of our operations was as follows:

STERIS plc 70 Sir John Rogerson’s Quay Dublin 2 Ireland      The components of the provision for income taxes consisted of the following:       NO CHANGES IN THE REMAINDER OF THE FOOTNOTE    * * * * * * * *      If you have any questions regarding these matters, please do not hesitate to contact me at  +1(440) 392-7134.      Very truly yours,     /s/ Michael J. Tokich  Michael J. Tokich  Senior Vice President and Chief Financial  Officer    cc:  Karen L. Burton        Vice President, Chief Accounting Officer