On the Surface

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STERIS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Components of Net Periodic Benefit Cost. Components of the annual net periodic benefit cost of our defined benefit pension plans and our other post-retirement medical benefit plan were as follows: Pension Plans U.S. Qualified International Other Post-retirement Plan 2008 2007 2006 2008 2007 2006 2008 2007 2006 Service cost $ 105 $ 76 $ 850 $ 513 $ 454 $608 $ — $ — $ 1,090 Interest cost 2,796 2,769 2,722 337 331 322 4,643 4,673 4,535 Expected return on plan assets (3,127) (2,858) (2,764) (487) (402) (336) — — — Special termination benefits — — — — — — — — 8,982 Curtailment loss — — 1,326 — — — — — — Prior service cost recognition — — 1,009 — — — — — — Net amortization and deferral 301 265 1,061 — — — 988 922 1,753 Net periodic benefit cost $ 75 $ 252 $ 4,204 $ 363 $ 383 $594 $5,631 $5,595 $16,360 Assumptions Used in Calculating Benefit Obligations and Net Periodic Benefit Cost. The following table provides the applicable actuarial assumptions used to determine the benefit obligations at March 31: 2008 2007 Discount rate: U.S. qualified pension plans 6.00% 6.00% Switzerland pension plan 3.75% 3.00% Other post-retirement plan 6.00% 6.00% Expected return on plan assets: U.S. qualified pension plans 8.00% 8.00% Switzerland pension plan 4.50% 5.00% Rate of compensation increase: Switzerland pension plan 2.50% 3.00% 90
STERIS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) ended March 31: The following table provides the applicable actuarial assumptions used to determine the net periodic benefit cost for the years 2008 2007 2006 Discount rate: U.S. qualified pension plans 6.00% 6.00% 6.00% Switzerland pension plan 3.00% 3.25% 3.50% Other post-retirement plan 6.00% 6.00% 6.00% Expected return on plan assets: U.S. qualified pension plans 8.00% 8.00% 8.00% Switzerland pension plan 5.00% 5.00% 5.00% Rate of compensation increase: Switzerland pension plan 2.50% 3.00% 3.00% The net periodic benefit cost and the actuarial present value of projected benefit obligations are based upon assumptions that we review on an annual basis. These assumptions may be revised annually based upon an evaluation of long-term trends, as well as market conditions that may have an impact on the cost of providing benefits. We develop our expected long-term rate of return on plan assets assumptions by evaluating input from third-party professional advisors, 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 advisors, 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. 2008 2007 2006 Healthcare cost trend rate – medical 10.0% 10.0% 10.0% Healthcare cost trend rate – prescription drug 10.0% 15.0% 15.0% Long-term healthcare cost trend rate 5.0% 5.0% 5.0% 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 assumptions of other plan sponsors and national health trends, and adjustments for plan design changes, workforce changes, and changes in plan participant behavior. 91
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On the Surface FISCAL 2008 ANNUAL R
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“ We intend to give Customers mor
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ON THE SURFACE NET REVENUES and ded
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ON THE SURFACE large population of
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ON THE SURFACE Advanced Visualizati
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ON THE SURFACE Behind the Names Tec
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ON THE SURFACE Customer-Centric Com
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United States Securities and Exchan
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PART I Throughout this Annual Repor
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support services such as constructi
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Restructuring - European Restructur
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we cannot assure you that future or
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Our success depends, in part, on ou
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We conduct manufacturing, sales and
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• consent decree, which could res
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U.S. Locations (including Puerto Ri
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We believe we have adequately reser
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PART II ITEM 5. MARKET FOR REGISTRA
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ITEM 6. SELECTED FINANCIAL DATA Yea
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We use this measure to gauge our ab
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A detailed discussion of our fiscal
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FISCAL 2008 AS COMPARED TO FISCAL 2
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Compensation and benefit costs, fee
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Liabilities related to restructurin
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We operate in three reportable busi
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STERIS Isomedix Services segment op
Page 53 and 54: Operating Expenses. The following t
Page 55 and 56: March 31, 2006 European Restructuri
Page 57 and 58: The following table compares our re
Page 59 and 60: Net Cash Provided by Operating Acti
Page 61 and 62: • Stock option and other equity t
Page 63 and 64: CONTRACTUAL AND COMMERCIAL COMMITME
Page 65 and 66: Allowance for Sales Returns. We mai
Page 67 and 68: Our self-insured liabilities contai
Page 69 and 70: Amendment of FASB Statements No. 87
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Page 73 and 74: REPORT OF MANAGEMENT Board of Direc
Page 75 and 76: STERIS CORPORATION AND SUBSIDIARIES
Page 95 and 96: 9. INCOME TAXES STERIS CORPORATION
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Page 123 and 124: ITEM 9B. OTHER INFORMATION None. PA
Page 125 and 126: PART IV ITEM 15. EXHIBITS AND FINAN
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Page 129 and 130: EXHIBIT INDEX Exhibit Number Exhibi
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Page 133 and 134: EXHIBIT 23.1 CONSENT OF INDEPENDENT
Page 135 and 136: EXHIBIT 31.1 CERTIFICATION OF THE P
Page 137 and 138: EXHIBIT 32.1 CERTIFICATION PURSUANT
Page 139 and 140: Corporate Information BOARD OF DIRE
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