Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Part I. Financial Information
Index
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation (“MD&A”)			Page
Trends and Factors Impacting Our Performance			29
Summary of Key Performance Measures			30
Results of Operations			31
Results of Operations - Segments			34
Non-GAAP Financial Measures			34
Liquidity and Capital Resources			38
Recently Issued Accounting Pronouncements			40
Critical Accounting Estimates			40

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated and combined financial statements and corresponding notes included elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of GE HealthCare Technologies Inc. (“GE HealthCare,” the “Company,” “our,” or “we”) for the three months ended March 31, 2023 and 2022. For a full understanding of our financial condition and results of operations, the below discussion should be read alongside the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q, and particularly in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Actual results may differ materially from these expectations, see “Forward-Looking Statements.”

The following tables are presented in millions of United States ("U.S.") dollars unless otherwise stated, except for per-share amounts which are presented in U.S. dollars.

Unless the context otherwise requires, references to “GE HealthCare,” “we,” “us,” “our,” and the “Company” refer to (i) General Electric Company's ("GE's") healthcare business prior to the previously announced spin-off of the Company on January 3, 2023 (the “Spin-Off”) as a carve-out business of GE with related condensed combined financial statements and (ii) GE HealthCare Technologies Inc. and its subsidiaries following the Spin-Off with related condensed consolidated financial statements.

GE HealthCare’s operations are organized and managed through four reportable segments: Imaging, Ultrasound, Patient Care Solutions (“PCS”), and Pharmaceutical Diagnostics (“PDx”).

TRENDS AND FACTORS IMPACTING OUR PERFORMANCE

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and particularly in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

KEY TRENDS AFFECTING RESULTS OF OPERATIONS.

Russia and Ukraine Conflict

We had $158 million and $143 million of assets in, or directly related to, these two countries as of March 31, 2023 and December 31, 2022, respectively, none of which are subject to sanctions that impact the carrying value of the assets. We generated revenues of $78 million and $58 million from customers in these two countries for the three months ended March 31, 2023 and March 31, 2022, respectively. The potential inability to repatriate earnings from these two countries will not have a material impact on our ability to operate.

We continue to monitor the effects of Russia’s invasion of Ukraine, including the consideration of financial impact, cybersecurity risks, the applicability and effect of sanctions, and the employee base in Ukraine and Russia. Our board of directors (the "Board"), with management, will continue to assess whether developments related to the conflict have had, or are reasonably likely to have, a material impact on the Company.

TRANSITION TO STAND-ALONE COMPANY.

Financial Presentation Under GE Ownership

GE HealthCare utilized allocations and carve-out methodologies through the date of the Spin-Off to prepare historical condensed combined financial statements. The condensed combined financial statements herein for periods prior to the Spin-Off may not be indicative of our future performance, do not necessarily include the actual expenses that would have been incurred by us, and may not reflect our results of operations, financial position, and cash flows had we been a separate, stand-alone company during the historical periods presented. For additional information, see Note 1, “Organization and Basis of Presentation” to the condensed consolidated and combined financial statements.

Pension and Other Benefit-Related Liabilities

In connection with the Spin-Off, on January 1, 2023 GE transferred certain plan liabilities and assets to GE HealthCare. The amounts related to the plans assumed by GE HealthCare on January 1, 2023, in addition to the existing GE HealthCare plans, are shown in the table below.

Postretirement Benefit Plans
			Projected benefit obligations			Fair value of plan assets						Funded status - surplus (deficit)
GE HealthCare Pension Plan			$	15,968		$	14,860					$	(1,108)
GE HealthCare Supplementary Pension Plan			2,032			—						(2,032)
Other Pension Plans			3,743			4,048						305
Retiree Benefit Plans			1,210			—						(1,210)
Total transferred plans			$	22,953		$	18,908					$	(4,045)
Plans sponsored by GE HealthCare			703			425						(278)
Total postretirement benefit plans			$	23,656		$	19,333					$	(4,323)

Refer to Note 9, “Postretirement Benefit Plans” to the condensed consolidated and combined financial statements for further information.

SUMMARY OF KEY PERFORMANCE MEASURES

Management reviews and analyzes several key performance measures including Total revenues, Remaining Performance Obligations (“RPO”), Operating income, Net income attributable to GE HealthCare, Earnings per share - continuing operations, and Cash flow from operations. Management also reviews and analyzes Organic revenue*, Adjusted Earnings Before Interest and Taxes* (“Adjusted EBIT*”), Adjusted net income*, Adjusted earnings per share*, and Free cash flow*, which are non-GAAP financial measures. These measures are reviewed and analyzed in order to evaluate our business performance, identify trends affecting our business, allocate capital, and make strategic decisions, including those discussed below. The non-GAAP financial measures should be considered along with the most directly comparable U.S. generally accepted accounting principles (“U.S. GAAP”) financial measures. Definitions of these non-GAAP financial measures, a discussion of why we believe they are useful to management and investors as well as certain of their limitations, and reconciliations to their most directly comparable U.S. GAAP financial measures are provided below under “Non-GAAP Financial Measures.”

Total Revenues
			For the three months ended March 31
			2023			2022						% change			% organic change*
Total revenues			$	4,707		$	4,343					8		%	12		%

Total revenues were $4,707 million for the three months ended March 31, 2023, an increase of $364 million, or 8% as reported and 12% organically* from the three months ended March 31, 2022, primarily driven by growth across all segments. See “Total revenues” section below for further information.

Remaining Performance Obligations
			As of March 31			As of December 31
			2023			2022						% change
Products			$	4,966		$	4,992					(1)%
Services			9,524			9,351						2%
Total RPO			$	14,490		$	14,343					1%

RPO represents the estimated revenue expected from customer contracts that are partially or fully unperformed inclusive of amounts deferred in contract liabilities, excluding contracts, or portions thereof, that provide the customer with the ability to cancel or terminate without incurring a substantive penalty. RPO as of March 31, 2023 increased 1% from December 31, 2022, primarily due to the timing of multi-year service contract renewals in the U.S.

Business Performance
			For the three months ended March 31
			2023			2022						% change
Operating income			$	559		$	509					10%
Net income attributable to GE HealthCare			372			389						(4)%
Adjusted EBIT*			664			599						11%
Adjusted net income*			388			437						(11)%

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*Non-GAAP Financial Measure

Operating income was $559 million for the three months ended March 31, 2023, an increase of $50 million or 10% from the three months ended March 31, 2022. Net income attributable to GE HealthCare was $372 million for the three months ended March 31, 2023, a decrease of $17 million or 4% from the three months ended March 31, 2022. The increase in Operating income was mainly attributable to an increase in Total revenues, partially offset by increased costs associated with being a standalone company and planned Research and Development ("R&D") investments. The decrease in Net income attributable to GE HealthCare was mainly driven by increased interest expense on our indebtedness, partially offset by an increase in Non-operating benefit income.

Adjusted EBIT* was $664 million for the three months ended March 31, 2023, an increase of $65 million or 11% from the three months ended March 31, 2022. Adjusted net income* was $388 million for the three months ended March 31, 2023, a decrease of $49 million or 11% from the three months ended March 31, 2022. The increase of Adjusted EBIT* was mainly attributable to an increase in Operating income. The decrease in Adjusted net income* was primarily driven by increased interest expense on our indebtedness, partially offset by the increase in Operating income. See “Operating income, Net Income Attributable to GE HealthCare, Adjusted EBIT*, and Adjusted Net Income*” below for further information.

Cash Flow
			For the three months ended March 31
			2023			2022						% change
Cash from (used for) operating activities – continuing operations			$	468		$	468					—%
Free cash flow*			325			371						(12)%

Cash generated from operating activities – continuing operations was $468 million for the three months ended March 31, 2023 and 2022.

Free cash flow* was $325 million for the three months ended March 31, 2023, a decrease of $46 million or 12% from the three months ended March 31, 2022, primarily driven by a decrease in accounts payable, an increase in company funded benefit payments for postretirement benefit plans, and an increase in additions to Property, Plant, and Equipment (“PP&E”), partially offset by a decrease in inventory, a decrease in current receivables and lower cash taxes paid.

RESULTS OF OPERATIONS

The following tables set forth our results of operations for each of the periods presented:

Condensed Consolidated and Combined Statements of Income
			For the three months ended March 31
			2023			2022
Sales of products			$	3,131		$	2,787
Sales of services			1,576			1,556
Total revenues			4,707			4,343
Cost of products			2,037			1,914
Cost of services			779			751
Gross profit			1,891			1,678
Selling, general, and administrative			1,062			931
Research and development			270			238
Total operating expenses			1,332			1,169
Operating income			559			509
Interest and other financial charges—net			136			4
Non-operating benefit (income) costs			(115)			(2)
Other (income) expense—net			(8)			(26)
Income from continuing operations before income taxes			546			533
Benefit (provision) for income taxes			(163)			(131)
Net income			383			402
Net (income) attributable to noncontrolling interests			(11)			(13)
Net income attributable to GE HealthCare			$	372		$	389

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*Non-GAAP Financial Measure

TOTAL REVENUES.

Revenues by Segment
			For the three months ended March 31
			2023			2022						% change			% organic change*
Segment revenues
Imaging			$	2,496		$	2,311					8%			12%
Ultrasound			859			815						5%			10%
PCS			781			716						9%			11%
PDx			558			484						15%			19%
Other(a)			13			17
Total revenues			$	4,707		$	4,343					8%			12%

(a)Financial information not presented within the reportable segments, shown within the Other category, represents the HealthCare Financial Services (“HFS”) business which does not meet the definition of an operating segment.

Revenues by Region
			For the three months ended March 31
			2023			2022						% change
USCAN			$	2,083		$	1,943					7%
EMEA			1,168			1,092						7%
China region			672			569						18%
Rest of World			784			739						6%
Total revenues			$	4,707		$	4,343					8%

For the three months ended March 31, 2023

Total revenues were $4,707 million for the three months ended March 31, 2023, growing 8% or $364 million as reported and 12% organically*. The reported growth was primarily due to Sales of products growing 12% or $344 million as reported, driven by growth across all segment revenues.

The segment revenues were as follows:

• Imaging segment revenues were $2,496 million for the three months ended March 31, 2023, growing 8% or $185 million as reported due to an increase in Organic revenue*, partially offset by unfavorable foreign currency impacts. Organic revenue* grew 12% primarily due to growth in MR and MI/CT product lines due to supply chain fulfillment improvements and new product introductions;

• Ultrasound segment revenues were $859 million for the three months ended March 31, 2023, growing 5% or $44 million as reported due to an increase in Organic revenue*, partially offset by unfavorable foreign currency impacts. Organic revenue* grew 10% primarily due to growth in cardiovascular, general imaging, and women's health products primarily due to new product introductions and supply chain fulfillment improvements;

• PCS segment revenues were $781 million for the three months ended March 31, 2023, growing 9% or $65 million as reported due to an increase in Organic revenue*, partially offset by unfavorable foreign currency impacts. Organic revenue* grew 11% with growth across all product lines driven by supply chain fulfillment improvements; and

• PDx segment revenues were $558 million for the three months ended March 31, 2023, growing 15% or $74 million as reported due to an increase in Organic revenue*, partially offset by unfavorable foreign currency impacts. Organic revenue* grew 19%, with a growth in sales volume of our products seen across all regions.

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*Non-GAAP Financial Measure

The regional revenues were as follows:

• USCAN revenues were $2,083 million for the three months ended March 31, 2023, growing 7% or $140 million as reported due to growth across all segment revenues;

• EMEA revenues were $1,168 million for the three months ended March 31, 2023, growing 7% or $76 million as reported due to growth in Imaging and PDx revenues, partially offset by unfavorable foreign currency impacts;

• China region revenues were $672 million for the three months ended March 31, 2023, growing 18% or $103 million as reported due to growth across all segment revenues, partially offset by unfavorable foreign currency impacts; and

• Rest of World revenues were $784 million for the three months ended March 31, 2023, growing 6% or $45 million as reported due to growth in Imaging and PDx revenues, partially offset by unfavorable foreign currency impacts.

OPERATING INCOME, NET INCOME ATTRIBUTABLE TO GE HEALTHCARE, ADJUSTED EBIT, AND ADJUSTED NET INCOME.**

			For the three months ended March 31
			2023			% of Total revenues			2022			% of Total revenues									% change
Operating income			$	559		11.9%			$	509		11.7%									10%
Net income attributable to GE HealthCare			372			7.9%			389			9.0%									(4)%
Adjusted EBIT*			664			14.1%			599			13.8%									11%
Adjusted net income*			388			8.2%			437			10.1%									(11)%

For the three months ended March 31, 2023

Operating income was $559 million for the three months ended March 31, 2023, an increase of $50 million and 20 basis points as a percentage of Total revenues. The increase as a percent of Total revenues was due to the following factors:

• Cost of products sold increased $123 million but decreased 360 basis points as a percent of Sales of products. The decrease as a percent of sales was driven by cost productivity initiatives and an increase in pricing of our products, partially offset by continued cost inflation. Cost of services sold increased $28 million or 110 basis points as a percent of Sales of services. The increase as a percent of sales was driven by cost inflation, partially offset by cost productivity initiatives and an increase in pricing of our service offerings. Included in our total cost of revenue for the three months ended March 31, 2023, as part of our product investment, was $110 million in engineering costs for design follow-through on new product introductions and product lifecycle maintenance subsequent to the initial product launch, compared to $105 million for the three months ended March 31, 2022; and

• Total operating expenses increased $163 million due to an increase in Selling, general, and administrative (“SG&A”) expense of $131 million driven by increased costs associated with both the stand-up and operation as a standalone company and investment in commercial teams and an increase in planned R&D investments of $32 million. As a result, SG&A as a percentage of Total revenues increased by 120 basis points and R&D as a percentage of Total revenues increased by 20 basis points.

Net income attributable to GE HealthCare and Net income margin was $372 million and 7.9% for the three months ended March 31, 2023, a decrease of $17 million and 110 basis points, primarily due to the following factors:

*•*Operating income increased $50 million, as discussed above;

• Interest and other financial charges – net increased $132 million primarily due to interest expense related to the debt securities issued by GE HealthCare in November of 2022 and the Term Loan Facility drawn upon in January of 2023;

• Non-operating benefit (income) costs increased $113 million primarily related to the pension plans transferred to GE HealthCare as part of the Spin-Off; and

• Provision for income taxes increased $32 million primarily due to taxes accrued for the repatriation of current earnings as well as a one-time charge for prior period earnings of certain of our foreign subsidiaries. For additional detail regarding our income taxes, and Note 10, “Income Taxes” to the condensed consolidated and combined financial statements.

Adjusted EBIT* and Adjusted EBIT margin* were $664 million and 14.1% for the three months ended March 31, 2023, an increase of $65 million and 30 basis points, respectively, primarily due to an increase in Operating income as discussed above.

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*Non-GAAP Financial Measure

Adjusted net income* was $388 million for the three months ended March 31, 2023, a decrease of $49 million primarily due to higher Interest and other financial charges - net, partially offset by an increase in Operating income as discussed above.

RESULTS OF OPERATIONS – SEGMENTS

We report our business in four reportable segments (Imaging, Ultrasound, PCS, and PDx) and we evaluate their operating performance using revenue and Segment EBIT. We exclude from Segment EBIT certain corporate-related expenses and certain transactions or adjustments that our Chief Operating Decision Maker (which is our Chief Executive Officer) considers to be non-operational, such as interest expenses, income tax expenses, restructuring costs, acquisition and disposition related charges (benefits), Spin-Off and separation costs, Non-operating benefit (income) costs, gain/loss of business dispositions/divestments, amortization of acquisition-related intangible assets, Net (income) loss attributable to noncontrolling interests, Income (loss) from discontinued operations, net of taxes, and investment revaluation gain/loss. See “Results of Operations” section above for discussion on the performance of segments on revenue.

Segment EBIT
			For the three months ended March 31
			2023			% of segment revenues			2022			% of segment revenues									% change
Segment EBIT
Imaging			$	191		7.7		%	$	206		8.9		%							(7)		%
Ultrasound			207			24.1		%	192			23.6		%							8		%
PCS			109			14.0		%	65			9.1		%							68		%
PDx			155			27.8		%	138			28.5		%							12		%
Other(a)			2						(2)
			$	664					$	599											11		%

(a)Financial information not presented within the reportable segments, shown within the Other category, represents the HFS business and certain other investments which do not meet the definition of an operating segment.

For the three months ended March 31, 2023

• Imaging Segment EBIT was $191 million for the three months ended March 31, 2023, a decrease of $15 million due to cost inflation, planned investments, and mix between our product and service offerings, partially offset by productivity initiatives, an increase in price and growth in sales volume;

• Ultrasound Segment EBIT was $207 million for the three months ended March 31, 2023, an increase of $15 million due to growth in sales volume, cost productivity and an increase in price, partially offset by cost inflation and planned investments;

• PCS Segment EBIT was $109 million for the three months ended March 31, 2023, an increase of $44 million due to cost productivity and an increase in price, partially offset by cost inflation and planned investments; and

• PDx Segment EBIT was $155 million for the three months ended March 31, 2023, an increase of $17 million due to an increase in price, growth in sales volume, and cost productivity, partially offset by cost inflation and planned investments.

NON-GAAP FINANCIAL MEASURES

The non-GAAP financial measures presented in this Quarterly Report on Form 10-Q are supplemental measures of our performance and our liquidity that we believe help investors understand our financial condition, cash flows and operating results, and assess our future prospects. We believe that presenting these non-GAAP financial measures, in addition to the corresponding U.S. GAAP financial measures, are important supplemental measures that exclude non-cash or other items that may not be indicative of or related to our core operating results and the overall health of our company. We believe that these non-GAAP financial measures provide investors greater transparency to the information used by management for its operational decision-making and allow investors to see our results “through the eyes of management.” We further believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance. When read in conjunction with our U.S. GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as one basis for making financial, operational, and planning decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry.

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*Non-GAAP Financial Measure

The non-GAAP financial measures we report include:

Organic revenue and Organic revenue growth rate

We believe that Organic revenue and Organic revenue growth rate, by excluding the effect of acquisitions, dispositions, and foreign currency rate fluctuations, provide management and investors with additional understanding of our core, top-line operating results and greater visibility into underlying revenue trends of our established, ongoing operations. Organic revenue and Organic revenue growth rate also provide greater insight regarding the overall demand for our products and services.

Adjusted EBIT and Adjusted EBIT margin

We believe Adjusted EBIT and Adjusted EBIT margin provide management and investors with additional understanding of our business by highlighting the results from ongoing operations and the underlying profitability factors. These metrics exclude interest expense, interest income, non-operating benefit (income) costs, and tax expense, as well as unique and/or non-cash items, that can have a material impact on our results. In addition, we may from time to time consider excluding other nonrecurring items to enhance comparability between periods. We believe this provides additional insight into how our businesses are performing, on a normalized basis. However, Adjusted EBIT and Adjusted EBIT margin should not be construed as inferring that our future results will be unaffected by the items for which the measure adjusts.

Adjusted net income

We believe Adjusted net income provides investors with improved comparability of underlying operating results and a further understanding and additional transparency regarding how we evaluate our business. Adjusted net income also provides management and investors with additional perspective regarding the impact of certain significant items on our earnings. Adjusted net income excludes non-operating benefit (income) costs, certain tax expense adjustments, and unique and/or non-cash items, that can have a material impact on our results. In addition, we may from time to time consider excluding other nonrecurring items to enhance comparability between periods. However, Adjusted net income should not be construed as inferring that our future results will be unaffected by the items for which the measure adjusts.

Adjusted earnings per share

We believe Adjusted earnings per share provides investors with improved comparability of underlying operating results and a further understanding and additional transparency regarding how we evaluate our business. Adjusted earnings per share also provides management and investors with additional perspective regarding the impact of certain significant items on our per share earnings. Adjusted earnings per share excludes non-operating benefit (income) costs, certain tax expense adjustments, and unique and/or non-cash items, that can have a material impact on our results. In addition, we may from time to time consider excluding other nonrecurring items to enhance comparability between periods. However, Adjusted earnings per share should not be construed as inferring that our future results will be unaffected by the items for which the measure adjusts.

Free cash flow

We believe that Free cash flow provides management and investors with an important measure of our ability to generate cash on a normalized basis. Free cash flow also provides insight into our flexibility to allocate capital, including reinvesting in the Company for future growth, paying down debt, paying dividends, and pursuing other opportunities that may enhance stockholder value. Free cash flow is Cash from (used for) operating activities - continuing operations including cash flows related to the additions and dispositions of PP&E and internal-use software as well as the impact of discontinued factoring programs. Interest expense associated with external debt that was historically held by GE is not recognized in the condensed combined financial statements and related notes. Additionally, Free cash flow does not represent residual cash flows available for discretionary expenditures, due to the fact the measures do not deduct the payments required for debt repayments.

Non-GAAP Reconciliations

Management recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company. In order to compensate for these and the other limitations discussed below, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with U.S. GAAP. Readers should review the reconciliations below and should not rely on any single financial measure to evaluate our business. The reconciliations of each non-GAAP financial measure to the most directly comparable U.S. GAAP financial measure are provided below.

Organic Revenue*			For the three months ended March 31
			2023			2022			% change
Imaging revenues			$	2,496		$	2,311		8%
Less: Acquisitions(a)			—			—
Less: Dispositions(b)			—			—
Less: Foreign currency exchange			(98)			—
Imaging Organic revenue*			$	2,594		$	2,311		12%
Ultrasound revenues			$	859		$	815		5%
Less: Acquisitions(a)			—			—
Less: Dispositions(b)			—			—
Less: Foreign currency exchange			(40)			—
Ultrasound Organic revenue*			$	899		$	815		10%
PCS revenues			$	781		$	716		9%
Less: Acquisitions(a)			—			—
Less: Dispositions(b)			—			—
Less: Foreign currency exchange			(17)			—
PCS Organic revenue*			$	798		$	716		11%
PDx revenues			$	558		$	484		15%
Less: Acquisitions(a)			—			—
Less: Dispositions(b)			—			—
Less: Foreign currency exchange			(19)			—
PDx Organic revenue*			$	577		$	484		19%
Other revenues			$	13		$	17		(24)%
Less: Acquisitions(a)			—			—
Less: Dispositions(b)			—			—
Less: Foreign currency exchange			—			—
Other Organic revenue*			$	13		$	17		(24)%
Total revenues			$	4,707		$	4,343		8%
Less: Acquisitions(a)			—			—
Less: Dispositions(b)			—			—
Less: Foreign currency exchange			(174)			—
Organic revenue*			$	4,881		$	4,343		12%

(a)Represents revenues attributable to acquisitions from the date we completed the transaction through the end of four quarters following the transaction.

(b)Represents revenues attributable to dispositions for the four quarters preceding the disposition date.

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*Non-GAAP Financial Measure

Adjusted EBIT*			For the three months ended March 31
			2023			2022						% change
Net income attributable to GE HealthCare			$	372		$	389					(4)%
Add: Interest and other financial charges - net			136			4
Add: Non-operating benefit (income) costs			(115)			(2)
Less: Benefit (provision) for income taxes			(163)			(131)
Less: Net (income) attributable to noncontrolling interests			(11)			(13)
EBIT*			$	567		$	534					6%
Add: Restructuring costs(a)			12			12
Add: Acquisition and disposition related charges (benefits)(b)			1			15
Add: Spin-Off and separation costs(c)			58			—
Add: (Gain)/loss of business dispositions/divestments(d)			—			(3)
Add: Amortization of acquisition-related intangible assets			31			33
Add: Investment revaluation (gain)/loss(e)			(5)			8
Adjusted EBIT*			$	664		$	599					11%
Net income margin			7.9%			9.0%						(110) bps
Adjusted EBIT margin*			14.1%			13.8%						30 bps

(a)Consists of severance, facility closures, and other charges associated with restructuring programs.

(b)Consists of legal, consulting, and other transaction and integration fees, and adjustments to contingent consideration, as well as other purchase accounting related charges and other costs directly related to the transactions.

(c)Costs incurred in the Spin-Off and separation from GE, including system implementations, audit and advisory fees, legal entity separation, Founders Grant equity awards, and other one-time costs.

(d)Consists of gains and losses resulting from the sale of assets and investments.

(e)Primarily relates to valuation adjustments for equity investments.

Adjusted Net Income*			For the three months ended March 31
			2023			2022						% change
Net income attributable to GE HealthCare			$	372		$	389					(4)%
Add: Non-operating benefit (income) costs			(115)			(2)
Add: Restructuring costs(a)			12			12
Add: Acquisition and disposition related charges (benefits)(b)			1			15
Add: Spin-Off and separation costs(c)			58			—
Add: (Gain)/loss of business dispositions/divestments(d)			—			(3)
Add: Amortization of acquisition-related intangible assets			31			33
Add: Investment revaluation (gain)/loss(e)			(5)			8
Add: Tax effect of reconciling items			4			(15)
Add: Certain tax adjustments(f)			30			—
Adjusted net income*			$	388		$	437					(11)%

(a)Consists of severance, facility closures, and other charges associated with restructuring programs.

(b)Consists of legal, consulting, and other transaction and integration fees, and adjustments to contingent consideration, as well as other purchase accounting related charges and other costs directly related to the transactions.

(c)Costs incurred in the Spin-Off and separation from GE, including system implementations, audit and advisory fees, legal entity separation, Founders Grant equity awards, and other one-time costs.

(d)Consists of gains and losses resulting from the sale of assets and investments.

(e)Primarily relates to valuation adjustments for equity investments.

(f)Consists of certain income tax adjustments, including the accrual of a deferred tax liability on the prior period earnings of certain of our foreign subsidiaries for which we are no longer permanently reinvested.

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*Non-GAAP Financial Measure

Adjusted Earnings Per Share*			For the three months ended March 31
(In dollars, except shares outstanding presented in millions)			2023			2022						$ change
Diluted earnings per share – continuing operations			$	0.41		$	0.86					$	(0.45)
Add: Deemed preferred stock dividend of redeemable noncontrolling interest			0.40			—
Add: Non-operating benefit (income) costs			(0.25)			(0.00)
Add: Restructuring costs(a)			0.03			0.03
Add: Acquisition and disposition related charges (benefits)(b)			0.00			0.03
Add: Spin-Off and separation costs(c)			0.13			—
Add: (Gain)/loss of business dispositions/divestments(d)			—			(0.01)
Add: Amortization of acquisition-related intangible assets			0.07			0.07
Add: Investment revaluation (gain)/loss(e)			(0.01)			0.02
Add: Tax effect of reconciling items			0.01			(0.03)
Add: Certain tax adjustments(f)			0.07			—
Adjusted earnings per share***(g)**			$	0.85		$	0.96					$	(0.11)
Diluted weighted-average shares outstanding			457			454

(a)Consists of severance, facility closures, and other charges associated with restructuring programs.

(b)Consists of legal, consulting, and other transaction and integration fees, and adjustments to contingent consideration, as well as other purchase accounting related charges and other costs directly related to the transactions.

(c)Costs incurred in the Spin-Off and separation from GE, including system implementations, audit and advisory fees, legal entity separation, Founders Grant equity awards, and other one-time costs.

(d)Consists of gains and losses resulting from the sale of assets and investments.

(e)Primarily relates to valuation adjustments for equity investments.

(f)Consists of certain income tax adjustments, including the accrual of a deferred tax liability on the prior period earnings of certain of our foreign subsidiaries for which we are no longer permanently reinvested.

(g)Adjusted earnings per share* amounts are computed independently, thus, the sum of per-share amounts may not equal the total.

Free Cash Flow*			For the three months ended March 31
			2023			2022						% change
Cash from (used for) operating activities – continuing operations			$	468		$	468					—%
Add: Additions to PP&E and internal-use software			(143)			(100)
Add: Dispositions of PP&E			—			3
Free cash flow*			$	325		$	371					(12)%

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2023, our Cash, cash equivalents, and restricted cash balance was $2,327 million. We have historically generated positive cash flows from operating activities from continuing operations. Additionally, we have access to revolving credit facilities of $3,500 million in aggregate, described in detail in Note 8, "Borrowings" to the condensed consolidated and combined financial statements. Historically, we relied on cash pooling arrangements with GE to manage liquidity and fund our operations. Upon completion of the Spin-Off, we ceased participation in GE cash pooling arrangements and our Cash, cash equivalents, and restricted cash are held and used solely for our own ongoing operations and commitments.

We believe that our existing balance of Cash, cash equivalents, and restricted cash, future cash generated from operating activities, access to capital markets, and existing credit facilities will be sufficient to meet the needs of our current and ongoing operations, pay taxes due, service our existing debt, and fund investments in our business for at least the next 12 months.

The following table summarizes our cash flows for the periods presented:

Cash Flow
			For the three months ended March 31
			2023			2022
Cash from (used for) operating activities – continuing operations			$	468		$	468
Cash from (used for) investing activities – continuing operations			(266)			(100)
Cash from (used for) financing activities – continuing operations			673			(420)
Free cash flow*			325			371

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*Non-GAAP Financial Measure

Operating Activities

Cash generated from operating activities from continuing operations was $468 million for the three months ended March 31, 2023 and $468 million for the three months ended March 31, 2022.

Cash generated from operating activities in the three months ended March 31, 2023, included Net income of $383 million, non-cash charges for depreciation and amortization of $157 million, and $72 million outflow from changes in assets and liabilities, primarily driven by an increase in inventory and an increase in company funded benefit payments for postretirement benefit plans, partially offset by an increase in contract liabilities and an increase in accounts payable.

Cash generated from operating activities in the three months ended March 31, 2022 included Net income of $402 million, non-cash charges for depreciation and amortization of $159 million, and $93 million outflow from changes in assets and liabilities, primarily driven by an increase in inventory, an increase in current receivables, and higher cash taxes paid, partially offset by an increase in accounts payable.

Investing Activities

Cash used for investing activities from continuing operations was $266 million for the three months ended March 31, 2023 and $100 million for the three months ended March 31, 2022.

Cash used for investing activities in the three months ended March 31, 2023, primarily included additions to PP&E of $143 million related primarily to new product introductions and manufacturing capacity expansion and purchases of businesses, net of cash acquired of $127 million related to Caption Health, Inc. ("Caption Health"). On February 17, 2023, we acquired Caption Health, an artificial intelligence ("AI") company whose technology expands access to AI-guided ultrasound screening for novice users.

Cash used for investing activities from continuing operations was $100 million in the three months ended March 31, 2022, and included additions to PP&E of $100 million related primarily to new product introductions and manufacturing capacity expansion.

Financing Activities

Cash generated from financing activities from continuing operations was $673 million for the three months ended March 31, 2023 and cash used for financing activities from continuing operations was $420 million for the three months ended March 31, 2022. Cash used for financing activities included $1,317 million and $391 million of transfers to GE in the three months ended March 31, 2023 and 2022, respectively, offset by newly issued debt of $2,000 million in the three months ended March 31, 2023.

Free cash flow*

Free cash flow* was $325 million for the three months ended March 31, 2023 and $371 million for the three months ended March 31, 2022. Free cash flow* decreased $46 million primarily due to a decrease in accounts payable, an increase in company funded benefit payments for postretirement benefit plans, and an increase in additions to PP&E, partially offset by a decrease in inventory, a decrease in current receivables, and lower cash taxes paid.

Capital Expenditures

Cash used for capital expenditures was $143 million and $100 million for the three months ended March 31, 2023 and 2022, respectively. Capital expenditures were primarily for manufacturing capacity expansion, equipment and tooling for new and existing products, and purchased software.

Material Cash Requirements

In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. Information regarding our obligations under lease, debt, and purchase arrangements are provided in Note 8, “Borrowings,” and Note 13, “Commitments, Guarantees, Product Warranties, and Other Loss Contingencies,” to the condensed consolidated and combined financial statements contained elsewhere in this Quarterly Report on Form 10-Q, as well as Note 7, “Leases,” disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Additionally, we have material cash requirements related to our pension obligations as described in Note 9, “Postretirement Benefit Plans,” to the condensed consolidated and combined financial statements in this Quarterly Report on Form 10-Q.

Debt and Credit Facilities

As part of our capital structure, we have incurred debt. The servicing of this debt will be supported by cash flows from our operations. As of March 31, 2023, we had $10,239 million of total debt compared to $8,250 million as of December 31, 2022.

The increase in our total debt as of March 31, 2023 was driven by the completion of a $2,000 million drawdown of the Term Loan Facility in connection with the Spin-Off from GE. The average interest rate during the period from January 3, 2023 through March 31, 2023 was 5.94%.

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*Non-GAAP Financial Measure

Our credit facilities include a five-year senior unsecured revolving facility that provides borrowings of up to $2,500 million expiring in November 2028, and a 364-day senior unsecured revolving facility that provides borrowings of up to $1,000 million expiring in November 2023.

For additional details on debt and credit facilities, see Note 8, “Borrowings” to the condensed consolidated and combined financial statements.

Access to Capital and Credit Ratings

We have historically relied, via GE, on the debt capital markets to fund a significant portion of our operations. Concurrent with our Spin-off, we accessed the capital markets and raised $10,250 million of debt by issuing $8,250 million of senior unsecured notes in November 2022, and completed a drawdown of Term Loan Facility of $2,000 million in January 2023. In addition, we were able to arrange revolving credit facilities of $3,500 million to further support our liquidity needs. We plan to continue to rely on capital markets, and we expect to have access to credit facilities to fund operations. The cost and availability of debt financing will be influenced by our credit ratings and market conditions. Moody’s Investors Service (“Moody’s”), Standard and Poor's Global Ratings (“S&P”), and Fitch Ratings (“Fitch”) currently issue ratings on our long-term debt. Our credit ratings as of the date of this filing are set forth in the table below.

			Moody’s			S&P			Fitch
Long-term rating			Baa2			BBB			BBB
Outlook			Stable			Stable			Stable

We are disclosing our credit ratings to enhance understanding of our sources of liquidity and the effects of our ratings on our costs of funds and access to liquidity. Our ratings may be subject to a revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.

During the first quarter of 2023, the financial markets experienced disruption due to certain bank failures. We have not experienced any material financial impact from this disruption. We will continue to monitor the situation and take action accordingly. We believe that our financing arrangements, future cash from operations, and access to capital markets will provide adequate resources to fund our future cash flow needs.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

For a discussion of recently issued accounting standards, see Note 1, “Organization and Basis of Presentation” to the condensed consolidated and combined financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

CRITICAL ACCOUNTING ESTIMATES

Our financial results are affected by the selection and application of accounting policies and methods. We have adopted accounting policies to prepare our condensed consolidated and combined financial statements in conformity with U.S. GAAP.

To prepare our condensed consolidated and combined financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that may affect the reported amounts of our assets and liabilities, including our contingent liabilities, as of the date of our condensed consolidated and combined financial statements and the reported amounts of our revenues and expenses during the reporting periods. Our actual results may differ from these estimates. We consider estimates to be critical (i) if we are required to make assumptions about material matters that are uncertain at the time of estimation or (ii) if materially different estimates could have been made or it is reasonably likely that the accounting estimate will change from period to period.

Management believes that there have been no significant changes during the three months ended March 31, 2023 to the items that we disclosed as our critical accounting estimates in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.