0001822479-23-000033 | 10-Q | XBRL Viewer

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Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 647,948	$ 395,214
Restricted cash short-term	12,232	1,080
Accounts receivable, net of allowance for uncollectible accounts of $2,587 and $1,871, respectively	109,163	118,482
Inventories, net	46,736	37,145
Prepaid expenses and other current assets	87,303	80,995
Income taxes receivable	20,417	12,094
Total current assets	923,799	645,010
Property, plant, and equipment, net	816,164	774,527
Operating lease assets	24,941	26,481
Deferred income taxes	4,165	4,101
Post-retirement assets	36,915	35,570
Other assets	32,909	38,983
Other intangible assets, net	471,860	491,265
Goodwill	1,103,420	1,101,768
Total assets	3,414,173	3,117,705
Current liabilities:
Accounts payable	61,939	74,139
Accrued liabilities	496,791	490,130
Deferred revenue	15,161	12,140
Current portion of long-term debt	4,031	197,119
Current portion of finance lease obligations	8,588	1,722
Current portion of operating lease obligations	6,942	7,554
Current portion of asset retirement obligations	2,108	2,896
Income taxes payable	4,589	5,867
Total current liabilities	600,149	791,567
Long-term debt, less current portion	2,222,333	1,747,115
Finance lease obligations, less current portion	61,735	56,955
Operating lease obligations, less current portion	20,561	21,577
Noncurrent asset retirement obligations	43,350	42,586
Deferred lease income	18,785	18,902
Post-retirement obligations	7,858	7,910
Noncurrent liabilities	15,051	12,831
Deferred income taxes	63,226	68,024
Total liabilities	3,053,048	2,767,467
See Commitments and contingencies note
Equity:
Common stock, with $0.01 par value, 1,200,000 shares authorized; 286,037 shares issued at March 31, 2023 and December 31, 2022	2,860	2,860
Preferred stock, with $0.01 par value, 120,000 authorized; no shares issued at March 31, 2023 and December 31, 2022	0	0
Treasury stock, at cost (3,520 and 3,616 shares at March 31, 2023 and December 31, 2022, respectively)	(29,420)	(29,775)
Additional paid-in capital	1,195,357	1,189,622
Retained deficit	(702,974)	(705,816)
Accumulated other comprehensive loss	(104,698)	(106,653)
Total equity	361,125	350,238
Total liabilities and equity	$ 3,414,173	$ 3,117,705

Prepaid Expenses and Other Current Assets (Tables)

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Deferred Costs, Capitalized, Prepaid, and Other Assets

Prepaid expenses and other current assets consisted of the following:


(thousands of U.S. dollars)
	March 31, 2023		December 31, 2022
Prepaid taxes	$	26,426	$	26,598
Prepaid business insurance	8,184		9,964
Prepaid rent	1,072		998
Customer contract assets	18,736		19,777
Insurance and indemnification receivables	3,529		3,724
Current deposits	396		660
Prepaid maintenance contracts	517		324
Value added tax receivable	2,195		1,640
Prepaid software licensing	1,854		1,832
Stock supplies	3,639		3,656
Embedded derivative assets	2,507		2,721
Interest receivable - interest rate cap settlement	6,375		—
Other	11,873		9,101
Prepaid expenses and other current assets	$	87,303	$	80,995

Financial Instruments and Financial Risk (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following table provides a summary of the notional and fair values of our derivative instruments:


	March 31, 2023							December 31, 2022
(in U.S. Dollars; notional in millions, fair value in thousands)				Fair Value						Fair Value
	Notional Amount			Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
Derivatives designated as hedging instruments
Interest rate caps	$	2,000.0	(a)	$	24,129	—		$	2,000.0	$	34,764	—
Interest rate swaps	400.0		(b)	—		2,387		—		—		—
Derivatives not designated as hedging instruments

Foreign currency forward contracts	154.8			33		23		151.5		—		272
Embedded derivatives	172.5		(c)	2,507		3,524		179.9		2,721		3,508
Total	$	2,727.3		$	26,669	$	5,934	$	2,331.4	$	37,485	$	3,780

(a)$1,000.0 million notional amount of interest rate caps designated as hedging instruments have a forward start date beginning on July 31, 2023.

(b)The notional amount of interest rates swaps designated as hedging instruments reflected in the table above has a forward start date beginning on August 23, 2023.

(c)Represents the total notional amounts for certain of the Company’s supply and sales contracts accounted for as embedded derivatives.

Schedule of Derivative Instruments, Gain (Loss)

The following table summarize the activities of our derivative instruments for the periods presented, and the line item in which they are recorded in the Consolidated Statements of Operations and Comprehensive Income:


(thousands of U.S. dollars)
Three Months Ended March 31,	2023		2022
Unrealized gain on interest rate derivatives recorded in interest expense, net	$	—	$	(6,346)
Unrealized loss (gain) on embedded derivatives recorded in other income, net	227		(1,018)
Realized gain on interest rate derivatives recorded in interest expense, net(a)	(9,648)		—
Realized loss (gain) on foreign currency forward contracts recorded in foreign exchange (gain) loss	449		(1,530)

(a)For the three months ended March 31, 2023, amounts represent quarterly settlement of interest rate caps.

The following table summarizes the net gains (losses) on our cash flow hedges recognized in “Other comprehensive income (loss)” during the period:


(thousands of U.S. dollars)
Three Months Ended March 31,	2023		2022
Unrealized gain (loss) on interest rate derivatives recorded in other comprehensive income	$	(3,372)	$	6,179
Amounts reclassified from accumulated other comprehensive income to interest expense	(9,275)		$	—
Net current period other comprehensive income (loss)	$	(12,647)	$	6,179

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table discloses the fair value of our financial assets and liabilities:


As of March 31, 2023			Fair Value
(thousands of U.S. dollars)	Carrying Amount		Level 1		Level 2		Level 3
Derivatives designated as hedging instruments(a)
Interest rate caps	$	24,129	$	—	$	24,129	$	—
Interest rate swaps	2,387		—		2,387		—
Derivatives not designated as hedging instruments(b)
Foreign currency forward contract assets	33		—		33		—
Foreign currency forward contract liabilities	23		—		23		—
Embedded derivative assets	2,507		—		2,507		—
Embedded derivative liabilities	3,524		—		3,524		—
Current portion of long-term debt
Term loan B, due 2026	3,583		—		3,694		—
Other long-term debt(c)	448		—		448		—
Long-Term Debt(d)
Term loan, due 2026	1,748,221		—		1,694,868		—
Term loan B, due 2026	474,112		—		488,806		—
Finance Lease Obligations (with current portion)(e)	70,323		—		70,323		—


As of December 31, 2022			Fair Value
(thousands of U.S. dollars)	Carrying Amount		Level 1		Level 2		Level 3
Derivatives designated as hedging instruments(a)
Interest rate caps	$	34,764	$	—	$	34,764	$	—
Derivatives not designated as hedging instruments(b)
Foreign currency forward contracts	272		—		272		—
Embedded derivative assets	2,721		—		2,721		—
Embedded derivative liabilities	3,508		—		3,508		—
Current portion of long-term debt(c)
Revolving credit facility	196,672		—		$	196,672	—
Other long-term debt	447		—		$	447	—
Long-Term Debt(d)
Term loan, due 2026	1,747,115		—		1,626,460		—
Finance Lease Obligations (with current portion)(e)	58,677		—		58,677		—

(a)Derivatives designated as hedging instruments are measured at fair value with changes in fair value recorded as a component of accumulated other comprehensive income (loss). Interest rate caps and swaps are valued using pricing models that incorporate observable market inputs, including interest rate and yield curves.

(b)Derivatives that are not designated as hedging instruments are measured at fair value with gains or losses recognized immediately in the Consolidated Statements of Operations and Comprehensive Income. Embedded derivatives are valued using internally developed models that rely on observable market inputs, including foreign currency forward curves. Foreign currency forward contracts are valued by reference to changes in the forward foreign currency exchange rate over the life of the contract.

(c)Carrying value of other long-term debt and revolving credit facility approximates fair value.

(d)Carrying amounts of long-term debt instruments are reported net of discounts and debt issuance costs. The estimated fair value of these instruments is based on quoted prices for the term loans due in 2026 in inactive markets as provided by an independent fixed income security pricing service. Fair value approximates carrying value for “Other long-term debt.”

(e)Fair value approximates carrying value.

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

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+ Details

Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 1,101,768
Changes due to foreign currency exchange rates	1,652
Ending balance	1,103,420
Sterigenics
Goodwill [Roll Forward]
Beginning balance	657,458
Changes due to foreign currency exchange rates	823
Ending balance	658,281
Nordion
Goodwill [Roll Forward]
Beginning balance	270,966
Changes due to foreign currency exchange rates	291
Ending balance	271,257
Nelson Labs
Goodwill [Roll Forward]
Beginning balance	173,344
Changes due to foreign currency exchange rates	538
Ending balance	$ 173,882

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid taxes	$ 26,426	$ 26,598
Prepaid business insurance	8,184	9,964
Prepaid rent	1,072	998
Customer contract assets	18,736	19,777
Insurance and indemnification receivables	3,529	3,724
Current deposits	396	660
Prepaid maintenance contracts	517	324
Value added tax receivable	2,195	1,640
Prepaid software licensing	1,854	1,832
Stock supplies	3,639	3,656
Embedded derivative assets	2,507	2,721
Interest receivable - interest rate cap settlement	6,375	0
Other	11,873	9,101
Prepaid expenses and other current assets	$ 87,303	$ 80,995

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2023	Apr. 26, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-39729
Entity Registrant Name	SOTERA HEALTH COMPANY
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-3531161
Entity Address, Address Line One	9100 South Hills Blvd
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Broadview Heights
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44147
City Area Code	440
Local Phone Number	262-1410
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	SHC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		282,516,526
Entity Central Index Key	0001822479
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1

Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues:
Total net revenues	$ 220,590	$ 236,754
Cost of revenues:
Total cost of revenues	109,087	107,879
Gross profit	111,503	128,875
Operating expenses:
Selling, general and administrative expenses	61,910	59,542
Amortization of intangible assets	16,227	15,841
Total operating expenses	78,137	75,383
Operating income	33,366	53,492
Interest expense, net	28,870	10,404
Foreign exchange loss	347	788
Other income, net	(1,253)	(2,967)
Income before income taxes	5,402	45,267
Provision for income taxes	2,560	14,626
Net income	2,842	30,641
Other comprehensive income (loss) net of tax:
Pension and post-retirement benefits (net of taxes of $(17) and $(92), respectively)	(51)	(274)
Interest rate derivatives (net of taxes of $(3,396) and $2,109, respectively)	(9,251)	6,179
Foreign currency translation	11,257	14,975
Comprehensive income	$ 4,797	$ 51,521
Earnings per share:
Basic (in dollars per share)	$ 0.01	$ 0.11
Diluted (in dollars per share)	$ 0.01	$ 0.11
Weighted average number of shares outstanding:
Basic (in shares)	280,691	279,829
Diluted (in shares)	282,977	279,908
Service
Revenues:
Total net revenues	$ 214,510	$ 206,218
Cost of revenues:
Total cost of revenues	104,210	94,576
Product
Revenues:
Total net revenues	6,080	30,536
Cost of revenues:
Total cost of revenues	$ 4,877	$ 13,303

Employee Benefits - Schedule of Net Periodic Benefit Costs (Details) - Nordion - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Defined Benefit Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 131	$ 249
Interest cost	2,724	1,903
Expected return on plan assets	(4,019)	(3,704)
Net periodic benefit cost	(1,164)	(1,552)
Other Benefits Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost	2	4
Interest cost	90	65
Amortization of net actuarial gain	(44)	(2)
Net periodic benefit cost	$ 48	$ 67

Financial Instruments and Financial Risk - Schedule of Derivative Instruments, Gain (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized loss (gain) on derivatives not designated as hedging instruments	$ 227	$ (7,364)
Unrealized gain (loss) on interest rate derivatives recorded in other comprehensive income	(3,372)	6,179
Amounts reclassified from accumulated other comprehensive income to interest expense	(9,275)	0
Net current period other comprehensive income (loss)	(12,647)	6,179
Interest rate caps
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized loss (gain) on derivatives not designated as hedging instruments	0	(6,346)
Embedded Derivative
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized loss (gain) on derivatives not designated as hedging instruments	227	(1,018)
Interest rate swaps
Derivative Instruments, Gain (Loss) [Line Items]
Realized loss (gain) on foreign currency forward contracts recorded in foreign exchange (gain) loss	(9,648)	0
Foreign currency forward contracts
Derivative Instruments, Gain (Loss) [Line Items]
Realized loss (gain) on foreign currency forward contracts recorded in foreign exchange (gain) loss	$ 449	$ (1,530)

Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

Changes to goodwill during the three months ended March 31, 2023 were as follows:


(thousands of U.S. dollars)	Sterigenics		Nordion		Nelson Labs		Total
Goodwill at December 31, 2022	$	657,458	$	270,966	$	173,344	$	1,101,768
Changes due to foreign currency exchange rates	823		291		538		1,652
Goodwill at March 31, 2023	$	658,281	$	271,257	$	173,882	$	1,103,420

Schedule of Acquired Finite-Lived Intangible Assets

Other intangible assets consisted of the following:


(thousands of U.S. dollars)	Gross Carrying Amount		Accumulated Amortization
As of March 31, 2023
Finite-lived intangible assets
Customer relationships	$	654,918	$	438,612
Proprietary technology	86,406		53,365
Trade names	2,559		832
Land-use rights	9,025		1,746
Sealed source and supply agreements	204,612		96,187
Other	4,471		2,202
Total finite-lived intangible assets	961,991		592,944

Indefinite-lived intangible assets
Regulatory licenses and other(a)	77,061		—
Trade names / trademarks	25,752		—
Total indefinite-lived intangible assets	102,813		—
Total	$	1,064,804	$	592,944


As of December 31, 2022	Gross Carrying Amount		Accumulated Amortization
Finite-lived intangible assets
Customer relationships	$	652,811	$	422,277
Proprietary technology	86,054		50,952
Trade names	2,553		701
Land-use rights	8,986		1,683
Sealed source and supply agreements	204,391		93,034
Other	4,469		1,979
Total finite-lived intangible assets	959,264		570,626

Indefinite-lived intangible assets
Regulatory licenses and other(a)	76,978		—
Trade names / trademarks	25,649		—
Total indefinite-lived intangible assets	102,627		—
Total	$	1,061,891	$	570,626

(a)Includes certain transportation certifications, a class 1B nuclear license and other intangibles related to obtaining such licensure. These assets are considered indefinite-lived as the decision for renewal by the Canadian Nuclear Safety Commission is highly based on a licensee’s previous assessments, reported incidents, and annual compliance and inspection results. New applications for license can take a significant amount of time and cost; whereas an existing licensee with a historical record of compliance and current operating conditions more than likely ensures renewal for another 10-year license period, as Nordion has demonstrated over its 75 years of history.

Schedule of Acquired Indefinite-lived Intangible Assets

Other intangible assets consisted of the following:


(thousands of U.S. dollars)	Gross Carrying Amount		Accumulated Amortization
As of March 31, 2023
Finite-lived intangible assets
Customer relationships	$	654,918	$	438,612
Proprietary technology	86,406		53,365
Trade names	2,559		832
Land-use rights	9,025		1,746
Sealed source and supply agreements	204,612		96,187
Other	4,471		2,202
Total finite-lived intangible assets	961,991		592,944

Indefinite-lived intangible assets
Regulatory licenses and other(a)	77,061		—
Trade names / trademarks	25,752		—
Total indefinite-lived intangible assets	102,813		—
Total	$	1,064,804	$	592,944


As of December 31, 2022	Gross Carrying Amount		Accumulated Amortization
Finite-lived intangible assets
Customer relationships	$	652,811	$	422,277
Proprietary technology	86,054		50,952
Trade names	2,553		701
Land-use rights	8,986		1,683
Sealed source and supply agreements	204,391		93,034
Other	4,469		1,979
Total finite-lived intangible assets	959,264		570,626

Indefinite-lived intangible assets
Regulatory licenses and other(a)	76,978		—
Trade names / trademarks	25,649		—
Total indefinite-lived intangible assets	102,627		—
Total	$	1,061,891	$	570,626

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The estimated aggregate amortization expense for finite-lived intangible assets for each of the next five years and thereafter is as follows:


(thousands of U.S. dollars)
For the remainder of 2023	$	60,084
2024	79,986
2025	42,584
2026	22,227
2027	21,150
Thereafter	143,016
Total	$	369,047

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
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-Paragraph 2
-Subparagraph (b)
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+ Details

Long-Term Debt - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
2023	$ 2,950
2024	5,000
2025	5,000
2026	2,250,600
2027	0
Thereafter	0
Total	$ 2,263,550	$ 1,963,550

Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended
Revenue Recognition (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Total net revenues	$ 220,590	$ 236,754
Customer contract assets	18,736		$ 19,777
Deferred revenue	15,161		$ 12,140
Point in time
Disaggregation of Revenue [Line Items]
Total net revenues	167,585	182,747
Over time
Disaggregation of Revenue [Line Items]
Total net revenues	53,005	54,007
Sterigenics
Disaggregation of Revenue [Line Items]
Total net revenues	159,997	149,462
Sterigenics \| Point in time
Disaggregation of Revenue [Line Items]
Total net revenues	159,997	149,462
Sterigenics \| Over time
Disaggregation of Revenue [Line Items]
Total net revenues	0	0
Nordion
Disaggregation of Revenue [Line Items]
Total net revenues	8,551	34,002
Nordion \| Point in time
Disaggregation of Revenue [Line Items]
Total net revenues	7,588	33,285
Nordion \| Over time
Disaggregation of Revenue [Line Items]
Total net revenues	963	717
Nelson Labs
Disaggregation of Revenue [Line Items]
Total net revenues	52,042	53,290
Nelson Labs \| Point in time
Disaggregation of Revenue [Line Items]
Total net revenues	0	0
Nelson Labs \| Over time
Disaggregation of Revenue [Line Items]
Total net revenues	$ 52,042	$ 53,290

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Financial Instruments and Financial Risk - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)	May 31, 2022 USD ($) instrument	Oct. 31, 2021 USD ($) instrument
Derivative [Line Items]
Notional amount	$ 2,727,300,000		$ 2,331,400,000
Interest rate derivatives, net of tax	(9,251,000)	$ 6,179,000
Allowance for uncollectible accounts	2,587,000		1,871,000
Derivatives Designated in Hedge Relationships
Derivative [Line Items]
Interest rate derivatives, net of tax	16,700,000
Derivatives Designated in Hedge Relationships \| Interest rate swaps
Derivative [Line Items]
Notional amount	400,000,000		0
Derivatives Designated in Hedge Relationships \| Interest rate caps
Derivative [Line Items]
Notional amount	2,000,000,000		2,000,000,000	$ 1,000,000,000	$ 1,000,000,000
Number of instruments held \| instrument				2	2
Option premium				$ 4,100,000	$ 1,800,000
Derivatives Designated in Hedge Relationships \| Interest rate caps \| SOFR
Derivative [Line Items]
Percent of borrowing limitation due to cash flow exposure				3.50%
Derivatives Designated in Hedge Relationships \| Interest rate caps \| LIBOR
Derivative [Line Items]
Percent of borrowing limitation due to cash flow exposure					1.00%
Derivatives not designated as hedging instruments \| Foreign currency forward contracts
Derivative [Line Items]
Notional amount	$ 154,800,000		$ 151,500,000

Accrued Liabilities

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities consisted of the following:


(thousands of U.S. dollars)
	March 31, 2023		December 31, 2022
Accrued employee compensation	$	26,250	$	32,936
Illinois EO litigation settlement reserve	408,000		408,000
Other legal reserves	3,651		3,776
Accrued interest expense	27,714		23,291
Embedded derivatives	3,524		3,508
Professional fees	16,222		6,436
Accrued utilities	1,913		1,906
Insurance accrual	2,320		2,392
Accrued taxes	2,654		2,567
Other	4,543		5,318
Accrued liabilities	$	496,791	$	490,130

Share-Based Compensation - Schedule of Stock Option Activity (Details) - Stock options	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Number of Shares
Beginning balance (in shares) \| shares	5,990,470
Granted (in shares) \| shares	1,044,595
Forfeited (in shares) \| shares	(20,325)
Exercised (in shares) \| shares	0
Ending balance (in shares) \| shares	7,014,740
Weighted- average Exercise Price
Beginning balance (in shares) \| $ / shares	$ 14.84
Granted (in dollars per share) \| $ / shares	17.59
Forfeited (in dollars per share) \| $ / shares	21.57
Exercised (in dollars per share) \| $ / shares	0
Ending balance (in shares) \| $ / shares	$ 15.23

Financial Instruments and Financial Risk - Schedule of Derivative Instruments (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022	May 31, 2022	Oct. 31, 2021
Derivative [Line Items]
Notional Amount	$ 2,727,300,000	$ 2,331,400,000
Fair value, derivative assets	26,669,000	37,485,000
Fair value, derivative liabilities	5,934,000	3,780,000
Derivatives designated as hedging instruments \| Interest rate caps
Derivative [Line Items]
Notional Amount	2,000,000,000	2,000,000,000	$ 1,000,000,000	$ 1,000,000,000
Fair value, derivative assets	24,129,000	34,764,000
Fair value, derivative liabilities	0	0
Derivatives designated as hedging instruments \| Interest rate caps \| Forward Start Date Beginning on July 31, 2023
Derivative [Line Items]
Notional Amount	1,000,000,000
Derivatives designated as hedging instruments \| Interest rate swaps
Derivative [Line Items]
Notional Amount	400,000,000	0
Fair value, derivative assets	0	0
Fair value, derivative liabilities	2,387,000	0
Derivatives not designated as hedging instruments \| Foreign currency forward contracts
Derivative [Line Items]
Notional Amount	154,800,000	151,500,000
Fair value, derivative assets	33,000	0
Fair value, derivative liabilities	23,000	272,000
Derivatives not designated as hedging instruments \| Embedded derivatives
Derivative [Line Items]
Notional Amount	172,500,000	179,900,000
Fair value, derivative assets	2,507,000	2,721,000
Fair value, derivative liabilities	$ 3,524,000	$ 3,508,000

Segment Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

We identify our operating segments based on the way we manage, evaluate and internally report our business activities for purposes of allocating resources and assessing performance. We have three reportable segments: Sterigenics, Nordion and Nelson Labs. We have determined our reportable segments based upon an assessment of organizational structure, service types, and internally prepared financial statements. Our chief operating decision-maker evaluates performance and allocates resources based on net revenues and segment income after the elimination of intercompany activities. The accounting policies of our reportable segments are the same as those described in Note 1, “Significant Accounting Policies” of the Company's annual consolidated financial statements and accompanying notes on Form 10-K for the year ended December 31, 2022.

Sterigenics

Sterigenics provides outsourced terminal sterilization and irradiation services for the medical device, pharmaceutical, food safety and advanced applications markets using three major technologies: gamma irradiation, EO processing and E-beam irradiation.

Nordion

Nordion is a leading global provider of Co-60 used in the sterilization and irradiation processes for the medical device, pharmaceutical, food safety, and high-performance materials industries, as well as in the treatment of cancer. In addition, Nordion is a leading global provider of gamma irradiation systems.

Nelson Labs

Nelson Labs provides outsourced microbiological and analytical chemistry testing and advisory services for the medical device and pharmaceutical industries.

For the three months ended March 31, 2023, two customers reported within the Nordion segment individually represented 10% or more of the segment’s total net revenues. These customers represented 54.6% and 11.3% of the total segment’s external net revenues for the three months ended March 31, 2023. The high concentration of revenues from these customers mainly stems from the low sales volume pattern in the three months ended March 31, 2023. For the three months ended March 31, 2022, five customers reported within the Nordion segment individually represented 10% or more of the segment's total net revenues. These customers represented 15.7%, 14.4%, 13.9%, 12.2%, and 11.9% of the total segment's external net revenues for the three months ended March 31, 2022.


(thousands of U.S. dollars)	Three Months Ended March 31,
	2023		2022
Segment revenues(a)
Sterigenics	$	159,997	$	149,462
Nordion	8,551		34,002
Nelson Labs	52,042		53,290
Total net revenues	$	220,590	$	236,754
Segment income(b)
Sterigenics	$	82,840	$	79,403
Nordion	1,526		18,903
Nelson Labs	14,102		17,043
Total segment income	$	98,468	$	115,349

(a)Revenues are reported net of intersegment sales. Our Nordion segment recognized $2.9 million and $15.5 million in revenues from sales to our Sterigenics segment for the three months ended March 31, 2023 and 2022, respectively, that is not reflected in net revenues in the table above. Intersegment sales for Sterigenics and Nelson Labs are immaterial for both periods.

(b)Segment income is only provided on a net basis to the chief operating decision-maker and is reported net of intersegment profits.

Corporate operating expenses for executive management, accounting, information technology, legal, human resources, treasury, investor relations, corporate development, tax, purchasing, and marketing not directly incurred by a segment are allocated to the segments based on total net revenue. Corporate operating expenses that are directly incurred by a segment are reflected in each segment’s income.

Capital expenditures by segment for the three months ended March 31, 2023 and 2022 were as follows:


(thousands of U.S. dollars)	Three Months Ended March 31,
	2023		2022
Sterigenics	$	30,877	$	25,221
Nordion	10,545		7,090
Nelson Labs	3,578		3,235
Total capital expenditures	$	45,000	$	35,546

Total assets and depreciation and amortization expense by segment are not readily available and are not reported separately to the chief operating decision-maker.

A reconciliation of segment income to consolidated income before taxes is as follows:


(thousands of U.S. dollars)	Three Months Ended March 31,
	2023		2022
Segment income	$	98,468	$	115,349
Less adjustments:
Interest expense, net(a)	26,540		16,750
Depreciation and amortization(b)	39,538		36,049
Share-based compensation(c)	7,348		4,538
Gain on foreign currency and derivatives not designated as hedging instruments, net(d)	535		(6,552)
Acquisition and divestiture related charges, net(e)	592		(160)
Business optimization project expenses(f)	2,534		104
Plant closure expenses(g)	(895)		671
Professional services and other expenses relating to EO sterilization facilities(h)	16,302		18,059
Accretion of asset retirement obligation(i)	572		520
COVID-19 expenses(j)	—		103
Consolidated income before taxes	$	5,402	$	45,267

(a)The three months ended March 31, 2023 excludes $2.3 million of interest expense, net on Term Loan B attributable to the loan proceeds that were used to fund the $408.0 million Illinois EO litigation settlement. The three months ended March 31, 2022 excludes a $6.3 million net increase in the fair value of interest rate derivatives not designated as hedging instruments recorded to interest expense.

(b)Includes depreciation of Co-60 held at gamma irradiation sites.

(c)Represents share-based compensation expense to employees and Non-Employee Directors.

(d)Represents the effects of (i) fluctuations in foreign currency exchange rates, (ii) non-cash mark-to-fair value of embedded derivatives relating to certain customer and supply contracts at Nordion, and (iii) unrealized gains on interest rate caps not designated as hedging instruments.

(e)Represents (i) certain direct and incremental costs related to the acquisitions of RCA and BioScience Labs and certain related integration efforts as a result of those acquisitions, (ii) the earnings impact of fair value adjustments (excluding those recognized within amortization expense) resulting from the businesses acquired, and (iii) transition services income and non-cash deferred lease income associated with the terms of the divestiture of the Medical Isotopes business in 2018.

(f)Represents professional fees, contract termination and exit costs, severance and other payroll costs, and other costs associated with business optimization and cost savings projects relating to the integration of acquisitions, operating structure realignment and other process enhancement projects.

(g)Represents professional fees, severance and other payroll costs, and other costs, including ongoing lease and utility expenses associated with the closure of the Willowbrook, Illinois facility. The three months ended March 31, 2023 includes a $1.0 million cancellation fee received from a tenant in connection with the termination of an office space lease at the Nordion facility.

(h)Represents litigation and other professional fees associated with our EO sterilization facilities. This amount also includes $2.3 million of interest expense, net associated with Term Loan B that was issued to finance the $408.0 million cost to settle 880+ pending and threatened EO claims against the Settling Defendants in Illinois under Settlement Agreements entered into on March 28, 2023, subject to substantially all of the plaintiffs providing opt-in consents to their individual settlement allocations and dismissing their claims with prejudice. See Note 15, “Commitments and Contingencies”.

(i)Represents non-cash accretion of asset retirement obligations related to Co-60 and gamma processing facilities, which are based on estimated site remediation costs for any future decommissioning of these facilities (without regard for whether the decommissioning services would be performed by employees of Nordion, instead of by a third party) and are accreted over the life of the asset.

(j)Represents non-recurring costs associated with the COVID-19 pandemic, including incremental costs to implement workplace health and safety measures.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Financial Instruments and Financial Risk

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments and Financial Risk

Derivative Instruments

We do not use derivatives for trading or speculative purposes and are not a party to leveraged derivatives.

Derivatives Designated in Hedge Relationships

From time to time, the Company utilizes interest rate derivatives designated in hedge relationships to manage interest rate risk associated with our variable rate borrowings. These instruments are measured at fair value with changes in fair value recorded as a component of “Accumulated other comprehensive income (loss)” on our Consolidated Balance Sheets.

In March 2023, we entered into an interest rate swap agreement with a notional amount of $400.0 million. The interest rate swap has a forward start date of August 23, 2023 and expires on August 23, 2025. We have designated the interest rate swap as a cash flow hedge designed to hedge the variability of cash flows attributable to changes in the SOFR benchmark interest rate of our 2023 Term Loan. We receive interest at the one-month Term SOFR rate and pay a fixed interest rate under the terms of the swap agreement.

In May 2022, we entered into two interest rate cap agreements with a combined notional amount of $1,000.0 million for a total option premium of $4.1 million. The interest rate caps have a forward start date of July 31, 2023 and expire on July 31, 2024. We have designated these interest rate caps as cash flow hedges designed to hedge the variability of cash flows attributable to changes in the benchmark interest rate of our Term Loan. Under the current terms of the loan agreement, the benchmark interest rate index is expected to transition from LIBOR to the term SOFR at the earlier of June 30, 2023 or the Company's election to “early opt-in” to SOFR. Accordingly, the interest rate cap agreements hedge the variability of cash flows attributable to changes in SOFR by limiting our cash flow exposure related to the term SOFR under a portion of our variable rate borrowings to 3.5%.

In October 2021, we entered into two interest rate cap agreements with a combined notional amount of $1,000.0 million for a total option premium of $1.8 million. Both interest rate caps have a forward start date of December 31, 2022 and expire on July 31, 2023. These interest rate caps are designated as cash flow hedges and are designed to hedge the variability of cash flows attributable to changes in LIBOR (or its successor), the benchmark interest rate being hedged, by limiting our cash flow exposure related to the LIBOR base rate under a portion of our variable rate borrowings to 1.0%.

Derivatives Not Designated in Hedge Relationships

Additionally, from time to time, the Company enters into interest rate caps to manage economic risks associated with our variable rate borrowings that are not designated in hedge relationships. These instruments are recorded at fair value on the Consolidated Balance Sheets, with any changes in the value being recorded in “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Income.

The Company also routinely enters into foreign currency forward contracts to manage foreign currency exchange rate risk of our intercompany loans in certain of our international subsidiaries. The foreign currency forward contracts expire on a monthly basis.

Embedded Derivatives

We have embedded derivatives in certain of our customer and supply contracts as a result of the currency of the contract being different from the functional currency of the parties involved. Changes in the fair value of the embedded derivatives are recognized in “Other income, net” in the Consolidated Statements of Operations and Comprehensive Income.

The following table provides a summary of the notional and fair values of our derivative instruments:


	March 31, 2023							December 31, 2022
(in U.S. Dollars; notional in millions, fair value in thousands)				Fair Value						Fair Value
	Notional Amount			Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
Derivatives designated as hedging instruments
Interest rate caps	$	2,000.0	(a)	$	24,129	—		$	2,000.0	$	34,764	—
Interest rate swaps	400.0		(b)	—		2,387		—		—		—
Derivatives not designated as hedging instruments

Foreign currency forward contracts	154.8			33		23		151.5		—		272
Embedded derivatives	172.5		(c)	2,507		3,524		179.9		2,721		3,508
Total	$	2,727.3		$	26,669	$	5,934	$	2,331.4	$	37,485	$	3,780

(a)$1,000.0 million notional amount of interest rate caps designated as hedging instruments have a forward start date beginning on July 31, 2023.

(b)The notional amount of interest rates swaps designated as hedging instruments reflected in the table above has a forward start date beginning on August 23, 2023.

(c)Represents the total notional amounts for certain of the Company’s supply and sales contracts accounted for as embedded derivatives.

Embedded derivative assets and liabilities, interest rate caps and interest rate swaps are included in “Prepaid expenses and other current assets”, “Other assets”, and “Noncurrent liabilities” respectively, on our Consolidated Balance Sheets depending upon their position at period end. Embedded derivative liabilities are included in “Accrued liabilities” on the Consolidated Balance Sheets.


(thousands of U.S. dollars)
Three Months Ended March 31,	2023		2022
Unrealized gain on interest rate derivatives recorded in interest expense, net	$	—	$	(6,346)
Unrealized loss (gain) on embedded derivatives recorded in other income, net	227		(1,018)
Realized gain on interest rate derivatives recorded in interest expense, net(a)	(9,648)		—
Realized loss (gain) on foreign currency forward contracts recorded in foreign exchange (gain) loss	449		(1,530)

(a)For the three months ended March 31, 2023, amounts represent quarterly settlement of interest rate caps.

The following table summarizes the net gains (losses) on our cash flow hedges recognized in “Other comprehensive income (loss)” during the period:


(thousands of U.S. dollars)
Three Months Ended March 31,	2023		2022
Unrealized gain (loss) on interest rate derivatives recorded in other comprehensive income	$	(3,372)	$	6,179
Amounts reclassified from accumulated other comprehensive income to interest expense	(9,275)		$	—
Net current period other comprehensive income (loss)	$	(12,647)	$	6,179

We expect to reclassify approximately $16.7 million of net gains on derivative instruments from accumulated other comprehensive income to income during the next 12 months associated with our cash flow hedges.

Credit Risk

Certain of our financial assets, including cash and cash equivalents, are exposed to credit risk.

We are also exposed, in our normal course of business, to credit risk from our customers. As of March 31, 2023 and December 31, 2022, accounts receivable was net of an allowance for uncollectible accounts of $2.6 million and $1.9 million, respectively.

Credit risk on financial instruments arises from the potential for counterparties to default on their contractual obligations to us. We are exposed to credit risk in the event of non-performance, but do not anticipate non-performance by any of the counterparties to our financial instruments. We limit our credit risk by dealing with counterparties that are considered to be of high credit quality. In the event of non-performance by counterparties, the carrying value of our financial instruments represents the maximum amount of loss that would be incurred.

Our credit team evaluates and regularly monitors changes in the credit risk of our customers. We routinely assess the collectability of accounts receivable and maintain an adequate allowance for uncollectible accounts to address potential credit losses. The process includes a review of customer financial information and credit ratings, current market conditions as well as the expected future economic conditions that may impact the collection of trade receivables. We regularly review our customers’ past due amounts through an analysis of aged accounts receivables, specific customer past due aging amounts, and the history of trade receivables written off. Upon concluding that a receivable balance is not collectible, the balance is written off against the allowance for uncollectible accounts.

Fair Value Hierarchy

The fair value of our financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques we would use to determine such fair values are described as follows: Level 1—fair values determined by inputs utilizing quoted prices in active markets for identical assets or liabilities; Level 2—fair values based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable; Level 3—fair values determined by unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants.

The following table discloses the fair value of our financial assets and liabilities:


As of March 31, 2023			Fair Value
(thousands of U.S. dollars)	Carrying Amount		Level 1		Level 2		Level 3
Derivatives designated as hedging instruments(a)
Interest rate caps	$	24,129	$	—	$	24,129	$	—
Interest rate swaps	2,387		—		2,387		—
Derivatives not designated as hedging instruments(b)
Foreign currency forward contract assets	33		—		33		—
Foreign currency forward contract liabilities	23		—		23		—
Embedded derivative assets	2,507		—		2,507		—
Embedded derivative liabilities	3,524		—		3,524		—
Current portion of long-term debt
Term loan B, due 2026	3,583		—		3,694		—
Other long-term debt(c)	448		—		448		—
Long-Term Debt(d)
Term loan, due 2026	1,748,221		—		1,694,868		—
Term loan B, due 2026	474,112		—		488,806		—
Finance Lease Obligations (with current portion)(e)	70,323		—		70,323		—


As of December 31, 2022			Fair Value
(thousands of U.S. dollars)	Carrying Amount		Level 1		Level 2		Level 3
Derivatives designated as hedging instruments(a)
Interest rate caps	$	34,764	$	—	$	34,764	$	—
Derivatives not designated as hedging instruments(b)
Foreign currency forward contracts	272		—		272		—
Embedded derivative assets	2,721		—		2,721		—
Embedded derivative liabilities	3,508		—		3,508		—
Current portion of long-term debt(c)
Revolving credit facility	196,672		—		$	196,672	—
Other long-term debt	447		—		$	447	—
Long-Term Debt(d)
Term loan, due 2026	1,747,115		—		1,626,460		—
Finance Lease Obligations (with current portion)(e)	58,677		—		58,677		—

(c)Carrying value of other long-term debt and revolving credit facility approximates fair value.

(e)Fair value approximates carrying value.

Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials and supplies	$ 39,616	$ 36,402
Work-in-process	1,554	584
Finished goods	5,682	276
Inventories, gross	46,852	37,262
Reserve for excess and obsolete inventory	(116)	(117)
Inventories, net	$ 46,736	$ 37,145

Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 350,238	$ 586,096
Ending balance	361,125	642,130
AOCI Attributable to Parent
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(106,653)	(83,566)
Other comprehensive income (loss) before reclassifications	8,757	20,882
Amounts reclassified from accumulated other comprehensive income (loss)	(6,802)	(2)
Net current-period other comprehensive income (loss)	1,955	20,880
Ending balance	(104,698)	(62,686)
Defined Benefit Plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	3,209	(17,581)
Other comprehensive income (loss) before reclassifications	(7)	(272)
Amounts reclassified from accumulated other comprehensive income (loss)	(44)	(2)
Net current-period other comprehensive income (loss)	(51)	(274)
Ending balance	3,158	(17,855)
Foreign Currency Translation
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(131,205)	(66,389)
Other comprehensive income (loss) before reclassifications	11,257	14,975
Amounts reclassified from accumulated other comprehensive income (loss)	0	0
Net current-period other comprehensive income (loss)	11,257	14,975
Ending balance	(119,948)	(51,414)
Interest Rate Derivatives
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	21,343	404
Other comprehensive income (loss) before reclassifications	(2,493)	6,179
Amounts reclassified from accumulated other comprehensive income (loss)	(6,758)	0
Net current-period other comprehensive income (loss)	(9,251)	6,179
Ending balance	$ 12,092	$ 6,583

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

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+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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+ Details

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Income tax expense is provided on an interim basis based upon our estimate of the annual effective income tax rate. In determining the estimated annual effective income tax rate, we analyze various factors, including projections of our annual earnings and the taxing jurisdictions where the earnings will occur, the impact of state and local taxes, our ability to utilize tax credits and net operating loss carryforwards and available tax planning alternatives. Our effective tax rate was 47.4 % and 32.3% for the three months ended March 31, 2023 and 2022, respectively. Income tax expense for the three months ended March 31, 2023 differed from the statutory rate primarily due to a net increase in the valuation allowance attributable to the limitation on the deductibility of interest expense, the impact of the foreign rate differential, and non-deductible compensation. Income tax expense for the three months ended March 31, 2022 differed from the statutory rate primarily due to a net increase in the valuation allowance attributable to the limitation on the deductibility of interest expense, the impact of the foreign rate differential, and global intangible low-tax income (“GILTI”).

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Long-Term Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Long-Term Debt

Long-term debt consisted of the following:


(thousands of U.S. dollars)
As of March 31, 2023	Gross Amount		Unamortized Debt Issuance Costs		Unamortized Debt Discount		Net Amount
Term loan, due 2026	$	1,763,100	$	(2,007)	$	(12,872)	$	1,748,221
Term loan B, due 2026	500,000		(7,700)		(14,605)		477,695

Other long-term debt	450		(2)		—		448
	2,263,550		(9,709)		(27,477)		2,226,364
Less current portion	4,200		(60)		(109)		4,031
Long-term debt	$	2,259,350	$	(9,649)	$	(27,368)	$	2,222,333


(thousands of U.S. dollars)
As of December 31, 2022	Gross Amount		Unamortized Debt Issuance Costs		Unamortized Debt Discount		Net Amount
Term loan, due 2026	1,763,100		(2,140)		(13,845)		1,747,115
Revolving credit facility	200,000		(3,328)		—		196,672
Other long-term debt	450		(3)		—		447
	1,963,550		(5,471)		(13,845)		1,944,234
Less current portion	200,450		(3,331)		—		197,119
Long-term debt	$	1,763,100	$	(2,140)	$	(13,845)	$	1,747,115

Debt Facilities

Senior Secured Credit Facilities

On December 13, 2019, Sotera Health Holdings, LLC (“SHH”), our wholly-owned subsidiary, entered into senior secured first lien credit facilities (the “Senior Secured Credit Facilities”), consisting of both a prepayable senior secured first lien term loan (the “Term Loan”) and a senior secured first lien revolving credit facility (the “Revolving Credit Facility”) pursuant to a first lien credit agreement (the “Credit Agreement”). The Term Loan matures on December 13, 2026. After giving effect to the Revolving Credit Facility Amendment (defined below), the total borrowing capacity under the Revolving Credit Facility is $423.8 million. The Senior Secured Credit Facilities also provide SHH the right at any time and under certain conditions to request incremental term loans or incremental revolving credit commitments based on a formula defined in the Senior Secured Credit Facilities. As of March 31, 2023 and December 31, 2022, total borrowings under the Term Loan were $1,763.1 million. The weighted average interest rate on borrowings under the Term Loan for the three months ended March 31, 2023 and March 31, 2022 was 7.44% and 3.25%, respectively.

On February 23, 2023, we entered into the First Lien Credit Agreement (the “2023 Credit Agreement”), which provides for, among other things, a new Term Loan B facility (the "2023 Term Loan") in an aggregate principal amount of $500.0 million and bears interest, at the Company’s option, at a variable rate per annum equal to either (x) the Term Secured Overnight Financing Rate (“Term SOFR”) (as defined in the 2023 Credit Agreement) plus an applicable margin of 3.75% or (y) an alternative base rate (“ABR”) plus an applicable margin of 2.75%. The 2023 Credit Agreement is secured on a first priority basis on substantially all of our assets and is guaranteed by certain of our subsidiaries. It is prepayable without premium or penalty at any time six months after the closing date. The principal balance shall be paid at 1% of the aggregate principal amount ($5.0 million) per year, with the balance due at the end of 2026. The Company used the proceeds of this debt to fund a previously announced $408.0 million EO litigation settlement in Cook County, Illinois and pay down the $200.0 million of existing borrowings under the Revolving Credit Facility concurrent with the funding of this loan on February 23, 2023. In addition, the Company plans to use the remaining proceeds to further enhance liquidity and for general corporate purposes. The weighted average interest rate on borrowings under the 2023 Term Loan for the three months ended March 31, 2023 was 8.82%.

On March 21, 2023, the Company entered into an Incremental Facility Amendment to the Credit Agreement (“Revolving Credit Facility Amendment”), which provides for an increase in the commitments under the existing Revolving Credit Facility in an aggregate principal amount of $76.3 million. In addition, certain of the lenders providing revolving credit commitments provided additional commitments for the issuance of the letters of credit under the Revolving Credit Facility in an aggregate principal amount of $165.1 million. The Revolving Credit Facility Amendment also provides for the replacement of the reference interest rate option for Revolving Loans from London Interbank Offered Rate (“LIBOR”) to SOFR plus an applicable credit spread adjustment of 0.10% (subject to a minimum floor of 0.00%). After giving effect to the Revolving Credit Facility Amendment, the aggregate amount of the Lenders' Revolving Commitments is $423.8 million. The maturity date of the Revolving Credit Facility remains June 13, 2026. The Company borrowed $200.0 million under the Revolving Credit Facility during the fourth quarter of 2022, which was repaid in the first quarter of 2023, as noted above. As of March 31, 2023 there were no borrowings outstanding under the Revolving Credit Facility. The weighted average interest rate on outstanding borrowings under the Revolving Credit Facility for the three months ended March 31, 2023 was 7.47%.

The Senior Secured Credit Facilities and 2023 Credit Agreement contain additional covenants that, among other things, restrict, subject to certain exceptions, our ability and the ability of our restricted subsidiaries to engage in certain activities, such as incur indebtedness or permit to exist any lien on any property or asset now owned or hereafter acquired, as specified in the Senior Secured Credit Facilities and 2023 Credit Agreement. The Senior Secured Credit Facilities and 2023 Credit Agreement also contain certain customary affirmative covenants and events of default, including upon a change of control. An event of default under the Senior Secured Credit Facilities and 2023 Credit Agreement would occur if the Company or certain of its subsidiaries received one or more enforceable judgments for payment in an aggregate amount in excess of $100.0 million, which judgment or judgments are not stayed or remain undischarged for a period of sixty consecutive days or if, in order to enforce such a judgment, a judgment creditor attached or levied upon assets that are material to the business and operations, taken as a whole, of the Company and certain of its subsidiaries. As of March 31, 2023, we were in compliance with all of the Senior Secured Credit Facilities and 2023 Credit Agreement covenants.

All of SHH’s obligations under the Senior Secured Credit Facilities and 2023 Credit Agreement are unconditionally guaranteed by the Company and each existing and subsequently acquired or organized direct or indirect wholly-owned domestic restricted subsidiary of the Company, with customary exceptions including, among other things, where providing such guarantees is not permitted by law, regulation or contract or would result in material adverse tax consequences. All obligations under the Senior Secured Credit Facilities and 2023 Credit Agreement, and the guarantees of such obligations, are secured by substantially all assets of the borrower and guarantors, subject to permitted liens and other exceptions and exclusions, as outlined in the Senior Secured Credit Facilities and 2023 Credit Agreement.

Outstanding letters of credit are collateralized by encumbrances against the Revolving Credit Facility and the collateral pledged thereunder, or by cash placed on deposit with the issuing bank. As of March 31, 2023, the Company had $65.1 million of letters of credit issued against the Revolving Credit Facility, resulting in total availability under the Revolving Credit Facility of $358.7 million.

Term Loan Interest Rate Risk Management

The Company utilizes interest rate derivatives to eliminate the variability of cash flows in the interest payments associated with our variable rate debt due to changes in LIBOR and Term SOFR. For additional information on the derivative instruments described above, refer to Note 16, “Financial Instruments and Financial Risk”, “Derivatives Instruments.”

Publication of all U.S. LIBOR tenors will cease after June 30, 2023. The most likely replacement benchmark is expected to be the SOFR, which has been recommended by financial regulators in the United States. We have identified our LIBOR-based exposure in our debt and outstanding interest rate derivative agreements and have addressed the LIBOR transition for those contracts. In accordance with ASC 848 Reference Rate Reform, we have elected to apply certain optional expedients for contract modifications and hedging relationships for derivative instruments impacted by the benchmark interest rate transition. The optional expedients remove the requirement to remeasure contract modifications or dedesignate hedging relationships impacted by reference rate reform.

Aggregate Maturities

Aggregate maturities of the Company’s long-term debt, excluding debt discounts, as of March 31, 2023, are as follows:


(thousands of U.S. dollars)
2023	$	2,950
2024	5,000
2025	5,000
2026	2,250,600
2027	—
Thereafter	—
Total	$	2,263,550

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Section 50
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings / (Accumulated Deficit)	Accumulated Other Comprehensive (Loss) Income
Beginning balance (in shares) at Dec. 31, 2021		282,985
Beginning balance at Dec. 31, 2021	$ 586,096	$ 2,860	$ (33,545)	$ 1,172,593	$ (472,246)	$ (83,566)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation plans (in shares)		(55)
Share-based compensation plans	4,513		9	4,504
Comprehensive income (loss):
Pension and post-retirement plan adjustments, net of tax	(274)					(274)
Foreign currency translation	14,975					14,975
Interest rate derivatives, net of tax	6,179					6,179
Net income	30,641				30,641
Ending balance (in shares) at Mar. 31, 2022		282,930
Ending balance at Mar. 31, 2022	642,130	$ 2,860	(33,536)	1,177,097	(441,605)	(62,686)
Beginning balance (in shares) at Dec. 31, 2022		282,421
Beginning balance at Dec. 31, 2022	350,238	$ 2,860	(29,775)	1,189,622	(705,816)	(106,653)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation plans (in shares)		95
Share-based compensation plans	6,090		355	5,735
Comprehensive income (loss):
Pension and post-retirement plan adjustments, net of tax	(51)					(51)
Foreign currency translation	11,257					11,257
Interest rate derivatives, net of tax	(9,251)					(9,251)
Net income	2,842				2,842
Ending balance (in shares) at Mar. 31, 2023		282,516
Ending balance at Mar. 31, 2023	$ 361,125	$ 2,860	$ (29,420)	$ 1,195,357	$ (702,974)	$ (104,698)

Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following:


(thousands of U.S. dollars)
	March 31, 2023		December 31, 2022
Accrued employee compensation	$	26,250	$	32,936
Illinois EO litigation settlement reserve	408,000		408,000
Other legal reserves	3,651		3,776
Accrued interest expense	27,714		23,291
Embedded derivatives	3,524		3,508
Professional fees	16,222		6,436
Accrued utilities	1,913		1,906
Insurance accrual	2,320		2,392
Accrued taxes	2,654		2,567
Other	4,543		5,318
Accrued liabilities	$	496,791	$	490,130

Share-Based Compensation - Schedule of Restricted Stock Activity (Details) - RSUs	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Number of Shares
Beginning balance (in shares) \| shares	2,482,435
Granted (in shares) \| shares	664,433
Forfeited (in shares) \| shares	(42,275)
Vested (in shares) \| shares	(189,941)
Ending balance (in shares) \| shares	2,914,652
Weighted- average Grant Date Fair Value
Beginning balance (in dollars per share) \| $ / shares	$ 13.09
Granted (in dollars per share) \| $ / shares	17.59
Forfeited (in dollars per share) \| $ / shares	11.42
Vested (in dollars per share) \| $ / shares	20.11
Ending balance (in dollars per share) \| $ / shares	$ 13.69

Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Changes in our accumulated other comprehensive income (loss) balances, net of applicable tax, were as follows:


(thousands of U.S. dollars)	Defined Benefit Plans			Foreign Currency Translation		Interest Rate Derivatives			Total
Beginning balance – January 1, 2023	$	3,209		$	(131,205)	$	21,343		$	(106,653)
Other comprehensive income (loss) before reclassifications	(7)			11,257		(2,493)			8,757
Amounts reclassified from accumulated other comprehensive income (loss)	(44)		(a)	—		(6,758)		(b)	(6,802)
Net current-period other comprehensive income (loss)	(51)			11,257		(9,251)			1,955
Ending balance – March 31, 2023	$	3,158		$	(119,948)	$	12,092		$	(104,698)

Beginning balance – January 1, 2022	$	(17,581)		$	(66,389)	$	404		$	(83,566)
Other comprehensive income (loss) before reclassifications	(272)			14,975		6,179			20,882
Amounts reclassified from accumulated other comprehensive income (loss)	(2)		(a)	—		—			(2)
Net current-period other comprehensive income (loss)	(274)			14,975		6,179			20,880
Ending balance – March 31, 2022	$	(17,855)		$	(51,414)	$	6,583		$	(62,686)

(a)For defined benefit pension plans, amounts reclassified from accumulated other comprehensive income (loss) are recorded to “Other income, net” within the Consolidated Statements of Operations and Comprehensive Income.

(b)For interest rate derivatives, amounts reclassified from accumulated other comprehensive income (loss) are recorded to “Interest expense, net” within the Consolidated Statements of Operations and Comprehensive Income.

Financial Instruments and Financial Risk - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Derivative [Line Items]
Derivative asset	$ 26,669	$ 37,485
Derivative liabilities	5,934	3,780
Derivatives Designated as Hedging Instrument \| Interest rate caps
Derivative [Line Items]
Derivative asset	24,129	34,764
Derivative liabilities	0	0
Derivatives Designated as Hedging Instrument \| Interest rate caps \| Level 1
Derivative [Line Items]
Derivative asset	0	0
Derivatives Designated as Hedging Instrument \| Interest rate caps \| Level 2
Derivative [Line Items]
Derivative asset	24,129	34,764
Derivatives Designated as Hedging Instrument \| Interest rate caps \| Level 3
Derivative [Line Items]
Derivative asset	0	0
Derivatives Designated as Hedging Instrument \| Interest rate swaps
Derivative [Line Items]
Derivative asset	0	0
Derivative liabilities	2,387	0
Derivatives Designated as Hedging Instrument \| Interest rate swaps \| Level 1
Derivative [Line Items]
Derivative asset	0
Derivatives Designated as Hedging Instrument \| Interest rate swaps \| Level 2
Derivative [Line Items]
Derivative asset	2,387
Derivatives Designated as Hedging Instrument \| Interest rate swaps \| Level 3
Derivative [Line Items]
Derivative asset	0
Derivatives Designated as Hedging Instrument \| Carrying Amount \| Interest rate caps
Derivative [Line Items]
Derivative asset	24,129	34,764
Derivatives Designated as Hedging Instrument \| Carrying Amount \| Interest rate swaps
Derivative [Line Items]
Derivative asset	2,387
Derivatives Not Designated as Hedging Instruments \| Term loan B, due 2026 \| Level 1
Derivative [Line Items]
Current portion of long-term debt	0
Long-term debt	0
Derivatives Not Designated as Hedging Instruments \| Term loan B, due 2026 \| Level 2
Derivative [Line Items]
Current portion of long-term debt	3,694
Long-term debt	488,806
Derivatives Not Designated as Hedging Instruments \| Term loan B, due 2026 \| Level 3
Derivative [Line Items]
Current portion of long-term debt	0
Long-term debt	0
Derivatives Not Designated as Hedging Instruments \| Other long-term debt \| Level 1
Derivative [Line Items]
Current portion of long-term debt	0	0
Derivatives Not Designated as Hedging Instruments \| Other long-term debt \| Level 2
Derivative [Line Items]
Current portion of long-term debt	448	447
Derivatives Not Designated as Hedging Instruments \| Other long-term debt \| Level 3
Derivative [Line Items]
Current portion of long-term debt	0	0
Derivatives Not Designated as Hedging Instruments \| Term loan, due 2026 \| Level 1
Derivative [Line Items]
Long-term debt	0	0
Derivatives Not Designated as Hedging Instruments \| Term loan, due 2026 \| Level 2
Derivative [Line Items]
Long-term debt	1,694,868	1,626,460
Derivatives Not Designated as Hedging Instruments \| Term loan, due 2026 \| Level 3
Derivative [Line Items]
Long-term debt	0	0
Derivatives Not Designated as Hedging Instruments \| Revolving credit facility \| Level 1
Derivative [Line Items]
Current portion of long-term debt		0
Derivatives Not Designated as Hedging Instruments \| Revolving credit facility \| Level 2
Derivative [Line Items]
Current portion of long-term debt		196,672
Derivatives Not Designated as Hedging Instruments \| Revolving credit facility \| Level 3
Derivative [Line Items]
Current portion of long-term debt		0
Derivatives Not Designated as Hedging Instruments \| Finance Lease Obligations (with current portion) \| Level 1
Derivative [Line Items]
Long-term debt	0	0
Derivatives Not Designated as Hedging Instruments \| Finance Lease Obligations (with current portion) \| Level 2
Derivative [Line Items]
Long-term debt	70,323	58,677
Derivatives Not Designated as Hedging Instruments \| Finance Lease Obligations (with current portion) \| Level 3
Derivative [Line Items]
Long-term debt	0	0
Derivatives Not Designated as Hedging Instruments \| Foreign Exchange Forward Assets and Liabilities \| Level 1
Derivative [Line Items]
Derivative asset	0	0
Derivative liabilities	0
Derivatives Not Designated as Hedging Instruments \| Foreign Exchange Forward Assets and Liabilities \| Level 2
Derivative [Line Items]
Derivative asset	33	272
Derivative liabilities	23
Derivatives Not Designated as Hedging Instruments \| Foreign Exchange Forward Assets and Liabilities \| Level 3
Derivative [Line Items]
Derivative asset	0	0
Derivative liabilities	0
Derivatives Not Designated as Hedging Instruments \| Embedded Derivative Assets and Liabilities
Derivative [Line Items]
Derivative asset	2,507	2,721
Derivative liabilities	3,524	3,508
Derivatives Not Designated as Hedging Instruments \| Embedded Derivative Assets and Liabilities \| Level 1
Derivative [Line Items]
Derivative asset	0	0
Derivative liabilities	0	0
Derivatives Not Designated as Hedging Instruments \| Embedded Derivative Assets and Liabilities \| Level 2
Derivative [Line Items]
Derivative asset	2,507	2,721
Derivative liabilities	3,524	3,508
Derivatives Not Designated as Hedging Instruments \| Embedded Derivative Assets and Liabilities \| Level 3
Derivative [Line Items]
Derivative asset	0	0
Derivative liabilities	0	0
Derivatives Not Designated as Hedging Instruments \| Carrying Amount \| Term loan B, due 2026
Derivative [Line Items]
Current portion of long-term debt	3,583
Long-term debt	474,112
Derivatives Not Designated as Hedging Instruments \| Carrying Amount \| Other long-term debt
Derivative [Line Items]
Current portion of long-term debt	448	447
Derivatives Not Designated as Hedging Instruments \| Carrying Amount \| Term loan, due 2026
Derivative [Line Items]
Long-term debt	1,748,221	1,747,115
Derivatives Not Designated as Hedging Instruments \| Carrying Amount \| Revolving credit facility
Derivative [Line Items]
Current portion of long-term debt		196,672
Derivatives Not Designated as Hedging Instruments \| Carrying Amount \| Finance Lease Obligations (with current portion)
Derivative [Line Items]
Long-term debt	70,323	58,677
Derivatives Not Designated as Hedging Instruments \| Carrying Amount \| Foreign Exchange Forward Assets and Liabilities
Derivative [Line Items]
Derivative asset	33	272
Derivative liabilities	23
Derivatives Not Designated as Hedging Instruments \| Carrying Amount \| Embedded Derivative Assets and Liabilities
Derivative [Line Items]
Derivative asset	2,507	2,721
Derivative liabilities	$ 3,524	$ 3,508

Segment Information - Narrative (Details) - segment	3 Months Ended
Segment Information - Narrative (Details) - segment	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting [Abstract]
Number of reportable segments	3
Operating Segments \| Nordion \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk \| Customer One
Segment Reporting Information [Line Items]
Percentage	54.60%	15.70%
Operating Segments \| Nordion \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk \| Customer Two
Segment Reporting Information [Line Items]
Percentage	11.30%	14.40%
Operating Segments \| Nordion \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk \| Customer Three
Segment Reporting Information [Line Items]
Percentage		13.90%
Operating Segments \| Nordion \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk \| Customer Four
Segment Reporting Information [Line Items]
Percentage		12.20%
Operating Segments \| Nordion \| Revenue from Contract with Customer Benchmark \| Customer Concentration Risk \| Customer Five
Segment Reporting Information [Line Items]
Percentage		11.90%

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

Our basic and diluted earnings per common share are calculated as follows:


	Three Months Ended
in thousands of U.S. dollars and share amounts (except per share amounts)	March 31, 2023		March 31, 2022
Earnings:
Net income	$	2,842	$	30,641
Less: Allocation to participating securities	18		338
Net income attributable to Sotera Health Company common shareholders	$	2,824	$	30,303
Weighted Average Common Shares:
Weighted-average common shares outstanding - basic	280,691		279,829
Dilutive effect of potential common shares	2,286		79
Weighted-average common shares outstanding - diluted	282,977		279,908
Earnings per Common Share:
Net income attributable to Sotera Health Company common shareholders - basic	$	0.01	$	0.11
Net income attributable to Sotera Health Company common shareholders - diluted	0.01		0.11

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

Diluted earnings per share does not consider the following potential common shares as the effect would be anti-dilutive:


	Three Months Ended
in thousands of share amounts	March 31, 2023	March 31, 2022
Stock options	3,570	2,889
RSUs	492	172
Total anti-dilutive securities	4,062	3,061

Revenue Recognition

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue RecognitionThe following table shows disaggregated net revenues from contracts with external customers by timing of revenue and by segment for the three months ended March 31, 2023 and 2022:


(thousands of U.S. dollars)	Three Months Ended March 31, 2023
	Sterigenics		Nordion		Nelson Labs		Consolidated
Point in time	$	159,997	$	7,588	$	—	$	167,585
Over time	—		963		52,042		53,005
Total	$	159,997	$	8,551	$	52,042	$	220,590


(thousands of U.S. dollars)	Three Months Ended March 31, 2022
	Sterigenics		Nordion		Nelson Labs		Consolidated
Point in time	$	149,462	$	33,285	$	—	$	182,747
Over time	—		717		53,290		54,007
Total	$	149,462	$	34,002	$	53,290	$	236,754

Contract Balances

As of March 31, 2023, and December 31, 2022, contract assets included in prepaid expenses and other current assets on the Consolidated Balance Sheets totaled approximately $18.7 million and $19.8 million, respectively, resulting from revenue recognized over time in excess of the amount billed to the customer.

When we receive consideration from a customer prior to transferring goods or services under the terms of a sales contract, we record deferred revenue, which represents a contract liability. Deferred revenue totaled $15.2 million and $12.1 million at March 31, 2023 and December 31, 2022, respectively. We recognize deferred revenue after we have transferred control of the goods or services to the customer and all revenue recognition criteria are met.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

Long-Term Debt - Senior Secured Credit Facilities (Narrative) (Details) - USD ($)			3 Months Ended		12 Months Ended
	Feb. 23, 2023	Sep. 19, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Mar. 21, 2023	Dec. 13, 2019
Debt Instrument [Line Items]
Long-term debt, gross			$ 2,263,550,000		$ 1,963,550,000
Prepayment period without penalty	6 months
Asset Transfer Case \| Pending Litigation
Debt Instrument [Line Items]
Litigation settlement amount awarded to other party	$ 408,000,000				408,000,000
Ethylene Oxide Tort Litigation - Illinois \| Pending Litigation
Debt Instrument [Line Items]
Litigation settlement amount awarded to other party		$ 358,700,000	408,000,000
Base amount for default			$ 100,000,000
Triggering period for default			60 days
Revolving credit facility \| Term Loan
Debt Instrument [Line Items]
Weighted average interest rate			7.47%
Term loan, due 2026 \| Term Loan
Debt Instrument [Line Items]
Long-term debt, gross			$ 1,763,100,000		1,763,100,000
Weighted average interest rate			7.44%	3.25%
First Lien Notes due 2026 \| Secured Debt
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 500,000,000
Principal balance payment, percent of amount outstanding	1.00%
Annual principal payment	$ 5,000,000
First Lien Notes due 2026 \| Secured Debt \| SOFR
Debt Instrument [Line Items]
Basis spread on variable rate	3.75%		0.10%
First Lien Notes due 2026 \| Secured Debt \| SOFR \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate			0.00%
First Lien Notes due 2026 \| Secured Debt \| Alternative Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	2.75%
Term loan B, due 2026 \| Term Loan
Debt Instrument [Line Items]
Long-term debt, gross			$ 500,000,000
Weighted average interest rate			8.82%
Revolving credit facility \| Revolving credit facility
Debt Instrument [Line Items]
Maximum borrowing capacity						$ 423,800,000	$ 423,800,000
Long-term debt, gross					200,000,000
Extinguishment of debt	$ 200,000,000
Debt outstanding					$ 200,000,000
Capitalized debt issuance costs			$ 0
Letters of credit outstanding, amount			65,100,000
Unused borrowing capacity			$ 358,700,000
Revolving credit facility \| First Lien Notes due 2026
Debt Instrument [Line Items]
Maximum borrowing capacity						165,100,000
Revolving credit facility \| First Lien Notes due 2026 \| Secured Debt
Debt Instrument [Line Items]
Maximum borrowing capacity						$ 76,300,000

Employee Benefits - Narrative (Details) - Nordion - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Defined Benefit Plan Disclosure [Line Items]
Expect funding requirements in each of the next five years	$ 0.3
Defined Benefit Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Letters of credit outstanding, amount	$ 43.5	$ 44.1
Defined Benefit Pension Plan \| Maximum
Defined Benefit Plan Disclosure [Line Items]
Solvency payment as percent of market value	15.00%

Goodwill and Other Intangible Assets - Schedule of Future Amortization Expense (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
For the remainder of 2023	$ 60,084
2024	79,986
2025	42,584
2026	22,227
2027	21,150
Thereafter	143,016
Total	$ 369,047

Consolidated Statements of Operations and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Pension and post-retirement benefits, tax	$ (17)	$ (92)
Interest rate swaps, tax	$ (3,396)	$ 2,109

Earnings Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Basic earnings per share represents the amount of income attributable to each common share outstanding. Diluted earnings per share represents the amount of income attributable to each common share outstanding adjusted for the effects of potentially dilutive common shares. Potentially dilutive common shares include stock options and other stock-based awards. In the periods where the effect would be antidilutive, potentially dilutive common shares are excluded from the calculation of diluted earnings per share.

In periods in which the Company has net income, earnings per share is calculated using the two-class method. This method is required as unvested restricted stock distributed in respect of pre-IPO Class B-1 and B-2 awards have the right to receive non-forfeitable dividends or dividend equivalents if the Company were to declare dividends on its common stock. Pursuant to the two-class method, earnings for each period are allocated on a pro-rata basis to common stockholders and unvested pre-IPO Class B-1 and B-2 restricted stock awards. Diluted earnings per share is computed using the more dilutive of (a) the two-class method, or (b) treasury stock method, as applicable, to the potentially dilutive instruments.

Our basic and diluted earnings per common share are calculated as follows:


	Three Months Ended
in thousands of U.S. dollars and share amounts (except per share amounts)	March 31, 2023		March 31, 2022
Earnings:
Net income	$	2,842	$	30,641
Less: Allocation to participating securities	18		338
Net income attributable to Sotera Health Company common shareholders	$	2,824	$	30,303
Weighted Average Common Shares:
Weighted-average common shares outstanding - basic	280,691		279,829
Dilutive effect of potential common shares	2,286		79
Weighted-average common shares outstanding - diluted	282,977		279,908
Earnings per Common Share:
Net income attributable to Sotera Health Company common shareholders - basic	$	0.01	$	0.11
Net income attributable to Sotera Health Company common shareholders - diluted	0.01		0.11

Diluted earnings per share does not consider the following potential common shares as the effect would be anti-dilutive:


	Three Months Ended
in thousands of share amounts	March 31, 2023	March 31, 2022
Stock options	3,570	2,889
RSUs	492	172
Total anti-dilutive securities	4,062	3,061

Prepaid Expenses and Other Current Assets

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


(thousands of U.S. dollars)
	March 31, 2023		December 31, 2022
Prepaid taxes	$	26,426	$	26,598
Prepaid business insurance	8,184		9,964
Prepaid rent	1,072		998
Customer contract assets	18,736		19,777
Insurance and indemnification receivables	3,529		3,724
Current deposits	396		660
Prepaid maintenance contracts	517		324
Value added tax receivable	2,195		1,640
Prepaid software licensing	1,854		1,832
Stock supplies	3,639		3,656
Embedded derivative assets	2,507		2,721
Interest receivable - interest rate cap settlement	6,375		—
Other	11,873		9,101
Prepaid expenses and other current assets	$	87,303	$	80,995

Basis of Presentation (Policies)	3 Months Ended
Basis of Presentation (Policies)	Mar. 31, 2023
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates – In preparing our consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”), we make estimates and assumptions that affect the amounts reported and the accompanying notes. We regularly evaluate the estimates and assumptions used and revise them as new information becomes available. Actual results may vary from those estimates.
Adoption of Accounting Standard Updates	Adoption of Accounting Standard Updates Effective January 1, 2023, we adopted ASU 2021-08 - Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The amendments in ASU 2021-08 require that an acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contract with Customers (“ASC Topic 606”). At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC Topic 606 as if it had originated the contracts. The adoption of this standard did not have a material impact on our consolidated financial statements and disclosures.

Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued employee compensation	$ 26,250	$ 32,936
Illinois EO litigation settlement reserve	408,000	408,000
Other legal reserves	3,651	3,776
Accrued interest expense	27,714	23,291
Embedded derivatives	3,524	3,508
Professional fees	16,222	6,436
Accrued utilities	1,913	1,906
Insurance accrual	2,320	2,392
Accrued taxes	2,654	2,567
Other	4,543	5,318
Accrued liabilities	$ 496,791	$ 490,130

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating activities:
Net income	$ 2,842	$ 30,641
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	18,931	15,867
Amortization of intangible assets	20,607	20,182
Deferred income taxes	(1,770)	5,633
Share-based compensation expense	7,288	4,538
Accretion of asset retirement obligations	572	520
Unrealized foreign exchange loss	802	2,430
Unrealized loss (gain) on derivatives not designated as hedging instruments	227	(7,364)
Amortization of debt issuance costs	1,910	1,414
Other	(1,328)	(1,989)
Changes in operating assets and liabilities:
Accounts receivable	10,223	(6,387)
Inventories	(9,512)	9,323
Other current assets	(6,318)	(8,934)
Accounts payable	(9,610)	(12,742)
Accrued liabilities	8,826	2,479
Income taxes payable / receivable, net	(9,551)	(5,222)
Other liabilities	(372)	(81)
Other long-term assets	104	(341)
Net cash provided by operating activities	33,871	49,967
Investing activities:
Purchases of property, plant and equipment	(45,000)	(35,546)
Adjustment to purchase of Regulatory Compliance Associates Inc.	0	63
Other investing activities	32	0
Net cash used in investing activities	(44,968)	(35,483)
Financing activities:
Proceeds from long-term borrowings	500,000	0
Payment on revolving credit facility	(200,000)	0
Payments of debt issuance costs	(24,457)	(31)
Other financing activities	(1,627)	(418)
Net cash provided by (used in) financing activities	273,916	(449)
Effect of exchange rate changes on cash and cash equivalents	1,067	487
Net increase in cash and cash equivalents, including restricted cash	263,886	14,522
Cash and cash equivalents, including restricted cash, at beginning of period	396,294	106,924
Cash and cash equivalents, including restricted cash, at end of period	660,180	121,446
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	35,456	15,809
Cash paid during the period for income taxes, net of tax refunds received	14,014	13,505
Purchases of property, plant and equipment included in accounts payable	$ 13,061	$ 9,508

Long-Term Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total	$ 2,263,550	$ 1,963,550
Less current portion	4,200	200,450
Long-term debt	2,259,350	1,763,100
Long-term debt	(9,709)	(5,471)
Less current portion	(60)	(3,331)
Unamortized Debt Issuance Costs	(9,649)	(2,140)
Unamortized Debt Discount	(27,368)	(13,845)
Unamortized discount, excluding current portion	(27,477)	(13,845)
Less current portion	(109)
Total	2,226,364	1,944,234
Less current portion	4,031	197,119
Long-term debt	2,222,333	1,747,115
Revolving credit facility \| Revolving credit facility
Debt Instrument [Line Items]
Total		200,000
Long-term debt		(3,328)
Total		196,672
Term Loan \| Term loan, due 2026
Debt Instrument [Line Items]
Total	1,763,100	1,763,100
Long-term debt	(2,007)	(2,140)
Unamortized Debt Discount	(12,872)	(13,845)
Total	1,748,221	1,747,115
Term Loan \| Term loan B, due 2026
Debt Instrument [Line Items]
Total	500,000
Long-term debt	(7,700)
Unamortized Debt Discount	(14,605)
Total	477,695
Other long-term debt
Debt Instrument [Line Items]
Total	450	450
Long-term debt	(2)	(3)
Total	$ 448	$ 447

Basis of Presentation	3 Months Ended
Basis of Presentation	Mar. 31, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation Principles of Consolidation – Sotera Health Company (also referred to herein as the “Company,” “we,” “our,” “us” or “its”), is a global provider of mission-critical sterilization and lab testing and advisory services to the medical device and pharmaceutical industries with operations primarily in the Americas, Europe and Asia. We operate and report in three segments, Sterigenics, Nordion and Nelson Labs. We describe our reportable segments in Note 17, “Segment Information”. All significant intercompany balances and transactions have been eliminated in consolidation. In July 2020, we acquired a 60% equity ownership interest in a joint venture to construct an E-beam facility in Alberta, Canada in connection with our acquisition of Iotron Industries Canada, Inc. (“Iotron”). Our equity ownership interest in the joint venture was determined to be an investment in a variable interest entity (“VIE”). The investment was not consolidated as the Company concluded that it was not the primary beneficiary of the VIE. The Company accounted for the joint venture using the equity method. During the year ended December 31, 2022, we identified certain events and circumstances that indicated a decline in value of our investment in this joint venture that was other-than-temporary. Consequently, in the second quarter of 2022, we wrote down the investment in the joint venture to its fair value of $0, resulting in an impairment charge of approximately $9.6 million. In February 2023, we entered into a Share Purchase Agreement to transfer our equity ownership interest to the joint venture partner, thereby terminating our equity ownership interest. Use of Estimates – In preparing our consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”), we make estimates and assumptions that affect the amounts reported and the accompanying notes. We regularly evaluate the estimates and assumptions used and revise them as new information becomes available. Actual results may vary from those estimates. Interim Financial Statements – The accompanying consolidated financial statements include the assets, liabilities, operating results, and cash flows of the Company and its wholly owned subsidiaries. These financial statements are prepared in accordance with U.S. GAAP for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. These unaudited interim financial statements should be read in conjunction with the Company's annual consolidated financial statements and accompanying notes on Form 10-K for the year ended December 31, 2022.

Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Changes to goodwill during the three months ended March 31, 2023 were as follows:


(thousands of U.S. dollars)	Sterigenics		Nordion		Nelson Labs		Total
Goodwill at December 31, 2022	$	657,458	$	270,966	$	173,344	$	1,101,768
Changes due to foreign currency exchange rates	823		291		538		1,652
Goodwill at March 31, 2023	$	658,281	$	271,257	$	173,882	$	1,103,420

Other intangible assets consisted of the following:


(thousands of U.S. dollars)	Gross Carrying Amount		Accumulated Amortization
As of March 31, 2023
Finite-lived intangible assets
Customer relationships	$	654,918	$	438,612
Proprietary technology	86,406		53,365
Trade names	2,559		832
Land-use rights	9,025		1,746
Sealed source and supply agreements	204,612		96,187
Other	4,471		2,202
Total finite-lived intangible assets	961,991		592,944

Indefinite-lived intangible assets
Regulatory licenses and other(a)	77,061		—
Trade names / trademarks	25,752		—
Total indefinite-lived intangible assets	102,813		—
Total	$	1,064,804	$	592,944


As of December 31, 2022	Gross Carrying Amount		Accumulated Amortization
Finite-lived intangible assets
Customer relationships	$	652,811	$	422,277
Proprietary technology	86,054		50,952
Trade names	2,553		701
Land-use rights	8,986		1,683
Sealed source and supply agreements	204,391		93,034
Other	4,469		1,979
Total finite-lived intangible assets	959,264		570,626

Indefinite-lived intangible assets
Regulatory licenses and other(a)	76,978		—
Trade names / trademarks	25,649		—
Total indefinite-lived intangible assets	102,627		—
Total	$	1,061,891	$	570,626

Amounts include the impact of foreign currency translation. Fully amortized amounts are written off.

Amortization expense for other intangible assets was $20.6 million ($4.4 million is included in “Cost of revenues” and $16.2 million in “Amortization of intangible assets”) in the Consolidated Statements of Operations and Comprehensive Income and $20.2 million ($4.3 million is included in “Cost of revenues” and $15.9 million in “Amortization of intangible assets”) in the Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2023 and 2022, respectively.

The estimated aggregate amortization expense for finite-lived intangible assets for each of the next five years and thereafter is as follows:


(thousands of U.S. dollars)
For the remainder of 2023	$	60,084
2024	79,986
2025	42,584
2026	22,227
2027	21,150
Thereafter	143,016
Total	$	369,047

The weighted-average remaining useful life of the finite-lived intangible assets was approximately 9 years as of March 31, 2023.

Commitments and Contingencies (Details)						3 Months Ended	12 Months Ended	31 Months Ended
Commitments and Contingencies (Details)	Feb. 23, 2023 USD ($)	Jan. 09, 2023 segment	Sep. 19, 2022 USD ($)	Aug. 21, 2020 plaintiff	Aug. 17, 2020 segment claim	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($) claim	Mar. 31, 2023 plaintiff	May 01, 2023 USD ($)
Gain Contingencies [Line Items]
Loss contingency, insurance limits per occurrence						$ 10,000,000
Loss contingency, insurance limits						20,000,000
Secured Debt \| First Lien Notes Due 2026
Gain Contingencies [Line Items]
Aggregate principal amount	$ 500,000,000
Ethylene Oxide Tort Litigation - Illinois \| Pending Litigation
Gain Contingencies [Line Items]
Number of plaintiffs \| plaintiff				850
Number of individuals threatened to file lawsuits \| plaintiff				25
Consolidated claims \| claim							2
Claims scheduled for trials (in claims) \| claim							12
Litigation settlement amount awarded to other party			$ 358,700,000			408,000,000
Ethylene Oxide Tort Litigation - Illinois \| Pending Litigation \| Co Defendant
Gain Contingencies [Line Items]
Litigation settlement amount awarded to other party			2,600,000
Ethylene Oxide Tort Litigation - Illinois \| Pending Litigation \| Compensatory Damages
Gain Contingencies [Line Items]
Litigation settlement amount awarded to other party			36,100,000
Ethylene Oxide Tort Litigation - Illinois \| Pending Litigation \| Punitive Damages
Gain Contingencies [Line Items]
Litigation settlement amount awarded to other party			$ 320,000,000
Asset Transfer Case \| Pending Litigation
Gain Contingencies [Line Items]
Number of plaintiffs \| segment		881
Litigation settlement amount awarded to other party	$ 408,000,000						$ 408,000,000
Number of new claims filed \| segment		20
Eligible claimants (as a percent)		95.00%
Number of days to claimant receives		30 days
Asset Transfer Case \| Pending Litigation \| P E C
Gain Contingencies [Line Items]
Eligible claimants (as a percent)		99.00%
Asset Transfer Case \| Pending Litigation \| Subsequent Event
Gain Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss									$ 408,000,000
Asset Transfer Case \| Pending Litigation \| Subsidiaries
Gain Contingencies [Line Items]
Eligible claimants (as a percent)		100.00%
Asset Transfer Case \| Minimum \| Pending Litigation
Gain Contingencies [Line Items]
Number of plaintiffs \| segment		40
Number of new claims filed \| segment		5
Ethylene Oxide Tort Litigation – Georgia \| Pending Litigation
Gain Contingencies [Line Items]
Number of plaintiffs \| plaintiff								300
Number of consolidated cases \| claim					10
Loss contingency, insurance limits						$ 10,000,000
Ethylene Oxide Tort Litigation – Georgia \| Pending Litigation \| Gwinnett County \| Injury
Gain Contingencies [Line Items]
Consolidated claims \| segment					1
Ethylene Oxide Tort Litigation – Georgia \| Pending Litigation \| Subsidiaries \| Real Estate Damage
Gain Contingencies [Line Items]
Number of new claims filed \| segment					160
Ethylene Oxide Tort Litigation – Georgia \| Pending Litigation \| Subsidiaries \| Injury
Gain Contingencies [Line Items]
Consolidated claims \| claim					2

Employee Benefits

3 Months Ended

Mar. 31, 2023

Postemployment Benefits [Abstract]

Employee Benefits

The Company sponsors various post-employment benefit plans including, in certain countries outside the U.S., defined benefit and defined contribution pension plans, retirement compensation arrangements, and plans that provide extended health care coverage to retired employees, the majority of which relate to Nordion.

Defined benefit pension plan

The following defined benefit pension plan disclosure relates to Nordion. Certain immaterial foreign defined benefit pension plans have been excluded from the table below. The interest cost, expected return on plan assets, and amortization of net actuarial loss are recorded net in “Other income, net” and the service cost component is included in the same financial statement line item as the applicable employee’s wages in the Consolidated Statements of Operations and Comprehensive Income. The components of net periodic pension cost for the defined benefit plans for the three months ended March 31, 2023 and 2022 were as follows:


Three Months Ended March 31,
(thousands of U.S. dollars)	2023		2022
Service cost	$	131	$	249
Interest cost	2,724		1,903
Expected return on plan assets	(4,019)		(3,704)

Net periodic benefit	$	(1,164)	$	(1,552)

Other benefit plans

Other benefit plans disclosed below relate to Nordion and include a supplemental retirement arrangement, a retirement and termination allowance, and post-retirement benefit plans, which include contributory health and dental care benefits and contributory life insurance coverage. Certain immaterial other foreign benefit plans have been excluded from the table below. All but one, non-pension post-employment benefit plans are unfunded. The components of net periodic benefit cost for the other benefit plans for the three months ended March 31, 2023 and 2022 were as follows:


Three Months Ended March 31,
(thousands of U.S. dollars)	2023		2022
Service cost	$	2	$	4
Interest cost	90		65
Amortization of net actuarial gain	(44)		(2)
Net periodic benefit cost	$	48	$	67

We currently expect funding requirements of approximately $0.3 million in each of the next five years to fund the regulatory solvency deficit, as defined by Canadian federal regulation, which requires solvency testing on defined benefit pension plans.

The Company may obtain a qualifying letter of credit for solvency payments, up to 15% of the market value of solvency liabilities as determined on the valuation date, instead of paying cash into the pension fund. As of March 31, 2023, and December 31, 2022, we had letters of credit outstanding relating to the defined benefit plans totaling $43.5 million and $44.1 million, respectively. The actual funding requirements over the five-year period will be dependent on subsequent annual actuarial valuations. These amounts are estimates, which may change with actual investment performance, changes in interest rates, any pertinent changes in Canadian government regulations and any voluntary contributions.

- Definition

The entire disclosure for retirement benefits.

+ References

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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Segment Information - Schedule of Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Details) $ in Thousands		3 Months Ended
	Sep. 19, 2022 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Jan. 09, 2023 claim
Segment Reporting Information [Line Items]
Share-based compensation expense		$ 7,288	$ 4,538
Accretion of asset retirement obligations		572	520
Net increase in the fair value of interest rate			6,300
Cancellation fee received from a tenant in connection with the termination		1,000
Ethylene Oxide Tort Litigation - Illinois \| Pending Litigation
Segment Reporting Information [Line Items]
Litigation settlement amount awarded to other party	$ 358,700	408,000
Term loan B, due 2026
Segment Reporting Information [Line Items]
Interest expense, net		2,300
Operating Segments
Segment Reporting Information [Line Items]
Total segment income		98,468	115,349
Segment Reconciling Items
Segment Reporting Information [Line Items]
Interest expense, net		26,540	16,750
Depreciation and amortization		39,538	36,049
Share-based compensation expense		7,348	4,538
Gain on foreign currency and derivatives not designated as hedging instruments, net		535	(6,552)
Acquisition and divestiture related charges, net		592	(160)
Business optimization project expenses		2,534	104
Plant closure expenses		(895)	671
Professional services and other expenses relating to EO sterilization facilities		16,302	18,059
Accretion of asset retirement obligations		572	520
COVID-19 expenses		0	103
Consolidated income before taxes		$ 5,402	$ 45,267
Segment Reconciling Items \| Minimum
Segment Reporting Information [Line Items]
Number of pending claims \| claim				880

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Allowance for uncollectible accounts	$ 2,587	$ 1,871
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,200,000,000	1,200,000,000
Common stock, shares issued (in shares)	286,037,000	286,037,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	120,000,000	120,000,000
Preferred stock, shares issued (in shares)	0	0
Treasury stock (in shares)	3,520,000	3,616,000

Employee Benefits (Tables)

3 Months Ended

Mar. 31, 2023

Postemployment Benefits [Abstract]

Schedule of Net Periodic Benefit Costs

The components of net periodic pension cost for the defined benefit plans for the three months ended March 31, 2023 and 2022 were as follows:


Three Months Ended March 31,
(thousands of U.S. dollars)	2023		2022
Service cost	$	131	$	249
Interest cost	2,724		1,903
Expected return on plan assets	(4,019)		(3,704)

Net periodic benefit	$	(1,164)	$	(1,552)

The components of net periodic benefit cost for the other benefit plans for the three months ended March 31, 2023 and 2022 were as follows:


Three Months Ended March 31,
(thousands of U.S. dollars)	2023		2022
Service cost	$	2	$	4
Interest cost	90		65
Amortization of net actuarial gain	(44)		(2)
Net periodic benefit cost	$	48	$	67

Acquisitions (Details) - USD ($) $ in Thousands	Nov. 04, 2021	Mar. 31, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Goodwill		$ 1,103,420	$ 1,101,768
Regulatory Compliance Associates Inc. (RCA)
Business Acquisition [Line Items]
Purchase price	$ 30,600
Cash acquired from acquisition	$ 600
Goodwill		25,300
Regulatory Compliance Associates Inc. (RCA) \| Customer relationships
Business Acquisition [Line Items]
Finite-lived intangibles		$ 6,400

- Definition

+ References + Details

Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 961,991	$ 959,264
Accumulated Amortization	592,944	570,626
Acquired Indefinite-lived Intangible Assets [Line Items]
Gross Carrying Amount	102,813	102,627
Total	1,064,804	1,061,891
Regulatory licenses and other
Acquired Indefinite-lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 77,061	76,978
Renewal term	10 years
Trade names / trademarks
Acquired Indefinite-lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 25,752	25,649
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	654,918	652,811
Accumulated Amortization	438,612	422,277
Proprietary technology
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	86,406	86,054
Accumulated Amortization	53,365	50,952
Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	2,559	2,553
Accumulated Amortization	832	701
Land-use rights
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	9,025	8,986
Accumulated Amortization	1,746	1,683
Sealed source and supply agreements
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	204,612	204,391
Accumulated Amortization	96,187	93,034
Other
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	4,471	4,469
Accumulated Amortization	$ 2,202	$ 1,979

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table shows disaggregated net revenues from contracts with external customers by timing of revenue and by segment for the three months ended March 31, 2023 and 2022:


(thousands of U.S. dollars)	Three Months Ended March 31, 2023
	Sterigenics		Nordion		Nelson Labs		Consolidated
Point in time	$	159,997	$	7,588	$	—	$	167,585
Over time	—		963		52,042		53,005
Total	$	159,997	$	8,551	$	52,042	$	220,590


(thousands of U.S. dollars)	Three Months Ended March 31, 2022
	Sterigenics		Nordion		Nelson Labs		Consolidated
Point in time	$	149,462	$	33,285	$	—	$	182,747
Over time	—		717		53,290		54,007
Total	$	149,462	$	34,002	$	53,290	$	236,754

Share-Based Compensation - Schedule of Nonvested Restricted Stock Units Activity (Details) - Restricted Stock	3 Months Ended
	Mar. 31, 2023 shares
Pre-IPO B-1
Number of Shares
Beginning balance (in shares)	716,091
Forfeited (in shares)	(5,378)
Vested (in shares)	(86,051)
Ending balance (in shares)	624,662
Pre-IPO B-2
Number of Shares
Beginning balance (in shares)	1,098,415
Forfeited (in shares)	(19,127)
Vested (in shares)	0
Ending balance (in shares)	1,079,288

Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

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.

Changes in our accumulated other comprehensive income (loss) balances, net of applicable tax, were as follows:


(thousands of U.S. dollars)	Defined Benefit Plans			Foreign Currency Translation		Interest Rate Derivatives			Total
Beginning balance – January 1, 2023	$	3,209		$	(131,205)	$	21,343		$	(106,653)
Other comprehensive income (loss) before reclassifications	(7)			11,257		(2,493)			8,757
Amounts reclassified from accumulated other comprehensive income (loss)	(44)		(a)	—		(6,758)		(b)	(6,802)
Net current-period other comprehensive income (loss)	(51)			11,257		(9,251)			1,955
Ending balance – March 31, 2023	$	3,158		$	(119,948)	$	12,092		$	(104,698)

Beginning balance – January 1, 2022	$	(17,581)		$	(66,389)	$	404		$	(83,566)
Other comprehensive income (loss) before reclassifications	(272)			14,975		6,179			20,882
Amounts reclassified from accumulated other comprehensive income (loss)	(2)		(a)	—		—			(2)
Net current-period other comprehensive income (loss)	(274)			14,975		6,179			20,880
Ending balance – March 31, 2022	$	(17,855)		$	(51,414)	$	6,583		$	(62,686)

Acquisitions	3 Months Ended
Acquisitions	Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract]
Acquisitions	Acquisitions Acquisition of Regulatory Compliance Associates Inc. On November 4, 2021, we acquired Regulatory Compliance Associates Inc. (“RCA”) for approximately $30.6 million, net of $0.6 million of cash acquired. RCA is an industry leader in providing life sciences consulting focused on quality, regulatory, and technical advisory services for the pharmaceutical, medical device and combination device industries. Headquartered in Pleasant Prairie, Wisconsin, RCA expands and further strengthens our technical consulting and expert advisory capabilities within our Nelson Labs segment. The purchase price of RCA was allocated to the underlying assets acquired and liabilities assumed based upon management's estimated fair values at the date of acquisition. As of March 31, 2023, approximately $25.3 million of goodwill was recorded related to the RCA acquisition, representing the excess of the purchase price over the estimated fair values of all the assets acquired and liabilities assumed. We also recorded $6.4 million of finite-lived intangible assets, primarily related to customer relationships. We funded this acquisition using available cash. The acquisition price and the results of operations for this acquired entity are not material in relation to our consolidated financial statements.

Share-Based Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
2020 Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 6.8	$ 3.9
Restricted Stock \| Pre-IPO B-1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	5 years
Share-based compensation expense	$ 0.5	0.6
Restricted Stock \| Pre-IPO B-1 \| Year One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	20.00%
Restricted Stock \| Pre-IPO B-1 \| Year Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	20.00%
Restricted Stock \| Pre-IPO B-1 \| Year Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	20.00%
Restricted Stock \| Pre-IPO B-1 \| Year Four
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	20.00%
Restricted Stock \| Pre-IPO B-1 \| Year Five
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	20.00%
Restricted Stock \| Pre-IPO B-2
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of return on investments	150.00%
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Contractual term	10 years
Stock options vested	$ 1.4
Stock options exercisable	$ 1.4
Stock options \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	2 years
Stock options \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Stock options \| 2020 Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 3.1	1.5
RSUs \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
RSUs \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
RSUs \| 2020 Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 3.7	$ 2.4

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies From time to time, we may be subject to various lawsuits and other claims, as well as gain contingencies, in the ordinary course of our business. In addition, from time to time, we receive communications from government or regulatory agencies concerning investigations or allegations of noncompliance with laws or regulations in jurisdictions in which we operate. We establish reserves for specific liabilities in connection with regulatory and legal actions that we determine to be both probable and reasonably estimable. Except for the accrual for the Ethylene Oxide Tort Litigation settlement in Illinois discussed below, no material amounts have been accrued in our consolidated financial statements with respect to any loss contingencies as of March 31, 2023. If a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. In certain of the matters described below, we are not able to make a reasonable estimate of any liability because of the uncertainties related to the outcome and/or the amount or range of loss. While it is not possible to determine the ultimate disposition of each of these matters, we do not expect that the ultimate resolution of pending regulatory and legal matters in future periods, including the matters described below, will have a material effect on our financial condition, results of operations or liquidity. Despite the above, the Company may incur material defense and settlement costs, diversion of management resources and other adverse effects on our business, financial condition, or results of operations. Ethylene Oxide Tort Litigation Sterigenics U.S., LLC and other medical supply sterilization companies have been subjected to personal injury and related tort lawsuits alleging various injuries caused by low-level environmental exposure to EO emissions from sterilization facilities. Those lawsuits, as detailed further below, are individual claims, as opposed to class actions. Illinois Approximately 850 plaintiffs have filed lawsuits, and approximately 25 individuals have threatened to file lawsuits, against subsidiaries of the Company and other parties, alleging personal injuries including cancer and other diseases, or wrongful death, resulting from purported emissions and releases of EO from Sterigenics’ former Willowbrook facility. Additional derivative claims are alleged on behalf of relatives of some of these personal injury plaintiffs. Each plaintiff seeks damages in an amount to be determined by the trier of fact. The lawsuits were consolidated for pre-trial purposes by the Cook County Circuit Court, Illinois (the “Consolidated Case”). Jury trials were conducted during 2022 in two of the individual cases included in the Consolidated Case, and twelve individual cases were scheduled for trials in 2023. The first trial began on August 12, 2022, and on September 19, 2022, the jury rendered a verdict in favor of the plaintiff and awarded damages in the amount of $358.7 million, including $36.1 million of compensatory damages, $320.0 million of punitive damages and $2.6 million of prejudgment interest against Sterigenics U.S., LLC and Sotera Health, LLC (the “Defendant Subsidiaries”). Post-judgment interest accrues on the compensatory and punitive damages awards from September 20, 2022, the date of the judgment order. The Defendant Subsidiaries filed a Motion for Post Trial Relief, which was denied on December 19, 2022. On January 9, 2023 the Defendant Subsidiaries filed a Notice of Appeal to the First District Appellate Court in Illinois, appealing the September 20, 2022 adverse judgment. The deadline for posting an appellate bond or providing an alternate form of security for the appeal was extended to February 8, 2023. The second individual trial began on October 6, 2022, and on November 18, 2022 the jury returned a defense verdict on all counts. On January 4, 2023, the plaintiff in the second trial filed a motion for post-trial relief seeking an order reversing and/or vacating the verdict, granting a new trial, and/or entering judgment in the plaintiff’s favor notwithstanding the verdict. On November 1, 2022 certain plaintiffs in the Consolidated Case filed a lawsuit in the Circuit Court of Cook County, Illinois against the Company and certain affiliates, subsidiaries and current and former officers, alleging that certain transfers of assets occurring after December 2016 were intended to make assets unavailable to satisfy judgments the plaintiffs might win in future trials in their individual personal injury cases included in the Consolidated Case (the “Asset Transfer Case”). On November 10, 2022, the Asset Transfer Case was removed to the United States District Court for the Northern District of Illinois and all defendants filed answers and affirmative defenses. On January 9, 2023, the Defendant Subsidiaries (the “Settling Defendants”) entered into binding term sheets (the “Term Sheets”) with the “Plaintiffs’ Executive Committee” (the “PEC”) appointed to act on behalf of the more than 20 law firms (“Plaintiffs’ Counsel”) representing the plaintiffs in the Consolidated Case, the Asset Transfer Case, and other clients with personal injury claims that have not yet been filed (together, the “Eligible Claimants”). Upon entering into the Term Sheets, and based on our assessment of the likelihood that the conditions to the Term Sheets will be satisfied or waived, we concluded that the Settlement was probable and reasonably estimable. Accordingly, the Company recorded a charge of $408.0 million for the year ended December 31, 2022. The Term Sheets provide an agreed path to final settlement of the Eligible Claimants’ claims, subject to the satisfaction or waiver of certain conditions, including but not limited to the Settling Defendants and the PEC working in good faith to draft and execute full settlement agreements in accordance with the Term Sheets. On March 28, 2023, the Settling Defendants and the PEC entered into full settlement agreements (the “Settlement Agreements”). The Settlement Agreements provide a pathway to comprehensively resolve the claims pending against the Settling Defendants in Illinois and thereby enable the Company to focus its full attention on operating the business. The Company denies any liability and maintains that its Willowbrook, Illinois operations did not pose a safety risk to the community in which it operated, and believes the evidence and science ultimately would have compelled the rejection of the plaintiffs’ claims. However, years of biased media coverage in the greater Chicago area, the significant costs of posting a large bond in support of the appeal of the first trial verdict and the time and expense that would have been required to continue to contest hundreds of additional lawsuits through a multi-year process in the Illinois court system led the Company to conclude that resolving the pending Illinois EO cases would be in the best interest of the Company and its stakeholders. The scope of the settlement includes all claims that have been alleged or could have been alleged by 881 Eligible Claimants related to or arising from alleged emissions of EO from Sterigenics’ operations in or around Willowbrook, Illinois and related claims that have been or could have been alleged by Eligible Claimants seeking to challenge any transfer of assets to or from the Company, its subsidiaries and certain affiliates to any other entity or person (the “Covered Claims”). The Settling Defendants deny any liability for the Covered Claims and, per their express terms, the Settlement Agreements are not to be construed as an admission of liability or that the Company engaged in any wrongful, tortious, or unlawful activity or that use and/or emissions of EO from Sterigenics’ operations in or around Willowbrook, Illinois posed any safety hazard to the surrounding communities. If the conditions of the Settlement Agreements are satisfied or waived, among other things, the Eligible Claimants participating in the settlement will release the Company, its subsidiaries and certain affiliates from all Covered Claims and dismiss with prejudice all pending lawsuits and appeals relating to or arising from any Covered Claims. The Settlement Agreements provide that final settlement is conditioned, among other things, on (1) the continuance of the stays of all pending Covered Claims, (2) Plaintiffs’ Counsel obtaining opt-in consent from (i) 99% of all Eligible Claimants represented by the PEC law firms, (ii) 95% of all Eligible Claimants represented by law firms not on the PEC and (iii) 100% of all Eligible Claimants within certain specified subgroups, within 30 days of the date each Eligible Claimant receives all disclosures required by applicable state rules along with their individual settlement allocation (the “Participation Requirement”), which may be extended up to 30 days with the consent of the Settling Defendants, (3) the dismissal with prejudice of the Covered Claims of all Eligible Claimants participating in the settlement, and (4) court approval of the settlement as a good faith settlement under the Illinois Joint Contribution Among Tortfeasors Act. In addition, the Settling Defendants will have the right to elect not to proceed with final settlement of the Covered Claims if it is determined that 40 or more Eligible Claimants do not have valid claims or more than five new lawsuits are filed by Plaintiffs’ Counsel. The Settling Defendants have the right to waive the Participation Requirement and elect to proceed with final settlement, in which case the settlement will be binding only on Eligible Claimants participating in the settlement and providing opt-in consent. The PEC and other Plaintiffs’ Counsel have agreed, subject to the exercise of their independent professional judgment, to recommend to their clients that they participate in the settlement. On May 1, 2023, Sterigenics U.S., LLC contributed $408.0 million to a settlement escrow fund that will be used, if the conditions of the Settlement Agreements are satisfied or waived, to pay all settlement fees and expenses and cash payments to the Eligible Claimants participating in the settlement. On January 11, 2023 and January 13, 2023, the Circuit Court of Cook County, Illinois entered orders staying all proceedings and deadlines and vacating all trial dates in the Consolidated Case, and staying all enforcement proceedings relating to the September 20, 2022 adverse judgment. On January 16, 2023 the United States District Court for the Northern District of Illinois entered an order staying all proceedings in the Asset Transfer Case. On January 23, 2023 the First District Appellate Court in Illinois entered an order staying the Settling Defendants’ appeal of the September 20, 2022 adverse judgment. The final settlement of claims contemplated under the Settlement Agreements may not occur or may not occur for all Eligible Claimants for a number of reasons, including but not limited to, a failure to satisfy the Participation Requirement. If the final settlement occurs, the settlement will not cover unfiled claims of claimants who are represented by lawyers other than Plaintiffs’ Counsel, claims of Eligible Claimants who elect and are permitted by the Participation Requirements to opt out of the settlement, claims for illnesses diagnosed in the future that claimants allege were caused by emissions from Sterigenics’ operations in or around Willowbrook, Illinois, or lawsuits alleging injuries from emissions of EO from operations other than those in or around Willowbrook, Illinois, including the previously disclosed lawsuits in Georgia and New Mexico. The Company denies these allegations, intends to defend itself vigorously in all such litigation, and does not believe that the facts and law justify the September 20, 2022 adverse judgment in the first trial in Illinois or, as detailed further below, that the verdict and damage awards in that case are predictive of future EO tort cases in Illinois or other jurisdictions. On February 23, 2023 the Company successfully closed on a new senior secured Term Loan B facility in an aggregate principal amount of $500.0 million. The Company used the proceeds of this debt financing to fund the $408.0 million settlement described above. Refer to Note 9, “Long-Term Debt” for additional information. Georgia Since August 17, 2020, approximately 300 plaintiffs have filed lawsuits against subsidiaries of the Company and other parties in the State Court of Cobb County, Georgia and the State Court of Gwinnett County, Georgia alleging that they suffered personal injuries resulting from emissions of EO from Sterigenics’ Atlanta facility. Additional derivative claims are alleged on behalf of relatives of some of these personal injury plaintiffs. Our subsidiaries are also defendants in approximately 160 lawsuits alleging that the Atlanta facility has devalued and harmed plaintiffs’ use of real properties they own in the Atlanta, Georgia area and caused other damages. These personal injury and property devaluation plaintiffs seek various forms of relief including damages. All but two of the personal injury lawsuits pending in Cobb County have been consolidated for pretrial purposes. The Court has entered a phased case management schedule for a “pool” of ten of the consolidated cases by which threshold general causation issues will be decided in Phase 1, followed by specific causation issues in Phase 2 as to any of the pooled cases that survive Phase 1. The Court has stayed the remainder of the consolidated personal injury cases pending in Cobb County and an immediate appeal of a discrete procedural issue is being pursued by the defendants. One personal injury case is pending in Gwinnett County and is scheduled for trial in October 2023. The remaining personal injury case and approximately 160 property devaluation cases are in various stages of pleadings and motions practice, and fact discovery. In January 2023 a personal injury and premises liability case was filed in Cobb County, Georgia by a delivery driver alleging injuries from purported exposure to EO emissions and releases while making deliveries to our Atlanta facility. That case has not been consolidated with the other personal injury cases and is not stayed. The court has not yet entered an initial case management order or schedule. New Mexico On April 24, 2023, a lawsuit was filed in the Third Judicial District Court, Doña Ana County, New Mexico against the Company and certain subsidiaries alleging wrongful death caused by exposure to emissions of EO from Sterigenics’ sterilization facility in Santa Teresa, New Mexico while working at a different company’s facility approximately one mile away. On April 27, 2023 the case was removed to the United States District Court for the District of New Mexico. The court has not yet entered an initial case management order or schedule. New Mexico Attorney General Litigation On December 22, 2020, the New Mexico Attorney General filed a lawsuit in the Third Judicial District Court, Doña Ana County, New Mexico against the Company and certain subsidiaries alleging that emissions of EO from Sterigenics’ sterilization facility in Santa Teresa, New Mexico have deteriorated the air quality in Santa Teresa and surrounding communities and materially contributed to increased health risks suffered by residents of those communities. The Complaint asserts claims for public nuisance, negligence, strict liability, violations of New Mexico’s Public Nuisance Statute and Unfair Practices Act and seeks various forms of relief including a temporary restraining order, preliminary injunctive relief and damages. On June 29, 2021, the Court entered an Order Granting Preliminary Injunction (the “Order”) prohibiting Sterigenics from allowing any uncontrolled emission or release of EO from the facility. On December 20, 2021 the Court entered an order establishing a protocol to monitor Sterigenics’ compliance with the Order. Operations at the facility continue to be in compliance with the June 2021 and December 2021 orders. A motion challenging the Court’s jurisdiction over Sotera Health Company and another defendant, and a motion for summary judgment by Sterigenics U.S., LLC and Sotera Health LLC are pending. A Scheduling Order was entered on September 13, 2022, including a June 3, 2024 trial date. The Company believes that neither the verdict in the first trial in Illinois nor the settlement of the pending and threatened claims in Illinois is predictive of potential future verdicts in other EO tort cases in Illinois or other jurisdictions. The Company intends to defend itself vigorously in all such litigation, which will be presided over by different judges, tried by different counsel presenting different evidence and fact and expert witness testimony at trial, and decided by different juries. Each plaintiff’s claim involves unique facts and evidence, including but not limited to, the circumstances of the plaintiff’s alleged exposure, the type and severity of the plaintiff’s disease and the plaintiff’s medical history and course of treatment. As a result, we believe that loss in such subsequent cases is not probable and it is not possible to estimate the range of loss. Due to the uncertainties associated with the amount of any such liability and/or the nature of any other remedy which may be imposed in such litigation, any potential liability determined to be attributable to the Company arising out of such litigation may have a material adverse effect on the Company’s results of operations, liquidity or financial condition. An estimate of the potential impact on the Company’s results of operations, liquidity or financial condition cannot be made due to the aforementioned uncertainties. Our insurance for litigation related to alleged environmental liabilities, like the litigation pending in Illinois, Georgia and New Mexico described above, has limits of $10.0 million per occurrence and $20.0 million in the aggregate. The per occurrence limit related to the Willowbrook, Illinois litigation was fully utilized by June 30, 2020. The remaining $10.0 million was fully utilized by March 31, 2023 for occurrences related to the EO litigation in Georgia and New Mexico described above. Our insurance for future alleged environmental liabilities excludes coverage for EO claims. In addition, we are pursuing other insurance coverage for our legal expenses related to the EO tort litigation. In 2021, Sterigenics filed an insurance coverage lawsuit in the U.S. District Court for the Northern District of Illinois relating to two commercial general liability policies issued in the 1980s. On August 3, 2022, the Court issued a Memorandum Opinion and Order concluding that the insurer owes Sterigenics and another insured party a duty to defend the Willowbrook, Illinois litigation, which may allow us to recover defense costs related to that litigation. Sotera Health Company Securities Litigation On January 24, 2023, a putative stockholder class action was filed in the U.S. District Court for the Northern District of Ohio against the Company, its directors, certain senior executives, the Company’s private equity stockholders and the underwriters of the Company’s initial public offering (“IPO”) in November 2020 and the Company’s secondary public offering (“SPO”) in March 2021. On April 17, 2023 the court appointed the Oakland County Employees’ Retirement System, Oakland County Voluntary Employees’ Beneficiary Association, and Wayne County Employees’ Retirement System (the “Michigan Funds”) to serve as lead plaintiff to prosecute claims on behalf of a proposed class of stockholders who acquired shares of the Company in connection with our IPO or SPO or between November 20, 2020 and September 19, 2022 (the “Proposed Class”). The Michigan Funds allege that statements made regarding the safety of the Company’s use of EO and/or the litigation and other risks of its EO operations violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (when made in the registration statements for the IPO and SPO) and violated Sections 10(b), Section 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934 (when made in subsequent securities filings and other contexts). The Michigan Funds seek damages and other relief on behalf of the Proposed Class. The Company believes that these claims are without merit and plans to mount a vigorous defense.

Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

Long-term debt consisted of the following:


(thousands of U.S. dollars)
As of March 31, 2023	Gross Amount		Unamortized Debt Issuance Costs		Unamortized Debt Discount		Net Amount
Term loan, due 2026	$	1,763,100	$	(2,007)	$	(12,872)	$	1,748,221
Term loan B, due 2026	500,000		(7,700)		(14,605)		477,695

Other long-term debt	450		(2)		—		448
	2,263,550		(9,709)		(27,477)		2,226,364
Less current portion	4,200		(60)		(109)		4,031
Long-term debt	$	2,259,350	$	(9,649)	$	(27,368)	$	2,222,333


(thousands of U.S. dollars)
As of December 31, 2022	Gross Amount		Unamortized Debt Issuance Costs		Unamortized Debt Discount		Net Amount
Term loan, due 2026	1,763,100		(2,140)		(13,845)		1,747,115
Revolving credit facility	200,000		(3,328)		—		196,672
Other long-term debt	450		(3)		—		447
	1,963,550		(5,471)		(13,845)		1,944,234
Less current portion	200,450		(3,331)		—		197,119
Long-term debt	$	1,763,100	$	(2,140)	$	(13,845)	$	1,747,115

Schedule of Maturities of Long-term Debt

Aggregate maturities of the Company’s long-term debt, excluding debt discounts, as of March 31, 2023, are as follows:


(thousands of U.S. dollars)
2023	$	2,950
2024	5,000
2025	5,000
2026	2,250,600
2027	—
Thereafter	—
Total	$	2,263,550

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e24072-122690

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
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+ Details

Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Nonvested Restricted Stock Units Activity

A summary of the activity for the three months ended March 31, 2023 related to the restricted stock awards distributed in respect of the pre-IPO awards (Class B-1 and B-2 Units) is presented below:


	Number of shares
	Restricted Stock Pre-IPO B-1	Restricted Stock - Pre-IPO B-2
Unvested at December 31, 2022	716,091	1,098,415

Forfeited	(5,378)	(19,127)
Vested	(86,051)	—
Unvested at March 31, 2023	624,662	1,079,288

Schedule of Stock Option Activity

The following table summarizes our stock option activity:


	Number of Shares	Weighted- average Exercise Price
Outstanding stock options at December 31, 2022	5,990,470	$	14.84
Granted	1,044,595	17.59
Forfeited	(20,325)	21.57
Exercised	—	—
Outstanding stock options at March 31, 2023	7,014,740	$	15.23

Schedule of Restricted Stock Activity

The following table summarizes our unvested RSUs activity:


	Number of Shares	Weighted- average Grant Date Fair Value
Unvested at December 31, 2022	2,482,435	$	13.09
Granted	664,433	17.59
Forfeited	(42,275)	11.42
Vested	(189,941)	20.11
Unvested at March 31, 2023	2,914,652	$	13.69

Long-Term Debt - First Lien Notes (Narrative) (Details)	Feb. 23, 2023 USD ($)
Secured Debt \| First Lien Notes due 2026
Debt Instrument [Line Items]
Face amount	$ 500,000,000

Segment Information (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment


(thousands of U.S. dollars)	Three Months Ended March 31,
	2023		2022
Segment revenues(a)
Sterigenics	$	159,997	$	149,462
Nordion	8,551		34,002
Nelson Labs	52,042		53,290
Total net revenues	$	220,590	$	236,754
Segment income(b)
Sterigenics	$	82,840	$	79,403
Nordion	1,526		18,903
Nelson Labs	14,102		17,043
Total segment income	$	98,468	$	115,349

(b)Segment income is only provided on a net basis to the chief operating decision-maker and is reported net of intersegment profits.

Capital expenditures by segment for the three months ended March 31, 2023 and 2022 were as follows:


(thousands of U.S. dollars)	Three Months Ended March 31,
	2023		2022
Sterigenics	$	30,877	$	25,221
Nordion	10,545		7,090
Nelson Labs	3,578		3,235
Total capital expenditures	$	45,000	$	35,546

Schedule of Reconciliation of Operating Profit (Loss) from Segments to Consolidated

A reconciliation of segment income to consolidated income before taxes is as follows:


(thousands of U.S. dollars)	Three Months Ended March 31,
	2023		2022
Segment income	$	98,468	$	115,349
Less adjustments:
Interest expense, net(a)	26,540		16,750
Depreciation and amortization(b)	39,538		36,049
Share-based compensation(c)	7,348		4,538
Gain on foreign currency and derivatives not designated as hedging instruments, net(d)	535		(6,552)
Acquisition and divestiture related charges, net(e)	592		(160)
Business optimization project expenses(f)	2,534		104
Plant closure expenses(g)	(895)		671
Professional services and other expenses relating to EO sterilization facilities(h)	16,302		18,059
Accretion of asset retirement obligation(i)	572		520
COVID-19 expenses(j)	—		103
Consolidated income before taxes	$	5,402	$	45,267

(b)Includes depreciation of Co-60 held at gamma irradiation sites.

(c)Represents share-based compensation expense to employees and Non-Employee Directors.

(j)Represents non-recurring costs associated with the COVID-19 pandemic, including incremental costs to implement workplace health and safety measures.

Inventories

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Inventories

Inventories consisted of the following:


(thousands of U.S. dollars)
	March 31, 2023		December 31, 2022
Raw materials and supplies	$	39,616	$	36,402
Work-in-process	1,554		584
Finished goods	5,682		276
	46,852		37,262
Reserve for excess and obsolete inventory	(116)		(117)
Inventories, net	$	46,736	$	37,145

Basis of Presentation (Details) $ in Millions	3 Months Ended
Basis of Presentation (Details) $ in Millions	Mar. 31, 2023 segment	Jun. 30, 2022 USD ($)	Jul. 31, 2020
Accounting Policies [Abstract]
Number of operating segments \| segment	3
Number of reportable segments \| segment	3
Unnamed E-Beam Joint Venture \| Iotron
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Ownership percentage			60.00%
Auralux
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Investments, fair value disclosure \| $		$ 0.0
Impairment of investment in unconsolidated affiliate \| $		$ 9.6

Recent Accounting Standards	3 Months Ended
Recent Accounting Standards	Mar. 31, 2023
Accounting Changes and Error Corrections [Abstract]
Recent Accounting Standards	Recent Accounting Standards Adoption of Accounting Standard Updates Effective January 1, 2023, we adopted ASU 2021-08 - Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The amendments in ASU 2021-08 require that an acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contract with Customers (“ASC Topic 606”). At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC Topic 606 as if it had originated the contracts. The adoption of this standard did not have a material impact on our consolidated financial statements and disclosures.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

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+ Details

Inventories (Tables)

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consisted of the following:


(thousands of U.S. dollars)
	March 31, 2023		December 31, 2022
Raw materials and supplies	$	39,616	$	36,402
Work-in-process	1,554		584
Finished goods	5,682		276
	46,852		37,262
Reserve for excess and obsolete inventory	(116)		(117)
Inventories, net	$	46,736	$	37,145

Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 20,607	$ 20,182
Finite-lived intangible assets, remaining amortization period	9 years
Other
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 20,600	20,200
Other \| Cost of Revenue
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	4,400	4,300
Other \| Amortization of Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 16,200	$ 15,900

Segment Information - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting Information [Line Items]
Total net revenues	$ 220,590	$ 236,754
Sterigenics
Segment Reporting Information [Line Items]
Total net revenues	159,997	149,462
Nordion
Segment Reporting Information [Line Items]
Total net revenues	8,551	34,002
Nelson Labs
Segment Reporting Information [Line Items]
Total net revenues	52,042	53,290
Operating Segments
Segment Reporting Information [Line Items]
Total net revenues	220,590	236,754
Total segment income	98,468	115,349
Total capital expenditures	45,000	35,546
Operating Segments \| Sterigenics
Segment Reporting Information [Line Items]
Total net revenues	159,997	149,462
Total segment income	82,840	79,403
Total capital expenditures	30,877	25,221
Operating Segments \| Nordion
Segment Reporting Information [Line Items]
Total net revenues	8,551	34,002
Total segment income	1,526	18,903
Total capital expenditures	10,545	7,090
Operating Segments \| Nelson Labs
Segment Reporting Information [Line Items]
Total net revenues	52,042	53,290
Total segment income	14,102	17,043
Total capital expenditures	3,578	3,235
Intersegment
Segment Reporting Information [Line Items]
Total net revenues	$ 2,900	$ 15,500

- Definition

+ References

+ Details

Share-Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

Pre-IPO Awards

Restricted stock distributed in respect of pre-IPO Class B-1 time vesting units vests on a daily basis pro rata over the five-year vesting period (20% per year) beginning on the original vesting commencement date of the corresponding Class B-1 time vesting units, subject to the grantee’s continued services through each vesting date. Upon the occurrence of a change in control of the Company, all then-outstanding unvested shares of our common stock distributed in respect of Class B-1 Units will become vested as of the date of consummation of such change in control, subject to the grantee’s continued services through the consummation of the change in control.

Restricted stock distributed in respect of pre-IPO Class B-2 Units (which were considered performance vesting units) are scheduled to vest only upon satisfaction of certain thresholds. These units generally vest as of the first date on which (i) our Sponsors have received actual cash proceeds in an amount equal to or in excess of at least two and one-half times their invested capital in Sotera Health Topco Parent, L.P. (of which the Company was a direct wholly-owned subsidiary prior to the IPO) and (ii) the Sponsors’ internal rate of return exceeds twenty percent, subject to such grantee’s continued services through such date. In the event of a change in control of the Company, any outstanding shares of our common stock distributed in respect of Class B-2 Units that remain unvested immediately following the consummation of such a change in control of the Company shall be immediately canceled and forfeited without compensation. Stock-based compensation expense attributed to the pre-IPO Class B-2 awards was recorded in the fourth quarter of 2020, as the related performance conditions were considered probable of achievement and the implied service conditions were met. As of March 31, 2023, these awards remain unvested.

We recognized $0.5 million and $0.6 million of share-based compensation expense related to the pre-IPO Class B-1 awards for the three months ended March 31, 2023 and 2022, respectively.

A summary of the activity for the three months ended March 31, 2023 related to the restricted stock awards distributed in respect of the pre-IPO awards (Class B-1 and B-2 Units) is presented below:


	Number of shares
	Restricted Stock Pre-IPO B-1	Restricted Stock - Pre-IPO B-2
Unvested at December 31, 2022	716,091	1,098,415

Forfeited	(5,378)	(19,127)
Vested	(86,051)	—
Unvested at March 31, 2023	624,662	1,079,288

2020 Omnibus Incentive Plan

We maintain a long-term incentive plan (the “2020 Omnibus Incentive Plan” or the “2020 Plan”) that allows for grants of incentive stock options to employees (including employees of any of our subsidiaries), nonstatutory stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and other cash-based, equity-based or equity-related awards to employees, directors, and consultants, including employees or consultants of our subsidiaries.

We recognized $6.8 million ($3.1 million for stock options and $3.7 million for RSUs) and $3.9 million ($1.5 million for stock options and $2.4 million for RSUs) of share-based compensation expense for these awards in our Consolidated Statements of Operations and Comprehensive Income, in “Selling, general and administrative expenses,” for the three months ended March 31, 2023 and 2022, respectively.

Stock Options

Stock options generally vest ratably over a period of two to four years. They have an exercise price equal to the fair market value of a share of common stock on the date of grant, and a contractual term of 10 years. The following table summarizes our stock option activity:


	Number of Shares	Weighted- average Exercise Price
Outstanding stock options at December 31, 2022	5,990,470	$	14.84
Granted	1,044,595	17.59
Forfeited	(20,325)	21.57
Exercised	—	—
Outstanding stock options at March 31, 2023	7,014,740	$	15.23

As of March 31, 2023, there were 1.4 million vested and exercisable stock options.

RSUs

RSUs generally vest ratably over a period of one to four years and are valued based on our market price on the date of grant. The following table summarizes our unvested RSUs activity:


	Number of Shares	Weighted- average Grant Date Fair Value
Unvested at December 31, 2022	2,482,435	$	13.09
Granted	664,433	17.59
Forfeited	(42,275)	11.42
Vested	(189,941)	20.11
Unvested at March 31, 2023	2,914,652	$	13.69

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings:
Net income	$ 2,842	$ 30,641
Less: Allocation to participating securities	18	338
Net income attributable to Sotera Health Company common shareholders, Basic	2,824	30,303
Net income attributable to Sotera Health Company common shareholders, Diluted	$ 2,824	$ 30,303
Weighted Average Common Shares:
Weighted-average common shares outstanding - basic (in shares)	280,691,000	279,829,000
Dilutive effect of potential common shares (in shares)	2,286,000	79,000
Weighted-average common shares outstanding - diluted (in shares)	282,977,000	279,908,000
Earnings per Common Share:
Net income attributable to Sotera Health Company common shareholders - basic (in dollars per share)	$ 0.01	$ 0.11
Net income attributable to Sotera Health Company common shareholders - diluted (in dollars per share)	$ 0.01	$ 0.11
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	4,062,000	3,061,000
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	3,570,000	2,889,000
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	492,000	172,000

Income Taxes (Details)	3 Months Ended
Income Taxes (Details)	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Effective income tax rate	47.40%	32.30%