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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
or
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 001-41528
https://cdn.kscope.io/1df410f4b07ff7b20d4175897b78760e-GE-HLTHCR_Standard_RGB_GEHCPrpl.jpg
GE HEALTHCARE TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)

Delaware88-2515116
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
500 W. Monroe Street, Chicago IL
60661
(Address of principal executive offices)(Zip Code)
(Registrant’s telephone number, including area code) (833) 735-1139

Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 per shareGEHCThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
There were 454,677,236 shares of common stock with a par value of $0.01 per share outstanding as of April 18, 2023.




Table of Contents
Page
Part I.Financial Information
     Item 1.
     Item 2.
     Item 3.
     Item 4.
Part II.Other Information
     Item 1.
     Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
     Item 6.
Signatures


















FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements might be identified by words, and variations of words, such as “will,” “expect,” “may,” “would,” “could,” “plan,” “believe,” “anticipate,” “intend,” “estimate,” “potential,” “position,” “forecast,” “target,” “guidance,” “outlook,” and similar expressions. These forward-looking statements may include, but are not limited to, statements about our business; information related to our business segment portfolios and strategies; financial performance, financial condition, and results of operations, including revenue growth, profit, cash flows, and earnings per share; the impacts of macroeconomic and market conditions and volatility on our business operations, financial results, and financial position and on supply chains and the world economy; our strategy, innovation, and investments; our cost structure; our funding and liquidity; the impacts on our business of manufacturing, sourcing, and supply chain management, the Coronavirus Disease 2019 ("COVID-19") pandemic, and the Russia and Ukraine conflict; our operations as a stand-alone company; and risks related to foreign currency exchange, interest rates, and commodity price volatility. These forward-looking statements involve risks and uncertainties, many of which are beyond our control. Factors that could cause our actual results to differ materially from those described in our forward-looking statements include, but are not limited to, operating in highly competitive markets; the actions or inactions of third parties with whom we partner and the various collaboration, licensing, and other partnerships and alliances we have with third parties; demand for our products, services, or solutions and factors that affect that demand; management of our supply chain and our ability to cost-effectively secure the materials we need to operate our business; disruptions in our operations; changes in third-party and government reimbursement processes, rates, contractual relationships, and mix of public and private payers; the ability to attract and/or retain key personnel and qualified employees; the global COVID-19 pandemic and its effects on our business; maintenance and protection of our intellectual property rights; the impact of potential information technology, cybersecurity, or data security breaches; compliance with the various legal, regulatory, tax, and other laws to which we are subject and related changes, claims, or actions; ability to control increases in healthcare costs and any subsequent effect on demand for our products, services, or solutions; the impact of potential product liability claims; environmental, social, and governance matters; our ability to successfully complete strategic transactions; our ability to operate effectively as an independent, publicly traded company and achieve the benefits we expect from our spin-off from General Electric Company; and the incurrence of substantial indebtedness in connection with the spin-off and any related effect on our business. Please also see the “Risk Factors” section of our Annual Report on Form 10-K and any updates or amendments we make in future filings. There may be other factors not presently known to us or which we currently consider to be immaterial that could cause our actual results to differ materially from those projected in any forward-looking statements we make. We do not undertake any obligation to update or revise our forward-looking statements except as required by applicable law or regulation.


3


ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Part I. Financial Information
Index
Item 1. Condensed Consolidated and Combined Financial Statements (Unaudited)Page
4



Condensed Consolidated and Combined Statements of Income (Unaudited)
For the three months ended March 31
(In millions, except per share amounts)20232022
Sales of products$3,131 $2,787 
Sales of services1,576 1,556 
Total revenues4,707 4,343 
Cost of products2,037 1,914 
Cost of services779 751 
Gross profit1,891 1,678 
Selling, general, and administrative1,062 931 
Research and development270 238 
Total operating expenses1,332 1,169 
Operating income559 509 
Interest and other financial charges – net136 4 
Non-operating benefit (income) costs(115)(2)
Other (income) expense – net(8)(26)
Income from continuing operations before income taxes546 533 
Benefit (provision) for income taxes(163)(131)
Net income383 402 
Net (income) attributable to noncontrolling interests(11)(13)
Net income attributable to GE HealthCare372 389 
Deemed preferred stock dividend of redeemable noncontrolling interest(183) 
Net income attributable to GE HealthCare common stockholders$189 $389 
Earnings per share:
Basic earnings per share$0.42 $0.86 
Diluted earnings per share$0.41 $0.86 
Weighted-average number of shares outstanding:
Basic454454
Diluted457454

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.
5



Condensed Consolidated and Combined Statements of Comprehensive Income (Unaudited)
For the three months ended March 31
(In millions, net of tax)20232022
Net income attributable to GE HealthCare$372 $389 
Net income attributable to noncontrolling interests11 13 
Net income383 402 
Other comprehensive income (loss):
Currency translation adjustments – net of taxes57 (153)
Benefit plans – net of taxes(65)(5)
Cash flow hedges – net of taxes(39)24 
Other comprehensive income (loss)(47)(134)
Comprehensive income336 268 
Comprehensive (income) attributable to noncontrolling interests(11)(13)
Comprehensive income attributable to GE HealthCare$325 $255 

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

6



Condensed Consolidated and Combined Statements of Financial Position (Unaudited)
As of
(In millions, except share and per share amounts)March 31, 2023December 31, 2022
Cash, cash equivalents, and restricted cash$2,327 $1,445 
Receivables – net of allowances of $91 and $91
3,373 3,295 
Due from related parties31 17 
Inventories2,256 2,155 
Contract and other deferred assets983 989 
All other current assets634 417 
Current assets9,604 8,318 
Property, plant, and equipment – net2,327 2,314 
Goodwill12,924 12,813 
Other intangible assets – net1,494 1,520 
Deferred income taxes4,336 1,550 
All other assets1,952 1,024 
Total assets$32,637 $27,539 
Short-term borrowings$5 $15 
Accounts payable2,977 2,944 
Due to related parties186 146 
Contract liabilities2,031 1,896 
All other current liabilities3,037 2,190 
Current liabilities8,236 7,191 
Long-term borrowings10,234 8,234 
Compensation and benefits5,372 549 
Deferred income taxes64 370 
All other liabilities1,834 1,603 
Total liabilities25,740 17,947 
Commitments and contingencies
Redeemable noncontrolling interests201 230 
Common stock, par value $0.01 per share, 1,000,000,000 shares authorized, 454,617,131 shares issued and outstanding as of March 31, 2023; 100 shares issued and outstanding as of December 31, 2022
5  
Additional paid-in capital6,425  
Retained earnings185  
Net parent investment 11,235 
Accumulated other comprehensive income (loss) – net75 (1,878)
Total equity attributable to GE HealthCare6,690 9,357 
Noncontrolling interests6 5 
Total equity6,696 9,362 
Total liabilities, redeemable noncontrolling interests, and equity$32,637 $27,539 

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



7



Condensed Consolidated and Combined Statements of Changes in Equity (Unaudited)
Common stock
(In millions)Common shares outstandingPar valueAdditional paid-in capitalRetained earningsNet parent investmentAccumulated other comprehensive income (loss) – netEquity attributable to noncontrolling interestsTotal equity
Balances as of December 31, 2022
 $ $ $ $11,235 $(1,878)$5 $9,362 
Net transfers from Parent, 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 investment454 5 6,397 — (6,402)— —  
Issuance of common stock in connection with employee stock plans1 — 4 — — — — 4 
Net income attributable to GE HealthCare— — — 372 — — — 372 
Currency translation adjustments – net of taxes— — — — — 57 — 57 
Benefit plans – net of taxes— — — — — (65)— (65)
Cash flow hedges – net of taxes— — — — — (39)— (39)
Changes in equity attributable to noncontrolling interests— — — — — — 2 2 
Share-based compensation expense— — 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 

Common stock
(In millions)Common shares outstandingPar valueAdditional paid-in capitalRetained earningsNet parent investmentAccumulated other comprehensive income (loss) – netEquity attributable to noncontrolling interestsTotal equity
Balances as of December 31, 2021
 $ $ $ $17,692 $(1,037)$21 $16,676 
Net income attributable to GE HealthCare— — — — 389 — — 389 
Currency translation adjustments – net of taxes— — — — — (153)— (153)
Benefit plans – net of taxes— — — — — (5)— (5)
Cash flow hedges – net of taxes— — — — — 24 — 24 
Transfers (to) from GE— — — — (353)— — (353)
Changes in equity attributable to noncontrolling interests— — — — — — —  
Balances as of March 31, 2022
 $ $ $ $17,728 $(1,171)$21 $16,578 

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

8



Condensed Consolidated and Combined Statements of Cash Flows (Unaudited)
For the three months ended March 31
(In millions)
20232022
Net income$383 $402 
Adjustments to reconcile Net income to Cash from (used for) operating activities
Depreciation and amortization of property, plant, and equipment61 56 
Amortization of intangible assets96 103 
Net periodic postretirement benefit plan (income) expense(101)3 
Postretirement plan contributions(91)(6)
Provision for income taxes163 131 
Share-based compensation24 19 
Cash paid during the year for income taxes(102)(203)
Cash paid during the year for interest(42) 
Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions:
Receivables(22)(139)
Due from related parties5 (5)
Inventories(122)(244)
Contract and other deferred assets12 (34)
Accounts payable87 319 
Due to related parties6 16 
Contract liabilities119 77 
All other operating activities(8)(27)
Cash from (used for) operating activities468 468 
Cash flows – investing activities
Additions to property, plant, and equipment(143)(100)
Dispositions of property, plant, and equipment 3 
Purchases of businesses, net of cash acquired(127) 
All other investing activities4 (3)
Cash from (used for) investing activities(266)(100)
Cash flows – financing activities
Net increase (decrease) in borrowings (maturities of 90 days or less)(9)2 
Newly issued debt, net of debt issuance costs (maturities longer than 90 days)2,000  
Repayments and other reductions (maturities longer than 90 days)(6)(1)
Net transfers (to) from GE(1,317)(391)
All other financing activities5 (30)
Cash from (used for) financing activities673 (420)
Effect of foreign currency rate changes on cash, cash equivalents, and restricted cash8 (3)
Increase (decrease) in cash, cash equivalents, and restricted cash883 (55)
Cash, cash equivalents, and restricted cash at beginning of year1,451 561 
Cash, cash equivalents, and restricted cash as of March 31$2,334 $506 

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

9



NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

BACKGROUND.
GE HealthCare Technologies Inc. (“GE HealthCare,” the “Company,” “our,” or “we”) is a leading global medical technology, pharmaceutical diagnostics, and digital solutions innovator. We operate at the center of the healthcare ecosystem, enabling 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 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” or “Parent”) completed the previously announced 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. Our common stock is listed under the symbol “GEHC” on the Nasdaq Stock Market LLC (“Nasdaq”).

During the first quarter of 2023, certain Spin-Off-related 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: (a) the transfer of certain pension plan liabilities and assets as described in Note 9, “Postretirement Benefit Plans,” (b) the transfer of certain deferred income taxes as described in Note 10, “Income Taxes,” (c) deferred compensation liabilities of $548 million, and (d) employee termination obligations as described in Note 14, “Restructuring and Other Activities.”

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 18, “Related Parties” for more information on these agreements.

Unless the context otherwise requires, references to “GE HealthCare,” “we,” “us,” “our,” and the “Company” refer to (i) GE’s healthcare business prior to 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.

BASIS OF PRESENTATION.
The condensed consolidated and combined financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles (“U.S. GAAP”) and present the historical results of operations, comprehensive income, and cash flows for the three months ended March 31, 2023 and 2022 and the financial position as of March 31, 2023 and December 31, 2022. It is management’s opinion that these financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position and operating results. The following tables are presented in millions of U.S dollars ("USD") unless otherwise stated.

All intercompany balances and transactions within the Company have been eliminated in the condensed consolidated and combined financial statements. These financial statements include certain transactions with GE, which are disclosed as related party transactions. See Note 18, “Related Parties” for further information.

Prior to the Spin-Off, the condensed combined financial statements were derived from the consolidated financial statements and accounting records of GE including the historical cost basis of assets and liabilities comprising the Company, as well as the historical revenues, direct costs, and allocations of indirect costs attributable to the operations of the Company, using the historical accounting policies applied by GE. The condensed combined financial statements do not purport to reflect what the results of operations, comprehensive income, financial position, or cash flows would have been had the Company operated as a separate, stand-alone entity during the periods presented.

The condensed consolidated and combined financial statements should be read in conjunction with the Company’s audited combined financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2022.

ESTIMATES AND ASSUMPTIONS.
The preparation of the condensed consolidated and combined 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 and combined 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.

10



While there has not been a material impact to our accounting estimates as of March 31, 2023 and December 31, 2022 and the results for the three months ended March 31, 2023 and 2022, a number of estimates could be affected by the ongoing COVID-19 pandemic. The severity, magnitude, and duration, as well as the economic consequences of the COVID-19 pandemic, are uncertain and difficult to predict. As a result, our accounting estimates and assumptions may change over time in response to COVID-19. Such changes could result in future impairments of goodwill, intangible assets, long-lived assets, and investment securities, incremental credit losses on receivables, a decrease in the realizability of our tax assets, or an increase in our related obligations as of the time of a relevant measurement event.

ACCOUNTING CHANGES.

Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, provides that interest and penalties related to unrecognized income tax benefits may either be classified as income tax expense or interest expense in the condensed consolidated statements of operations. In the first quarter of 2023, the Company changed its accounting policy for presentation of interest expense on uncertain tax positions. The interest was previously presented within “Interest and other financial charges – net” and has changed to being presented within “Benefit (provision) for income taxes.” The Company believes this presentation is preferable because the cost is related to income tax matters and this presentation enhances comparability with our peers. The effects of the change in accounting have been prospectively applied to periods beginning in the first quarter of 2023 and were not material to any previously reported periods prior to March 31, 2023.

Recent Accounting Pronouncements reflected in the Condensed Consolidated and Combined Financial Statements
In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50). The ASU requires companies to disclose information about supplier finance programs, including key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where the amounts are presented. The new standard does not affect the recognition, measurement, or financial statement presentation of supplier finance obligations. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods, except for rollforward information, which is effective for fiscal years beginning after December 15, 2023. The Company adopted this guidance on January 1, 2023. See Note 17, “Supplemental Financial Information” for further information.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The ASU requires companies to apply the definition of a performance obligation under ASC 606, Revenue from Contracts with Customers, to recognize and measure contract assets and contract liabilities relating to contracts with customers acquired in a business combination. Prior to the adoption of this ASU, an acquirer generally recognized assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at fair value on the acquisition date. The ASU results in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASC 606. The ASU is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company adopted this guidance on January 1, 2023 using a prospective method, and the adoption did not have a material impact on the condensed consolidated financial statements.

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 related parts and labor, 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 and Other Deferred Assets
As of
March 31, 2023December 31, 2022
Contract assets$593 $584 
Other deferred assets390 405 
Contract and other deferred assets983 989 
Non-current contract assets(a)
38 37 
Non-current other deferred assets(a)
81 82 
Total contract and other deferred assets$1,102 $1,108 
(a)Non-current contract and other deferred assets are recognized within All other assets in the Condensed Consolidated and Combined Statements of Financial Position.



11



Contract assets primarily reflect revenue recognized on contracts 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 LIABILITIES.

Contract liabilities primarily 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 are expected to be satisfied and fulfilled with our customers.
As of March 31, 2023 and December 31, 2022, contract liabilities were approximately $2,681 million and $2,526 million, respectively, of which the non-current portion of $650 million and $630 million, respectively, was recognized in All other liabilities in the Condensed Consolidated and Combined Statements of Financial Position. Contract liabilities increased by $155 million in 2023 primarily due to an increase in customer advances and deposits as a result of product orders growth relative to fulfillment and the normal annual service contract billing cycle. Revenue recognized related to the contract liabilities balance at the beginning of the year was approximately $759 million and $715 million for the three months ended March 31, 2023 and 2022, respectively.

REMAINING PERFORMANCE OBLIGATIONS.

Remaining performance obligations represent 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, 2023, the aggregate amount of the contracted revenues allocated to our unsatisfied (or partially unsatisfied) performance obligations was $14,490 million. We expect to recognize revenue as we satisfy our remaining performance obligations as follows: a) product-related remaining performance obligations of $4,966 million of which 99% is expected to be recognized within two years, and the remaining thereafter; and b) services-related remaining performance obligations of $9,524 million of which 67% and 97% is 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 year ended December 31, 2022.

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 from continuing operations less the following: Benefit (provision) for income taxes, Interest and other financial charges – net, Non-operating benefit (income) costs, restructuring costs, acquisition and disposition-related benefits (charges), gains and losses on business dispositions, Spin-Off and separation costs, amortization of acquisition-related intangible assets, and investment revaluation gains and losses.

Total Revenues by Segment
For the three months ended March 31
20232022
Imaging:
Radiology$2,088 $1,918 
Interventional Guidance 408 393 
Total Imaging2,496 2,311 
Total Ultrasound859 815 
PCS:
     Monitoring Solutions 552 521 
     Life Support Solutions229 195 
Total PCS781 716 
Total PDx558 484 
Other(a)
13 17 
Total revenues$4,707 $4,343 
(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.

12



Segment EBIT
For the three months ended March 31
20232022
Segment EBIT
Imaging$191 $206 
Ultrasound207 192 
PCS 109 65 
PDx 155 138 
Other(a)
2 (2)
664 599 
Restructuring costs(12)(12)
Acquisition and disposition-related benefits (charges)(1)(15)
Gain (loss) of business dispositions and divestments 3 
Spin-Off and separation costs(58) 
Amortization of acquisition-related intangible assets(31)(33)
Investment revaluation gain (loss)5 (8)
Interest and other financial charges – net(136)(4)
Non-operating benefit income (costs)115 2 
Income from continuing operations before income taxes$546 $533 
(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.

NOTE 4. RECEIVABLES

Current Receivables
As of
March 31, 2023December 31, 2022
Current customer receivables(a)
$3,150 $3,112 
Non-income based tax receivables192 174 
Other sundry receivables122 100 
Sundry receivables314 274 
Allowance for credit losses(91)(91)
Total current receivables – net$3,373 $3,295 
(a) 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 $200 million and $157 million as of March 31, 2023 and December 31, 2022, respectively. The increase in chargebacks is primarily due to higher wholesaler product levels.

Long-Term Receivables
As of
March 31, 2023December 31, 2022
Long-term customer receivables$71 $80 
Sundry receivables71 57 
Non-income based tax receivables28 28 
Supplier advances11 11 
Allowance for credit losses(30)(31)
Total long-term receivables – net(a)
$151 $145 
(a) Long-term receivables are recognized within All other assets in the Condensed Consolidated and Combined Statements of Financial Position.


13



NOTE 5. FINANCING RECEIVABLES

Financing Receivables
As of
March 31, 2023December 31, 2022
Loans, net of deferred income$31 $29 
Investment in financing leases, net of deferred income73 72 
Allowance for credit losses(4)(4)
Current financing receivables – net(a)
100 97 
Loans, net of deferred income44 44 
Investment in financing leases, net of deferred income157 158 
Allowance for credit losses(5)(6)
Non-current financing receivables – net(a)
$196 $196 
(a) Current financing receivables and non-current financing receivables are recognized within All other current assets and All other assets, respectively, in the Condensed Consolidated and Combined Statements of Financial Position.

As of March 31, 2023, 6%, 4%, and 5% 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, 2022, 7%, 6%, 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. PROPERTY, PLANT, AND EQUIPMENT AND OPERATING LEASES

Property, Plant, and Equipment - Net
As of
March 31, 2023December 31, 2022
Original cost$5,060 $4,989 
Less accumulated depreciation and amortization(3,039)(2,988)
Right-of-use operating lease assets306 313 
Property, plant, and equipment - net$2,327 $2,314 

OPERATING LEASE LIABILITIES.

Operating lease liabilities recognized within all other current and non-current liabilities in the Condensed Consolidated and Combined Statements of Financial Position were $341 million and $347 million as of March 31, 2023 and December 31, 2022, respectively. Expense related to our operating lease portfolio was $56 million for both the three months ended March 31, 2023 and 2022.

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 future holdback payment and potential earn-out payments valued at $13 million based primarily on various milestones and sales targets. The preliminary purchase price allocation resulted in goodwill of $105 million, intangible assets of $60 million, and deferred tax liabilities of $14 million. 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.

See Note 12, “Financial Instruments and Fair Value Measurements” for further information about the fair value measurement of contingent consideration.

14



Goodwill
Balance as of December 31, 2022
AcquisitionsForeign exchange and other
Balance as of
March 31, 2023
Imaging$4,409 $ $4 $4,413 
Ultrasound3,835 105 1 3,941 
PCS2,036  1 2,037 
PDx2,533   2,533 
Total Goodwill$12,813 $105 $6 $12,924 

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.

Substantially all other intangible assets are subject to amortization. Intangible assets decreased during the three months ended March 31, 2023, primarily as a result of amortization, partially offset by $60 million of additions related to the acquisition of Caption Health. Amortization expense was $96 million and $103 million for the three months ended March 31, 2023 and 2022, respectively.

NOTE 8. BORROWINGS

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

Senior Unsecured Notes
The Company’s long-term 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”).

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, 2023 or December 31, 2022. On January 3, 2023, the Company completed a $2,000 million drawdown of the Term Loan Facility in connection with the Spin-Off from GE.

The average interest rate for the Notes and our Credit Facilities for the three months ended March 31, 2023 was 5.94%. We had no principal debt repayments on the Notes or the Credit Facilities for the three months ended March 31, 2023.

Long-Term Borrowings Composition
As of
March 31, 2023December 31, 2022
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 
Term Loan Facility2,000  
Other33 38 
Total principal debt issued10,283 8,288 
Less: Unamortized debt issuance costs and discounts44 47 
Less: Current portion of long-term borrowings5 7 
Long-term borrowings, net of current portion$10,234 $8,234 


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See Note 12, “Financial Instruments and Fair Value Measurements” for further information about borrowings and associated interest rate and cross-currency swaps.

LETTERS OF CREDIT, GUARANTEES, AND OTHER COMMITMENTS.

In addition to the Notes, which were guaranteed on a senior unsecured basis by GE through the completion of the Spin-Off, at which time GE was automatically and unconditionally released and discharged from all obligations under its guarantees, as of March 31, 2023 and December 31, 2022, the Company had unused letters of credit, bank guarantees, bid bonds, and surety bonds of approximately $675 million and $657 million, respectively, related to certain commercial contracts. Additionally, we have approximately $44 million and $43 million of guarantees as of March 31, 2023 and December 31, 2022, respectively, primarily related to residual value guarantees on equipment sold to third-party finance companies. Our Condensed Consolidated and Combined Statements of Financial Position reflects a liability of $4 million and $4 million as of March 31, 2023 and December 31, 2022, respectively, 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

PENSION BENEFITS AND RETIREE HEALTH AND LIFE BENEFITS SPONSORED BY GE, TRANSFERRED TO GE HEALTHCARE IN CONNECTION WITH THE SPIN-OFF.

Certain GE HealthCare employees were covered under various pension and retiree health and life plans sponsored by GE prior to the Spin-Off, including principal pension plans, other pension plans, and principal retiree benefit plans. A subset of these pension plans have been closed to new participants. For the three months ended March 31, 2022, relevant participation costs for these plans were allocated to the Company and recognized within the Condensed Combined Statement of Income. These included service costs for active employees in the U.S. GE Pension Plan, certain international pension plans, the U.S. GE Supplementary Pension Plan, and the U.S. retiree benefit plan. We did not record any liabilities associated with our participation in these plans in our Condensed Combined Statement of Financial Position as of December 31, 2022.

Expenses associated with our employees’ participation in the U.S. GE principal pension and principal retiree benefit plans, which represent the majority of related expense, were $24 million for the three months ended March 31, 2022. Expenses associated with our employees’ participation in GE’s non-U.S. based pension plans were $4 million for the three months ended March 31, 2022.

In connection with the Spin-Off, on January 1, 2023, these plans were separated and GE transferred certain liabilities and assets of these plans to GE HealthCare based upon measurements as of December 31, 2022. The amounts assumed by GE HealthCare on January 1, 2023, are shown in the tables below.

Accumulated Benefit Obligations and Unrecognized Gain
As of January 1, 2023
Defined benefit plansOther postretirement plansTotal
Accumulated benefit obligations$21,696 $1,210 $22,906 
Unrecognized gain to be recorded in AOCI1,258 1,223 2,481 

Net Benefit Liability
As of January 1, 2023
Defined benefit plansOther postretirement plansTotal
Projected benefit obligations$21,743 $1,210 $22,953 
Fair value of assets18,908  18,908 
Net liability$2,835 $1,210 $4,045 

PENSION PLANS SPONSORED BY GE HEALTHCARE, INCLUDING THOSE TRANSFERRED BY GE.

As the pension plans were transferred by GE on January 1, 2023 there are no amounts included for these plans in the period ended March 31, 2022. Pension plans with pension assets or obligations less than $50 million and $20 million as of March 31, 2023 and 2022, respectively, are not included in the results below.


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Components of Expense (Income)
Defined benefit plansOther postretirement plans
For the three months ended March 31
2023202220232022
Service cost – Operating$14 $5 $2 $ 
Interest cost292 4 15  
Expected return on plan assets(356)(7)  
Amortization of net loss (gain)(29)2 (16) 
Amortization of prior service cost (credit)(1)(1)(22) 
Non-operating$(94)$(2)$(23)$ 
Net periodic (income) expense$(80)$3 $(21)$ 

For the three months ended March 31, 2023, the Company made contributions for benefit payments totaling $48 million to the pension plans and $43 million to its postretirement plans. For the remainder of 2023, the Company expects to make future benefit payments of approximately $255 million to our defined benefit pension and postretirement plans for benefit payments. The Company does not have a required minimum cash pension contribution obligation for its U.S. plans in 2023. Future contributions will depend on market conditions, interest rates, and other factors.

Prior to the Spin-Off, we disclosed postretirement plans with assets or obligations that exceeded $20 million. As a result of the transferred liabilities and assets to GE HealthCare on January 1, 2023, we now present postretirement plans with assets or obligations that exceed $50 million. For the year, the Company expects to contribute approximately $11 million to postretirement plans that are no longer disclosed.

Defined Contribution Plan
As a result of the Spin-Off, GE HealthCare established a defined contribution plan for its eligible U.S. employees that was largely consistent with the plan they participated in while GE HealthCare operated as a business of GE. Expenses associated with our employees’ participation in GE HealthCare’s defined contribution plan in 2023 and GE’s defined contribution plan in 2022 represent the employer matching contributions for GE HealthCare employees and were $33 million and $31 million for the three months ended March 31, 2023 and 2022, respectively.

NOTE 10. INCOME TAXES

Our income tax rate was 29.9% and 24.6% for the three months ended March 31, 2023 and 2022, respectively. The tax rate for 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. The tax rate for 2022 is higher than the U.S. statutory rate primarily due to the cost of global activities, including the U.S. taxation on international operations and state taxes.

The Company is currently being audited in a number of jurisdictions for tax years 2004-2021, including China, Egypt, France, Germany, Norway, the United Kingdom, and the U.S.

In the first quarter of 2023, the Company changed its accounting policy for presentation of interest expense on uncertain tax positions from within “Interest and other financial charges – net” to within “Benefit (provision) for income taxes.” See Note 1, “Organization and Basis of Presentation” for further information.

Post Spin-Off, the Company’s previously undistributed earnings of certain of our foreign subsidiaries are no longer indefinitely reinvested in non-U.S. businesses due to current U.S. funding needs. Therefore, an incremental deferred tax liability of $30 million has been 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.

Also, in connection with the Spin-Off, our net deferred income tax assets increased by $3,099 million primarily due to transfers from GE, including $964 million related to pension and postretirement benefits, with the remainder primarily attributable to tax attributes that were not part of the Company’s stand-alone operations, and changes to valuation on a GE HealthCare basis.


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

Changes in Accumulated other comprehensive income (loss) (AOCI) by component, net of income taxes, for the three months ended March 31, 2023 and 2022 were as follows:

For the three months ended March 31, 2023
Currency translation adjustments(a)
Benefit plansCash flow hedgesTotal AOCI
December 31, 2022$(1,845)$(42)$9 $(1,878)
Other comprehensive income (loss) before reclasses – net of taxes of $(11), $2, and $4
85 (13)(13)59 
Unrecognized gain transferred from GE pension – net of taxes of $0, $(509), and $0(b)
 1,972  1,972 
Reclasses from AOCI – net of taxes of $0, $16, and $7
 (52)(26)(78)
March 31, 2023
$(1,760)$1,865 $(30)$75 

For the three months ended March 31, 2022
Currency translation adjustments(a)
Benefit plansCash flow hedgesTotal AOCI
December 31, 2021$(969)$(100)$32 $(1,037)
Other comprehensive income (loss) before reclasses – net of taxes of $(2), $(9), and $(6)
(153)(5)35 (123)
Reclasses from AOCI – net of taxes of $0, $0, and $0
  (11)(11)
March 31, 2022
$(1,122)$(105)$56 $(