Item 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

112K characters. Original on sec.gov · Markdown

Item 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


Part I. Financial Information
Index
Item 1. Condensed Consolidated Financial Statements (Unaudited)			Page
Condensed Consolidated Statements of Income			5
Condensed Consolidated Statements of Comprehensive Income (Loss)			6
Condensed Consolidated Statements of Financial Position			7
Condensed Consolidated Statements of Changes in Equity			8
Condensed Consolidated Statements of Cash Flows			9

Notes to the Condensed Consolidated Financial Statements (Unaudited)			10
Note 1 . Organization and Basis of Presentation			10
Note 2 . Revenue Recognition			11
Note 3 . Segment Information			11
Note 4 . Receivables			13
Note 5 . Financing Receivables			13
Note 6 . Leases			13
Note 7 . Acquisitions, Goodwill , and Other Intangible Assets			14
Note 8 . Borrowings			14
Note 9 . Postretirement Benefit Plans			15
Note 10 . Income Taxes			16
Note 11 . Accumulated Other Comprehensive Income (Loss) – Net			16
Note 12 . Financial Instruments and Fair Value Measurements			17
Note 13 . Commitments, Guarantees, Product Warranties, and Other Loss Contingencies			20
Note 14 . Restructuring and Other Activities – Net			21
Note 1 5. Earnings Per Share			21
Note 1 6. Supplemental Financial Information			22
Note 1 7. Related Parties			25
Note 1 8. Subsequent Events			25


Condensed Consolidated Statements of Income (Unaudited)
	For the three months ended March 31
(In millions, except per share amounts)	2024		2023
Sales of products	$	3,045	$	3,131
Sales of services	1,605		1,576
Total revenues	4,650		4,707
Cost of products	1,967		2,037
Cost of services	782		779
Gross profit	1,902		1,891
Selling, general, and administrative	1,038		1,062
Research and development	324		270
Total operating expenses	1,362		1,332
Operating income	540		559
Interest and other financial charges – net	122		136
Non-operating benefit (income) costs	(102)		(115)
Other (income) expense – net	8		(8)
Income before income taxes	512		546
Benefit (provision) for income taxes	(124)		(163)


Net income	388		383
Net (income) loss attributable to noncontrolling interests	(14)		(11)
Net income attributable to GE HealthCare	374		372
Deemed preferred stock dividend of redeemable noncontrolling interest	—		(183)
Net income attributable to GE HealthCare common stockholders	$	374	$	189




Earnings per share attributable to GE HealthCare common stockholders:
Basic	$	0.82	$	0.42
Diluted	$	0.81	$	0.41
Weighted-average number of shares outstanding:
Basic	456		454
Diluted	459		457

The accompanying notes are an integral part of these condensed consolidated financial statements.


Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

	For the three months ended March 31
(In millions, net of tax)	2024		2023
Net income attributable to GE HealthCare	$	374	$	372
Net income (loss) attributable to noncontrolling interests	14		11
Net income	388		383
Other comprehensive income (loss):

Currency translation adjustments – net of taxes	(76)		57
Pension and Other Postretirement Plans – net of taxes	(35)		(65)
Cash flow hedges – net of taxes	16		(39)
Other comprehensive income (loss)	(95)		(47)
Comprehensive income (loss)	292		336
Less: Comprehensive income (loss) attributable to noncontrolling interests	14		11
Comprehensive income attributable to GE HealthCare	$	278	$	325

The accompanying notes are an integral part of these condensed consolidated financial statements.


Condensed Consolidated Statements of Financial Position (Unaudited)

	As of

(In millions, except share and per share amounts)	March 31, 2024		December 31, 2023
Cash, cash equivalents, and restricted cash	$	2,563	$	2,504
Receivables – net of allowances of $102 and $98	3,324		3,525
Due from related parties	20		32
Inventories	1,989		1,960
Contract and other deferred assets	961		1,000
All other current assets	517		389
Current assets	9,373		9,410
Property, plant, and equipment – net	2,445		2,500
Goodwill	12,927		12,936
Other intangible assets – net	1,174		1,253
Deferred income taxes	4,413		4,474
All other non-current assets	1,878		1,881
Total assets	$	32,208	$	32,454
Short-term borrowings	$	1,008	$	1,006
Accounts payable	2,931		2,947
Due to related parties	48		99
Contract liabilities	1,879		1,918
All other current liabilities	2,993		3,011
Current liabilities	8,859		8,981
Long-term borrowings	8,247		8,436
Compensation and benefits	5,625		5,782
Deferred income taxes	68		68
All other non-current liabilities	1,811		1,877
Total liabilities	24,609		25,144
Commitments and contingencies
Redeemable noncontrolling interests	177		165
Common stock, par value $0.01 per share, 1,000,000,000 shares authorized, 456,328,270 shares issued and outstanding as of March 31, 2024; 455,342,290 shares issued and outstanding as of December 31, 2023	5		5
Additional paid-in capital	6,504		6,493
Retained earnings	1,687		1,326

Accumulated other comprehensive income (loss) – net	(787)		(691)
Total equity attributable to GE HealthCare	7,408		7,133
Noncontrolling interests	14		12
Total equity	7,423		7,145
Total liabilities, redeemable noncontrolling interests, and equity	$	32,208	$	32,454

The accompanying notes are an integral part of these condensed consolidated financial statements.


Condensed Consolidated Statements of Changes in Equity (Unaudited)
	Common stock
(In millions)	Common shares outstanding	Par value		Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss) – net		Equity attributable to noncontrolling interests		Total equity
Balances as of December 31, 2023	455	$	5	$	6,493	$	1,326	$	(691)	$	12	$	7,145











Issuance of common stock in connection with employee stock plans, net of shares withheld for employee taxes	1	—		(24)		—		—		—		(24)
Net income attributable to GE HealthCare	—	—		—		374		—		—		374
Dividends declared ($0.03 per common share)	—	—		—		(14)		—		—		(14)
Other comprehensive income (loss) attributable to GE HealthCare	—	—		—		—		(95)		—		(95)
Changes in equity attributable to noncontrolling interests	—	—		—		—		—		2		2
Share-based compensation	—	—		34		—		—		—		34
Balances as of March 31, 2024	456	$	5	$	6,504	$	1,687	$	(787)	$	14	$	7,423



	Common stock
(In millions)	Common shares outstanding	Par value		Additional paid-in capital		Retained earnings		Net parent investment		Accumulated other comprehensive income (loss) – net		Equity attributable to noncontrolling interests		Total equity
Balances as of December 31, 2022	—	$	—	$	—	$	—	$	11,235	$	(1,878)	$	5	$	9,362
Net transfers from GE, including Spin-Off-related adjustments	—	—		—		—		(4,833)		2,000		(1)		(2,834)
Issuance of common stock in connection with the Spin-Off and reclassification of net parent investment	454	5		6,397		—		(6,402)		—		—		—
Issuance of common stock in connection with employee stock plans, net of shares withheld for employee taxes	1	—		4		—		—		—		—		4
Net income attributable to GE HealthCare	—	—		—		372		—		—		—		372
Other comprehensive income (loss) attributable to GE HealthCare	—	—		—		—		—		(47)		—		(47)



Changes in equity attributable to noncontrolling interests	—	—		—		—		—		—		2		2
Share-based compensation	—	—		24		—		—		—		—		24
Changes in equity due to redemption value adjustments on redeemable noncontrolling interests	—	—		—		(187)		—		—		—		(187)
Balances as of March 31, 2023	455	$	5	$	6,425	$	185	$	—	$	75	$	6	$	6,696

The accompanying notes are an integral part of these condensed consolidated financial statements.


Condensed Consolidated Statements of Cash Flows (Unaudited)
	For the three months ended March 31
(In millions)	2024		2023
Net income	$	388	$	383


Adjustments to reconcile Net income to Cash from (used for) operating activities
Depreciation of property, plant, and equipment	68		61
Amortization of intangible assets	80		96

Gain on fair value remeasurement of contingent consideration	(1)		—
Net periodic postretirement benefit plan (income) expense	(90)		(101)
Postretirement plan contributions	(87)		(91)
Share-based compensation	34		24
Provision for income taxes	124		163
Cash paid during the year for income taxes	(86)		(102)


Changes in operating assets and liabilities, excluding the effects of acquisitions:
Receivables	155		(22)
Due from related parties	13		5
Inventories	(59)		(122)
Contract and other deferred assets	32		12
Accounts payable	81		87
Due to related parties	(50)		6
Contract liabilities	(18)		119
All other operating activities	(165)		(50)
Cash from (used for) operating activities	419		468
Cash flows – investing activities
Additions to property, plant and equipment and internal-use software	(145)		(143)

Purchases of businesses, net of cash acquired	—		(127)
All other investing activities	(42)		4
Cash from (used for) investing activities	(188)		(266)
Cash flows – financing activities
Net increase (decrease) in borrowings (maturities of 90 days or less)	1		(9)
Newly issued debt, net of debt issuance costs (maturities longer than 90 days)	1		2,000
Repayments and other reductions (maturities longer than 90 days)	(153)		(6)
Dividends paid to stockholders	(14)		—

Net transfers (to) from GE	—		(1,317)
All other financing activities	12		5
Cash from (used for) financing activities	(153)		673



Effect of foreign currency rate changes on cash, cash equivalents, and restricted cash	(19)		8
Increase (decrease) in cash, cash equivalents, and restricted cash	59		883
Cash, cash equivalents, and restricted cash at beginning of year	2,506		1,451

Cash, cash equivalents, and restricted cash as of March 31	$	2,565	$	2,334

Supplemental disclosure of cash flows information
Cash paid during the year for interest	$	(55)	$	(42)
Non-cash investing activities
Acquired but unpaid property, plant, and equipment	$	53	$	64

The accompanying notes are an integral part of these condensed consolidated financial statements.

NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

GE HealthCare Technologies Inc. and its subsidiaries (“GE HealthCare,” the “Company,” “our,” “us,” or “we”) is a leading global medical technology, pharmaceutical diagnostics, and digital solutions innovator. We operate at the center of the healthcare ecosystem, helping enable precision care by increasing health system capacity, enhancing productivity, digitizing healthcare delivery, and improving clinical outcomes while serving patients’ demand for greater efficiency, access, and personalized medicine. Our products, services, and solutions are designed to enable clinicians to make more informed decisions quickly and efficiently, improving patient care from diagnosis to therapy to monitoring.

On January 3, 2023 (the “Distribution Date”), the General Electric Company (“GE”) completed the spin-off of GE HealthCare Technologies Inc. (the “Spin-Off”). The Spin-Off was completed through a distribution of approximately 80.1% of the Company’s outstanding common stock to holders of record of GE’s common stock as of the close of business on December 16, 2022 (the “Distribution”), which resulted in the issuance of approximately 454 million shares of common stock. Prior to the Distribution, the Company issued 100 shares of common stock in exchange for $1.00, all of which were held by GE as of December 31, 2022. As a result of the Distribution, the Company became an independent public company. As of March 31, 2024, GE’s beneficial ownership was approximately 6.7% of the Company’s outstanding common stock.

In connection with the Spin-Off, certain adjustments were recorded to reflect transfers from GE, the draw-down of the Term Loan Facility and settlement of Spin-Off transactions with GE, which resulted in the net reduction in Total equity of $2,834 million. These items substantially consisted of the transfer of: (1) certain pension plan liabilities and assets, (2) certain deferred income taxes, (3) deferred compensation liabilities, and (4) employee termination obligations.

In connection with the Spin-Off, the Company entered into or adopted several agreements that provide a framework for the relationship between the Company and GE. See Note 17, “Related Parties” for more information on these agreements and related transactions.

The condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position and operating results have been included. All intercompany balances and transactions within the Company have been eliminated in the condensed consolidated financial statements. Operating results for the three months ended March 31, 2024 and 2023 are not necessarily indicative of the results that may be expected for the fiscal year as a whole. The December 31, 2023 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The following tables are presented in millions of U.S. dollars unless otherwise stated. Certain columns and rows throughout this document may not sum due to the use of rounded numbers. Percentages presented are calculated from the underlying whole-dollar amounts.

The condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated and combined financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

ESTIMATES AND ASSUMPTIONS.

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates based on assumptions about current, and for some estimates, future, economic and market conditions, which affect the reported amounts and related disclosures in the condensed consolidated financial statements. We base our estimates and judgments on historical experience and on various other assumptions and information that we believe to be reasonable under the circumstances. Although our estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations, financial position, and cash flows.

RECENT ACCOUNTING PRONOUNCEMENTS.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07 (“ASU 2023-07”), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires annual and interim disclosures that are expected to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The provisions of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2023-07.

In December 2023, the FASB issued ASU No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The provisions of ASU 2023-09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2023-09.

NOTE 2. REVENUE RECOGNITION

Our revenues primarily consist of sales of products and services to customers. Products include equipment, imaging agents, software-related offerings, and upgrades. Services include contractual and stand-by preventative maintenance and corrective services, as well as on-demand service parts and maintenance services, extended warranties, training, and other service-type offerings. The Company recognizes revenue from contracts with customers when the customer obtains control of the underlying products or services.

CONTRACT ASSETS.

Contract assets reflect revenue recognized on contracts with customers in excess of billings based on contractual terms. Contract assets are classified as current or non-current based on the amount of time expected to lapse until the Company’s right to consideration becomes unconditional. Other deferred assets consist of costs to obtain contracts, primarily commissions, other cost deferrals for shipped products, and deferred service, labor, and direct overhead costs.


Contract and Other Deferred Assets
	As of
	March 31, 2024		December 31, 2023
Contract assets	$	577	$	600
Other deferred assets	384		400
Contract and other deferred assets	961		1,000
Non-current contract assets(1)	78		72
Non-current other deferred assets(1)	97		96
Total contract and other deferred assets	$	1,136	$	1,168

(1)Non-current contract and other deferred assets are recognized within All other non-current assets in the Condensed Consolidated Statements of Financial Position.

CONTRACT LIABILITIES.

Contract liabilities include customer advances and deposits received when orders are placed and billed in advance of completion of performance obligations. Contract liabilities are classified as current or non-current based on the periods over which remaining performance obligations (“RPO”) are expected to be satisfied with our customers.

As of March 31, 2024 and December 31, 2023, contract liabilities were approximately $2,566 million and $2,623 million, respectively, of which the non-current portion of $687 million and $705 million, respectively, was recognized in All other non-current liabilities in the Condensed Consolidated Statements of Financial Position. Contract liabilities decreased $56 million in 2024 primarily due to a decrease in customer advances. Revenue recognized related to the contract liabilities balance at the beginning of the year was approximately $741 million and $759 million for the three months ended March 31, 2024 and 2023, respectively.

REMAINING PERFORMANCE OBLIGATIONS.

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. As of March 31, 2024, the aggregate amount of the contracted revenues allocated to our unsatisfied performance obligations was $14,313 million. We expect to recognize revenue as we satisfy our RPO as follows: a) product-related RPO of $4,742 million of which 98% is expected to be recognized within two years, and the remaining thereafter; and b) services-related RPO of $9,570 million of which 65% and 94% are expected to be recognized within two years and five years, respectively, and the remaining thereafter.

NOTE 3. SEGMENT INFORMATION

GE HealthCare’s operations are organized and managed through four reportable segments: Imaging, Ultrasound, Patient Care Solutions (“PCS”), and Pharmaceutical Diagnostics (“PDx”). These segments have been identified based on the nature of the products sold and how the Company manages its operations. We have not aggregated any of our operating segments to form reportable segments. A description of our reportable segments has been provided in the “Business” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

The performance of these segments is principally measured based on Total revenues and an earnings metric defined as “Segment EBIT.” Segment EBIT is calculated as Income before income taxes in our Condensed Consolidated Statements of Income excluding the impact of the following: Interest and other financial charges – net, Non-operating benefit (income) costs, restructuring costs, acquisition and disposition-related benefits (charges), gain (loss) on business and asset dispositions, Spin-Off and separation costs, amortization of acquisition-related intangible assets, and investment revaluation gain (loss).


Total Revenues by Segment
	For the three months ended March 31

	2024		2023
Imaging:
Radiology	$	2,062	$	2,088
Interventional Guidance	403		408
Total Imaging	2,466		2,496
Total Ultrasound	824		859
PCS:
Monitoring Solutions	527		552
Life Support Solutions	220		229
Total PCS	747		781
Total PDx	599		558
Other(1)	15		13
Total revenues	$	4,650	$	4,707

(1) 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.


Segment EBIT
	For the three months ended March 31
	2024		2023
Segment EBIT
Imaging	$	240	$	191
Ultrasound	182		207
PCS	81		109
PDx	178		155
Other(1)	(1)		2
	681		664
Restructuring costs	(40)		(12)
Acquisition and disposition-related benefits (charges)	—		(1)
Gain (loss) on business and asset dispositions	—		—
Spin-Off and separation costs	(60)		(58)
Amortization of acquisition-related intangible assets	(31)		(31)
Investment revaluation gain (loss)	(20)		5
Interest and other financial charges – net	(122)		(136)
Non-operating benefit income (costs)	102		115
Income before income taxes	$	512	$	546

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

NOTE 4. RECEIVABLES


Current Receivables
	As of
	March 31, 2024		December 31, 2023
Current customer receivables(1)	$	3,148	$	3,339
Non-income based tax receivables	151		166
Other sundry receivables	127		118
Current sundry receivables	278		284
Allowance for credit losses	(102)		(98)
Total current receivables – net	$	3,324	$	3,525

(1) Chargebacks, which are primarily related to our PDx business, are generally settled through issuance of credits, typically within one month of initial recognition, and are recorded as a reduction to current customer receivables. Balances related to chargebacks were $136 million and $144 million as of March 31, 2024 and December 31, 2023, respectively.


Long-Term Receivables
	As of
	March 31, 2024		December 31, 2023
Long-term customer receivables	$	57	$	55
Non-income based tax receivables	25		26
Other sundry receivables	78		73
Long-term sundry receivables	102		99

Allowance for credit losses	(30)		(30)
Total long-term receivables – net(1)	$	130	$	124

(1) Long-term receivables are recognized within All other non-current assets in the Condensed Consolidated Statements of Financial Position.

NOTE 5. FINANCING RECEIVABLES


Financing Receivables
	As of
	March 31, 2024		December 31, 2023
Loans, net of deferred income	$	29	$	29
Investment in financing leases, net of deferred income	71		71
Allowance for credit losses	(3)		(3)
Current financing receivables – net(1)	96		97
Loans, net of deferred income	36		37
Investment in financing leases, net of deferred income	149		146
Allowance for credit losses	(5)		(5)
Non-current financing receivables – net(1)	$	181	$	178

(1) Current financing receivables and non-current financing receivables are recognized within All other current assets and All other non-current assets, respectively, in the Condensed Consolidated Statements of Financial Position.

As of March 31, 2024, 6%, 5%, and 7% of financing receivables were over 30 days past due, over 90 days past due, and on nonaccrual, respectively, with the majority of nonaccrual financing receivables secured by collateral. As of December 31, 2023, 5%, 5%, and 6% of financing receivables were over 30 days past due, over 90 days past due, and on nonaccrual, respectively, with the majority of nonaccrual financing receivables secured by collateral.

NOTE 6. LEASES

Operating lease liabilities recognized within All other current liabilities and All other non-current liabilities in the Condensed Consolidated Statements of Financial Position were $376 million and $383 million as of March 31, 2024 and December 31, 2023, respectively. The total lease expense related to our operating lease portfolio was $60 million and $56 million for the three months ended March 31, 2024 and 2023, respectively.

NOTE 7. ACQUISITIONS, GOODWILL, AND OTHER INTANGIBLE ASSETS

ACQUISITIONS.

On February 17, 2023, the Company acquired 100% of the stock of Caption Health, Inc. (“Caption Health”) for $127 million of upfront payment, $10 million of future holdback payment, and potential earn-out payments valued at $13 million based primarily on various milestones and sales targets. This transaction was accounted for as a business combination. The preliminary purchase price allocation resulted in goodwill of $94 million, intangible assets of $60 million, and deferred tax liabilities of $3 million. The purchase price allocation for Caption Health was finalized in the first quarter of 2024 without material adjustments. The goodwill associated with the acquired business is non-deductible for tax purposes and is reported in the Ultrasound segment. Caption Health is an artificial intelligence (“AI”) company whose technology expands access to AI-guided ultrasound screening for novice users.

GOODWILL.


	Balance as of December 31, 2023		Acquisitions		Foreign exchange and other		Balance as of March 31, 2024
Imaging	$	4,431	$	—	$	(4)	$	4,427
Ultrasound	3,933		—		(5)		3,928
PCS	2,038		—		(1)		2,037
PDx	2,534		—		—		2,534
Total Goodwill	$	12,936	$	—	$	(10)	$	12,927

We assess the possibility that a reporting unit’s fair value has been reduced below its carrying amount due to the occurrence of events or circumstances between annual impairment testing dates. We did not identify any reporting units that required an interim impairment test since the last annual impairment testing date.

OTHER INTANGIBLE ASSETS.

Intangible assets decreased during the three months ended March 31, 2024, primarily as a result of amortization. Substantially all of our intangible assets are subject to amortization. Amortization expense was $80 million and $96 million for the three months ended March 31, 2024 and 2023, respectively.

NOTE 8. BORROWINGS

The Company’s borrowings include the following senior unsecured notes and credit agreements:

Senior Unsecured Notes

The Company’s borrowings include $8,250 million aggregate principal amount of senior unsecured notes in six series with maturity dates ranging from 2024 through 2052 (collectively, the “Notes”). Refer to the table below for further information about the Notes.

Credit Facilities

The Company has credit agreements providing for:

a five-year senior unsecured revolving credit facility in an aggregate committed amount of $2,500 million;
a 364-day senior unsecured revolving credit facility in an aggregate committed amount of $1,000 million; and
a three-year senior unsecured term loan credit facility in an aggregate principal amount of $2,000 million (the “Term Loan Facility” and, together with the five-year revolving credit facility and the 364-day revolving credit facility, the “Credit Facilities”).

There were no outstanding amounts under the five-year revolving credit facility and 364-day revolving credit facility as of March 31, 2024 or December 31, 2023.

In the first quarter of 2024, we repaid $150 million of the outstanding Term Loan Facility. As of March 31, 2024, we have repaid a total of $1,000 million of this facility. We had no principal debt repayments on the Notes for the three months ended March 31, 2024.


Borrowings Composition
	As of
	March 31, 2024		December 31, 2023
5.550% senior notes due November 15, 2024	$	1,000	$	1,000
5.600% senior notes due November 15, 2025	1,500		1,500
5.650% senior notes due November 15, 2027	1,750		1,750
5.857% senior notes due March 15, 2030	1,250		1,250
5.905% senior notes due November 22, 2032	1,750		1,750
6.377% senior notes due November 22, 2052	1,000		1,000
Floating rate Term Loan Facility due January 2, 2026	1,000		1,150
Other	51		52
Total principal debt issued	9,301		9,452
Less: Unamortized debt issuance costs and discounts	33		35
Add: Cumulative basis adjustment for fair value hedges	(13)		25
Total borrowings	9,255		9,442
Less: Short-term borrowings(1)	1,008		1,006
Long-term borrowings	$	8,247	$	8,436

(1) Short-term borrowings as of March 31, 2024 and December 31, 2023 includes $1,003 million and $1,002 million, respectively, related to the current portion of our long-term borrowings, net of unamortized debt issuance costs and discounts.

See Note 12, “Financial Instruments and Fair Value Measurements” for further information about borrowings and associated derivatives contracts.

LETTERS OF CREDIT, GUARANTEES, AND OTHER COMMITMENTS.

As of March 31, 2024 and December 31, 2023, the Company had bank guarantees and surety bonds of approximately $717 million and $751 million, respectively, related to certain commercial contracts. Additionally, we have approximately $33 million and $39 million of guarantees as of March 31, 2024 and December 31, 2023, respectively, primarily related to residual and credit guarantees on equipment sold to third-party finance companies. Our Condensed Consolidated Statements of Financial Position reflect a liability of $4 million as of March 31, 2024 and December 31, 2023 related to these guarantees. For credit-related guarantees, we estimate our expected credit losses related to off-balance sheet credit exposure consistent with the method used to estimate the allowance for credit losses on financial assets held at amortized cost. See Note 13, “Commitments, Guarantees, Product Warranties, and Other Loss Contingencies” for further information on guarantee arrangements with GE.

NOTE 9. POSTRETIREMENT BENEFIT PLANS

We sponsor a number of pension and retiree health and life insurance benefit plans that we present in three categories, Principal Pension Plans, Other Pension Plans, and Other Postretirement Plans (“OPEB Plans”). Please refer to Note 10, “Postretirement Benefit Plans” to the consolidated and combined financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for further information. On January 1, 2024, we transitioned from legacy GE multiple-employer OPEB plans to GE HealthCare sponsored single-employer OPEB plans. This change did not have an impact on our results of operations or financial position. Pension plans with pension assets or obligations less than $50 million are not included in the results below.


Components of Expense (Income)
	For the three months ended March 31
	Principal Pension Plans				Other Pension Plans					OPEB Plans

	2024		2023			2024		2023			2024		2023
Service cost – Operating	$	7	$	8		$	6	$	6		$	2	$	2
Interest cost	227		240			50		52			13		15
Expected return on plan assets	(283)		(293)			(63)		(63)			—		—
Amortization of net loss (gain)	(19)		(31)			5		2			(15)		(16)
Amortization of prior service cost (credit)	2		—			—		(1)			(22)		(22)


Non-operating	$	(73)	$	(84)		$	(8)	$	(10)		$	(24)	$	(23)
Net periodic expense (income)	$	(66)	$	(76)		$	(2)	$	(4)		$	(22)	$	(21)

In the three months ended March 31, 2024, the Company made cash benefit payments totaling $27 million to its Principal Pension Plans, $21 million to its Other Pension Plans, and $39 million to its OPEB Plans. In 2024, the Company expects to make total cash contributions of approximately $336 million to these plans. The Company does not have a required minimum funding contribution for its U.S.-based GE HealthCare Pension Plan in 2024. Future contributions will depend on market conditions, interest rates, and other factors.

Defined Contribution Plan

GE HealthCare sponsors a defined contribution plan for its eligible U.S. employees. Expenses associated with our employees’ participation in GE HealthCare’s defined contribution plan were $32 million and $33 million for the three months ended March 31, 2024 and 2023, respectively.

NOTE 10. INCOME TAXES

Our effective income tax rate was 24.2% and 29.9% for the three months ended March 31, 2024 and 2023, respectively. The tax rate for the three months ended March 31, 2024 and 2023 is higher than the U.S. statutory rate primarily due to the cost of global activities, including the U.S. taxation on international operations, withholding taxes, and state taxes.

Post Spin-Off, the Company’s previously undistributed earnings of our foreign subsidiaries are no longer indefinitely reinvested in non-U.S. businesses due to current U.S. funding needs. Therefore, in the first quarter of 2023, an incremental deferred tax liability of $30 million was recorded for withholding and other foreign taxes due upon future distribution of earnings. In addition, the Company is providing for withholding and other foreign taxes due upon future distribution of current period earnings.

The Company is currently being audited in a number of jurisdictions for tax years 2004-2022, including China, Germany, Norway, the United Kingdom, and the United States.

NOTE 11. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) – NET

Changes in Accumulated other comprehensive income (loss) (“AOCI”) by component, net of income taxes, were as follows.


	For the three months ended March 31, 2024
	Currency translation adjustments(1)		Pension and Other Postretirement Plans		Cash flow hedges		Total AOCI
December 31, 2023	$	(1,706)	$	1,033	$	(18)	$	(691)
Other comprehensive income (loss) before reclassifications – net of taxes of $(7), $(1), and $(4)	(76)		2		15		(58)
Reclassifications from AOCI – net of taxes(2) of $0, $12, and $0	—		(38)		—		(37)
Other comprehensive income (loss)	(76)		(35)		16		(95)


Less: Other comprehensive income (loss) attributable to noncontrolling interests	—		—		—		—
March 31, 2024	$	(1,781)	$	997	$	(2)	$	(787)


	For the three months ended March 31, 2023
	Currency translation adjustments(1)		Pension and Other Postretirement Plans		Cash flow hedges		Total AOCI
December 31, 2022	$	(1,845)	$	(42)	$	9	$	(1,878)
Other comprehensive income (loss) before reclassifications – net of taxes of $(11), $2, and $4	57		(13)		(13)		31

Reclassifications from AOCI – net of taxes(2) of $0, $16, and $7	—		(52)		(26)		(78)
Other comprehensive income (loss)	57		(65)		(39)		(47)
Spin-Off related adjustments – net of taxes of $0, $(509), and $0	28		1,972		—		2,000
Less: Other comprehensive income (loss) attributable to noncontrolling interests	—		—		—		—
March 31, 2023	$	(1,760)	$	1,865	$	(30)	$	75

(1) The amount of Currency translation adjustments recognized in Other comprehensive income (loss) (“OCI”) during the three months ended March 31, 2024 and 2023 included net gains (losses) relating to net investment hedges, as further discussed in Note 12, “Financial Instruments and Fair Value Measurements.”

(2) Reclassifications from AOCI into earnings for Pension and Other Postretirement Plans are recognized within Non-operating benefit (income) costs, while Cash flow hedges are recognized within Cost of products and Cost of services in our Condensed Consolidated Statements of Income.

NOTE 12. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

DERIVATIVES AND HEDGING.

Our primary objective in executing and holding derivative contracts is to reduce the volatility of earnings and cash flows associated with risks related to foreign currency exchange rates, interest rates, equity prices, and commodity prices. These derivative contracts reduce, but do not entirely eliminate, the aforementioned risks. Our policy is to use derivative contracts solely for managing risks and not for speculative purposes.

Cash Flow Hedges

For derivative instruments designated as cash flow hedges, changes in the fair value of designated hedging instruments are initially recorded as a component of AOCI and subsequently reclassified to earnings in the period in which the hedged transaction affects earnings and to the same financial statement line item impacted by the hedged transaction. As of March 31, 2024, we expect to reclassify $3 million of pre-tax net deferred losses associated with designated cash flow hedges to earnings in the next 12 months, contemporaneously with the impact on earnings of the related hedged transactions.

Net Investment Hedges

We use cross-currency interest rate swaps and foreign currency forward contracts in combination with foreign currency option contracts to hedge the foreign currency risk associated with our net investment in foreign operations. As of March 31, 2024, these contracts were designated as hedges of our net investment in foreign operations with Euro, Japanese Yen, and Chinese Renminbi functional currencies.

Fair Value Hedges

We use interest rate swaps to hedge the interest rate risk on our fixed rate borrowings. These derivatives are designated as fair value hedges. In the first quarter of 2024, we executed interest rate swap contracts to hedge the benchmark interest rate risk of specific designated cash flows of our senior unsecured notes.

We record the changes in fair value on the swap contracts in Interest and other financial charges – net in our Condensed Consolidated Statements of Income, the same line item where the offsetting change in the fair value of the designated cash flows of the senior unsecured note is recorded as a basis adjustment.

Derivatives Not Designated as Hedging Instruments

We also execute derivative instruments, such as foreign currency forward contracts, equity-linked total return swaps, and commodity forward contracts that are not designated as qualifying hedges. These derivatives serve as economic hedges of the foreign currency rate risk, equity price risk and commodity price risk. We identify foreign currency-related features in our purchase or sales contracts where the currency is not the local or functional currency of a substantive party to the contract and record them as embedded derivatives.

The changes in fair value of derivatives not designated in qualifying hedge transactions are recorded in Cost of products, Cost of services, Selling, general, and administrative (“SG&A”), and Other (income) expense – net in the Condensed Consolidated Statements of Income based on the nature of the underlying hedged transaction. Changes in fair value of embedded derivatives are recognized in Other (income) expense – net in the Condensed Consolidated Statements of Income.

The following table presents the gross fair values of our outstanding derivative instruments.


Fair Value of Derivatives
	March 31, 2024						December 31, 2023
	Gross Notional		Fair Value – Assets		Fair Value – Liabilities		Gross Notional		Fair Value – Assets		Fair Value – Liabilities
Foreign currency forward contracts	$	1,176	$	15	$	15	$	1,356	$	8	$	30
Derivatives accounted for as cash flow hedges	1,176		15		15		1,356		8		30
Cross-currency swaps(1)	2,178		—		174		2,209		—		204
Foreign currency forward and options contracts	976		10		8		991		9		11
Derivatives accounted for as net investment hedges	3,154		10		182		3,200		9		215
Interest rate swaps(1)	1,700		3		16		1,000		35		10
Derivatives accounted for as fair value hedges	1,700		3		16		1,000		35		10
Foreign currency forward contracts	3,586		8		15		3,597		19		12
Other derivatives(2)	375		78		1		438		57		2



Derivatives not designated as hedging instruments	3,961		87		17		4,035		76		14
Total derivatives	$	9,991	$	115	$	230	$	9,591	$	128	$	269

(1) Accrued interest was immaterial for the periods presented and is excluded from fair value. These amounts are recognized within All other current assets and All other current liabilities in the Condensed Consolidated Statements of Financial Position.

(2) Other derivatives are comprised of embedded derivatives and derivatives related to equity contracts.

The following table presents amounts recorded in Long-term borrowings in the Condensed Consolidated Statements of Financial Position related to cumulative basis adjustment for fair value hedges.


	March 31, 2024				December 31, 2023
	Carrying amount		Cumulative basis adjustment included in the carrying amount		Carrying amount		Cumulative basis adjustment included in the carrying amount
Long-term borrowings designated in fair value hedges	$	1,683	$	(13)	$	1,023	$	25

Under the master arrangements with the respective counterparties to our derivative contracts, in certain circumstances and subject to applicable requirements, we are allowed to net settle transactions with a single net amount payable by one party to the other. However, we have elected to present the derivative assets and derivative liabilities on a gross basis on our Condensed Consolidated Statements of Financial Position and in the table above.

As of March 31, 2024, the potential effect of rights of offset associated with the derivative contracts would be an offset to both assets and liabilities by $40 million.

The table below presents the pre-tax gains (losses) recognized in OCI associated with the Company’s cash flow and net investment hedges.


Pre-tax Gains (Losses) Recognized in OCI Related to Cash Flow and Net Investment Hedges
	For the three months ended March 31
		2024		2023
Cash flow hedges		$	20	$	(17)
Net investment hedges(1)		32		35

(1) Amounts recognized in OCI for excluded components for the periods presented were immaterial.

The tables below present the gains (losses) on our derivative financial instruments and hedging activity in the Condensed Consolidated Statements of Income.


Derivative Financial Instruments and Hedging Activity
	For the three months ended March 31, 2024
	Cost of products		Cost of services		SG&A		Interest and other financial charges – net		Other(3)

Foreign currency forward contracts	$	(1)	$	—	$	—	$	—	$	—
Effects of cash flow hedges	(1)		—		—		—		—
Cross-currency swaps	—		—		—		8		—
Foreign currency forward and options contracts	—		—		—		2		—
Effects of net investment hedges(1)	—		—		—		10		—

Interest rate swaps(4)	—		—		—		(45)		—
Debt basis adjustment on Long-term borrowings	—		—		—		38		—

Effects of fair value hedges	—		—		—		(6)		—
Foreign currency forward contracts	(12)		(3)		—		—		—



Other derivatives(2)	—		—		5		—		20
Effects of derivatives not designated as hedging instruments	$	(12)	$	(3)	$	5	$	—	$	20























	For the three months ended March 31, 2023
	Cost of products		Cost of services		SG&A		Interest and other financial charges – net		Other(3)

Foreign currency forward contracts	$	27	$	6	$	—	$	—	$	—
Effects of cash flow hedges	27		6		—		—		—
Cross-currency swaps	—		—		—		9		—
Foreign currency forward and option contracts	—		—		—		—		—
Effects of net investment hedges(1)	—		—		—		9		—

Interest rate swaps	—		—		—		—		—
Debt basis adjustment on Long-term borrowings	—		—		—		—		—

Effects of fair value hedges	—		—		—		—		—
Foreign currency forward contracts	7		2		—		—		1
Other derivatives(2)	—		—		15		—		—
Effects of derivatives not designated as hedging instruments	$	7	$	2	$	15	$	—	$	1

(1) Amounts are excluded from effectiveness testing for the three months ended March 31, 2024 and 2023.

(2) Other derivatives are comprised of embedded derivatives, derivatives related to equity contracts, and commodity derivatives.

(3) Amounts are inclusive of gains (losses) in Other (income) expense – net in the Condensed Consolidated Statements of Income.

(4) Amount includes $(6) million of interest expense on interest rate derivatives.

FAIR VALUE MEASUREMENTS.

The following table represents assets and liabilities that are recorded and measured at fair value on a recurring basis.


Fair Value of Assets and Liabilities Measured on a Recurring Basis
	As of March 31, 2024								As of December 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Investment securities	$	28	$	—	$	—	$	28	$	31	$	—	$	—	$	31
Derivatives	—		115		—		115		—		128		—		128
Liabilities:
Deferred compensation	263		5		—		268		264		5		—		269
Derivatives	—		230		—		230		—		269		—		269
Contingent consideration	—		—		41		41		—		—		44		44

Deferred compensation

The deferred compensation liabilities as of March 31, 2024 and December 31, 2023 are comprised of market-based obligations indexed to the S&P 500 index fund and GE HealthCare stock in Level 1, and mutual funds in Level 2.

Contingent Consideration

The contingent consideration liabilities as of March 31, 2024 and December 31, 2023 were recorded in connection with business acquisitions.

Non-recurring Fair Value Measurements

Changes in fair value measurements of assets and liabilities measured at fair value on a non-recurring basis, such as equity method investments, equity investments without readily determinable fair value, financing receivables, and long-lived assets, were not material for the three months ended March 31, 2024 and 2023.

Fair Value of Other Financial Instruments

The estimated fair value of borrowings as of March 31, 2024 and December 31, 2023 was $9,807 million and $9,959 million, respectively, compared to a carrying value (which includes a reduction for unamortized debt issuance costs and discounts and cumulative basis adjustment) of $9,255 million and $9,442 million, respectively. The fair value of our borrowings includes accrued interest and is determined based on observable and quoted prices and spreads of comparable debt and benchmark securities and is considered Level 2 in the fair value hierarchy. See Note 8, “Borrowings” for further information.

NOTE 13. COMMITMENTS, GUARANTEES, PRODUCT WARRANTIES, AND OTHER LOSS CONTINGENCIES

GUARANTEES.

The Company has off-balance sheet credit exposure through standby letters of credit, bank guarantees, bid bonds, and surety bonds. See Note 8, “Borrowings” for further information.

Following the Spin-Off, which was completed pursuant to a Separation and Distribution Agreement (the “Separation and Distribution Agreement”), the Company has remaining performance guarantees on behalf of GE. Under the Separation and Distribution Agreement, GE is obligated to use reasonable best efforts to replace the Company as the guarantor or terminate all such performance guarantees. Until such termination or replacement, in the event of non-fulfillment of contractual obligations by the relevant obligors, the Company could be obligated to make payments under the applicable instruments for which GE is obligated to reimburse and indemnify the Company. As of March 31, 2024 the Company’s maximum aggregate exposure, subject to GE reimbursement, is approximately $114 million.

PRODUCT WARRANTIES.

We provide warranty coverage to our customers as part of customary practices in the market to provide assurance that the products we sell comply with agreed-upon specifications. We provide estimated product warranty expenses when we sell the related products. Warranty accruals are estimates that are based on the best available information, mostly historical claims experience, therefore claims costs may differ from amounts provided. An analysis of changes in the liability for product warranties follows.



	For the three months ended March 31
	2024		2023
Balance at beginning of period	$	192	$	193
Current-year provisions	41		49
Expenditures	(55)		(51)
Other changes	(2)		2
Balance at end of period	$	175	$	193

Product warranties are recognized within All other current liabilities in the Condensed Consolidated Statements of Financial Position.

LEGAL MATTERS.

In the normal course of our business, we are involved from time to time in various arbitrations; class actions; commercial, intellectual property, and product liability litigation; government investigations; investigations by competition/antitrust authorities; and other legal, regulatory, or governmental actions, including the significant matters described below that could have a material impact on our results of operations and cash flows. In many proceedings, including the specific matters described below, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the size or range of the possible loss, and accruals for legal matters are not recorded until a loss for a particular matter is considered probable and reasonably estimable. Given the nature of legal matters and the complexities involved, it is often difficult to predict and determine a meaningful estimate of loss or range of loss until we know, among other factors, the particular claims involved, the likelihood of success of our defenses to those claims, the damages or other relief sought, how discovery or other procedural considerations will affect the outcome, the settlement posture of other parties, and other factors that may have a material effect on the outcome. For such matters, unless otherwise specified, we do not believe it is possible to provide a meaningful estimate of loss at this time. Moreover, it is not uncommon for legal matters to be resolved over many years, during which time relevant developments and new information must be continuously evaluated.

Contracts with Iraqi Ministry of Health

In 2017, a number of U.S. Service members, civilians, and their families brought a complaint in the U.S. District Court for the District of Columbia (the “District Court”) against a number of pharmaceutical and medical device companies, including GE HealthCare and certain affiliates, alleging that the defendants violated the U.S. Anti-Terrorism Act. The complaint seeks monetary relief and alleges that the defendants provided funding for an Iraqi terrorist organization through their sales practices pursuant to pharmaceutical and medical device contracts with the Iraqi Ministry of Health. In July 2020, the District Court granted defendants’ motions to dismiss and dismissed all of the plaintiffs’ claims. In January 2022, a panel of the U.S. Court of Appeals for the District of Columbia Circuit reversed the District Court’s decision. In February 2022, the defendants requested review of the decision by all of the judges on the U.S. Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”). In February 2023, the D.C. Circuit denied this request. In June 2023, defendants petitioned the Supreme Court to review the D.C. Circuit’s decision. On October 2, 2023, the Supreme Court invited the Solicitor General to file a brief in this case expressing the views of the United States. The proceedings in the District Court are currently inactive.

Government Disclosures

From time to time, we make self-disclosures regarding our compliance with the Foreign Corrupt Practices Act (“FCPA”) and similar laws to relevant authorities who may pursue or decline to pursue enforcement proceedings against us. We, with the assistance of outside counsel, made voluntary self-disclosures to the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice (“DOJ”) beginning in 2018 regarding tender irregularities and other potential violations of the FCPA relating to our activities in certain provinces in China. We have been engaged in ongoing discussions with each of the SEC and the DOJ regarding these matters. We are fully cooperating with the reviews by these agencies and have implemented, and continue to implement, enhancements to our compliance policies and practices. At this time, we are unable to predict the duration, scope, result, or related costs associated with these disclosures to the SEC and the DOJ. We also are unable to predict what, if any, action may be taken by the SEC or the DOJ or what penalties or remedial actions they may seek. Any determination that our operations or activities are not in compliance with existing laws or regulations, including applicable foreign laws, could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses.

NOTE 14. RESTRUCTURING AND OTHER ACTIVITIES – NET

Restructuring activities are essential to optimize the business operating model for GE HealthCare and mostly involve workforce reductions, organizational realignments, and revisions to our real estate footprint. Specifically, restructuring and other charges (gains) primarily include facility exit costs, employee-related termination benefits associated with workforce reductions, asset write-downs, and cease-use costs. For segment reporting, restructuring and other activities are not allocated.

For restructuring initiatives committed to by management through March 31, 2024, including additional initiatives committed to in the three months ended March 31, 2024, we recorded net expenses of $40 million and $12 million for the three months ended March 31, 2024 and 2023, respectively. These restructuring initiatives are expected to result in additional expenses of approximately $25 million, to be incurred primarily over the next 12 months, substantially related to employee-related termination benefits and asset write-downs. Restructuring expenses (gains) are recognized within Cost of products, Cost of services, or SG&A, as appropriate, in the Condensed Consolidated Statements of Income.


Restructuring and Other Activities
	For the three months ended March 31
		2024		2023
Employee termination costs		$	25	$	10
Facility and other exit costs		8		1
Asset write-downs		7		1
Total restructuring and other activities – net		$	40	$	12

Liabilities related to restructuring are recognized within All other current liabilities, All other non-current liabilities, and Compensation and benefits in the Condensed Consolidated Statements of Financial Position and totaled $76 million and $68 million as of March 31, 2024 and December 31, 2023, respectively.

NOTE 15. EARNINGS PER SHARE

The numerator for both basic and diluted earnings per share (“EPS”) is net income attributable to GE HealthCare common stockholders. The denominator of basic EPS is the weighted-average number of shares outstanding during the period. The dilutive effect of outstanding stock options, restricted stock units, and performance share units is reflected in the denominator for diluted EPS using the treasury stock method.


Earnings Per Share
	For the three months ended March 31
(In millions, except per share amounts)	2024		2023
Numerator:
Net income	$	388	$	383
Net (income) loss attributable to noncontrolling interests	(14)		(11)
Net income attributable to GE HealthCare	374		372
Deemed preferred stock dividend of redeemable noncontrolling interest	—		(183)


Net income attributable to GE HealthCare common stockholders	$	374	$	189
Denominator:
Basic weighted-average shares outstanding	456		454
Dilutive effect of common stock equivalents	3		3
Diluted weighted-average shares outstanding	459		457

Basic earnings per share	$	0.82	$	0.42



Diluted earnings per share	$	0.81	$	0.41


Antidilutive securities(1)	4		4

(1) Diluted earnings per share excludes certain shares issuable under share-based compensation plans because the effect would have been antidilutive.

NOTE 16. SUPPLEMENTAL FINANCIAL INFORMATION


Cash, Cash Equivalents, and Restricted Cash
	As of
	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	2,551	$	2,494
Short-term restricted cash	12		10
Total Cash, cash equivalents, and restricted cash as presented on the Condensed Consolidated Statements of Financial Position	2,563		2,504
Long-term restricted cash(1)	2		2
Total Cash, cash equivalents, and restricted cash as presented on the Condensed Consolidated Statements of Cash Flows	$	2,565	$	2,506

(1) Long-term restricted cash is recognized within All other non-current assets in the Condensed Consolidated Statements of Financial Position.


Inventories
	As of
	March 31, 2024		December 31, 2023
Raw materials	$	927	$	961
Work in process	101		91
Finished goods	961		908
Inventories(1)	$	1,989	$	1,960

(1) Certain inventory items are long-term in nature and therefore have been recognized within All other non-current assets in the Condensed Consolidated Statements of Financial Position.


Property, Plant, and Equipment – Net
	As of
	March 31, 2024		December 31, 2023
Original cost	$	5,180	$	5,208
Accumulated depreciation	(3,089)		(3,064)
Right-of-use operating lease assets, net of amortization	354		356
Property, plant, and equipment – net	$	2,445	$	2,500


All Other Current and Non-Current Assets
	As of
	March 31, 2024		December 31, 2023
Prepaid expenses and deferred costs	$	244	$	147
Financing receivables – net	96		97
Derivative instruments	101		84
Other(1)	75		61
All other current assets	$	517	$	389
Prepaid pension asset	727		716
Equity method and other investments	346		357
Financing receivables – net	181		178
Long-term receivables – net	130		124
Inventories	154		147
Contract and other deferred assets	175		168
Other(2)	165		191
All other non-current assets	$	1,878	$	1,881

(1) Current Other primarily consists of tax receivables.

(2) Non-current Other primarily consists of indemnities due from GE, capitalized cloud computing software, tax receivables and derivative instruments.


All Other Current and Non-Current Liabilities
	As of
	March 31, 2024		December 31, 2023
Employee compensation and benefit liabilities(1)	$	1,502	$	1,518
Sales allowances and related liabilities	208		228
Income and indirect tax liabilities including uncertain tax positions	266		260
Product warranties	175		192
Accrued freight and utilities	113		132
Operating lease liabilities	109		110
Derivative instruments(2)	110		128
Interest payable on borrowings	170		87
Environmental and asset retirement obligations	20		21
Other(3)	318		335
All other current liabilities	$	2,993	$	3,011
Contract liabilities	687		705
Operating lease liabilities	267		273
Environmental and asset retirement obligations	265		265
Income and indirect tax liabilities including uncertain tax positions	207		208
Derivative instruments	114		136
Finance lease obligations	37		38
Sales allowances and related liabilities	24		27
Other(4)	209		225
All other non-current liabilities	$	1,811	$	1,877

(1) Employee compensation and benefit liabilities consists of incentive compensation and commissions, pension and other postretirement benefit obligations, payroll accruals, other employee related liabilities, and deferred compensation.

(2) Derivative instruments include the related accrued interest. Refer to Note 12, “Financial Instruments and Fair Value Measurements” for further information.

(3) Current Other primarily consists of miscellaneous accrued costs, dividends payable to stockholders, and contingent consideration liabilities.

(4) Non-current Other primarily consists of miscellaneous accrued costs, contingent consideration liabilities, and indemnities due to GE.

SUPPLY CHAIN FINANCE PROGRAMS.

The Company participates in voluntary supply chain finance programs which provide participating suppliers the opportunity to sell their GE HealthCare receivables to third parties at the sole discretion of both the suppliers and the third parties. We evaluate supply chain finance programs to ensure the use of a third-party intermediary to settle our trade payables does not change the nature, existence, amount, or timing of our trade payables and does not provide the Company with any direct economic benefit. If any characteristics of the trade payables change or we receive a direct economic benefit, we reclassify the trade payables as borrowings. In connection with the supply chain finance programs, payment terms normally range from 30 to 150 days, not exceeding 180 days, depending on the underlying supplier agreements.

Included within Accounts payable in the Condensed Consolidated Statements of Financial Position as of March 31, 2024 and December 31, 2023 were $384 million and $365 million, respectively, of confirmed supplier invoices that are outstanding and subject to third-party programs.

REDEEMABLE NONCONTROLLING INTERESTS**.**

The Company has noncontrolling interests with redemption features. These redemption features, such as put options, could require the Company to purchase the noncontrolling interests upon the occurrence of certain events. All noncontrolling interests with redemption features that are not solely within our control are recognized within the Condensed Consolidated Statements of Financial Position between liabilities and equity. Redeemable noncontrolling interests are initially recorded at the issuance date fair value. Those that are currently redeemable, or probable of becoming redeemable, are subsequently adjusted to the greater of current redemption value or initial carrying value.

The activity attributable to redeemable noncontrolling interests for the three months ended March 31, 2024 and 2023 is presented below.


Redeemable Noncontrolling Interests
	For the three months ended March 31
	2024		2023
Balance at beginning of period	$	165	$	230
Net income attributable to redeemable noncontrolling interests	11		10
Redemption value adjustments(1)	—		183
Distributions to and exercise of redeemable noncontrolling interests and other(2)	—		(222)
Balance at end of period	$	177	$	201

(1) As of January 3, 2023, certain redeemable noncontrolling interests were probable of becoming redeemable due to the change of control that occurred upon consummation of the Spin-Off. As a result, these redeemable noncontrolling interests were remeasured to their current redemption value. The remeasurement was accounted for as a deemed preferred stock dividend of redeemable noncontrolling interest and recorded as an adjustment to retained earnings.

(2) In the first quarter of 2023, the redeemable noncontrolling interest holder exercised its option redemption provision. The expected redemption payment of $211 million was recognized within All other current liabilities as of March 31, 2023 and was subsequently paid out in the second quarter of 2023.


Other Income (Expense) – Net
	For the three months ended March 31
	2024		2023
Net financing income and investment income (loss)	$	(16)	$	13
Equity method income (loss)	1		4
Change in fair value of assumed obligations	(8)		(13)
Other items, net(1)	14		4
Total other income (expense) – net	$	(8)	$	8

(1) Other items, net primarily consists of change in tax indemnities with GE, lease income, gains and losses related to derivatives, and licensing and royalty income for the three months ended March 31, 2024, and lease income, gains and losses related to derivatives, and licensing and royalty income for the three months ended March 31, 2023.

NOTE 17. RELATED PARTIES

In connection with the Spin-Off, the Company entered into or adopted several agreements that provide a framework for the relationship between the Company and GE, including the Transition Services Agreement (“TSA”). For the three months ended March 31, 2024 and 2023, we incurred $53 million, net, and $108 million, net, respectively, under the TSA which represents fees charged from GE to the Company primarily for information technology, human resources, and research and development and is net of fees charged from the Company to GE for facilities and other shared services.

Current amounts due from and to GE under the various agreements are recognized within Due from related parties or Due to related parties, as applicable, in the Condensed Consolidated Statements of Financial Position. Non-current amounts due from GE were $80 million and $81 million, and due to GE were $33 million and $33 million, as of March 31, 2024 and December 31, 2023, respectively. These amounts were recognized within All other non-current assets and All other non-current liabilities, respectively, in the Condensed Consolidated Statements of Financial Position and primarily relate to tax and other indemnities. For more information on these arrangements, see Note 19, “Related Parties” to the consolidated and combined financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

NOTE 18. SUBSEQUENT EVENTS

On April 1, 2024, the Company acquired 100% of the stock of MIM Software Inc. (“MIM Software”) for approximately $258 million, net of cash acquired, and up to $35 million in cash upon the completion of certain milestones and service requirements. The acquisition was funded with cash on hand. The Company is in the process of measuring the acquired assets and assumed liabilities as of the acquisition date. MIM Software is a global provider of medical imaging analysis and AI solutions for the practice of radiation oncology, molecular radiotherapy, diagnostic imaging, and urology at imaging centers, hospitals, specialty clinics, and research organizations worldwide. The addition of MIM Software to GE HealthCare’s portfolio is expected to strengthen the Company’s response to provider needs, supplying established solutions that are designed to help simplify, streamline, and automate essential tasks to enhance workflow.

Previous: Cover and table of contents · Next: Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS