INSERTING and REPLACING GE HealthCare Reports Fourth Quarter and Full Year 2023 Financial Results

Delivers Strong Financial and Operating Performance in First Year as Public Company

Fourth Quarter 2023

  • Revenue growth was 5% year-over-year; Organic revenue growth* of 5%

  • Net income margin was 7.7% versus 11.2% for the prior year; Adjusted Earnings Before Interest and Taxes (EBIT) margin* was 16.1% versus the fourth quarter of 2022 Standalone Adjusted EBIT margin* of 16.1%

  • Cash flow from operating activities was $1.1 billion versus $1.1 billion for the prior year; Free cash flow* was $956 million versus $987 million; repaid $850 million of debt in the fourth quarter of 2023 and an additional $150 million of debt in January 2024

Full Year 2023

  • Revenue growth was 7% year-over-year; Organic revenue growth* of 8%

  • Net income margin was 8% versus 10.4% for the prior year; Adjusted EBIT margin* was 15.1% versus 2022 Standalone Adjusted EBIT margin* of 14.5%

  • Cash flow from operating activities was $2.1 billion versus $2.1 billion for the prior year, and Free cash flow* was $1.7 billion versus $1.8 billion last year, due to standalone interest and postretirement benefit payments

  • Company provides 2024 financial guidance, demonstrating progress toward medium-term financial targets

CHICAGO, February 06, 2024--(BUSINESS WIRE)--Insertion of Fourth Quarter 2023 P&L labeled "Consolidated and Combined Statements of Income" following the 2024 Guidance information.

The updated release reads:

GE HEALTHCARE REPORTS FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS

Delivers Strong Financial and Operating Performance in First Year as Public Company

Fourth Quarter 2023

  • Revenue growth was 5% year-over-year; Organic revenue growth* of 5%

  • Net income margin was 7.7% versus 11.2% for the prior year; Adjusted Earnings Before Interest and Taxes (EBIT) margin* was 16.1% versus the fourth quarter of 2022 Standalone Adjusted EBIT margin* of 16.1%

  • Cash flow from operating activities was $1.1 billion versus $1.1 billion for the prior year; Free cash flow* was $956 million versus $987 million; repaid $850 million of debt in the fourth quarter of 2023 and an additional $150 million of debt in January 2024

Full Year 2023

  • Revenue growth was 7% year-over-year; Organic revenue growth* of 8%

  • Net income margin was 8% versus 10.4% for the prior year; Adjusted EBIT margin* was 15.1% versus 2022 Standalone Adjusted EBIT margin* of 14.5%

  • Cash flow from operating activities was $2.1 billion versus $2.1 billion for the prior year, and Free cash flow* was $1.7 billion versus $1.8 billion last year, due to standalone interest and postretirement benefit payments

  • Company provides 2024 financial guidance, demonstrating progress toward medium-term financial targets

GE HealthCare (Nasdaq: GEHC), a leading global precision care innovator, today reported financial results for the fourth quarter ended December 31, 2023.

GE HealthCare President and CEO Peter Arduini said, "After our first year as a publicly traded company, I’m pleased to announce robust fourth quarter and full year results. This strong financial performance is a testament to our dedicated team and successful execution of our precision care strategy. We’ve made significant strides, including investing over $1 billion in R&D for future growth, helping drive more than 40 innovations in 2023. We bolstered our market position with strategic acquisitions, while at the same time paying down $1 billion in debt, setting a solid foundation for continued growth. We’re confident heading into 2024 amid the backdrop of an improved capital equipment landscape."

Fourth Quarter 2023 Total Company Financial Performance

  • Revenues of $5.2 billion increased 5% on both a reported and Organic* basis year-over-year, driven by price and volume.

  • Total company book-to-bill was strong at 1.05 times, defined as Total orders divided by Total revenues, as the Company continues to build a robust backlog. Total company orders increased 3% organically year-over-year.

  • Net income attributable to GE HealthCare was $403 million versus $554 million for the prior year, and Adjusted EBIT* was $837 million versus $844 million.

  • Net income margin was 7.7% versus 11.2% for the prior year, down 350 basis points (bps) primarily impacted by standalone interest expense. Adjusted EBIT margin* was 16.1% versus 17.1%, down 100 bps. Adjusted EBIT margin* for the fourth quarter of 2023 was flat versus the Company’s estimated fourth quarter 2022 Standalone Adjusted EBIT margin* of 16.1% as benefits from productivity and price were offset primarily by investments.

  • Earnings per share (EPS) from continuing operations were $0.88 versus $1.21, down $0.33 from the prior year. Adjusted EPS* was $1.18 versus $1.31, down $0.13 from the prior year. Both comparisons were impacted by standalone interest expense. Adjusted EPS* for the fourth quarter of 2023 grew $0.12 versus the Company’s estimated fourth quarter 2022 Standalone Adjusted EPS* of $1.06.

  • Cash flow from operating activities was $1.1 billion, down $13 million year-over-year. Free cash flow* was $956 million, down $31 million year-over-year. Both metrics were primarily impacted by standalone interest and postretirement benefit payments. The Company repaid $850 million of debt in the fourth quarter of 2023 and an additional $150 million of debt in January 2024.

Fourth Quarter 2023 Segment Financial Performance

Imaging

  • Revenues of $2.8 billion increased 4% on both a reported and Organic* basis year-over-year.

  • Segment EBIT was $337 million versus $321 million for the prior year.

  • Segment EBIT margin was 11.9% versus 11.8% for the prior year.

Ultrasound

  • Revenues of $944 million declined 1% reported and 2% on an Organic* basis year-over-year.

  • Segment EBIT was $244 million versus $285 million for the prior year.

  • Segment EBIT margin was 25.8% versus 29.8% for prior year.

Patient Care Solutions

  • Revenues of $827 million increased 5% reported and 4% on an Organic* basis year-over-year.

  • Segment EBIT was $110 million versus $130 million for the prior year.

  • Segment EBIT margin was 13.3% versus 16.5% for the prior year.

Pharmaceutical Diagnostics

  • Revenues of $591 million increased 25% reported and 23% on an Organic* basis year-over-year.

  • Segment EBIT was $144 million versus $109 million for the prior year.

  • Segment EBIT margin was 24.4% versus 23.0% for the prior year.

Full Year 2023 Total Company Financial Performance

  • Revenues of $19.6 billion increased 7% year-over-year and 8% on an Organic* basis with growth across all segments and regions.

  • Total company book-to-bill was 1.03 times, as orders dollars outpaced revenues. Total company orders increased 3% organically year-over-year.

  • Net income attributable to GE HealthCare was $1.6 billion versus $1.9 billion for the prior year, and Adjusted EBIT* was $3.0 billion versus $2.9 billion in the same period last year.

  • Net income margin was 8% versus 10.4% for the prior year, down 240 bps, primarily impacted by standalone interest expense. Adjusted EBIT margin* was 15.1% versus 15.6% last year, down 50 bps. Adjusted EBIT margin* for the full year 2023 was up 60 bps versus the Company’s estimated full year 2022 Standalone Adjusted EBIT margin* of 14.5% last year. Margin benefited from productivity, price, and volume, and was partially offset by inflation.

  • EPS from continuing operations was $3.04 compared to $4.18 for full year 2022, down $1.14 from the prior year. Adjusted EPS* was $3.93, versus $4.63 in prior year. Both comparisons were impacted by standalone interest expense. Adjusted EPS* for the full year 2023 grew $0.55 versus the Company’s estimated full year 2022 Standalone Adjusted EPS* of $3.38.

  • Cash flow from operating activities was $2.1 billion, down $33 million year-over-year, and Free cash flow* was $1.7 billion, down $113 million year-over-year, due to standalone interest and postretirement benefit payments.

  • Cash flow conversion, defined as cash from operating activities divided by net income attributable to GE HealthCare, was 134% while Free cash flow conversion* was 95% for 2023.

Growth and Innovation

2024 Guidance

Full year 2024 guidance is as follows:

  • Organic revenue growth* of approximately 4% year-over-year.

  • Adjusted EBIT margin* in the range of 15.6% to 15.9%, reflecting an expansion of 50 to 80 basis points versus 2023 Adjusted EBIT margin* of 15.1%.

  • Adjusted effective tax rate (ETR)* in the range of 23% to 25%.

  • Adjusted EPS* in the range of $4.20 to $4.35, representing 7% to 11% growth versus Adjusted EPS* of $3.93 for 2023.

  • Free cash flow* of approximately $1.8 billion.

The Company provides its outlook on a non-GAAP basis. Refer to the Non-GAAP Financial Measures in Outlook section below for more details.

Consolidated and Combined Statements of Income

Unaudited

For the three months ended December 31

For the years ended December 31

(In millions, except per share amounts)

2023

2022

2023

2022

Sales of products

$

3,597

$

3,342

$

13,127

$

12,044

Sales of services

1,609

1,596

6,425

6,297

Total revenues

5,206

4,938

19,552

18,341

Cost of products

2,268

2,150

8,465

7,975

Cost of services

782

856

3,165

3,187

Gross profit

2,156

1,932

7,922

7,179

Selling, general, and administrative

1,152

884

4,282

3,631

Research and development

315

271

1,205

1,026

Total operating expenses

1,467

1,155

5,487

4,657

Operating income

689

777

2,435

2,522

Interest and other financial charges – net

131

59

542

77

Non-operating benefit (income) costs

(50

)

(1

)

(382

)

(5

)

Other (income) expense – net

(1

)

1

(86

)

(62

)

Income from continuing operations before income taxes

609

718

2,361

2,512

Benefit (provision) for income taxes

(193

)

(151

)

(743

)

(563

)

Net income from continuing operations

416

567

1,618

1,949

Income (loss) from discontinued operations, net of taxes

6

(4

)

18

Net income

416

573

1,614

1,967

Net (income) loss attributable to noncontrolling interests

(13

)

(19

)

(46

)

(51

)

Net income attributable to GE HealthCare

403

554

1,568

1,916

Deemed preferred stock dividend of redeemable noncontrolling interest

(183

)

Net income attributable to GE HealthCare common stockholders

$

403

$

554

$

1,385

$

1,916

Earnings per share from continuing operations attributable to GE HealthCare common stockholders:

Basic

$

0.89

$

1.21

$

3.06

$

4.18

Diluted

0.88

1.21

3.04

4.18

Earnings per share attributable to GE HealthCare common stockholders:

Basic

$

0.89

$

1.22

$

3.05

$

4.22

Diluted

0.88

1.22

3.03

4.22

Weighted-average number of shares outstanding:

Basic

455

454

455

454

Diluted

458

454

458

454

Consolidated and Combined Statements of Income

For the years ended December 31

(In millions, except per share amounts)

2023

2022

2021

Sales of products

$

13,127

$

12,044

$

11,165

Sales of services

6,425

6,297

6,420

Total revenues

19,552

18,341

17,585

Cost of products

8,465

7,975

7,196

Cost of services

3,165

3,187

3,215

Gross profit

7,922

7,179

7,174

Selling, general, and administrative

4,282

3,631

3,563

Research and development

1,205

1,026

816

Total operating expenses

5,487

4,657

4,379

Operating income

2,435

2,522

2,795

Interest and other financial charges – net

542

77

40

Non-operating benefit (income) costs

(382

)

(5

)

3

Other (income) expense – net

(86

)

(62

)

(123

)

Income from continuing operations before income taxes

2,361

2,512

2,875

Benefit (provision) for income taxes

(743

)

(563

)

(600

)

Net income from continuing operations

1,618

1,949

2,275

Income (loss) from discontinued operations, net of taxes

(4

)

18

18

Net income

1,614

1,967

2,293

Net (income) loss attributable to noncontrolling interests

(46

)

(51

)

(46

)

Net income attributable to GE HealthCare

1,568

1,916

2,247

Deemed preferred stock dividend of redeemable noncontrolling interest

(183

)

Net income attributable to GE HealthCare common stockholders

$

1,385

$

1,916

$

2,247

Earnings per share from continuing operations attributable to GE HealthCare common stockholders:

Basic

$

3.06

$

4.18

$

4.91

Diluted

3.04

4.18

4.91

Earnings per share attributable to GE HealthCare common stockholders:

Basic

$

3.05

$

4.22

$

4.95

Diluted

3.03

4.22

4.95

Weighted-average number of shares outstanding:

Basic

455

454

454

Diluted

...

458

454

454

Consolidated and Combined Statements of Financial Position

As of

(In millions, except share and per share amounts)

December 31, 2023

December 31, 2022

Cash, cash equivalents, and restricted cash

$

2,504

$

1,445

Receivables – net of allowances of $98 and $91

3,525

3,295

Due from related parties

32

17

Inventories

1,960

2,155

Contract and other deferred assets

1,000

989

All other current assets

389

417

Current assets

9,410

8,318

Property, plant, and equipment – net

2,500

2,314

Goodwill

12,936

12,813

Other intangible assets – net

1,253

1,520

Deferred income taxes

4,474

1,550

All other assets

1,881

1,024

Total assets

$

32,454

$

27,539

Short-term borrowings

$

1,006

$

15

Accounts payable

2,947

2,944

Due to related parties

99

146

Contract liabilities

1,918

1,896

All other current liabilities

3,011

2,190

Current liabilities

8,981

7,191

Long-term borrowings

8,436

8,234

Compensation and benefits

5,782

549

Deferred income taxes

68

370

All other liabilities

1,877

1,603

Total liabilities

25,144

17,947

Commitments and contingencies

Redeemable noncontrolling interests

165

230

Common stock, par value $0.01 per share, 1,000,000,000 shares authorized, 455,342,290 shares issued and outstanding as of December 31, 2023; 100 shares issued and outstanding as of December 31, 2022

5

Additional paid-in capital

6,493

Retained earnings

1,326

Net parent investment

11,235

Accumulated other comprehensive income (loss) – net

(691

)

(1,878

)

Total equity attributable to GE HealthCare

7,133

9,357

Noncontrolling interests

12

5

Total equity

7,145

9,362

Total liabilities, redeemable noncontrolling interests, and equity

$

32,454

$

27,539

Consolidated and Combined Statements of Cash Flows

For the years ended December 31

(In millions)

2023

2022

2021

Net income

$

1,614

$

1,967

$

2,293

Less: Income (loss) from discontinued operations, net of taxes

(4

)

18

18

Net income from continuing operations

$

1,618

$

1,949

$

2,275

Adjustments to reconcile Net income from continuing operations to Cash from (used for) operating activities

Depreciation of property, plant, and equipment

248

228

225

Amortization of intangible assets

362

405

400

Gain on fair value remeasurement of contingent consideration

(17

)

(65

)

Net periodic postretirement benefit plan (income) expense

(332

)

9

25

Postretirement plan contributions

(357

)

(18

)

(20

)

Share-based compensation

114

67

76

Provision for income taxes

743

563

600

Cash paid during the year for income taxes

(474

)

(851

)

(615

)

Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions:

Receivables

(185

)

(231

)

(1,336

)

Due from related parties

4

13

157

Inventories

111

(402

)

(435

)

Contract and other deferred assets

10

(222

)

23

Accounts payable

(13

)

481

263

Due to related parties

(84

)

(33

)

(21

)

Contract liabilities

26

138

(21

)

All other operating activities

327

103

11

Cash from (used for) operating activities – continuing operations

2,101

2,134

1,607

Cash flows – investing activities

Additions to property, plant and equipment and internal-use software

(387

)

(310

)

(248

)

Dispositions of property, plant, and equipment

1

4

15

Purchases of businesses, net of cash acquired

(147

)

(1,481

)

All other investing activities

(25

)

(92

)

(47

)

Cash from (used for) investing activities – continuing operations

(558

)

(398

)

(1,761

)

Cash flows – financing activities

Net increase (decrease) in borrowings (maturities of 90 days or less)

(12

)

9

(7

)

Newly issued debt, net of debt issuance costs (maturities longer than 90 days)

2,006

8,198

5

Repayments and other reductions (maturities longer than 90 days)

(855

)

(3

)

(10

)

Dividends paid to stockholders

(41

)

Redemption of noncontrolling interests

(211

)

Net transfers (to) from GE

(1,317

)

(8,934

)

(238

)

All other financing activities

(48

)

(92

)

(13

)

Cash from (used for) financing activities – continuing operations

(478

)

(822

)

(263

)

Cash from (used for) operating activities – discontinued operations

(21

)

Effect of foreign currency rate changes on cash, cash equivalents, and restricted cash

(10

)

(3

)

(34

)

Increase (decrease) in cash, cash equivalents, and restricted cash

1,055

890

(451

)

Cash, cash equivalents, and restricted cash at beginning of year

1,451

561

1,012

Cash, cash equivalents, and restricted cash as of December 31

$

2,506

$

1,451

$

561

Supplemental disclosure of cash flows information

Cash paid during the year for interest

$

(570

)

$

$

(21

)

Non-cash investing activities

Acquired but unpaid property, plant, and equipment

$

140

$

136

$

93

Non-GAAP Financial Measures

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

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

The Company defines these non-GAAP financial measures as:

  • Organic revenue: Total revenues excluding the effects of: (1) net sales from recent acquisitions and dispositions with less than a full year of comparable net sales; and (2) foreign currency exchange rate fluctuations in order to present revenue on a constant currency basis.

  • Organic revenue growth rate: Rate of change when comparing Organic revenue, period over period.

  • Adjusted EBIT: Net income attributable to GE HealthCare excluding the effects of: (1) Interest and other financial charges – net; (2) Non-operating benefit (income) costs; (3) Provision (benefit) for income taxes; (4) Income (loss) from discontinued operations, net of taxes; (5) Net (income) loss attributable to noncontrolling interests; (6) restructuring costs; (7) acquisition and disposition-related charges (benefits); (8) Spin-Off and separation costs; (9) (gain) loss on business and asset dispositions; (10) amortization of acquisition-related intangible assets; and (11) investment revaluation (gain) loss. In addition, the Company may from time to time consider excluding other nonrecurring items to enhance comparability between periods.

  • Adjusted EBIT margin: Adjusted EBIT divided by Total revenues for the same period.

  • Standalone Adjusted EBIT: Adjusted EBIT including the effects of recurring and on-going costs to operate new functions required for a standalone company that management believes provide a better depiction of the operations of GE HealthCare as a standalone company.

  • Standalone Adjusted EBIT margin: Standalone Adjusted EBIT divided by Total revenues for the same period.

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

The Company believes Adjusted EBIT, Adjusted EBIT margin, Standalone Adjusted EBIT, and Standalone Adjusted EBIT margin provide management and investors with additional understanding of its business by highlighting the results from ongoing operations and the underlying profitability factors. These metrics exclude interest expense, interest income, non-operating benefit (income) costs, and tax expense, as well as non-recurring and/or non-cash items, which may have a material impact on the Company’s results. The Company believes this provides additional insight into how its businesses are performing, on a normalized basis. However, these non-GAAP financial measures should not be construed as inferring that the Company’s future results will be unaffected by the items for which the measure adjusts.​

  • Adjusted net income: Net income attributable to GE HealthCare excluding (1) Non-operating benefit (income) costs; (2) restructuring costs; (3) acquisition and disposition-related charges (benefits); (4) Spin-Off and separation costs; (5) (gain) loss on business and asset dispositions; (6) amortization of acquisition-related intangible assets; (7) investment revaluation (gain) loss; (8) tax effect of reconciling items (items 1-7); (9) certain tax adjustments as described in Adjusted tax expense definition below and (10) Income (loss) from discontinued operations, net of taxes. In addition, the Company may from time to time consider disclosing other nonrecurring items to enhance comparability between periods.

  • Adjusted EPS: Diluted earnings per share from continuing operations excluding the per share impact of: (1) deemed preferred stock dividend of redeemable noncontrolling interest, (2) Non-operating benefit (income) costs; (3) restructuring costs; (4) acquisition and disposition-related charges (benefits); (5) Spin-Off and separation costs; (6) (gain) loss on business and asset dispositions; (7) amortization of acquisition-related intangible assets; (8) investment revaluation (gain) loss; (9) tax effect of reconciling items (items 1-8); and (10) certain tax adjustments as described in Adjusted tax expense definition below. In addition, the Company may from time to time consider disclosing other nonrecurring items to enhance comparability between periods.

  • Standalone Adjusted EPS: Adjusted EPS including the per share impact of the effects of recurring and on-going costs to operate new functions required for a standalone company and interest expense associated with third party debt that management believes provide a better depiction of the operations of GE HealthCare as a standalone company.

The Company believes Adjusted net income, Adjusted EPS, and Standalone Adjusted EPS provide investors with improved comparability of underlying operating results and a further understanding and additional transparency regarding how it evaluates the business. These non-GAAP financial measures also provide management and investors with additional perspective regarding the impact of certain significant items on the Company’s consolidated and combined earnings. However, they should not be construed as inferring that the Company’s future results will be unaffected by the items for which the measure adjusts.​

  • Adjusted tax expense and Adjusted ETR: Adjusted tax expense is Income tax expense less the income tax related to pre-tax income adjustments above and certain income tax adjustments. Examples of certain income tax adjustments include the accrual of a deferred tax liability on the prior period earnings of certain of the Company’s foreign subsidiaries for which the Company is no longer permanently reinvested. Adjusted ETR is Adjusted tax expense divided by Income before income taxes less pre-tax income adjustments above. Adjusted tax expense and Adjusted ETR can be used by investors to review the income tax expense and effective tax rate for the Company’s operations on a consistent basis.

  • Free cash flow: Cash from (used for) operating activities - continuing operations adjusting for the effects of (1) additions to property, plant and equipment (PP&E) and internal-use software; (2) dispositions of PP&E; and (3) impact of factoring programs.

  • Free cash flow conversion: Free cash flow divided by Adjusted net income.

The Company believes that Free cash flow and Free cash flow conversion provide management and investors with important measures of the Company’s ability to generate cash on a normalized basis. These metrics also provide insight into the Company’s flexibility to allocate capital, including reinvesting in the Company for future growth, paying down debt, paying dividends, and pursuing other opportunities that may enhance stockholder value. The Company believes investors may find it useful to compare Free cash flow performance without the effects of the factoring program discontinuation. However, they should not be construed as inferring that the Company’s future results will be unaffected by the items for which the measure adjusts.

Organic Revenue*

Unaudited

For the three months ended December 31

For the years ended December 31

($ In millions)

2023

2022

% change

2023

2022

% change

Imaging revenues

$

2,830

$

2,709

4

%

$

10,581

$

9,985

6

%

Less: Acquisitions(1)

1

1

Less: Dispositions(2)

Less: Foreign currency exchange

15

(144

)

Imaging Organic revenue*

$

2,814

$

2,709

4

%

$

10,724

$

9,985

7

%

Ultrasound revenues

$

944

$

956

(1

)%

$

3,457

$

3,422

1

%

Less: Acquisitions(1)

Less: Dispositions(2)

Less: Foreign currency exchange

11

(43

)

Ultrasound Organic revenue*

$

933

$

956

(2

)%

$

3,500

$

3,422

2

%

PCS revenues

$

827

$

786

5

%

$

3,142

$

2,916

8

%

Less: Acquisitions(1)

Less: Dispositions(2)

Less: Foreign currency exchange

6

(16

)

PCS Organic revenue*

$

821

$

786

4

%

$

3,158

$

2,916

8

%

PDx revenues

$

591

$

473

25

%

$

2,306

$

1,958

18

%

Less: Acquisitions(1)

Less: Dispositions(2)

Less: Foreign currency exchange

9

(14

)

PDx Organic revenue*

$

582

$

473

23

%

$

2,320

$

1,958

18

%

Other revenues

$

14

$

14

%

$

66

$

60

10

%

Less: Acquisitions(1)

Less: Dispositions(2)

Less: Foreign currency exchange

1

1

Other Organic revenue*

$

13

$

14

(7

)%

$

65

$

60

8

%

Total revenues

$

5,206

$

4,938

5

%

$

19,552

$

18,341

7

%

Less: Acquisitions(1)

1

1

Less: Dispositions(2)

Less: Foreign currency exchange

42

(216

)

Organic revenue*

$

5,163

$

4,938

5

%

$

19,767

$

18,341

8

%

(1)

Represents revenues attributable to acquisitions from the date the Company completed the transaction through the end of four quarters following the transaction.

(2)

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

Unaudited Net Income to Adjusted EBIT* and Standalone Adjusted EBIT* (estimated)

For the three months ended December 31

For the years ended December 31

($ In millions)

2023

2022

% change

2023

2022

% change

Net income attributable to GE HealthCare

$

403

$

554

(27

)%

$

1,568

$

1,916

(18

)%

Add: Interest and other financial charges - net

131

59

542

77

Add: Non-operating benefit (income) costs

(50

)

(1

)

(382

)

(5

)

Less: Benefit (provision) for income taxes

(193

)

(151

)

(743

)

(563

)

Less: Income (loss) from discontinued operations, net of taxes

6

(4

)

18

Less: Net (income) loss attributable to noncontrolling interests

(13

)

(19

)

(46

)

(51

)

EBIT*

$

690

$

776

(11

)%

$

2,521

$

2,584

(2

)%

Add: Restructuring costs(1)

20

36

54

146

Add: Acquisition and disposition-related charges (benefits)(2)

(14

)

(15

)

(34

)

Add: Spin-Off and separation costs(3)

95

7

270

14

Add: (Gain) loss on business and asset dispositions(4)

(1

)

Add: Amortization of acquisition-related intangible assets

32

31

127

121

Add: Investment revaluation (gain) loss(5)

8

(1

)

31

Adjusted EBIT*

$

837

$

844

(1

)%

$

2,956

$

2,861

3

%

Less: Estimated standalone costs(6)

50

200

Less: Estimated incremental interest expense(7)

Less: Estimated tax effect of reconciling items(8)

Standalone Adjusted EBIT* (estimate)

$

837

$

794

5

%

$

2,956

$

2,661

11

%

Net income margin

7.7

%

11.2

%

(350) bps

8.0

%

10.4

%

(240) bps

Adjusted EBIT margin*

16.1

%

17.1

%

(100) bps

15.1

%

15.6

%

(50) bps

Standalone Adjusted EBIT margin* (estimate)

16.1

%

16.1

%

0 bps

15.1

%

14.5

%

60 bps

(1)

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

(2)

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

(3)

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

(4)

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

(5)

Primarily relates to valuation adjustments for equity investments.

(6)

Estimated 4Q’22 quarter to date and FY’22 expense of recurring and ongoing costs required to operate new functions required for a public company such as external reporting, internal audit, treasury, investor relations, board of directors and officers, stock administration, and expanding the services of existing functions such as information technology, finance, supply chain, human resources, legal, tax, facilities, branding, security, government relations, community outreach, and insurance.

(7)

Estimated 4Q’22 quarter to date and FY’22 additional interest expense related to the GE HealthCare debt issuances on November 22nd, 2022 and the draw down of the term loan on January 3rd, 2023, the amortization of original issue discount and deferred, debt issuance costs, and certain Euro to U.S. Dollar cross currency interest rate swap arrangements with a notional amount of $2.0 billion. Interest expense was calculated assuming constant debt levels throughout the periods.

(8)

Estimated 4Q’22 quarter to date and FY’22 tax effect was determined by applying the respective statutory tax rates to the pre-tax adjustments, as appropriate, in jurisdictions where valuation allowances were not required. The applicable tax rates could be impacted (either higher or lower) depending on many factors including, but not limited to, the profitability in local jurisdictions and may be different from the estimate.

Unaudited Net Income to Adjusted Net Income* and Standalone Adjusted Net Income* (estimated)

For the three months ended December 31

For the years ended December 31

($ In millions)

2023

2022

% change

2023

2022

% change

Net income attributable to GE HealthCare

$

403

$

554

(27

)%

$

1,568

$

1,916

(18

)%

Add: Non-operating benefit (income) costs

(50

)

(1

)

(382

)

(5

)

Add: Restructuring costs(1)

20

36

54

146

Add: Acquisition and disposition-related charges (benefits)(2)

(14

)

(15

)

(34

)

Add: Spin-Off and separation costs(3)

95

7

270

14

Add: (Gain) loss on business and asset dispositions(4)

(1

)

Add: Amortization of acquisition-related intangible assets

32

31

127

121

Add: Investment revaluation (gain) loss(5)

8

(1

)

31

Add: Tax effect of reconciling items

(11

)

(19

)

92

(67

)

Add: Certain tax adjustments(6)

50

80

Less: Income (loss) from discontinued operations, net of taxes

6