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What changed in GE HealthCare's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of GE HealthCare's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+610 added−723 removedSource: 10-K (2024-02-06) vs 10-K (2023-02-15)

Top changes in GE HealthCare's 2023 10-K

610 paragraphs added · 723 removed · 476 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

130 edited+24 added−67 removed41 unchanged
Biggest changeWestrick 54 CEO, Patient Care Solutions The following are brief biographies describing the backgrounds of our executive officers. Peter J. Arduini . Mr. Arduini was appointed as our President and Chief Executive Officer in connection with our Spin-Off from GE. He served as the President and Chief Executive Officer of GE’s healthcare business from January 2022 until January 2023.
Biggest changeO’Neill 55 CEO, Pharmaceutical Diagnostics Roland Rott 52 CEO, Ultrasound Kenneth Stacherski 53 Chief Global Supply Chain and Service Officer Thomas J. Westrick 55 CEO, Patient Care Solutions The following are brief biographies describing the backgrounds of our executive officers. Peter J. Arduini . Mr.
The development of a medical device typically requires extensive non-clinical testing and, for some of our devices, clinical testing involving human subjects. For all our medical devices, we must comply with FDA’s requirements governing, among other things, device site registration and listing, labeling, post-market record keeping and reporting, and the Quality System Regulation.
The development of a medical device typically requires extensive non-clinical testing and, for some of our devices, clinical testing involving human subjects. For all our medical devices, we must comply with the FDA’s requirements governing, among other things, device site registration and listing, labeling, post-market record keeping and reporting, and the Quality System Regulation.
All of these materials are available on our web site, www.gehealthcare.com, and will be provided free of charge to any shareholder requesting a copy by writing to: Corporate Secretary, GE HealthCare Technologies Inc., 500 W. Monroe Street, Chicago, IL 60661. ADDITIONAL INFORMATION ABOUT GE HEALTHCARE GE HealthCare's Internet address is gehealthcare.com, and our Investor Relations website is investor.gehealthcare.com.
All of these materials are available on our web site, gehealthcare.com, and will be provided free of charge to any shareholder requesting a copy by writing to: Corporate Secretary, GE HealthCare Technologies Inc., 500 W. Monroe Street, Chicago, IL 60661. ADDITIONAL INFORMATION ABOUT GE HEALTHCARE GE HealthCare’s Internet address is gehealthcare.com, and our Investor Relations website is investor.gehealthcare.com.
All our pharmaceutical products require pre-market approval from the NMPA before they can be marketed in China, and those marketing applications must be supported by clinical data, which typically comes from a multi-phase study in China or by relying on clinical data generated abroad that meets the NMPA’s requirements. DATA PRIVACY LAWS.
All our pharmaceutical products require pre-market approval from the NMPA before they can be marketed in China, and those marketing applications must be supported by clinical data, which typically comes from a multi-phase study in China or by relying on clinical data generated abroad that meets the NMPA’s requirements. 11 DATA PRIVACY LAWS.
FDA’s generic drug program requires filing of an Abbreviated New Drug Application ("ANDA") for a generic drug application that does not include preclinical or clinical data to establish safety and effectiveness, but must demonstrate equivalency to the innovator drug. EUROPEAN UNION. Devices There is no pre-market approval of medical devices in the EU.
The FDA’s generic drug program requires filing of an Abbreviated New Drug Application for a generic drug application that does not include preclinical or clinical data to establish safety and effectiveness, but must demonstrate equivalency to the innovator drug. EUROPEAN UNION. Devices There is no pre-market approval of medical devices in the EU.
Our Ultrasound business’ focus is on designing solutions that are aligned by specialties/care areas for specific clinical workflows to better serve the unique needs of our customers and improve patient outcomes, while lowering the overall cost of care.
Our Ultrasound business’ focus is on designing solutions that are aligned by specialties or care areas for specific clinical workflows to better serve the unique needs of our customers and improve patient outcomes, while lowering the overall cost of care.
Food and Drug Administration ("FDA") accepts MDSAP audit reports as a substitute for routine agency inspections, it considers the following types of inspections to fall outside the scope of MDSAP: for-cause or compliance follow-up inspections; pre-approval or post-approval inspections; and inspections to assess compliance with Electronic Product and Radiation Control regulations, which apply to Molecular Imaging, X-ray, Women’s Health, Interventional, and Surgery products.
Food and Drug Administration (“FDA”) accepts MDSAP audit reports as a substitute for routine agency inspections, it considers the following types of inspections to fall outside the scope of MDSAP: for-cause or compliance follow-up inspections; pre-approval or post-approval inspections; and inspections to assess compliance with Electronic Product and Radiation Control regulations, which apply to Molecular Imaging, X-ray, Women’s Health, Interventional, and Surgery products.
GE HealthCare’s relationship with employee-representative organizations outside the United States takes many forms, including in Europe where GE HealthCare engages the representative bodies for employees, such as works councils and trade unions, in accordance with local law. We strive to unlock the ambition of all our people so they can innovate, grow, and reach their full potential.
GE HealthCare’s relationship with employee-representative organizations outside the United States takes many forms, including in Europe where GE HealthCare engages the representative bodies for colleagues, such as works councils and trade unions, in accordance with local law. We strive to unlock the ambition of all our people so they can innovate, grow, and reach their full potential.
These requirements are detailed, comprehensive, and require extensive investment and resources to comply with the legal and regulatory requirements. Pharmaceutical Products Our pharmaceutical products are subject to FDA’s pre-market approval process.
These requirements are detailed, comprehensive, and require extensive investment and resources to comply with legal and regulatory requirements. 10 Pharmaceutical Products Our pharmaceutical products are subject to the FDA’s pre-market approval process.
Similar state false claims, anti-kickback, anti-self-referral, and insurance laws also apply to state-funded Medicaid and other healthcare programs and private third-party payers. Any failure to comply with these laws and regulations could subject us or our officers and employees to criminal and civil financial penalties and expose us to civil liability and risk of further enforcement action under the U.S.
Similar state false claims, anti-kickback, anti-self-referral, and insurance laws also apply to state-funded Medicaid and other healthcare programs and private third-party payers. Any failure to comply with these laws and regulations could subject us or our officers and colleagues to criminal and civil financial penalties and expose us to civil liability and risk of further enforcement action under the U.S.
We also are subject to FDA’s requirements, including drug establishment registration and listing, labeling and advertising, and current Good Manufacturing Practice ("cGMP") regulations, which set forth minimum requirements for the methods, facilities, and controls used in manufacturing, processing, and packing pharmaceutical products. Post-approval, we must maintain and submit to the FDA reports of product quality defects and adverse events.
We also are subject to the FDA’s requirements, including drug establishment registration and listing, labeling and advertising, and current Good Manufacturing Practice (“cGMP”) regulations, which set forth minimum requirements for the methods, facilities, and controls used in manufacturing, processing, and packing pharmaceutical products. Post-approval, we must maintain and submit to the FDA reports of product quality defects and adverse events.
All new medical devices placed on the market or put into service in the EU must be compliant with and meet the requirements of the Medical Device Regulation, which was implemented on May 26, 2021. Devices that conform to these requirements can be affixed with a CE marking and commercialized throughout the European Economic Area ("EEA") and in Switzerland.
All new medical devices placed on the market or put into service in the EU must be compliant with and meet the requirements of the Medical Device Regulation, which was implemented on May 26, 2021. Devices that conform to these requirements can be affixed with a CE marking and commercialized throughout the European Economic Area (“EEA”) and in Switzerland.
Our products, services, and solutions enable clinicians to make more informed decisions quickly and efficiently, improving patient care from diagnosis to therapy to monitoring. We have more than 125 years of experience and one of the strongest reputations in the global healthcare industry, built from our demonstrated record of delivering industry-defining innovation.
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. We have more than 125 years of experience and one of the strongest reputations in the global healthcare industry, built from our demonstrated record of delivering industry-defining innovation.
FDA-cleared and -approved devices and drugs reimbursable by federal healthcare programs, we are subject to the U.S. federal Physician Payments Sunshine Act (the "Sunshine Act"), which requires us to annually track and report to the federal government certain payments and other transfers of value we make to U.S.-licensed physicians and other healthcare professionals or U.S. teaching hospitals. The U.S.
FDA-cleared and -approved devices and drugs reimbursable by federal healthcare programs, we are subject to the U.S. federal Physician Payments Sunshine Act (the “Sunshine Act”), which requires us to annually track and report to the federal government certain payments and other transfers of value we make to U.S.-licensed physicians and other healthcare professionals or U.S. teaching hospitals. The U.S.
We use globally managed and coordinated quality assurance programs across our manufacturing and ISO-certified distribution facilities, and we regularly inspect and audit our sites. We hold our suppliers to the same rigorous operating standards. REGULATION The development, manufacturing, marketing, sale, promotion, and distribution of medical devices and pharmaceutical products are subject to stringent government regulation globally.
We use globally managed and coordinated quality assurance programs across our manufacturing and distribution facilities, and we regularly inspect and audit our sites. We hold our suppliers to the same rigorous operating standards. REGULATION The development, manufacturing, marketing, sale, promotion, and distribution of medical devices and pharmaceutical products are subject to stringent government regulation globally.
Kass-Hout was Vice President of Machine Learning, Distinguished Engineer, and Chief Medical Officer at Amazon from May 2017 to January 2023, where he led the company’s cloud Health AI strategy, products, and services, and was a key contributor to Amazon health initiatives, including pharmacy and diagnostics.
Kass-Hout served as Vice President of Machine Learning, Distinguished Engineer and Chief Medical Officer at Amazon from May 2017 to January 2023, where he led the company’s cloud health AI strategy, products, and services, and was a key contributor to Amazon health initiatives, including pharmacy and diagnostics.
Our well-established employee development strategy allows us to attract and retain innovative leaders, which is instrumental to our long-term success. ENVIRONMENTAL, SOCIAL, AND GOVERNANCE GE HealthCare is committed to delivering products and solutions that build a healthier and more sustainable world for this and future generations.
Our well-established colleague development strategy allows us to attract and retain innovative leaders, which is instrumental to our long-term success. ENVIRONMENTAL, SOCIAL, AND GOVERNANCE GE HealthCare is committed to delivering products and solutions that build a healthier and more sustainable world for this and future generations.
This is complemented by our broad service capabilities and dedication to quality and integrity with a strong operational culture, deeply embedded in lean continuous improvement. We generate revenue from the sale of medical devices, single-use and consumable products, service capabilities, and digital solutions.
This is complemented by our broad service capabilities and dedication to quality and integrity with a strong operational culture, deeply embedded in lean continuous improvement. We generate revenue from the sale of medical devices, consumable products, service capabilities, and digital solutions.
Our MR portfolio includes scanners for a range of clinical capabilities through different bore sizes, magnetic field strengths, and scalable platforms. • Our Image-Guided Therapies business provides technologies that assist clinicians and surgeons during open surgeries and minimally-invasive endovascular procedures.
Our Magnetic Resonance portfolio includes scanners for a range of clinical capabilities through different bore sizes, magnetic field strengths, and scalable platforms. • Our Image-Guided Therapies business provides technologies that assist clinicians and surgeons during open surgeries and minimally-invasive endovascular procedures.
Our systems combine exceptional image quality with comprehensive clinical tools, including measurement quantification, workflow automation, cross-modality networking, portability, and cloud-based technologies. • Women’s Health Ultrasound is comprised of obstetrics, gynecology, assisted reproductive medicine, and supplemental breast cancer screening.
Our systems combine high image quality with comprehensive clinical tools, including measurement quantification, workflow automation, cross-modality networking, portability, and cloud-based technologies. • Women’s Health Ultrasound is comprised of obstetrics, gynecology, assisted reproductive medicine, and supplemental breast cancer screening.
UNITED STATES OF AMERICA. Food and Drug Law Under the Food, Drug, and Cosmetic Act ("FDCA"), we must comply with regulations governing the design, development, testing, manufacturing, packaging, labeling, distribution, import/export, sale, servicing, and marketing of medical products, including medical devices and pharmaceuticals. U.S.
UNITED STATES OF AMERICA. Food and Drug Law Under the Food, Drug, and Cosmetic Act (“FDCA”), we must comply with regulations governing the design, development, testing, manufacturing, packaging, labeling, distribution, import/export, sale, servicing, and marketing of medical products, including medical devices and pharmaceuticals. U.S.
We rely on confidentiality agreements with employees, contractors, consultants, and third parties to help protect our trade secrets, proprietary technology, and other confidential information. We also monitor development and commercialization activities of third parties so our IP rights are not infringed upon.
We rely on confidentiality agreements with colleagues, contractors, consultants, and third parties to help protect our trade secrets, proprietary technology, and other confidential information. We also monitor development and commercialization activities of third parties so our IP rights are not infringed upon.
Prior to that, he was the Chief Financial Officer of the Life Sciences division of GE’s Healthcare business since August 2013. Mr. O’Neill has over 20 years of experience with GE, beginning in the Energy services business in the U.K. and U.S.
Prior to that, he was the Chief Financial Officer of the Life Sciences division of GE’s healthcare business starting in August 2013. Mr. O’Neill has over 20 years of experience with GE, beginning in the Energy services business in the U.K. and U.S.
Our products have added innovation in design including integrated scales, hands-free alarm silencing, angled radiant heating, and thermoregulation. • Our Consumables and Services portfolio consists of 1,100 products that are used primarily with our monitoring solutions patient parameters, such as blood pressure, ECG, pulse, temperature, respiratory rate, blood oxygen level, and brain activity, and are used throughout the hospital.
Our products have added innovation in design, including integrated scales, hands-free alarm silencing, angled radiant heating, and thermoregulation. • Our Consumables and Services portfolio consists of approximately 1,000 consumables that are used primarily with our monitoring solutions patient parameters, such as blood pressure, ECG, pulse, temperature, respiratory rate, blood oxygen level, and brain activity, and are used throughout the hospital.
In addition, there are also various US state-level laws (e.g., the California Consumer Privacy Act), country regional laws, and proposed legislation that we monitor for applicability and impact to our business. These laws present a continuing challenge to businesses to structure their data collection, storage, use, and cross-border transmission in a compliant manner.
In addition, there are also various U.S. state-level laws (e.g., the California Consumer Privacy Act), country regional laws, and proposed legislation that we monitor for applicability and impact to our business. These laws present a continuing challenge to businesses to structure their data collection, storage, use, and cross-border transmission in a compliant manner.
Rott was Managing Director, Europe, the Middle East, and Africa ("EMEA") & Asia Pacific, and Executive Board Member of the then Euronext listed ERP Software group Exact Holding, Netherlands. In his early career he had an entrepreneurial start, founding and successfully exiting two software companies in Austria. Mr.
Rott was Managing Director, Europe, the Middle East, and Africa and Asia Pacific, and Executive Board Member of the then Euronext listed ERP Software group Exact Holding, Netherlands. In his early career, he had an entrepreneurial start, founding and successfully exiting two software companies in Austria. Kenneth Stacherski . Mr.
PCS' broad product and digital solution portfolio is complemented by a comprehensive suite of service offerings, including parts, labor, and training, as well as emerging data, analytics, and networking solutions to aid our customers in improving uptime and efficiency of their medical technology fleets. PHARMACEUTICAL DIAGNOSTICS BUSINESS.
Our broad product and digital solution portfolio is complemented by a comprehensive suite of service offerings, including parts, labor, and training, as well as emerging data, analytics, and networking solutions to aid our customers in improving uptime and efficiency of their medical technology fleets. 6 PHARMACEUTICAL DIAGNOSTICS.
GE HealthCare’s X-ray product portfolio includes systems for three distinct clinical situations: fixed room radiography products installed in hospitals and imaging centers; mobile radiography products used for bedside or other point-of-care imaging needs; and fluoroscopy products installed in hospitals for dynamic or “moving” X-ray imaging in applications like gastrointestinal examinations.
Our X-ray product portfolio includes systems for three distinct clinical situations: fixed room radiography products installed in hospitals and imaging centers; mobile radiography products used for bedside or other point-of-care imaging needs; and fluoroscopy products installed in hospitals for dynamic or “moving” X-ray imaging in applications like gastrointestinal examinations.
The Medical Device Single Audit Program ("MDSAP") provides for a single annual audit of a medical device manufacturer by a MDSAP-recognized auditing organization to satisfy the requirements of ISO 13485 and the regulatory requirements of the authorities that participate in MDSAP (currently the United States ("U.S.")), Canada, Australia, Brazil, and Japan). While the U.S.
The Medical Device Single Audit Program (“MDSAP”) provides for a single annual audit of a medical device manufacturer by a MDSAP-recognized auditing organization to satisfy the requirements of ISO 13485 and the regulatory requirements of the authorities that participate in MDSAP (currently the U.S., Canada, Australia, Brazil, and Japan). While the U.S.
The pharmaceutical product development and approval process typically begins with extensive pre-clinical R&D, followed by approval of an Investigational New Drug ("IND"), and then, upon successful completion of several phases of clinical trials, the filing and request for FDA approval of a New Drug Application ("NDA").
The pharmaceutical product development and approval process typically begins with extensive pre-clinical R&D, followed by approval of an Investigational New Drug (“IND”), and then, upon successful completion of several phases of clinical trials, the filing and request for FDA approval of a New Drug Application.
GDPR”), and other EU country-level laws; the Lei Geral de Proteção de Dados Pessoias (“Brazil LGPD”); and the various laws and accompanying regulations in China governing data privacy and cybersecurity (e.g., the Cybersecurity Law of the People’s Republic of China, Personal Information Protection Law ("China PIPL")).
GDPR”), and other EU country-level laws; the Lei Geral de Proteção de Dados Pessoias (“Brazil LGPD”); and the various laws and accompanying regulations in China governing data privacy and cybersecurity (e.g., the Cybersecurity Law of the People’s Republic of China, Personal Information Protection Law (“China PIPL”)).
The pursuit of precision care opportunities significantly expands our served industries to include integrated diagnostics, artificial intelligence ("AI") and machine learning-based clinical decision support, highly personalized therapies enabled by more precise diagnostics, and remote patient monitoring. The scale and breadth of our portfolio, combined with our innovation capabilities, position us to be a leading enabler of precision care.
The pursuit of precision care opportunities significantly expands our addressable industries to include integrated diagnostics, AI and machine learning-based clinical decision support, highly personalized therapies enabled by more precise diagnostics, and remote patient monitoring. The scale and breadth of our portfolio, combined with our innovation capabilities, position us to be a leading enabler of precision care.
Our surgical systems are commercialized under the OEC brand and are comprised of a broad portfolio of mobile surgical C-arms that meet the varying clinical and environmental needs for surgical imaging around the world. • Women’s Health products use X-ray technology to help clinicians screen for and diagnose breast cancer as well as bone and metabolic diseases in women.
Our surgical systems are comprised of a broad portfolio of mobile surgical C-arms that meet the varying clinical and environmental needs for surgical imaging around the world. • Women’s Health products use X-ray technology to help clinicians screen for and diagnose breast cancer as well as bone and metabolic diseases in women.
GE HealthCare’s PDx business is a leading supplier of diagnostic agents to the global radiology and nuclear medicine industry. These diagnostic agents help clinicians assess patients to enable more precise diagnoses and better therapy selection. We distribute products globally, providing on-time delivery of quality products that help meet patient and procedural needs across a multitude of modalities.
GE HealthCare is a leading supplier of diagnostic agents to the global radiology and nuclear medicine industry. These diagnostic agents help clinicians assess patients to enable more precise diagnoses and better therapy selection. We distribute products globally, providing on-time delivery of quality products that help meet patient and procedural needs across a multitude of modalities.
Our portfolio ranges from spot-check to continuous patient monitoring across acute care settings, including comprehensive multi-parameter monitors; central stations; continuous, wearable and mobile monitors; transport monitors; cardiac telemetry solutions; spot-check monitors; and visualization, alarm distribution, and care team collaboration solutions.
Our portfolio ranges from spot-check to continuous patient monitoring, including comprehensive multi-parameter monitors; central stations; continuous, wearable, and mobile monitors; transport monitors; cardiac telemetry solutions; spot-check monitors; and visualization, alarm distribution, and care team collaboration solutions.
Below are our human capital priorities: • Protect the health and safety of our workforce : Safety is our first priority and is integrated into everything we do, from manufacturing to installation, operation, and service. We are committed to prioritizing safety over quality, delivery, and cost.
Below are our human capital priorities: • Protect the health and safety of our workforce : Safety is integrated into everything we do, from manufacturing to installation, operation, and service. We are committed to prioritizing safety over delivery and cost.
Intraoperative imaging systems are used to visualize procedures that involve implants and devices, such as stents, balloons, pace makers, and artificial joints. Our Image-Guided Therapies business includes two business lines: interventional systems and surgery systems.
Intraoperative imaging systems are used to visualize procedures that involve implants and devices, such as stents, balloons, pacemakers, and artificial joints. Our Image-Guided Therapies business includes two business lines: interventional systems and surgery systems.
Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act of 2010, and similar anti-corruption and anti-bribery laws in other jurisdictions generally prohibit companies from making corrupt payments to or otherwise engaging in bribery of governmental officials.
Foreign Corrupt Practices Act, the U.K. Bribery Act of 2010, and similar anti-corruption and anti-bribery laws in other jurisdictions generally prohibit companies from making corrupt payments to or otherwise engaging in bribery of government officials.
Furthermore, these laws and regulations are continuously evolving, and further clarification in the form of implementing rules, guidelines and related guidance from the data protection authorities is necessary to paint a full picture of the compliance obligations imposed on businesses within their scope.
Furthermore, these laws and regulations are continuously evolving, and further clarification in the form of implementing rules, guidelines, and related guidance from the data protection authorities is necessary to paint a full picture of the compliance obligations imposed on businesses within their scope. REGULATION ON ADVERTISING, MARKETING, AND PROMOTION.
Stacherski served for over ten years in various leadership roles with Honeywell, including: Vice President of Integrated Supply Chain from October 2019 to June 2021; Vice President of Enterprise Digital Transformation from November 2018 to October 2019; Vice President of Portfolio Transformation from October 2017 to October 2018; Vice President and General Manager of Honeywell UOP from April 2016 to October 2017; Vice President of Procurement, Logistics, and Trade Compliance from May 2013 to April 2016; and Global Director of Integrated Supply Chain from June 2011 to May 2013.
Stacherski served for over ten years in various leadership roles with Honeywell, a diversified technology and manufacturing company, including Vice President of Integrated Supply Chain from October 2019 to June 2021; Vice President of Enterprise Digital Transformation from November 2018 to October 2019; Vice President of Portfolio Transformation from October 2017 to October 2018; Vice President and General Manager of Honeywell UOP from April 2016 to October 2017; Vice President of Procurement, Logistics, and Trade Compliance from May 2013 to April 2016; and Global Director of Integrated Supply Chain from June 2011 to May 2013.
Securities and Exchange Commission (the "SEC"). Reports filed with the SEC may be viewed at sec.gov. The information on our website is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the SEC. 17
Reports filed with the SEC may be viewed at sec.gov. The information on our website is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the SEC.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are available, without charge, on our website, as soon as reasonably practicable after they are filed electronically with the U.S.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available, without charge, on our website, as soon as reasonably practicable after they are filed electronically with the SEC.
GE HealthCare is a global leader in medical imaging with a comprehensive portfolio of scanning devices, clinical applications, service capabilities, and digital solutions. Our Imaging portfolio spans the care continuum and provides critical tools for physicians from initial screening and diagnosis, through therapeutic decision-making, to monitoring of patient progression.
Our business is comprised of four segments: IMAGING. GE HealthCare is a global leader in medical imaging with a comprehensive portfolio of scanning devices, clinical applications, service capabilities, and digital solutions. Our Imaging portfolio spans the care continuum and provides critical tools for physicians, from initial screening and diagnosis, through therapeutic decision-making and monitoring of patient progression.
Precision care is expected to drive continued demand and opportunity for novel technologies and future innovation, as healthcare providers and researchers seek new solutions and tools for managing existing and new care pathways.
Precision care is expected to drive continued demand and the need for novel technologies and future innovation, as healthcare providers and researchers seek new solutions and tools for managing existing and new care pathways.
Department of Housing and Urban Development, and Deputy Chief of Staff and Acting General Counsel for former Florida Governor Jeb Bush. He was previously a litigation partner at Squire Patton Boggs (f/k/a Steel Hector & Davis). Mr.
Department of Housing and Urban Development, and Deputy Chief of Staff and Acting General Counsel for former Florida Governor Jeb Bush. He was previously a litigation partner at Steel Hector & Davis LLP (now Squire Patton Boggs LLP). Mr.
Our Patient Monitoring business includes proprietary parameters and complementary consumables, as well as OEM parameters that are integrated into our monitoring fleet, of which a significant portion represents recurring revenue streams. • Anesthesia and Respiratory Care products offer life support solutions via ventilation technology.
Our Patient Monitoring business includes proprietary parameters and complementary consumables as well as original equipment manufacturer (“OEM”) parameters that are integrated into our monitoring fleet, of which a significant portion represents recurring revenue streams. • Anesthesia and Respiratory Care products offer life support solutions via ventilation technology.
Our interventional systems are commercialized under the IGS brand and are comprised of a broad portfolio of products that provide real-time advanced X-ray imaging and integrate with other imaging and diagnostic technologies that support clinicians in planning, guiding, and assessing minimally-invasive procedures.
Our interventional systems are comprised of a broad portfolio of products that provide real-time advanced X-ray imaging and integrate with other imaging and diagnostic technologies that support clinicians in planning, guiding, and assessing minimally-invasive procedures.
We commit extensive resources to maintain compliance with these regulations. The United States, European Union ("EU"), and China are our most significant regions based on revenue and the regulatory landscape within these regions. Sales of medical devices and pharmaceuticals outside of these regions are subject to requirements that vary from country to country.
We commit extensive resources to maintain compliance with these regulations. The U.S., European Union (“EU”), and China are our most significant regions based on revenue and the regulatory landscape within these regions. Sales of medical devices and pharmaceuticals outside of these regions are subject to requirements that vary from country to country.
We will disclose any waiver we grant to an executive officer or director under our code of ethics, or certain amendments to the code of ethics, on our website. In addition, we have adopted Governance Principles and charters for each of the three standing committees of our Board of Directors (the "Board").
Monroe Street, Chicago, IL 60661. We will disclose any waiver we grant to an executive officer or director under our code of ethics, or certain amendments to the code of ethics, on our website. In addition, we have adopted Governance Principles and charters for each of the three standing committees of our Board of Directors (the “Board”).
Our equipment sales representatives partner closely with their service sales counterparts to position both equipment contracts and long-term maintenance agreements along with system upgrades and SaaS agreements. We complement our direct and indirect sales channels with end-to-end virtual sales teams.
Our equipment sales representatives partner closely with their service sales counterparts to position both equipment contracts and long-term maintenance agreements along with system upgrades and software as a service (“SaaS”) agreements. We complement our direct and indirect sales channels with end-to-end virtual sales teams.
Our products are essential in the delivery of care for a broad spectrum of clinical specialties, including oncology, cardiology, neurology, nuclear medicine, orthopedics, women’s health, pediatrics, and surgery. Our Imaging portfolio is comprised of six product lines and associated service capabilities: Molecular Imaging ("MI"), Computed Tomography ("CT"), Magnetic Resonance ("MR"), Image-Guided Therapies, Women’s Health ("WH"), and X-ray.
Our products support providers in the delivery of care for a broad spectrum of clinical specialties, including oncology, cardiology, neurology, nuclear medicine, orthopedics, women’s health, pediatrics, and surgery. Our Imaging portfolio is comprised of six product lines and associated service capabilities: Molecular Imaging, Computed Tomography, Magnetic Resonance, Image-Guided Therapies, Women’s Health, and X-ray.
Anti-Kickback Statute ("AKS"), the False Claims Act ("FCA"), or other healthcare fraud and abuse laws. In addition, as a manufacturer of U.S.
Anti-Kickback Statute (“AKS”), the False Claims Act (“FCA”), or other healthcare fraud and abuse laws. In addition, as a manufacturer of U.S.
Kass-Hout, MD, MS has served as GE HealthCare's Chief Technology Officer since January 2023 where he leads the Company’s Science and Technology organization, as well as efforts to drive growth through clinical research and the advancement of digital and machine learning capabilities. Previously, Dr.
Taha Kass-Hout . Dr. Kass-Hout, MD, MS has served as GE HealthCare’s Chief Science and Technology Officer since January 2023, where he leads the Company’s Science and Technology organization, as well as efforts to drive growth through clinical research and the advancement of digital and machine learning capabilities. Prior to his role with GE HealthCare, Dr.
Our Ultrasound portfolio and associated service capabilities serve customers across five clinical areas: Radiology and Primary Care, Women’s Health, Cardiovascular, Point of Care and Handheld, and Surgical Visualization & Guidance: • Radiology and Primary Care ultrasound systems produce images to support precise diagnoses and treatment across the whole body, including liver, thyroid, renal, breast, vascular, and transcranial.
Our Ultrasound equipment portfolio, digital and AI solutions, and associated service capabilities serve customers across five clinical areas: Radiology and Primary Care, Women’s Health, Cardiovascular, Point of Care and Handheld, and Surgical Visualization and Guidance: • Radiology and Primary Care Ultrasound is comprised of systems that produce images to support precise diagnoses and treatment across the whole body, including liver, thyroid, renal, breast, vascular, and transcranial applications.
Our ECG ecosystem obtains, interprets, and stores ECGs captured from devices in both hospital and home settings and provides a full care continuum for cardiology. • Our Maternal Infant Care products are used in the labor and delivery department to monitor important maternal and fetal parameters, and in neonatal intensive care to assist in critical care for newborns.
Our ECG ecosystem obtains, interprets, and stores ECGs captured from devices in both hospital and home settings, supporting patients and clinicians along the continuum of care for cardiology. • Our Maternal Infant Care products are used in the labor and delivery department to monitor important maternal and fetal parameters, and in neonatal intensive care to assist in critical care for newborns.
Our MI team works closely with the Pharmaceutical Diagnostics ("PDx") segment and their innovations and collaborations with pharmaceutical companies. • CT scans render 3D anatomical images of structures such as bone, soft tissue, and air cavities using an X-ray tube that rotates around a patient.
Our Molecular Imaging team works closely with the PDx segment and their innovations and collaborations with pharmaceutical companies. • Computed tomography (“CT”) scans render 3D anatomical images of structures, such as bone, soft tissue, and air cavities using an X-ray tube that rotates around a patient.
Previously, Mr. Arduini was the President and Chief Executive Officer of Integra LifeSciences from 2012 to 2021. During his tenure as CEO, the Integra portfolio evolved significantly to a faster growing and more profitable company through multiple acquisitions and a sustainable research and development pipeline. Prior to Integra, Mr.
Arduini was the President and Chief Executive Officer of Integra LifeSciences (“Integra”), a global medical technologies and solutions company, from January 2012 to December 2021. During his tenure as CEO, the Integra portfolio evolved significantly to a faster growing and more profitable company through multiple acquisitions and a sustainable research and development pipeline. Prior to Integra, Mr.
ITEM 1. BUSINESS GE HealthCare Technologies Inc. (“GE HealthCare,” the "Company," "our," or "we") is a leading global medical technology, pharmaceutical diagnostics, and digital solutions innovator. We have approximately 50,000 employees dedicated to our mission to create a world where healthcare has no limits.
ITEM 1. BUSINESS GE HealthCare Technologies Inc. (“GE HealthCare,” the “Company,” “our,” or “we”) is a leading global medical technology, pharmaceutical diagnostics, and digital solutions innovator. We have approximately 51,000 colleagues dedicated to our mission to create a world where healthcare has no limits.
Our service offerings are flexible and can range from preventative maintenance to comprehensive, onsite biomedical service engineering contract. Both our consumables and services offer our customers ongoing clinical impact, protect their capital investment, and provide us consistent recurring revenue streams.
Our service offerings are flexible and can range from preventative maintenance to comprehensive, onsite biomedical service engineering contracts. Both our consumables and services provide our customers with ongoing clinical impact and protect their capital investment while providing us with recurring revenue streams.
Our comprehensive CT portfolio includes multi-purpose and specialty scanners. • MR is a sophisticated, non-invasive imaging technology that produces detailed anatomical images of almost every internal structure in the human body, such as the brain, spinal cord, heart, breast, kidneys, muscles, ligaments, and tendons.
Our comprehensive Computed Tomography portfolio includes multi-purpose and specialty scanners. 4 • Magnetic resonance (“MR”) is a non-invasive imaging technology that produces detailed anatomical images of almost every internal structure in the human body, such as the brain, spinal cord, heart, breast, kidneys, muscles, ligaments, and tendons.
We manage our MI and CT product lines together (“MI/CT”) and our Women’s Health and X-ray product lines together (“WH/XR”). • MI enables the visualization, characterization, and quantification of functional processes taking place at the cellular and subcellular levels within patients.
We manage our Molecular Imaging and Computed Tomography product lines together (“MI/CT”) and our Women’s Health and X-ray product lines together (“WH/XR”). • Molecular imaging (“MI”) enables the visualization, characterization, and quantification of functional processes taking place at the cellular and subcellular levels within patients.
Jimenez serves on the boards of Huntington Ingalls Industries (NYSE: HII), where he serves on the compensation committee and the governance and policy committee, Equal Justice Works and the Yale Law School Fund, and the advisory boards of the Columbia University Mailman School of Public Health, the Yale Law School Center for the Study of Corporate Law, the University of Miami Herbert Business School, and the National Security Institute of the Antonin Scalia Law School at George Mason University.
Jimenez serves on the boards of Huntington Ingalls Industries (NYSE: HII) (where he serves on the compensation committee and the governance and policy committee), Equal Justice Works, and the Yale Law School Fund, and on the advisory boards of the Columbia University Mailman School of Public Health, the Yale Law School Center for the Study of Corporate Law, the Yale Law School Tsai Leadership Program, and the National Security Institute of the Antonin Scalia Law School at George Mason University, as well as serving on the University of Miami President’s Council.
We have established and maintain effective health and safety standard protocols across our businesses that are aligned with regulatory requirements, industry practices, and Company values.
We have established and maintain health and safety standard protocols across our businesses that are designed to align with regulatory requirements, industry practices, and company values.
O’Neill was appointed as our Chief Executive Officer, Pharmaceutical Diagnostics in connection with the Spin-Off, and from 2017 until the Spin-Off, had served as Chief Executive Officer, Pharmaceutical Diagnostics of GE’s Healthcare business. Mr. O’Neill has also served as President and CEO, GE Ireland and U.K. since 2018.
O’Neill has served as our Chief Executive Officer, Pharmaceutical Diagnostics since the Spin-Off. He served as as Chief Executive Officer, Pharmaceutical Diagnostics of GE’s healthcare business from July 2017 until the Spin-Off. Mr. O’Neill has also served as President and CEO, GE Ireland and U.K., since 2018.
Makela previously served as President and CEO, Global Services of GE’s Healthcare business from December 2017 to early 2020, where he oversaw the global development and execution of service solutions and operations. From 2010 to 2013, he served as Chief Operations Officer for the European region. From 2013 to 2017, Mr.
Makela previously served as President and CEO, Global Services of GE’s healthcare business from December 2017 to February 2020, where he oversaw the global development and execution of service solutions and operations. From 2013 to 2017, Mr.
PDx's diagnostic agents are complementary to the imaging and ultrasound devices we offer, including CT, angiography and X-ray, MR, single-photon emission computed tomography (“SPECT”), PET, and ultrasound, and are also compatible with systems from other equipment vendors.
PDx’s diagnostic agents are complementary to the imaging and ultrasound devices we offer, including CT, angiography and X-ray, MR, single-photon emission computed tomography (“SPECT”) and PET, and are also compatible with systems from other equipment vendors. PDx operates within a strictly regulated industry with unique operational needs.
Our efforts extend to promoting the mental and emotional health and wellness of our workforce. 10 • Transform our culture : Our senior management team is leading our company through a transformational time having recently completed the Spin-Off from GE and executing on our next phase of growth.
Our efforts extend to promoting the mental and emotional health and wellness of our workforce. • Transform our culture : Our senior management team is leading our company through a transformational period having completed the Spin-Off in January 2023 and now executing on our next phase of growth.
Prior to his role with GE HealthCare, he served as the Chief Operations Officer of Array Technologies, where he led the company’s global integrated supply chain strategy including procurement, manufacturing, operations, logistics, planning, quality and business systems, from July 2021 to October 2022. Before joining Array Technologies, Mr.
Previously, from July 2021 to October 2022 he served as the Chief Operations Officer of Array Technologies, a solar tracking company, where he led the company’s global integrated supply chain strategy including procurement, manufacturing, operations, logistics, planning, quality and business systems. Before joining Array Technologies, Mr.
Products in our Anesthesia portfolio are used by anesthesiologists to ventilate and deliver general anesthetic drugs to patients during surgeries. Our products are installed in many operating rooms across the world.
Products in our Anesthesia portfolio are used by anesthesiologists and nurse anesthetists to ventilate and deliver general anesthetic drugs to patients during surgeries. Our products are installed in many operating rooms, non-operating room anesthesia environments and ambulatory surgical centers across the world.
We must also comply with the Mammography Quality Standards Act for our mammography products. Further, clinical studies of medical devices and pharmaceuticals are subject to regulation and inspection.
We must also comply with the Mammography Quality Standards Act for our mammography products. Further, clinical studies of medical devices and pharmaceuticals are subject to regulation and inspection. In addition, we are subject to applicable laws and regulations of state and local authorities.
This was followed by a series of CFO roles in GE’s Healthcare business, including in the Life Sciences, Supply Chain, Western Europe and the PDx business. Prior to joining GE, Mr. O’Neill was Financial Controller for Eurostar, the European high-speed train operator.
This was followed by a series of CFO roles in GE’s healthcare business, including in the Life Sciences, Supply Chain, Western Europe, and the PDx business. Prior to joining GE, Mr. O’Neill was Financial Controller for Eurostar, the European high-speed train operator. Roland Rott . Mr. Rott has served as our Chief Executive Officer, Ultrasound since the Spin-Off.
Our digital solutions simplify visualization to guide clinical and operational decisions, enabling efficient care team collaboration virtually. These solutions are interoperable and vendor-agnostic to integrate with customer environments in a multi-vendor setting and provide a recurring revenue stream.
These solutions aggregate and integrate clinical data from various devices across care settings in real time and simplify visualization to guide clinical and operational decisions, enabling efficient care team collaboration, virtually. These solutions are interoperable and vendor-agnostic to integrate with customer environments in a multi-vendor setting and provide a recurring revenue stream.
Westrick was appointed as our Chief Executive Officer, Patient Care Solutions in connection with the Spin-Off and, prior to the Spin-Off, had served as Chief Executive Officer, Patient Care Solutions of GE’s Healthcare business since 2020. Previously he led the Global Quality, Medical, Regulatory Affairs and Global Research organization for GE’s Healthcare business from January 2016 to September 2020. Mr.
He served as Chief Executive Officer, Patient Care Solutions of GE’s healthcare business from September 2020 until the Spin-Off. Previously, he led the Global Quality, Medical, Regulatory Affairs and Global Research organization for GE’s healthcare business from January 2016 to September 2020. Mr. Westrick joined GE’s healthcare business in 2003 as Global Controller and Chief Accounting Officer.
Our IP team collaborates with our R&D and product teams to develop product-line-focused IP strategies and secure IP rights as appropriate. We generally file patent applications in the United States and foreign countries that have strong technology patent protections. We also license from third parties a variety of IP that complements our internal R&D efforts and our product offerings.
We generally file patent applications in the United States and foreign countries that have strong technology patent protections. We also license from third parties a variety of IP that complements our internal R&D efforts and our product offerings.
Stacherski has served as the Chief Global Supply Chain and Service Officer of GE HealthCare since October 2022.
Stacherski has served as the Chief Global Supply Chain and Service Officer of GE HealthCare since the Spin-Off. He served as the Chief Global Supply Chain and Service Officer of GE’s healthcare business from October 2022 until the Spin-Off.
In addition, we are subject to applicable laws and regulations of state and local authorities. 12 Devices The FDCA classifies medical devices into three classes based on risk, including Class I (lowest risk), Class II (moderate risk), and Class III (highest risk), with more stringent regulatory requirements applicable to higher-risk devices.
Devices The FDCA classifies medical devices into three classes based on risk, including Class I (lowest risk), Class II (moderate risk), and Class III (highest risk), with more stringent regulatory requirements applicable to higher-risk devices.
Makela was appointed as our Chief Executive Officer, Imaging in connection with the Spin-Off and from 2020 until the Spin-Off, he had served as Chief Executive Officer, Imaging of GE’s Healthcare business. Mr.
Arduini was appointed as our President and Chief Executive Officer in connection with our Spin-Off from GE. He served as the President and Chief Executive Officer of GE’s healthcare business from January 2022 until the Spin-Off. Previously, Mr.
These laws apply to many of our customer interactions, as healthcare professionals in other countries are often considered government officials, and in some cases lay out requirements of how to operationalize compliance with the legal requirements. Failure to comply with these laws may expose us to criminal and civil enforcement actions, monetary fines and penalties, and reputational harm.
These laws apply to many of our customer interactions, as healthcare professionals in other countries are often considered government officials, and in some cases lay out requirements of how to operationalize compliance with the legal requirements.
Industry trade associations (such as AdvaMed and MedTech) increasingly provide guidance on, and compliance with, applicable laws and regulations. 14 U.S. federal healthcare laws apply when we or our customers submit claims for items or services that are reimbursed under Medicare, Medicaid, or other federally funded healthcare programs, including laws related to kickbacks, false claims, self-referrals, and healthcare fraud and abuse.
U.S. federal healthcare laws apply when we or our customers submit claims for items or services that are reimbursed under Medicare, Medicaid, or other federally funded healthcare programs, including laws related to kickbacks, false claims, self-referrals, and healthcare fraud and abuse.
In addition to the solutions above, the PCS portfolio includes digital solutions that provide timely and accurate clinical decision support in acute and other care settings, simplifying clinical and operational workflows to drive efficiencies, and improving delivery of precision medicine and patient outcomes. These solutions aggregate and integrate clinical data from various devices across care settings in real time.
The Patient Care Solutions portfolio also includes digital solutions that provide timely and accurate clinical decision support in acute and other care settings, simplifying clinical and operational workflows to drive efficiencies and improving delivery of precision medicine and patient outcomes.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome of the more significant challenges and risks we face include the following: • We operate in highly competitive markets, competition may increase in the future, and our industry may be disrupted, requiring us to lower prices or resulting in a loss of market share. • Our business dealings involve third-party partners in various markets and the actions or inactions of these third parties could adversely affect our business. • Our inability to complete strategic transactions or to successfully integrate acquisitions could adversely affect our business. • Our inability to manage our supply chain or obtain supplies of components or raw materials has restricted and may continue to restrict the manufacturing of products, cause delays in delivery, or significantly increase our costs. • Any interruption in the operations of our manufacturing facilities may impair our ability to deliver products or provide services. • We have significant net liabilities with respect to our postretirement benefit plans, including increases in pension, healthcare, and life insurance benefits obligations, and the actual costs and related cash flows of these obligations could exceed current estimates. • If we are unable to attract or retain key personnel and qualified employees, or maintain relations with our employees, unions, and other employee representatives, it could adversely affect our business. • We are exposed to risks relating to the global COVID-19 pandemic. • We may be unable to obtain, maintain, protect, or effectively enforce our intellectual property rights. • Increased cybersecurity requirements, vulnerabilities, threats, and more sophisticated and targeted computer crimes pose a risk to our systems, networks, products, solutions, services, and data, as well as our reputation, which could adversely affect our business. • We are subject to stringent privacy laws and information security policies and regulations. • Our increasing focus on and investment in cloud, edge, artificial intelligence, and software offerings presents risks to our business. • Failure to comply with the U.S.
Biggest changeSome of the more significant challenges and risks we face include the following: • We operate in highly competitive markets, competition may increase in the future, and our industry may be disrupted, requiring us to lower prices or resulting in a loss of market share. • Our business dealings involve third-party partners in various markets, and the actions or inactions of these third parties could adversely affect our business. • Our inability to successfully complete strategic transactions could adversely affect our business. • Our inability to manage our supply chain or obtain supplies of components or raw materials has restricted, and could continue to restrict, the manufacturing of products, cause delays in delivery, or significantly increase our costs. • Any interruption in the operations of our manufacturing facilities, or our suppliers’ or customers’ facilities, may impair our ability to deliver products or provide services. • We rely on third parties to help perform logistics, transportation, shipping, warehousing, and services functions on our behalf, and disruptions at these third-party providers could adversely affect our business. • We have significant postretirement benefit liabilities, including pension, healthcare, and life insurance benefits obligations, and the actual costs and related cash flows of these obligations are uncertain and could exceed current estimates. • If we are unable to attract or retain key personnel and qualified employees or maintain relations with our employees, unions, and other employee representatives it could adversely affect our business. • Public health crises, epidemics, and pandemics, such as the COVID-19 pandemic, have had and in the future may have a material adverse impact on our business, as well as on the operations and financial performance of some of the customers and suppliers in industries that we serve. • Our research and development efforts may not succeed in developing commercially successful products and technologies, which could adversely affect our business. • We may be unable to obtain, maintain, protect, or effectively enforce our IP rights. 15 • Increased cybersecurity requirements, vulnerabilities, threats, and more sophisticated and targeted computer crimes pose a risk to our systems, networks, products, solutions, services, and data, as well as our reputation, which could adversely affect our business. • We are subject to stringent privacy laws and information security policies and regulations. • Our increasing focus on and investment in cloud, edge, AI, and software offerings present risks to our business. • Failure to comply with the FCPA and similar anti-corruption and anti-bribery laws globally has resulted and could continue to result in civil or criminal sanctions and adversely affect our business. • We are subject to anti-kickback and false claims laws, and failure to comply with these laws could adversely affect our business. • We are subject to antitrust and competition laws that can result in sanctions and conditions on the way we conduct our business. • If we do not successfully manage our collaboration arrangements, licensing arrangements, joint ventures, or strategic alliances with third parties, we may not realize the expected benefits from such arrangements, which could adversely affect our business. • Efforts by public and private payers to control increases in healthcare costs may lead to lower reimbursements or increased utilization controls related to the use of our products by healthcare providers, which may affect the price of and demand for our products, services, or solutions. • We are exposed to risks associated with product liability claims that have been and may be brought against us or as a result of the actions or inactions of our customers or third parties that are outside of our control. • We may become involved in litigation, arbitration, and governmental proceedings, including those stemming from third-party conduct beyond our control. • Global geopolitical and economic instability, as well as continuing uncertainties and challenging conditions in regional economies, could adversely affect our business. • Our business operations are subject to extensive laws and regulations, and any changes thereto or violations thereof could have a material adverse effect on our business. • Increasing attention to ESG matters, including environmental, health, and safety (“EH&S”) matters, may impose additional costs on our business and expose us to new risks. • Our level of indebtedness, as well as our general ability to comply with covenants under our debt instruments, could adversely affect our business, results of operations, cash flows, and financial condition. • Substantial sales of our common stock, including the disposition by GE of our shares of common stock that it retained after our Spin-Off, could cause our stock price to decline or be volatile.
Promising new products, services, and solutions may fail to reach the market or may only have limited commercial success because of safety or efficacy concerns, failure to achieve positive outcomes, inability to obtain necessary regulatory authorizations, or third-party reimbursement decisions.
Promising new products, services, and solutions may fail to reach the market or may have only limited commercial success because of safety or efficacy concerns, failure to achieve positive outcomes, inability to obtain necessary regulatory authorizations, or third-party reimbursement decisions.
The U.S. federal government, various states, and certain foreign governments have also enacted other laws to regulate the sales and marketing practices of companies selling medical devices, pharmaceutical products, and related services.
The U.S. federal government, various U.S. states, and certain foreign governments have also enacted other laws to regulate the sales and marketing practices of companies selling medical devices, pharmaceutical products, and related services.
It is possible that governmental and enforcement authorities will conclude that our business practices do not comply with current or future laws and regulations. If any such actions are instituted against us, defense can be costly, time-consuming and may require significant financial and personnel resources.
It is possible that governmental and enforcement authorities will conclude that our business practices do not comply with current or future laws and regulations. If any such actions are instituted against us, defense can be costly and time-consuming, and may require significant financial and personnel resources.
In addition, independent service organizations could fail to adequately perform their obligations or to properly service our products, which could subject us to further liability. We may also be subject to claims for property damage, economic loss, or bodily injury, or death related to or resulting from the installation, servicing, and support of our products.
In addition, independent service organizations could fail to adequately perform their obligations or to properly service our products, which could subject us to further liability. We may also be subject to claims for property damage, economic loss, bodily injury, or death related to or resulting from the installation, servicing, and support of our products.
GENERAL RISKS. Global geopolitical and economic instability as well as continuing uncertainties and challenging conditions in regional economies could adversely affect our business. We generate the majority of our revenue outside the United States and our business is sensitive to global economic conditions.
GENERAL RISKS. Global geopolitical and economic instability, as well as continuing uncertainties and challenging conditions in regional economies, could adversely affect our business. We generate the majority of our revenue outside of the United States and our business is sensitive to global economic conditions.
To obtain PMA approval, we must provide FDA with valid scientific evidence demonstrating that there is a reasonable assurance of the safety and effectiveness of the device for its intended uses.
To obtain PMA approval, we must provide the FDA with valid scientific evidence demonstrating that there is a reasonable assurance of the safety and effectiveness of the device for its intended uses.
In the case of 510(k) medical devices, FDA requires a device manufacturer to document its determination of whether or not a modification requires a new clearance. FDA can review a manufacturer’s decision not to file and may disagree and require a 510(k) submission or take other regulatory actions or enforcement.
In the case of 510(k) medical devices, the FDA requires a device manufacturer to document its determination of whether or not a modification requires a new clearance. The FDA can review a manufacturer’s decision not to file and may disagree and require a 510(k) submission or take other regulatory actions or enforcement.
Modifications to a PMA-approved device may require either submission of a PMA supplement for review and approval by FDA prior to implementing the modification or a notification in an annual report.
Modifications to a PMA-approved device may require either submission of a PMA supplement for review and approval by the FDA prior to implementing the modification or a notification in an annual report.
FDA’s cGMPs (referred to in the medical device context as the medical device Quality System Regulation (“QSR”)) set forth minimum requirements for the methods, facilities, and controls used in the design, testing, production, control, quality assurance, inspection, complaint handling, recordkeeping, management review, adverse event reporting, labeling, packaging, sterilization, storage, and shipping of our medical devices and pharmaceutical products.
The FDA’s cGMPs (referred to in the medical device context as the medical device Quality System Regulation (“QSR”)) set forth minimum requirements for the methods, facilities, and controls used in the design, testing, production, control, quality assurance, inspection, complaint handling, recordkeeping, management review, adverse event reporting, labeling, packaging, sterilization, storage, and shipping of our medical devices and pharmaceutical products.
In general, outside the United States, our products are regulated as medical devices or pharmaceuticals by foreign governmental agencies similar to FDA, but regulatory requirements affecting our operations and sales vary from country to country. To market our products internationally in compliance with applicable medical device and pharmaceutical regulations, we must obtain approvals for products and product modifications.
In general, outside the United States, our products are regulated as medical devices or pharmaceuticals by foreign governmental agencies similar to the FDA, but regulatory requirements affecting our operations and sales vary from country to country. To market our products internationally in compliance with applicable medical device and pharmaceutical regulations, we must obtain approvals for products and product modifications.
If any of these logistics providers fails to honor a contractual relationship with us, suffers a business interruption, or experiences delays, disruptions, or quality control problems in its operations, including due to pandemics, regional conflicts, sanctions, geopolitical events, natural disasters, or extreme weather events, or if we have to change and qualify alternative providers for these services, shipments to our customers may be delayed.
If any of these providers fails to honor a contractual relationship with us, suffers a business interruption, or experiences delays, disruptions, or quality control problems in its operations, including due to pandemics, regional conflicts, sanctions, geopolitical events, natural disasters, or extreme weather events, or if we have to change and qualify alternative providers for these services, shipments to our customers may be delayed.
Any governmental law or regulation, whether now existing or imposed in the future, or enforcement action taken could have a material adverse effect on our business results, cash flows, financial condition, or prospects. The U.S. FDA and other regulatory agencies actively enforce the laws and regulations governing the development, approval, or clearance and commercialization of medical devices and pharmaceutical products.
Any governmental law or regulation, whether existing or imposed in the future, or enforcement action taken could have a material adverse effect on our business results, cash flows, financial condition, or prospects. The U.S. FDA and other regulatory agencies actively enforce the laws and regulations governing the development, approval, and clearance and commercialization of medical devices and pharmaceutical products.
This could cause us to be unable to fulfill contractual obligations to non-U.S. federal government customers and harm long-term business relationships with our customers, suppliers, and channel partners, which could adversely affect our business. We are also subject to government audits, investigations, and oversight proceedings. Efforts to ensure our business arrangements comply with applicable laws involve substantial costs.
This could cause us to be unable to fulfill contractual obligations to non-U.S. federal government customers and harm long-term business relationships with our customers, suppliers, and channel partners, which could adversely affect our business. 28 We are also subject to government audits, investigations, and oversight proceedings. Efforts to ensure our business arrangements comply with applicable laws involve substantial costs.
Furthermore, regulatory and legislative changes, such as the adoption of right-to-repair laws in the United States, could further strengthen the ability of ISOs to obtain valuable service contracts and directly compete with us in the services area. Right-to-repair legislation may require us to provide ISOs with increased access to our service tools, parts, documents, software updates, and training.
Furthermore, regulatory and legislative changes, such as the adoption of right-to-repair laws in the United States and elsewhere, could further strengthen the ability of ISOs to obtain valuable service contracts and directly compete with us in the services area. Right-to-repair legislation may require us to provide ISOs with increased access to our service tools, parts, documents, software updates, and training.
Any of these risks or costs, and any future violations or liabilities under existing or future EH&S laws or regulations, could have a material adverse effect on our business results, cash flows, financial condition, or prospects. 33 Future material impairments in the value of our long-lived assets, including goodwill, could adversely affect our business.
Any of these risks or costs, and any future violations or liabilities under existing or future EH&S laws or regulations, could have a material adverse effect on our business results, cash flows, financial condition, or prospects. Future material impairments in the value of our long-lived assets, including goodwill, could adversely affect our business.
GAAP, because of its inherent limitations, internal control over financial reporting might not prevent or detect fraud or misstatements. This, in turn, could have an adverse impact on trading prices for shares of our common stock, and could adversely affect our ability to access the capital markets.
Because of its inherent limitations, internal control over financial reporting might not prevent or detect fraud or misstatements. This, in turn, could have an adverse impact on trading prices for shares of our common stock, and could adversely affect our ability to access the capital markets.
If consolidation trends continue, it could adversely affect our business results, cash flows, financial condition, or prospects. Additionally, the U.S. healthcare industry has undergone significant changes designed to increase access to medical care, improve safety and patient outcomes, contain costs, and increase efficiencies.
If consolidation trends continue, it could adversely affect our business results, cash flows, financial condition, or prospects. Additionally, the U.S. healthcare industry has undergone significant changes designed to help increase access to medical care, improve safety and patient outcomes, contain costs, and increase efficiencies.
ITEM 1A. RISK FACTORS SUMMARY OF RISK FACTORS. An investment in our company is subject to a number of risks. These risks relate to our business, the healthcare industry, data privacy, laws and regulations, financing and capital markets activities, our recent Spin-Off from GE, our common stock, and the securities market.
ITEM 1A. RISK FACTORS SUMMARY OF RISK FACTORS. An investment in our company is subject to a number of risks. These risks relate to our business, the healthcare industry, data privacy, laws and regulations, financing and capital markets activities, our Spin-Off from GE, our common stock, and the securities market.
In addition, the market for such insurance continues to evolve and, in the future, our data privacy and IT security insurance coverage may be prohibitively expensive or not available on acceptable terms or in sufficient amounts, or at all. We are subject to stringent privacy laws and information security policies and regulations.
In addition, the market for such insurance continues to evolve and, in the future, our data privacy and IT security insurance coverage may be prohibitively expensive or not available on acceptable terms or in sufficient amounts, or at all. 23 We are subject to stringent privacy laws and information security policies and regulations.
FDA can delay, limit or deny clearance or approval of a product, which could have a material adverse effect on our business results, cash flows, financial condition, or prospects. Once a medical device or pharmaceutical is cleared or approved, a manufacturer must notify FDA of certain changes to the product.
The FDA can delay, limit, or deny clearance or approval of a product, which could have a material adverse effect on our business results, cash flows, financial condition, or prospects. 36 Once a medical device or pharmaceutical is cleared or approved, a manufacturer must notify the FDA of certain changes to the product.
As a device manufacturer, we are required to report to the FDA within specific timelines when any of our devices may have caused or contributed to death or serious injury, or when any of our devices has malfunctioned and it would be likely to cause or contribute to a death or serious injury if the malfunction were to recur.
As a device manufacturer, we are required to report to the FDA within specific timelines when any of our devices may have caused or contributed to death or serious injury, or when any of our devices has malfunctioned and would be likely to cause or contribute to a death or serious injury if the malfunction were to recur.
In the event of adverse capital and credit market conditions, we may be unable to obtain capital market financing on favorable terms, or at all, and changes in credit ratings issued by nationally recognized credit rating agencies could adversely affect our ability to obtain capital market financing and the cost of such financing.
In the event of adverse capital market conditions, we may be unable to obtain capital market financing on favorable terms, or at all. Furthermore, changes in our credit ratings issued by nationally recognized credit rating agencies could adversely affect our ability to obtain financing and the cost of such financing.
Success with these solutions depends on execution in many areas, including: • establishing and maintaining the utility, compatibility, and performance of our cloud, edge, and software solutions (including the reliability of our third-party software vendors, network, and cloud providers) on a growing array of medical devices, software, and equipment; • continuing to enhance the attractiveness of our solutions to our customers in the face of increasing competition from a significant number of existing and new entrants in the market, while ensuring these solutions meet their reliability and security expectations; and • ensuring these solutions meet regulatory requirements in a fast-moving space disrupted by changing regulations around data and the need for innovation, including obtaining marketing authorizations when required.
Success with these solutions depends on execution in many areas, including: • establishing and maintaining the utility, compatibility, and performance of our cloud, edge, AI, and software solutions (including the reliability of our third-party software vendors, network, and cloud providers) on a growing array of medical devices, software, and equipment; 24 • continuing to enhance the attractiveness of our solutions to our customers in the face of increasing competition from a significant number of existing and new entrants in the market, while ensuring these solutions meet their reliability and security expectations; and • ensuring these solutions meet regulatory requirements in a fast-moving space disrupted by changing regulations around data and the need for innovation, including obtaining marketing authorizations when required.
Any significant cuts in reimbursement rates or changes in reimbursement methodology or administration for procedures that use our offerings, or concerns or proposals regarding further cuts or changes in methodology or administration, could further increase uncertainty, adversely affect our customers’ decisions, reduce demand for our offerings, cause customers to cancel orders, and could have a material adverse effect on our business results, cash flows, financial condition, or prospects. 30 We are exposed to risks associated with product liability claims that have been and may be brought against us or as a result of the actions or inactions of our customers or third parties that are outside of our control.
Any significant cuts in reimbursement rates or changes in reimbursement methodology or administration for procedures that use our offerings, or concerns or proposals regarding further cuts or changes in methodology or administration, could further increase uncertainty, adversely affect our customers’ decisions, reduce demand for our offerings, cause customers to cancel orders, and have a material adverse effect on our business results, cash flows, financial condition, or prospects. 29 We are exposed to risks associated with product liability claims that have been and may be brought against us or as a result of the actions or inactions of our customers or third parties that are outside of our control.
Any of these risks could have a material adverse effect on our business results, cash flows, financial condition, or prospects. 32 Increasing attention to ESG matters, including EH&S matters, may impose additional costs on our business and expose us to new risks.
Any of these risks could have a material adverse effect on our business results, cash flows, financial condition, or prospects. Increasing attention to ESG matters, including EH&S matters, may impose additional costs on our business and expose us to new risks.
Any of these risks could have a material adverse effect on our business results, cash flows, financial condition, or prospects. Consolidation in the U.S. healthcare industry and other changes to the U.S. healthcare environment may adversely affect our business.
Any of these risks could have a material adverse effect on our business results, cash flows, financial condition, or prospects. 39 Consolidation in the U.S. healthcare industry and other changes to the U.S. healthcare environment may adversely affect our business.
For additional information about our past financial performance and the basis of presentation of our combined financial statements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical combined financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K.
For additional information about our past financial performance and the basis of presentation of our consolidated and combined financial statements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated and combined financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K.
Investor advocacy groups, certain institutional investors, lenders, investment funds, and other influential investors are increasingly focused on companies’ ESG commitments, performance, and disclosures, and in recent years have placed increasing importance on social costs and related implications of their investments.
Investor advocacy groups, certain institutional investors, lenders, investment funds, and other influential investors are focused on companies’ ESG commitments, performance, and disclosures, and in recent years have placed increasing importance on social costs and related implications of their investments.
Any significant event affecting one of our production or operating facilities may result in a disruption to our ability to supply customers, and standby capacity necessary for the reliable operation of the facility may not be sufficiently available.
Any significant event affecting one of our or our suppliers’ production or operating facilities may result in a disruption to our ability to supply customers, and standby capacity necessary for the reliable operation of the facility may not be sufficiently available.
Our business may also be affected by new laws and regulations, in particular laws and regulations that may govern innovative offerings and business activities, including digital offerings, such as cloud and edge computing, software, mobile medical applications, and AI. 35 The U.S.
Our business may also be affected by new laws and regulations, in particular laws and regulations that may govern innovative offerings and business activities, including digital offerings, such as cloud and edge computing, software, mobile medical applications, and AI. The U.S.
Any accident, mistreatment, or related injury or death could cause us to incur legal costs, subject us to litigation, recall, or regulatory enforcement actions, or generate negative publicity and cause damage to our reputation, whether or not we or our products were at fault and could have a material adverse effect on our business results, cash flows, financial condition, or prospects. 31 We may become involved in litigation, arbitration, and governmental proceedings, including those stemming from third-party conduct beyond our control.
Any accident, mistreatment, or related injury or death could cause us to incur legal costs, subject us to litigation, recall, or regulatory enforcement actions, or generate negative publicity and cause damage to our reputation, whether or not we or our products were at fault, and could have a material adverse effect on our business results, cash flows, financial condition, or prospects. 30 We may become involved in litigation, arbitration, and governmental proceedings, including those stemming from third-party conduct beyond our control.
In addition, privacy laws and regulations in other regions of the world, such as Asia and Latin America, are becoming stricter and may potentially impose additional requirements on our business (e.g., Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoias)), and certain jurisdictions have implemented data localization laws which can be costly and operationally difficult to satisfy.
In addition, privacy laws and regulations in other regions of the world, such as Asia and Latin America, are becoming stricter and may potentially impose additional requirements on our business (e.g., Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoias)), and certain jurisdictions have implemented data localization laws that can be costly and operationally difficult to satisfy.
We do not own the GE trademark or logo, and we entered into a Trademark License Agreement with GE in connection with the Spin-Off, pursuant to which GE will grant us a license to use specified trademarks, which will include the GE Monogram and the “GE HealthCare” word mark for use in connection with certain of our products, services, and solutions, as well as the right to use the GE brand in connection with certain legal entity names within our corporate structure.
We do not own the GE trademark or logo, and we entered into a Trademark License Agreement with GE in connection with the Spin-Off (the “Trademark License Agreement”), pursuant to which GE will grant us a license to use specified trademarks, which will include the GE Monogram and the “GE HealthCare” word mark for use in connection with certain of our products, services, and solutions, as well as the right to use the GE brand in connection with certain legal entity names within our corporate structure.
Clinical development of a new investigational device or an existing device for a new intended use may require FDA approval of an Investigational Device Exemption (“IDE”), if the device at issue meets the criteria for a “significant risk” device.
Development of a new investigational device or an existing device for a new intended use may require FDA approval of an Investigational Device Exemption (“IDE”) if the device at issue meets the criteria for a “significant risk” device.
If the Spin-Off were taxable to GE due to such a 50% or greater change by vote or value in the ownership of our stock, GE would recognize a gain equal to the excess of the fair market value on January 3, 2023 (the "Distribution Date") of our common stock distributed to GE stockholders over GE's tax basis in our common stock, and we generally would be required to indemnify GE for the tax on such gain and related expenses.
If the Spin-Off were taxable to GE due to such a 50% or greater change by vote or value in the ownership of our stock, GE would recognize a gain equal to the excess of the fair market value on January 3, 2023 of our common stock distributed to GE stockholders over GE’s tax basis in our common stock, and we generally would be required to indemnify GE for the tax on such gain and related expenses.
We are subject to FDA’s requirements for registration and listing, as well as cGMPs, which are intended to ensure that our products are safe and consistently meet applicable requirements and specifications.
We are subject to the FDA’s requirements for registration and listing, as well as cGMPs, which are intended to ensure that our products are safe and consistently meet applicable requirements and specifications.
Risks Relating to Our Operations We operate in highly competitive markets, competition may increase in the future, and our industry may be disrupted, requiring us to lower prices or resulting in a loss of market share. Healthcare markets are characterized by rapidly evolving technology, frequent introduction of new products, intense competition, and pricing pressure.
Risks Relating to Our Operations We operate in highly competitive markets, competition may increase in the future, and our industry may be disrupted, requiring us to lower prices or resulting in a loss of market share. Healthcare markets are characterized by rapidly evolving technology, frequent introduction of new products, intense competition, and pricing pressures.
The occurrence of any of the foregoing could have a material adverse effect on our business results, cash flows, financial condition, or prospects. Our products and operations utilizing radioactive materials are subject to varying international, federal, state, and local regulation and must be conducted in accordance with a number of licenses and certifications.
The occurrence of any of the foregoing could have a material adverse effect on our business results, cash flows, financial condition, or prospects. Our products and operations utilizing radioactive materials are subject to varying international, federal, state, and local regulations and must be conducted in accordance with a number of licenses and certifications.
We also may not effectively execute organizational and technical changes to accelerate innovation and execution. In a number of countries, certain cloud, edge, and software solutions are restricted areas of foreign investment. Collaborating with a domestic, qualified third party will increase the costs and may create uncertainties in such jurisdictions.
We also may not effectively execute organizational and technical changes to accelerate innovation and execution. In a number of countries, certain cloud, edge, AI, and software solutions are restricted areas of foreign investment. Collaborating with a domestic, qualified third party will increase costs and may create uncertainties in such jurisdictions.
We are required to comply with the highest quality standards in product manufacturing and quality management plays an essential role in determining and meeting customer requirements, preventing defects, improving our offerings, and assuring the safety and efficacy of our products. As a result, our business exposes us to potential product liability claims.
We are required to comply with the highest quality standards in product manufacturing, and quality management plays an essential role in determining and meeting customer requirements, preventing defects, improving our offerings, and ensuring the safety and efficacy of our products. As a result, our business exposes us to potential product liability claims.
While we have policies and procedures in place to comply with these laws and regulations, a failure by any of our employees or agents to abide by such policies and procedures could result in potential criminal or civil penalties and damages against us, which may include treble damages, fines, or penalties under the FCA.
A failure by any of our employees or agents to abide by the policies and procedures we have in place to comply with these laws and regulations could result in potential criminal or civil penalties and damages against us, which may include treble damages, fines, or penalties under the FCA.
Our ability to compete successfully may be adversely affected by factors such as: • the introduction of new or more affordable products or product enhancements by competitors, including products that could substitute for our products; • the development of new technology, the application of known or unknown technology, advances in medicine, or new developments in the treatment or diagnosis of disease that transform our industry or render a product line obsolete; • competitors responding more quickly or effectively to new technology or changes in customer requirements and industry trends; • a failure to satisfy local market conditions, such as mandatory intellectual property transfers, protectionist measures, and other government policies supporting increased local competition; • the application of new or innovative business models to our industry; • the emergence of new market entrants, including those with innovative technology or substantial financial resources, such as startups or established technology companies; • a failure to maintain or expand relationships with existing customers or attract new customers; • cost of production or delivery, whether due to geographic location, currency fluctuations, taxes, duties, or otherwise, which may enable our competitors to offer greater discounts or lower prices; • the perception of our brand and image in the market; • the strengthening of independent service organizations ("ISOs") and companies specializing in one or more of our operating segments or offerings; • a failure to successfully enter new geographic or adjacent product markets; • a failure to acquire or effectively integrate businesses and technologies that complement or expand our existing businesses; • changing regulatory standards, legal requirements or enforcement rigor; or • consolidation among customers, suppliers, channel partners, or competitors.
Our ability to compete successfully may be adversely affected by factors such as: 16 • the introduction of new or more affordable products or product enhancements by competitors, including products that could substitute for our products; • the development of new technology, the application of known or unknown technology, advances in medicine, or new developments in the treatment or diagnosis of disease that transform our industry or render a product line obsolete; • competitors responding more quickly or effectively to new technology, or changes in customer requirements and industry trends; • a failure to satisfy local market conditions and regulations, such as mandatory IP transfers, protectionist measures, and other government policies supporting increased local competition; • the application of new or innovative business models to our industry; • the emergence of new market entrants, including those with innovative technology or substantial financial resources, such as startups or established technology companies; • a failure to maintain or expand relationships with existing customers or attract new customers; • cost of production or delivery, whether due to geographic location, currency fluctuations, taxes, duties, or otherwise, which may enable our competitors to offer greater discounts or lower prices; • the perception of our brand and image in the market; • the strengthening of independent service organizations (“ISOs”) and companies specializing in one or more of our operating segments or offerings; • a failure to successfully enter new geographic or adjacent product markets; • a failure to acquire or effectively integrate businesses and technologies that complement or expand our existing businesses; • changing regulatory standards, legal requirements, or enforcement rigor; or • consolidation among customers, suppliers, channel partners, or competitors.
If we or any of our suppliers, channel partners, or agents fail to comply with FDA, FTC, and other applicable U.S. regulatory requirements or any such promotional labeling and advertising is perceived to potentially be false, misleading, or otherwise not permissible, we may face legal or regulatory actions.
If we or any of our suppliers, channel partners, or agents fail to comply with FDA, FTC, and other applicable U.S. regulatory requirements or any such promotional labeling and advertising are perceived to potentially be false, misleading, or otherwise not permissible, we may face legal or regulatory actions.
Any of the foregoing could have a material adverse effect on our business results, cash flows, financial condition, or prospects. Our inability to complete strategic transactions or to successfully integrate acquisitions could adversely affect our business. Our business strategy includes the acquisition of technologies and businesses that expand or complement our existing business.
Any of the foregoing could have a material adverse effect on our business results, cash flows, financial condition, or prospects. Our inability to successfully complete strategic transactions could adversely affect our business. Our business strategy includes the acquisition of technologies and businesses that expand or complement our existing business.
Our products and systems receive, generate, and store significant volumes of sensitive information, such as employee, customer, patient, and other personal data.
Our products and systems receive, generate, and store significant volumes of personal and sensitive information, such as employee, customer, and patient data.
Any efforts to send direct marketing to potential consumers of our products would need to comply with EU rules regulating such marketing, including the e-Privacy Directive 2002/58 and member state laws transposing that Directive. There are, additionally, EU laws regulating e-commerce activities more generally.
Any efforts to send direct marketing to potential consumers of our products would need to comply with EU rules regulating such marketing, including the e-Privacy Directive 2002/58 and member state laws transposing that Directive. There are also EU laws regulating e-commerce activities more generally.
We rely on software, hardware, and other material components from a number of third parties to manufacture our products. If a material cyber incident impacting a supplier were to result in its prolonged inability to manufacture and/or ship such components, this could impact our ability to manufacture our products.
We rely on software, SaaS, hardware, and other material components from a number of third parties to manufacture our products. If a material cyber incident impacting a supplier were to result in its prolonged inability to use, manufacture and/or ship such components, this could impact our ability to manufacture and/or use our products.
Equity investments, such as our investment in AliveCor, and other strategic alliances pose additional risks, as we could share ownership in both public and private companies and in some cases management responsibilities with one or more other parties whose objectives for the alliance may diverge from ours over time, who may not have the same priorities, strategies, or resources as we do, or whose interpretation of applicable policies may differ from our own.
Equity and other investments and strategic alliances pose additional risks, as we could share ownership in both public and private companies and in some cases management responsibilities with one or more other parties whose objectives for the alliance may diverge from ours over time, who may not have the same priorities, strategies, or resources as we do, or whose interpretation of applicable policies may differ from our own.
We may also incur substantial costs to protect ourselves in litigation or other proceedings involving the validity and enforceability of our intellectual property rights. If claims against us are successful, we could lose valuable intellectual property rights. An unfavorable outcome in any such litigation could have a material adverse effect on our business results, cash flows, financial condition, or prospects.
We may also incur substantial costs to protect ourselves in litigation or other proceedings involving the validity and enforceability of our IP rights. If claims against us are successful, we could lose valuable IP rights. An unfavorable outcome in any such litigation could have a material adverse effect on our business results, cash flows, financial condition, or prospects.
Our increasing focus on and investment in cloud, edge, AI, and software offerings presents risks to our business. We may not be successful in driving the successful global deployment and customer adoption of digital offerings characterized by digital applications and solutions.
Our increasing focus on and investment in cloud, edge, AI, and software offerings present risks to our business. We may not be successful in driving the global deployment and customer adoption of digital offerings characterized by digital applications and solutions.
We incur costs to develop cloud, edge, and software solutions and to build and maintain infrastructure to support cloud and edge computing offerings.
We incur costs to develop cloud, edge, AI, and software solutions and to build and maintain infrastructure to support cloud and edge computing offerings.
As such, the actual outcomes of these disputes and other tax audits could have a material impact on our business results or financial position. 34 Our ability to use deferred tax assets may be subject to limitation.
As such, the actual outcomes of these disputes and other tax audits could have a material impact on our business and financial results. 34 Our ability to use deferred tax assets may be subject to limitation.
Certain countries impose additional requirements on government suppliers as a prerequisite to doing business in the country. These can include, among other things, local headcount requirements, local manufacturing and supplier requirements, and technology or intellectual property transfers. China has a government-run procurement system for public hospitals to obtain medical devices (mainly high value medical consumables) and drugs.
Certain countries impose additional requirements on government suppliers as a prerequisite to doing business in the country. These can include, among other things, local headcount requirements, local manufacturing and supplier requirements, and technology or IP transfers. China has a government-run procurement system for public hospitals to obtain medical devices (mainly high-value medical consumables) and drugs.
Changes in these rules or their interpretation or changes in underlying assumptions, estimates, or judgments could significantly change our reported or expected financial performance or financial condition. RISKS RELATING TO TAXATION. Changes in applicable tax laws and regulations could adversely affect our business.
Changes in these rules or their interpretation or changes in underlying assumptions, estimates, or judgments could significantly change our reported or expected financial results and/or financial condition. RISKS RELATING TO TAXATION. Changes in applicable tax laws and regulations could adversely affect our business.
In particular, the sale, manufacturing, distribution, servicing and marketing of many of our offerings are highly regulated and we are subject to heightened scrutiny by regulators and other authorities, including with respect to our collaborations with third parties.
In particular, the sale, manufacturing, distribution, servicing, and marketing of many of our offerings are highly regulated and we are subject to heightened scrutiny by regulators and other authorities around the world, including with respect to our collaborations with third parties.
Furthermore, protecting confidential information and trade secrets can be difficult and, even if a successful enforcement action is brought, such action may not be effective in protecting our intellectual property rights. Additionally, the increased sharing of our data with third parties as a result of right-to-repair legislation could increase the risk of loss or damage to our intellectual property.
Furthermore, protecting confidential information and trade secrets can be difficult and, even if a successful enforcement action is brought, such action may not be effective in protecting our IP rights. Additionally, the increased sharing of our data with third parties as a result of right-to-repair legislation could increase the risk of loss or damage to our IP.
For both medical devices and pharmaceutical products, if a regulatory authority concludes that we are not in compliance with applicable laws or regulations, or that any of our offerings are defective, ineffective, or pose an unreasonable risk for patients, users, or others, the authority may ban such offerings, detain or seize adulterated or misbranded products, order a recall, repair, replacement, or refund of such products, or require us to notify healthcare professionals and others that the offerings present unreasonable risks of substantial harm to public health.
For both medical devices and pharmaceutical products, if a regulatory authority concludes that we are not in compliance with applicable laws or regulations, or that any of our offerings are defective, ineffective, or pose an unreasonable risk for patients, users, or others, the authority may refuse to accept or authorize regulatory filings, ban such offerings, detain or seize adulterated or misbranded products, order a recall, repair, replacement, or refund of such products, or require us to notify healthcare professionals and others that the offerings present unreasonable risks of substantial harm to public health.
The ultimate impact of the COVID-19 pandemic on our operations and financial performance depends on many factors that are not within our control, including, but not limited to: the severity and duration of the pandemic; the impact of coronavirus variants and resurgences; governmental, business, and individuals’ actions in response to the pandemic; the impact of the pandemic on global and regional economies, travel, and economic activity; the development, availability, and public acceptance of effective treatments or vaccines; our employees’ compliance with vaccine mandates that may apply in various jurisdictions; the availability of federal, state, local, or non-U.S. funding programs; global economic conditions and levels of economic growth; and the pace and extent of the ultimate recovery from the COVID-19 pandemic.
The ultimate impact of any public health crisis, epidemic, or pandemic, including the COVID-19 pandemic, on our operations and financial performance depends on many factors that are not within our control, including, but not limited to: the severity and duration of the public health crisis, epidemic, or pandemic; the impact of variants and resurgences; governmental, business, and individuals’ actions in response to the public health crisis, epidemic, or pandemic; the impact on global and regional economies, travel, and economic activity; the development, availability, and public acceptance of effective treatments or vaccines; our employees’ compliance with vaccine mandates that may apply in various jurisdictions; the availability of federal, state, local, or non-U.S. funding programs; global economic conditions and levels of economic growth; and the pace and extent of the ultimate recovery from the public health crisis, epidemic, or pandemic.
We are involved in, or threatened with, legal, arbitration, and governmental proceedings or investigations from time to time in the ordinary course of our business as well as heightened scrutiny in the healthcare industry, including disputes with employees, competitors, customers, suppliers, competition authorities, regulators and other authorities, purported whistle-blowers, or regulatory agencies concerning allegations of, among other things, breaches of contract, product liability, product defects, intellectual property infringement, logistics or manufacturing related topics, quality regulations, EH&S or employment issues, termination of business relationship, or alleged or suspected violations of applicable laws in various jurisdictions.
We are involved in, or threatened with, legal, arbitration, and governmental proceedings or investigations from time to time in the ordinary course of our business as well as heightened scrutiny in the healthcare industry, including disputes with employees, competitors, customers, suppliers, channel partners, competition authorities, regulators, and other authorities, purported whistle-blowers, or regulatory agencies concerning allegations of, among other things, breaches of contract, product liability, product defects, IP infringement, logistics or manufacturing related topics, quality regulations, EH&S or employment issues, termination of business relationship, or alleged or suspected violations of applicable laws in various jurisdictions.
We could suffer significant business disruption, including transaction errors, supply chain or manufacturing interruptions, processing inefficiencies, data loss, loss of customers, reputational damage, the loss of or damage to intellectual property or other proprietary information, litigation, investigation, and possible liability to employees, customers, suppliers, patients, and regulatory authorities as a result of a successful cyber-attack.
We could suffer significant business disruption, including transaction errors, supply chain or manufacturing interruptions, processing inefficiencies, data loss, loss of customers, reputational damage, the loss of or damage to IP or other proprietary information, litigation, investigation, and possible liability to employees, customers, suppliers, patients, and regulatory authorities as a result of a successful cyber-attack.
Notwithstanding the opinion of counsel, the opinion of Ernst & Young, LLP, or the private letter ruling, the IRS could determine on audit that the Spin-Off or any of certain related transactions is taxable if it determines that any of these facts, assumptions, representations, or undertakings are not correct or have been violated or if it disagrees with the conclusions in the opinion that are not covered by the private letter ruling, or for other reasons, including as a result of certain significant changes in the stock ownership of GE or us after the Spin-Off.
Notwithstanding the opinion of counsel, the opinion of EY, or the private letter ruling, the IRS could determine on audit that the Spin-Off or any of certain related transactions is taxable if it determines that any of these facts, assumptions, representations, or undertakings are not correct or have been violated or if it disagrees with the conclusions in the opinion that are not covered by the private letter ruling, or for other reasons, including as a result of certain significant changes in the stock ownership of GE or us after the Spin-Off.
These risks apply to our installed base of products, products we currently sell, new products we will introduce in the future, and older technology that we no longer sell or service but remains in use by customers. Additionally, we offer software, cloud, and edge products that are developed by, reside with, or are hosted by third-party providers.
These risks apply to our installed base of products, products we currently sell, new products we will introduce in the future, and older technology that we no longer sell or service but remains in use by customers. Additionally, we offer software, cloud, and edge products that are developed by, controlled by, or are hosted by third-party providers.
In addition, we are subject to Section 203 of the Delaware General Corporation Law (“DGCL”), which could have the effect of delaying or preventing a change of control that you may favor.
In addition, we are subject to Section 203 of the Delaware General Corporation Law (“DGCL”), which could have the effect of delaying or preventing a change of control that stockholders may favor.
The GDPR contains robust, direct obligations on data processors in addition to data controllers, heavier documentation requirements for company data protection compliance programs, and a prohibition on the transfer of personal data from the EU to other countries whose laws do not protect personal data to an adequate level of privacy or security (unless an approved cross-border transfer mechanism, such as binding corporate rules for personal data transfers, is maintained).
The GDPR contains robust, direct obligations on data processors in addition to data controllers, heavier documentation requirements for company data protection compliance programs, stringent reporting obligations of data breach to data protection authorities, and a prohibition on the transfer of personal data from the EU to other countries whose laws do not protect personal data to an adequate level of privacy or security (unless an approved cross-border transfer mechanism, such as binding corporate rules for personal data transfers, is maintained).
Any of these competitive factors could adversely affect our pricing, margins, and market share and have a material adverse effect on our business, cash flows, financial condition, results of operations, or prospects. 19 Our business dealings involve third-party partners in various markets, and the actions or inactions of these third parties could adversely affect our business.
Any of these competitive factors could adversely affect our pricing, margins, and market share and have a material adverse effect on our business results, cash flows, financial condition, or prospects. 17 Our business dealings involve third-party partners in various markets, and the actions or inactions of these third parties could adversely affect our business.
Intellectual property rights may also be unavailable, limited, unenforceable, or practically unenforceable in some countries, and some governments may require us to transfer our intellectual property rights to local entities to do business in the jurisdiction, either of which could make it easier for competitors to capture increased market position and compete with us.
IP rights may also be unavailable, limited, unenforceable, or practically unenforceable in some countries, and some governments may require us to transfer our IP rights to local entities to do business in the jurisdiction, either of which could make it easier for competitors to capture increased market position and compete with us.
Data Protection Act, we could face fines and penalties. In China, we are subject to laws and regulations governing both the use and disclosure of confidential patient medical information that may become more restrictive in the future, including restrictions on transfer of healthcare data (e.g., China PIPL).
Data Protection Act, we could face fines, penalties, and harm to our reputation. In China, we are subject to laws and regulations governing both the use and disclosure of confidential patient medical information that may become more restrictive in the future, including restrictions on transfer of healthcare data (e.g., China PIPL).
Any of these risks could have a material adverse effect on our business results, cash flows, financial condition, prospects, and the market price of our securities. In addition, a prolonged period of extremely volatile and unstable market conditions may increase our funding costs and negatively affect market risk mitigation strategies.
In addition, a prolonged period of volatile and unstable capital markets conditions may increase our funding costs and negatively affect market risk mitigation strategies. Any of these risks could have a material adverse effect on our business results, cash flows, financial condition, prospects, and the market price of our securities.
Regulatory scrutiny may increase in the future and could require us to change the way we operate, including the way in which we offer certain services. These laws and regulations are complex, change frequently, are subject to changes in interpretation and enforcement, and have tended to become more stringent over time.
Regulatory scrutiny may increase in the future and could require us to change the way we operate, including the way in which we offer certain services. These laws and regulations vary by jurisdiction, are complex, change frequently, are subject to changes in interpretation and enforcement, and have tended to become more stringent over time.
Our business dealings involve third-party partners such as distributors, dealers, wholesalers, packagers, resellers, agents, collaboration partners, and others. In turn, these parties may use sub-parties.
Our business dealings involve third-party partners such as distributors, dealers, wholesalers, packagers, resellers, suppliers, agents, collaboration partners, sub-contractors, and others. In turn, these parties may use sub-parties.
Products sold by our competitors may infringe, misappropriate, or otherwise violate intellectual property rights owned or licensed by us. Any issued intellectual property rights owned by or licensed to us may be challenged, invalidated, held unenforceable, or circumvented in litigation or other proceedings, and these limited intellectual property rights may not provide us with effective competitive advantages.
Products sold by our competitors may infringe, misappropriate, or otherwise violate IP rights owned or licensed by us. Any issued IP rights owned by or licensed to us may be challenged, invalidated, held unenforceable, or circumvented in litigation or other proceedings, and these limited IP rights may not provide us with effective competitive advantages.
Successful growth through acquisitions depends upon our ability to identify suitable acquisition targets or assets, conduct due diligence, negotiate transactions on favorable terms, and ultimately complete such transactions and integrate the acquired target or asset successfully, and will be subject, in certain circumstances, to the consent of GE under the Tax Matters Agreement, as discussed in “Risks Relating to Our Recent Spin-Off from GE.” Acquisitions may expose us to significant risks and uncertainties, including: • competition for acquisition targets and assets, which may lead to substantial increases in purchase price or terms that are less attractive to us, including the use of our shares for payment of the purchase price; • dependence on external sources of capital, in particular to finance the purchase price of acquisitions; • rulings by certain antitrust or other regulatory bodies; • acquired companies’ previous failure to comply with applicable regulatory requirements; • failure to timely integrate acquired companies’ strategies, functions, and products into our own; • inability to produce products at increased scale or loss of previously available distribution channels; • heightened external scrutiny on acquired intellectual property rights, regulatory exclusivity periods, and confidentiality agreements, or lack of intellectual property rights for the acquired portfolio; • diversion of our management’s attention from existing operations to the acquisition and integration process; • a failure to accurately predict or to realize expected growth opportunities, cost savings, synergies, and market acceptance of acquired companies’ products; • a failure to identify significant non-compliant behaviors or practices by, or liabilities relating to, the acquisition target (or its agents) prior to acquisition; • successor liability imposed by regulators for actions by the target (or its agents) prior to acquisition; • expenses, delays, and difficulties in integrating acquired businesses into our existing businesses; and • difficulties in retaining key customers and personnel.
Successful growth through acquisitions depends upon our ability to identify suitable acquisition targets or assets, conduct due diligence, negotiate transactions on favorable terms, and ultimately complete such transactions and integrate the acquired target or asset successfully, and will be subject, in certain circumstances, to the consent of GE under the Tax Matters Agreement, as discussed in “Risks Relating to Our Spin-Off from GE.” Acquisitions may expose us to significant risks and uncertainties, including: • competition for acquisition targets and assets, which may lead to substantial increases in purchase price or other terms that are less attractive to us, including the use of our shares for payment of the purchase price; • dependence on external sources of capital, in particular to finance the purchase price of acquisitions; • rulings by antitrust, foreign direct investment, or other regulatory bodies; • acquired companies’ previous failure to comply with applicable regulatory requirements; • failure to timely or successfully integrate acquired companies’ strategies, functions, systems, controls, including cybersecurity and data protection controls, and products into our own; • inability to produce products at increased scale or loss of previously available distribution channels; • heightened external scrutiny on acquired IP rights, regulatory exclusivity periods, and confidentiality agreements, or lack of IP rights for the acquired portfolio; • diversion of our management’s attention from existing operations to the acquisition and integration process; • a failure to accurately predict or to realize expected growth opportunities, cost savings, synergies, and market acceptance of acquired companies’ products; • a failure to identify significant non-compliant behaviors or practices by, or liabilities relating to, an acquisition target (or its agents) prior to acquisition; • successor liability imposed by regulators for actions by a target (or its agents) prior to acquisition; • expenses, delays, and difficulties in integrating acquired businesses into our existing businesses; and • difficulties in retaining key customers and personnel.
Slower global economic growth, actual or anticipated default on sovereign debt, volatility in the currency and credit markets, high levels of unemployment or underemployment, reduced levels of capital expenditures, changes or anticipation of potential changes in government fiscal, tax, import and export, and monetary policies, changes in capital requirements for financial institutions, government deficit reduction and budget negotiation dynamics, sequestration, austerity measures, and other challenges that affect the global economy could adversely affect us and our customers, suppliers, and channel partners.
Slower global economic growth, actual or anticipated default on sovereign debt, volatility in the currency and credit markets, inflationary pressures, high levels of unemployment or underemployment, reduced levels of capital expenditures, changes or anticipation of potential changes in government fiscal, tax, import and export, and monetary policies, changes in capital requirements for financial institutions, disruptions in the financial services industry, government deficit reduction and budget negotiation dynamics, sequestration, austerity measures, and other challenges that affect the global economy could adversely affect us and our customers, suppliers, and channel partners.
We rely on third parties to perform logistics, transportation, and warehousing functions on our behalf, and disruptions at these logistics providers could adversely affect our business . Third-party providers perform our warehousing, logistics, shipping, and transportation functions.
We rely on third parties to help perform logistics, transportation, shipping, warehousing, and services functions on our behalf, and disruptions at these third-party providers could adversely affect our business . Third-party providers help perform our logistics, transportation, shipping, warehousing, and services functions.
If we cannot adequately obtain, maintain, protect, or enforce our intellectual property rights, our competitors may be able to compete more successfully against us, which could have a material adverse effect on our business results, cash flows, financial condition, or prospects.
If we cannot adequately obtain, maintain, protect, or enforce our IP rights, our competitors may be able to compete more successfully against us, which could have a material adverse effect on our business results, cash flows, financial condition, or prospects.
They can also impose cleanup liabilities, including with respect to discontinued or predecessor operations or third-party waste disposal sites. In some jurisdictions we may increasingly be subject to climate change mitigation and adaptation regulation, tax, disclosure, and reporting requirements.
They can also impose cleanup liabilities, including with respect to discontinued or predecessor operations or third-party waste disposal sites. In some jurisdictions we are, and are likely to increasingly be, subject to climate change mitigation and adaptation regulation, tax, disclosure, and reporting requirements.
We may not receive protection for pending or future applications relating to intellectual property rights owned by or licensed to us and the claims allowed under any issued intellectual property rights may not be sufficiently broad to protect our products, services, solutions, and any associated trademarks.
We may not receive protection for pending or future applications relating to IP rights owned by or licensed to us, and the claims allowed under any issued IP rights may not be sufficiently broad to protect our products, services, solutions, and any associated trademarks.
We have replaced certain internal capabilities with outsourced products, services, or solutions. These processes may result in increased dependency on external suppliers. Failure of third-party suppliers to establish and comply with required quality management systems may also lead to withdrawals of our certifications or authorizations required for market access in certain jurisdictions.
We have replaced certain internal capabilities with outsourced products, services, or solutions. These processes may result in increased dependency on external suppliers. Failure of third-party suppliers to establish and comply with required quality management systems or comply with applicable legal and regulatory requirements may also lead to withdrawals of our certifications or authorizations required for market access in certain jurisdictions.
We have deferred tax assets in certain countries and our ability to use such assets will depend on taxable income generation in the relevant countries.
We have deferred tax assets in certain countries and our ability to use such assets will depend on taxable income generation in the relevant countries over time.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES GE HealthCare is a global organization with major centers in or near Chicago, Milwaukee, Paris, Bangalore, and Shanghai, and is headquartered in Chicago, Illinois. We own or lease a total of 336 facilities around the world excluding third-party logistics sites.
Biggest changeITEM 2. PROPERTIES GE HealthCare is a global organization with major centers in or near Chicago, Milwaukee, Paris, Bangalore, and Shanghai, and is headquartered in Chicago, Illinois. We own or lease over 300 facilities around the world excluding third-party logistics sites. We have 43 manufacturing facilities, of which 31 are owned.
We have 17 manufacturing facilities located in the United States and 26 located outside of the United States, including in China, India, Israel, Mexico, Brazil, Austria, Denmark, France, Germany, Ireland, the Netherlands, Norway, Sweden, Finland, South Korea, and Japan.
We have 16 manufacturing facilities located in the United States and 27 located outside of the United States, including in China, India, Israel, Mexico, Brazil, Austria, Denmark, France, Germany, Ireland, the Netherlands, Norway, Sweden, Finland, South Korea, and Japan.
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We have 43 manufacturing facilities, of which 31 are owned and 12 are leased, inclusive of one facility that is part-owned and part-leased.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS Information on material pending legal proceedings is incorporated herein by reference to the information set forth in Note 14, “Commitments, Guarantees, Product Warranties, and Other Loss Contingencies” to the financial statements included elsewhere in this Annual Report on Form 10-K.
Biggest changeITEM 3. LEGAL PROCEEDINGS Information on material pending legal proceedings is incorporated herein by reference to the information set forth in Note 14, “Commitments, Guarantees, Product Warranties, and Other Loss Contingencies” to the financial statements included elsewhere in this Annual Report on Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
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We are reporting the following environmental matter in compliance with SEC requirements to disclose environmental proceedings where a governmental authority is a party and that involve potential monetary sanctions of $300,000 or greater.
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In July 2022, GE’s Healthcare business received a notice of intention to impose an administrative fine of approximately $0.6 million related to a December 2019 liquid hazardous waste event at our Rehovot, Israel site.
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The event involved clean room waste that spilled onto an unsealed floor, leading to an escape of a small amount of liquid to a third-party facility on a lower floor. The Israeli Ministry of Environmental Protection (“MEP”) concluded that the incident breached the site’s toxins permit.
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In accordance with local law, GE HealthCare has responded to MEP’s notice of fine challenging both the basis for, and level of, the fine. A decision from MEP is pending. 44 ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES PRINCIPAL MARKET The principal market for GE HealthCare's common stock is The Nasdaq Stock Market LLC.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES PRINCIPAL MARKET The principal market on which GE HealthCare’s common stock is traded is The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “GEHC”.
A "when issued" trading market for GE HealthCare's common stock began on Nasdaq on December 16, 2022, and "regular way" trading of GE HealthCare's common stock began on January 4, 2023. Prior to December 16, 2022 there was no public market for GE HealthCare's common stock.
A “when issued” trading market for GE HealthCare’s common stock began on Nasdaq on December 16, 2022, and “regular way” trading of GE HealthCare’s common stock began on January 4, 2023. Prior to December 16, 2022 there was no public market for GE HealthCare’s common stock.
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From January 4, 2023 through January 31, 2023, the highest sales price for GE HealthCare's common stock on Nasdaq was $73.95 per share, and the lowest sales price for GE HealthCare's common stock on Nasdaq was $53.50 per share. SHAREHOLDERS There were 207,717 shareholders of record of GE HealthCare common stock as of January 31, 2023.
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SHAREHOLDERS There were 198,387 shareholders of record of GE HealthCare common stock as of January 30, 2024. DIVIDENDS We declared and paid a quarterly dividend of $0.03 per share to our stockholders of record for the first, second, and third quarter of 2023.
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DIVIDENDS As an independent, publicly traded company, we will evaluate whether to pay cash dividends to our stockholders from time to time. The timing, declaration, amount, and payment of future dividends to stockholders, if any, will fall within the discretion of our Board.
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In the fourth quarter of 2023, we declared a dividend of $0.03 to be paid in the first quarter of 2024.
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Our Board’s decisions regarding the payment of dividends will depend on consideration of many factors, such as our financial condition, earnings, sufficiency of distributable reserves, opportunities to retain future earnings for use in the operation of our business and to fund future growth, capital requirements, debt service obligations, legal requirements, regulatory constraints, and other factors that our Board deems relevant.
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The timing, declaration, amount, and payment of future dividends to stockholders, if any, will fall within the discretion of the Board of Directors taking into consideration matters such as the capital needs of GE HealthCare and opportunities to retain future earnings for use in the operation of our business and to fund future growth. 45 STOCK PERFORMANCE GRAPH The following graph compares the total return on the Company’s common stock for the last 12 months with the Standard & Poor’s (“S&P”) 500 and S&P 500 Healthcare indices.
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There can be no assurance that we will pay a dividend in the future or continue to pay any dividend if we do commence paying dividends. ITEM 6. [RESERVED]
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The graph assumes $100 was invested in each of these indices on the first day of “regular way” trading for our common stock, and that all dividends were reinvested. ITEM 6. [RESERVED] 46 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Part II. Financial Information Index

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFree cash flow* was $1,828 million for the year ended December 31, 2022, a decrease of $999 million or 35% from the year ended December 31, 2021, primarily driven by an increase in receivables excluding the impact of factoring programs, a decrease in Net income from continuing operations, and higher cash taxes paid mainly due to mandatory capitalization of research and development costs under the TCJA beginning in 2022. ____________________ *Non-GAAP Financial Measure 49 RESULTS OF OPERATIONS The following tables set forth our results of operations for each of the periods presented: Combined Statements of Income For the years ended December 31 2022 2021 Sales of products $ 12,044 $ 11,165 Sales of services 6,297 6,420 Total revenues 18,341 17,585 Cost of products 7,975 7,196 Cost of services 3,187 3,215 Gross profit 7,179 7,174 Selling, general, and administrative 3,631 3,563 Research and development 1,026 816 Total operating expenses 4,657 4,379 Operating income 2,522 2,795 Interest and other financial charges—net 77 40 Non-operating benefit (income) costs (5) 3 Other (income) expense—net (62) (123) Income from continuing operations before income taxes 2,512 2,875 Benefit (provision) for income taxes (563) (600) Net income from continuing operations 1,949 2,275 Income (loss) from discontinued operations, net of taxes 18 18 Net income 1,967 2,293 Net (income) loss attributable to noncontrolling interests.
Biggest changeConsolidated and Combined Statements of Income For the years ended December 31 2023 2022 Sales of products $ 13,127 $ 12,044 Sales of services 6,425 6,297 Total revenues 19,552 18,341 Cost of products 8,465 7,975 Cost of services 3,165 3,187 Gross profit 7,922 7,179 Selling, general, and administrative 4,282 3,631 Research and development 1,205 1,026 Total operating expenses 5,487 4,657 Operating income 2,435 2,522 Interest and other financial charges – net 542 77 Non-operating benefit (income) costs (382) (5) Other (income) expense – net (86) (62) Income from continuing operations before income taxes 2,361 2,512 Benefit (provision) for income taxes (743) (563) Net income from continuing operations 1,618 1,949 Income (loss) from discontinued operations, net of taxes (4) 18 Net income 1,614 1,967 Net (income) loss attributable to noncontrolling interests (46) (51) Net income attributable to GE HealthCare $ 1,568 $ 1,916 TOTAL REVENUES AND RPO.
The following are areas considered to be critical and require management’s judgment: Revenue Recognition, Business Combination Related Measurements, Pensions, and Income Taxes. See Note 2, “Summary of Significant Accounting Policies” to the combined financial statements included elsewhere in this Annual Report on Form 10-K for further information on our significant accounting policies. REVENUE RECOGNITION.
The following are areas considered to be critical and require management’s judgment: Revenue Recognition, Business Combination Related Measurements, Pensions, and Income Taxes. See Note 2, “Summary of Significant Accounting Policies” to the consolidated and combined financial statements included elsewhere in this Annual Report on Form 10-K for further information on our significant accounting policies. REVENUE RECOGNITION.
When read in conjunction with our U.S. GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as one basis for financial, operational, and planning decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry.
When read in conjunction with our U.S. GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as one basis for making financial, operational, and planning decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry.
For pension benefits and retiree health and life benefits transferred from GE on January 1, 2023, third-party actuaries were engaged to assist in the valuation of transferred pension assets and liabilities using assumptions provided by GE which the Company reviewed prior to recording in our combined financial statements.
For pension benefits and retiree health and life benefits transferred from GE on January 1, 2023, third-party actuaries were engaged to assist in the valuation of transferred pension assets and liabilities using assumptions provided by GE which the Company reviewed prior to recording amounts in our combined financial statements.
A provision for chargebacks is recorded at the time we recognize revenue from the sale to the wholesaler and requires certain estimates such as the wholesaler chargeback rates, the expected sell-through levels by our wholesale customers to contracted customers, as well as estimated wholesaler inventory levels.
A provision for outstanding chargebacks is recorded at the time we recognize revenue from the sale to the wholesaler and requires certain estimates such as the wholesaler chargeback rates, the expected sell-through levels by our wholesale customers to contracted customers, as well as estimated wholesaler inventory levels.
GAAP, management makes estimates and assumptions that may affect the reported amounts of our assets and liabilities, including our contingent liabilities, as of the date of our combined financial statements and the reported amounts of our revenues and expenses during the reporting periods. Our actual results may differ from these estimates.
GAAP, management makes estimates and assumptions that may affect the reported amounts of our assets and liabilities, including our contingent liabilities, as of the date of our consolidated and combined financial statements, and the reported amounts of our revenues and expenses during the reporting periods. Our actual results may differ from these estimates.
This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in "Item 1A.
This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed below and elsewhere in this Annual Report on Form 10-K, and particularly in Item 1A. “Risk Factors”.
We believe that these non-GAAP financial measures provide investors greater transparency to the information used by management for its operational decision-making and allows investors to see our results “through the eyes of management.” We further believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance.
We believe that these non-GAAP financial measures provide investors greater transparency to the information used by management for its operational decision-making and allow investors to see our results “through the eyes of management.” We further believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance.
Such differences will be reflected as increases or decreases to income tax expense in the period in which they are determined. See Note 11, “Income Taxes” to the combined financial statements included elsewhere in this Annual Report on Form 10-K for further information on income taxes. 61
Such differences will be reflected as increases or decreases to income tax expense in the period in which they are determined. 61 See Note 11, “Income Taxes” to the consolidated and combined financial statements included elsewhere in this Annual Report on Form 10-K for further information on income taxes.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS For a discussion of recently issued accounting standards, see Note 2, "Summary of Significant Accounting Policies" to the combined financial statements appearing elsewhere in this Annual Report on Form 10-K. CRITICAL ACCOUNTING ESTIMATES Our financial results are affected by the selection and application of accounting policies and methods.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS For a discussion of recently issued accounting standards, see Note 2, “ Summary of Significant Accounting Policies ” to the consolidated and combined financial statements appearing elsewhere in this Annual Report on Form 10-K. CRITICAL ACCOUNTING ESTIMATES Our financial results are affected by the selection and application of accounting policies and methods.
See Note 3, “Revenue Recognition” to the combined financial statements included elsewhere in this Annual Report on Form 10-K for further information on revenue recognition. BUSINESS COMBINATION RELATED MEASUREMENTS. Our combined financial statements include the operations of an acquired business starting from the completion of the combination.
See Note 3, “Revenue Recognition” to the consolidated and combined financial statements included elsewhere in this Annual Report on Form 10-K for further information on revenue recognition. BUSINESS COMBINATION RELATED MEASUREMENTS. Our consolidated and combined financial statements include the operations of an acquired business starting from the completion of the combination.
We believe that presenting these non-GAAP financial measures, in addition to the corresponding U.S. GAAP financial measures, are important supplemental measures that exclude non-cash or other items that may not be indicative of or are unrelated to our core operating results and the overall health of our company.
We believe that presenting these non-GAAP financial measures, in addition to the corresponding U.S. GAAP financial measures, are important supplemental measures that exclude non-cash or other items that may not be indicative of or related to our core operating results and the overall health of our company.
We generated revenues of $395 million and $356 million from customers in these two countries for the years ended December 31, 2022, and December 31, 2021, respectively. The potential inability to repatriate earnings from these two countries will not have a material impact on our ability to operate.
We generated revenues of $340 million and $395 million from customers in these two countries for the years ended December 31, 2023 and December 31, 2022, respectively. The potential inability to repatriate earnings from these two countries will not have a material impact on our ability to operate.
(g) Adjusted earnings per share* amounts are computed independently, thus, the sum of per-share amounts may not equal the total.
(7) Adjusted earnings per share* amounts are computed independently, thus, the sum of per-share amounts may not equal the total.
These metrics exclude interest expense, interest income, non-operating benefit (income) costs, and tax expense, as well as unique and/or non-cash items, that can have a material impact on our results. In addition, we may from time to time consider excluding other nonrecurring items to enhance comparability between periods.
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 our results. In addition, we may from time to time consider excluding other nonrecurring items to enhance comparability between periods.
Adjusted net income excludes non-operating benefit (income) costs, certain tax expense adjustments, and unique and/or non-cash items, that can have a material impact on our results. In addition, we may from time to time consider excluding other nonrecurring items to enhance comparability between periods.
Adjusted net income excludes non-operating benefit (income) costs, certain tax expense adjustments, and non-recurring and/or non-cash items, which may have a material impact on our results. In addition, we may from time to time consider excluding other nonrecurring items to enhance comparability between periods.
SUMMARY OF KEY PERFORMANCE MEASURES Management reviews and analyzes several key performance measures including Total revenues, Remaining Performance Obligations (“RPO”), Operating income, Net income attributable to GE HealthCare, Earnings per share - continuing operations, and Cash flow from operations.
SUMMARY OF KEY PERFORMANCE MEASURES Management reviews and analyzes several key performance measures including Total revenues, Remaining Performance Obligations (“RPO”), Operating income, Net income attributable to GE HealthCare, Earnings per share – continuing operations, and Cash from (used for) operating activities – continuing operations.
Revenues in the fourth quarter have historically been higher than in other quarters due to the spending patterns of our customers. In addition, Cash provided from operating activities is typically higher in the fourth quarter sequentially as inventories are lower as a result of higher revenues. 46 TRANSITION TO STAND-ALONE COMPANY.
Revenues in the fourth quarter have historically been higher than in other quarters due to the spending patterns of our customers. In addition, cash from operating activities is typically higher in the fourth quarter sequentially as inventories are lower as a result of higher revenues. 48 OPERATION AS A STAND-ALONE COMPANY.
The non-GAAP financial measures we report include: Organic revenue and Organic revenue growth rate We believe that Organic revenue and Organic revenue growth rate, by excluding the effect of acquisitions, dispositions, and foreign currency rate fluctuations, provide management and investors with additional understanding of our core, top-line operating results and greater visibility into underlying revenue trends of our established, ongoing operations.
The non-GAAP financial measures we report include: Organic revenue and Organic revenue growth rate We believe that Organic revenue and Organic revenue growth rate, by excluding the effect of acquisitions, dispositions, and foreign currency rate fluctuations, provide management and investors with additional understanding and visibility into the underlying revenue trends of our established, ongoing operations.
Adjusted earnings per share also provides management and investors with additional perspective regarding the impact of certain significant items on our per share earnings. Adjusted earnings per share excludes non-operating benefit (income) costs, certain tax expense adjustments, and unique and/or non-cash items, that can have a material impact on our results.
Adjusted earnings per share also provides management and investors with additional perspective regarding the impact of certain significant items on our per share earnings. Adjusted earnings per share excludes non-operating benefit (income) costs, certain tax expense adjustments, and non-recurring and/or non-cash items, which may have a material impact on our results.
Moody's S&P Fitch Long-term rating Baa2 BBB BBB Outlook Stable Stable Stable ____________________ *Non-GAAP Financial Measure 59 We are disclosing our credit ratings to enhance understanding of our sources of liquidity and the effects of our ratings on our costs of funds and access to liquidity.
Moody’s S&P Fitch Long-term rating Baa2 BBB BBB Outlook Stable Stable Stable We are disclosing our credit ratings to enhance the understanding of our sources of liquidity and the effects of our ratings on our costs of funds and access to liquidity.
We have adopted accounting policies to prepare our combined financial statements in conformity with U.S. GAAP. To prepare our combined financial statements in accordance with U.S.
We have adopted accounting policies to prepare our consolidated and combined financial statements in conformity with U.S. GAAP. 59 To prepare our consolidated and combined financial statements in accordance with U.S.
The non-GAAP financial measures should be considered along with the most directly comparable U.S. GAAP financial measures. Definitions of these non-GAAP financial measures, a discussion of why we believe they are useful to management and investors as well as certain of their limitations, and reconciliations to their most directly comparable U.S.
GAAP financial measures. Definitions of these non-GAAP financial measures, a discussion of why we believe they are useful to management and investors as well as certain of their limitations, and reconciliations to their most directly comparable U.S.
Remaining Performance Obligations As of December 31 2022 2021 % change Products $ 4,992 $ 4,543 10% Services 9,351 10,028 (7)% Total RPO $ 14,343 $ 14,571 (2)% 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.
Remaining Performance Obligations As of December 31, 2023 December 31, 2022 % change Products $ 4,930 $ 4,992 (1)% Services 9,725 9,351 4% Total RPO $ 14,655 $ 14,343 2% 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.
Information regarding our obligations under lease, debt, and purchase arrangements are provided in Note 7 , " Leases ," Note 9 , “ Borrowings ,” and Note 14 , “ Commitments, Guarantees, Product Warranties, and Other Loss Contingencies ,” respectively, to the combined financial statements contained elsewhere in this Annual Report on Form 10-K.
Information regarding our obligations under lease, debt, and purchase arrangements are provided in Note 7, “Leases,” Note 9, “Borrowings,” and Note 14, “Commitments, Guarantees, Product Warranties, and Other Loss Contingencies,” to the consolidated and combined financial statements contained elsewhere in this Annual Report on Form 10-K.
Compensation We expect to institute competitive compensation policies and programs as an independent public company. The expense for these policies and programs will increase from the compensation expense allocated by GE in our combined financial statements and related notes, driven primarily by higher cash and stock compensation to retain employees and align more closely with industry peers.
Compensation We have and expect to continue to institute competitive compensation policies and programs as an independent public company. The expense for these policies and programs will increase from the compensation expense allocated by GE in years prior to the Spin-Off, driven primarily by higher cash and stock compensation to retain employees and align more closely with industry peers.
(b) Represents revenues attributable to dispositions for the four quarters preceding the disposition date. ____________________ *Non-GAAP Financial Measure 55 Adjusted EBIT* For the years ended December 31 2022 2021 % change Net income attributable to GE HealthCare $ 1,916 $ 2,247 (15)% Add: Interest and other financial charges - net 77 40 Add: Non-operating benefit (income) costs (5) 3 Less: Benefit (provision) for income taxes (563) (600) Less: Income (loss) from discontinued operations, net of taxes 18 18 Less: Net (income) loss attributable to noncontrolling interests (51) (46) EBIT* $ 2,584 $ 2,918 (11)% Add: Restructuring costs (a) 146 155 Add: Acquisition and disposition related charges (benefits) (b) (34) 14 Add: Spin-Off and separation costs (c) 14 — Add: (Gain)/loss of business dispositions/divestments (d) (1) (2) Add: Amortization of acquisition-related intangible assets 121 90 Add: Investment revaluation (gain)/loss (e) 31 (3) Adjusted EBIT* $ 2,861 $ 3,172 (10)% Net income margin 10.4% 12.8% (240) bps Adjusted EBIT margin* 15.6% 18.0% (240) bps (a) Consists of severance, facility closures, and other charges associated with historical restructuring programs.
(2) Represents revenues attributable to dispositions for the four quarters preceding the disposition date. ____________________ *Non-GAAP Financial Measure 55 Adjusted EBIT* For the years ended December 31 2023 2022 % change Net income attributable to GE HealthCare $ 1,568 $ 1,916 (18)% Add: Interest and other financial charges – net 542 77 Add: Non-operating benefit (income) costs (382) (5) Less: Benefit (provision) for income taxes (743) (563) Less: Income (loss) from discontinued operations, net of taxes (4) 18 Less: Net (income) loss attributable to noncontrolling interests (46) (51) EBIT* $ 2,521 $ 2,584 (2)% Add: Restructuring costs (1) 54 146 Add: Acquisition and disposition-related charges (benefits) (2) (15) (34) Add: Spin-Off and separation costs (3) 270 14 Add: (Gain) loss on business and asset dispositions (4) — (1) Add: Amortization of acquisition-related intangible assets 127 121 Add: Investment revaluation (gain) loss (5) (1) 31 Adjusted EBIT* $ 2,956 $ 2,861 3% Net income margin 8.0% 10.4% (240) bps Adjusted EBIT margin* 15.1% 15.6% (50) bps (1) Consists of severance, facility closures, and other charges associated with restructuring programs.
As a result, R&D as a percentage of Total revenues increased by 100 basis points and SG&A as a percentage of Total revenues decreased by 50 basis points.
As a result, SG&A as a percentage of Total revenues increased by 210 basis points and R&D as a percentage of Total revenues increased by 60 basis points.
For additional detail regarding our income taxes, please see “Critical Accounting Estimates” below and Note 11, “Income Taxes” to the combined financial statements.
For additional detail regarding our income taxes, see Note 11, “Income Taxes” to the consolidated and combined financial statements.
We have begun to establish additional procedures and practices as a stand-alone public company. As a result, we have started to and will continue to incur additional costs related to external reporting, internal audit, treasury, investor relations, Board of Directors and officers, and stock administration.
As a result, we have and will continue to incur additional costs related to external reporting, internal audit, treasury, investor relations, Board of Directors and officers, and stock administration.
The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of GE HealthCare Technologies Inc. for the years ended December 31, 2022 and 2021.
The following discussion and analysis provide information management believes to be relevant to understanding the financial condition and results of operations of GE HealthCare Technologies Inc. (“GE HealthCare,” the “Company,” “our,” or “we”) for the years ended December 31, 2023 and 2022.
We had $143 million and $194 million of assets in or directly related to these two countries as of December 31, 2022, and December 31, 2021, respectively, none of which are subject to sanctions that impact the carrying value of the assets.
Russia and Ukraine Conflict We had $153 million and $143 million of assets in, or directly related to, Russia and Ukraine as of December 31, 2023 and December 31, 2022, respectively, none of which are subject to sanctions that impact the carrying value of the assets.
Adjusted Net Income* For the years ended December 31 2022 2021 % change Net income attributable to GE HealthCare $ 1,916 $ 2,247 (15)% Add: Non-operating benefit (income) costs (5) 3 Add: Restructuring costs (a) 146 155 Add: Acquisition and disposition related charges (benefits) (b) (34) 14 Add: Spin-Off and separation costs (c) 14 — Add: (Gain)/loss of business dispositions/divestments (d) (1) (2) Add: Amortization of acquisition-related intangible assets 121 90 Add: Investment revaluation (gain)/loss (e) 31 (3) Add: Tax effect of reconciling items (67) (62) Less: Certain tax adjustments (f) — 77 Less: Income (loss) from discontinued operations, net of taxes 18 18 Adjusted net income* $ 2,103 $ 2,347 (10)% (a) Consists of severance, facility closures, and other charges associated with historical restructuring programs.
Adjusted Net Income* For the years ended December 31 2023 2022 % change Net income attributable to GE HealthCare $ 1,568 $ 1,916 (18)% Add: Non-operating benefit (income) costs (382) (5) Add: Restructuring costs (1) 54 146 Add: Acquisition and disposition-related charges (benefits) (2) (15) (34) Add: Spin-Off and separation costs (3) 270 14 Add: (Gain) loss on business and asset dispositions (4) — (1) Add: Amortization of acquisition-related intangible assets 127 121 Add: Investment revaluation (gain) loss (5) (1) 31 Add: Tax effect of reconciling items 92 (67) Add: Certain tax adjustments (6) 80 — Less: Income (loss) from discontinued operations, net of taxes (4) 18 Adjusted net income* $ 1,797 $ 2,103 (15)% (1) Consists of severance, facility closures, and other charges associated with restructuring programs.
Cash generated from operating activities in the year ended December 31, 2022, included Net income from continuing operations of $1,949 million, non-cash charges for depreciation and amortization of $633 million, and $448 million outflow from changes in assets and liabilities, primarily driven by an increase in inventory mainly due to inventory build to meet demand for 2023, higher cash taxes paid mainly due to mandatory capitalization of research and development costs under the TCJA beginning in 2022, and an increase in receivables, partially offset by an increase in accounts payable.
Cash generated from operating activities in the year ended December 31, 2022 was $2,134 million and included Net income from continuing operations of $1,949 million, non-cash charges for depreciation and amortization of $633 million, and a $448 million outflow from changes in assets and liabilities, primarily driven by an increase in inventory, higher cash taxes paid, and an increase in receivables, partially offset by an increase in accounts payable.
Segment EBIT For the years ended December 31 2022 % of segment revenues 2021 % of segment revenues % change Segment EBIT Imaging $ 1,100 11.0 % $ 1,240 13.1 % (11) % Ultrasound 908 26.5 % 885 27.9 % 3 % PCS 341 11.7 % 356 12.2 % (4) % PDx 520 26.6 % 693 34.3 % (25) % Other (a) (8) (2) $ 2,861 $ 3,172 (10) % (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.
Segment EBIT For the years ended December 31 2023 % of segment revenues 2022 % of segment revenues % change Segment EBIT Imaging $ 1,124 10.6 % $ 1,100 11.0 % 2 % Ultrasound 821 23.7 % 908 26.5 % (10) % PCS 383 12.2 % 341 11.7 % 12 % PDx 617 26.8 % 520 26.6 % 19 % Other (1) 11 (8) $ 2,956 $ 2,861 3 % (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.
For additional information on the year ended December 31, 2020 and year-over-year comparisons to December 31, 2021, refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-12B/A filed with the SEC on December 2, 2022.
For additional information on the year ended December 31, 2021 and year-over-year comparisons to December 31, 2022, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
We plan to continue to rely on capital markets, and we expect to have access to credit facilities to fund operations. The cost and availability of debt financing will be influenced by our credit ratings and market conditions. Moody's Investors Service ("Moody's"), Standard and Poor's Global Ratings ("S&P"), and Fitch Ratings ("Fitch") currently issue ratings on our long-term debt.
We plan to continue to rely on capital markets, and we expect to have access to credit facilities to fund our operations. The cost and availability of debt financing will be influenced by our credit ratings and market conditions.
Changes in existing tax laws or rates could significantly impact the estimate of our tax liabilities. Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in future years.
Our annual tax expense is based on our income, statutory tax rates, and tax incentives available to us in the various jurisdictions in which we operate. Changes in existing tax laws or rates could significantly impact the estimate of our tax liabilities. Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in future years.
For additional details on debt and credit facilities, see Note 9 , " Borrowings " to the combined financial statements. Access to Capital and Credit Ratings We have historically relied, via GE, on the debt capital markets to fund a significant portion of our operations.
Access to Capital and Credit Ratings We have historically relied, via GE, on the debt capital markets to fund a significant portion of our operations.
We continue to monitor the effects of Russia’s invasion of Ukraine, including the consideration of financial impact, cybersecurity risks, the applicability and effect of sanctions, and the employee base in Ukraine and Russia. The Board of Directors of GE oversaw and monitored those risks prior to the Spin-Off.
We continue to monitor the effects of Russia’s invasion of Ukraine, including the consideration of financial impact, cybersecurity risks, the applicability and effect of sanctions, and the employee base in Ukraine and Russia. In May 2023, the U.S.
Additionally, we have material cash requirements related to our pension obligations as described in Note 10 , “ Postretirement Benefit Plans ,” to the combined financial statements. Debt and Credit Facilities As part of our capital structure, we have incurred debt. The servicing of this debt will be supported by cash flows from our operations.
Additionally, we have material cash requirements related to our pension obligations as described in Note 10, “Postretirement Benefit Plans,” to the consolidated and combined financial statements included elsewhere in this Annual Report on Form 10-K. Debt and Credit Facilities As part of our capital structure, we have incurred debt.
Upon completion of the Spin-Off, we ceased participation in GE cash pooling arrangements and our Cash, cash equivalents, and restricted cash are held and used solely for our own ongoing operations and commitments. Our capital structure, long-term commitments, and sources of liquidity will change significantly from our historical practices.
U pon completion of the Spin-Off, we ceased participation in GE cash pooling arrangements and our Cash, cash equivalents, and restricted cash are held and used solely for our own ongoing operations and commitments.
The increase as a percent of sales was driven by cost inflation in materials and labor, partially offset by cost productivity initiatives and an increase in pricing of our service offerings.
Cost of services sold decreased $22 million or 130 basis points as a percent of Sales of services. The decrease as a percent of sales was driven by cost productivity and an increase in pricing of our service offerings, partially offset by cost inflation.
Free cash flow is Cash from (used for) operating activities - continuing operations including cash flows related to the additions and dispositions of PP&E and internal-use software as well as the impact of discontinued factoring programs.
Free cash flow is Cash from (used for) operating activities – continuing operations including cash flows related to the additions and dispositions of PP&E and internal-use software as well as the impact of discontinued factoring programs. Interest expense associated with external debt that was historically held by GE is not recognized in the combined financial statements and related notes.
We exclude from Segment EBIT certain corporate-related expenses and certain transactions or adjustments that our Chief Operating Decision Maker (which is our Chief Executive Officer) considers to be non-operational, such as interest expenses, income tax expenses, restructuring costs, acquisition and disposition related charges (benefits), Spin-Off and separation costs, Non-operating benefit (income) costs, gain/loss of business dispositions/divestments, amortization of acquisition-related intangible assets, Net (income) loss attributable to noncontrolling interests, Income (loss) from discontinued operations, net of taxes, and investment revaluation gain/loss.
Adjusted net income* was $1,797 million, a decrease of $306 million primarily due to higher Interest and other financial charges – net, partially offset by an increase in Operating Income, excluding the impact of one-time Spin-Off and separation costs, as discussed above. ____________________ *Non-GAAP Financial Measure 52 RESULTS OF OPERATIONS – SEGMENTS We exclude from Segment EBIT certain corporate-related expenses and certain transactions or adjustments that our Chief Operating Decision Maker (which is our Chief Executive Officer) considers to be non-operational, such as Interest and other financial charges – net, Benefit (provision) for income taxes, Restructuring costs, Acquisition and disposition-related benefits (charges), Spin-Off and separation costs, Non-operating benefit (income) costs, Gain (loss) on business and asset dispositions, Amortization of acquisition-related intangible assets, Net (income) loss attributable to noncontrolling interests, Income (loss) from discontinued operations, net of taxes, and Investment revaluation gain (loss).
Organic revenue* grew 10% primarily due to growth in MR and MI/CT product lines due to new product introductions as well as supply chain fulfillment improvements; • Ultrasound segment revenues were $3,422 million for the year ended December 31, 2022, growing 8% or $250 million as reported due to the acquisition of BK Medical and an increase in Organic revenue*, partially offset by unfavorable foreign currency impacts.
Organic revenue* grew 7% primarily due to growth in Magnetic Resonance and MI/CT product lines, due to supply chain fulfillment improvements, new product introductions, and an increase in price; • Ultrasound segment revenues were $3,457 million, growing 1% or $35 million as reported due to an increase in Organic revenue*, partially offset by unfavorable foreign currency impacts.
For the year ended December 31, 2022 • Imaging Segment EBIT was $1,100 million for the year ended December 31, 2022, a decrease of $140 million due to cost inflation as well as planned R&D and commercial investments, partially offset by a growth in sales volume and an increase in pricing of our products, in part to offset inflation; • Ultrasound Segment EBIT was $908 million for the year ended December 31, 2022, an increase of $23 million due to an increase in pricing of our products, in part to offset inflation, and growth in sales volume supported by new product introductions, partially offset by planned R&D and commercial investments and cost inflation; • PCS Segment EBIT was $341 million for the year ended December 31, 2022, a decrease of $15 million due to cost inflation as well as planned R&D investments, partially offset by an increase in pricing of our products, in part to offset inflation; and • PDx Segment EBIT was $520 million for the year ended December 31, 2022, a decrease of $173 million due to China-related impacts and cost inflation, partially offset by a growth in sales volume. ____________________ *Non-GAAP Financial Measure 53 NON-GAAP FINANCIAL MEASURES The non-GAAP financial measures presented in this Annual Report on Form 10-K are supplemental measures of our performance and our liquidity that we believe help investors understand our financial condition, cash flows and operating results, and assess our future prospects.
For the year ended December 31, 2023 • Imaging Segment EBIT was $1,124 million, an increase of $24 million due to cost productivity, an increase in price, and growth in sales volume, largely offset by investments, liquidation of higher-cost inventory, and mix between our product and service offerings; • Ultrasound Segment EBIT was $821 million, a decrease of $87 million due to cost inflation and investments, partially offset by cost productivity and an increase in price; • PCS Segment EBIT was $383 million, an increase of $42 million due to cost productivity, an increase in price, and growth in sales volume, partially offset by investments and cost inflation; and • PDx Segment EBIT was $617 million, an increase of $97 million due to an increase in price, growth in sales volume, and cost productivity, partially offset by cost inflation and investments. ____________________ *Non-GAAP Financial Measure 53 NON-GAAP FINANCIAL MEASURES The non-GAAP financial measures presented in this Annual Report on Form 10-K are supplemental measures of our performance and our liquidity that we believe help investors understand our financial condition, cash flows, and operating results, and assess our future prospects.
Additionally, Free cash flow does not represent residual cash flows available for discretionary expenditures, due to the fact the measures do not deduct the payments required for debt repayments. 54 Non-GAAP Reconciliations Management recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company.
Non-GAAP Reconciliations Management recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company.
For additional information, see Note 1, "Organization and Basis of Presentation" and Note 19, "Subsequent Events" to our combined financial statements. GE HealthCare utilized allocations and carve-out methodologies through the date of the Spin-Off to prepare historical combined financial statements.
Financial Presentation Under GE Ownership GE HealthCare utilized allocations and carve-out methodologies through the date of the Spin-Off to prepare historical combined financial statements.
The increase as a percent of sales was driven by cost inflation in material and logistics, partially offset by an increase in pricing of our products and cost productivity benefits from engineering design improvements. Cost of services sold decreased $28 million but increased 50 basis points as a percent of Sales of services.
The decrease as a percent of Total revenues was due to the following factors: • Cost of products sold increased $490 million but decreased 170 basis points as a percent of Sales of products. The decrease as a percent of sales was driven by cost productivity and an increase in pricing of our products, partially offset by cost inflation.
Our Board assumed oversight of these risks upon completion of the Spin-Off and, with management, will continue to assess whether developments related to the conflict have had, or are reasonably likely to have, a material impact on the Company.
The Board, together with management, will continue to assess whether developments related to the conflict have had, or are reasonably likely to have, a material impact on the Company. Seasonality Our revenues and operating profits vary from quarter to quarter.
See Note 8, “Acquisitions, Goodwill, and Other Intangible Assets” to the combined financial statements included elsewhere in this Annual Report on Form 10-K for further information on our business combinations. PENSIONS. We engage third-party actuaries to assist in the determination of pension obligations and related plan costs.
See Note 8, “Acquisitions, Goodwill, and Other Intangible Assets” to the consolidated and combined financial statements included elsewhere in this Annual Report on Form 10-K for further information on our business combinations. PENSIONS. Pension benefits are calculated using significant inputs to the actuarial models that measure pension benefit obligations and related effects on operations.
Risk Factors." Actual results may differ materially from these expectations, see “Forward-Looking Statements.” The following tables are presented in millions of U.S. dollars unless otherwise stated, except for per-share amounts which are presented in U.S. dollars. BUSINESS OVERVIEW OUR BUSINESS. GE HealthCare Technologies Inc. is a leading global medical technology, pharmaceutical diagnostics, and digital solutions innovator.
Actual results may differ materially from these expectations; see “Forward-Looking Statements.” The following tables are presented in millions of United States (“U.S.”) dollars unless otherwise stated, except for per-share amounts which are presented in U.S. dollars.
We are organized into four business segments that are aligned with the industries we serve: Imaging, Ultrasound, PCS, and PDx. 45 TRENDS AND FACTORS IMPACTING OUR PERFORMANCE We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in "Item 1A.
“Business.” TRENDS AND FACTORS IMPACTING OUR PERFORMANCE We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and particularly in Item 1A. “Risk Factors.” KEY TRENDS AFFECTING RESULTS OF OPERATIONS.
For the years ended December 31 2022 % of Total revenues 2021 % of Total revenues % change Operating income $ 2,522 13.8% $ 2,795 15.9% (10)% Net income attributable to GE HealthCare 1,916 10.4% 2,247 12.8% (15)% Adjusted EBIT* 2,861 15.6% 3,172 18.0% (10)% Adjusted net income* 2,103 11.5% 2,347 13.3% (10)% For the year ended December 31, 2022 Operating income was $2,522 million for the year ended December 31, 2022, a decrease of $273 million or 210 basis points as a percentage of Total revenues due to the $756 million increase in Total revenues being more than offset by the following factors: • Cost of products sold increased $779 million or 170 basis points as a percent of Sales of products.
For the years ended December 31 2023 % of Total revenues 2022 % of Total revenues % change Operating income $ 2,435 12.5% $ 2,522 13.8% (3)% Net income attributable to GE HealthCare 1,568 8.0% 1,916 10.4% (18)% Adjusted EBIT* 2,956 15.1% 2,861 15.6% 3% Adjusted net income* 1,797 9.2% 2,103 11.5% (15)% For the year ended December 31, 2023 Operating income was $2,435 million, a decrease of $87 million and 130 basis points as a percent of Total revenues.
Risk Factors." KEY TRENDS AFFECTING RESULTS OF OPERATIONS. Manufacturing, Sourcing and Supply Chain Management Our suppliers must provide us with quality products in substantial quantities, in compliance with regulatory requirements, at acceptable costs and on a timely basis.
Manufacturing, Sourcing, and Supply Chain Management Our suppliers must provide us with quality products in substantial quantities, in compliance with regulatory requirements, at acceptable costs and on a timely basis. Trends affecting the supply chain for the previous two years include the impact of increasing prices of labor and raw materials, limitations on capacity, and increased cost of shipping.
Cash used for financing activities included $8,934 million and $238 million of transfers to parent in the years ended December 31, 2022 and 2021, respectively partially offset by newly issued debt of $8,198 million and $5 million in the years ended December 31, 2022 and 2021, respectively. ____________________ *Non-GAAP Financial Measure 58 Free cash flow* Free cash flow* was $1,828 million and $2,827 million in the years ended December 31, 2022 and 2021, respectively.
Cash used for financing activities in the year ended December 31, 2022 was $822 million and primarily included $8,934 million of transfers to GE, partially offset by $8,198 million of newly issued debt.
(b) Consists of legal, consulting, and other transaction and integration fees, and adjustments to contingent consideration, as well as other purchase accounting related charges and other costs directly related to the transactions. (c) Costs incurred in the Spin-Off and separation from GE, including system implementations, audit and advisory fees, legal entity separation, and other one-time costs.
(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.
(b) Consists of legal, consulting, and other transaction and integration fees, and adjustments to contingent consideration, as well as other purchase accounting related charges and other costs directly related to the transactions. (c) Costs incurred in the Spin-Off and separation from GE , including system implementations, audit and advisory fees, legal entity separation, and other one-time costs.
(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.
(b) Consists of legal, consulting, and other transaction and integration fees, and adjustments to contingent consideration, as well as other purchase accounting related charges and other costs directly related to the transactions. (c) Costs incurred in the Spin-Off and separation from GE , including system implementations, audit and advisory fees, legal entity separation, and other one-time costs.
(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.
Revenues by Segment For the years ended December 31 2022 2021 % change % organic* change Segment revenues Imaging $ 9,985 $ 9,433 6 % 10 % Ultrasound 3,422 3,172 8 6 PCS 2,916 2,915 0 3 PDx 1,958 2,018 (3) 2 Other (a) 60 47 Total revenues $ 18,341 $ 17,585 4 % 7 % (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. ____________________ *Non-GAAP Financial Measure 50 Revenues by Region For the years ended December 31 2022 2021 % change USCAN (a) $ 8,130 $ 7,373 10 % EMEA 4,684 4,535 3 China region (b) 2,531 2,690 (6) Rest of World 2,996 2,987 0 Total revenues $ 18,341 $ 17,585 4 % (a) Includes revenue from the United States and Canada.
Revenues by Segment For the years ended December 31 2023 2022 % change % organic* change Segment revenues Imaging $ 10,581 $ 9,985 6% 7% Ultrasound 3,457 3,422 1% 2% PCS 3,142 2,916 8% 8% PDx 2,306 1,958 18% 18% Other (1) 66 60 Total revenues $ 19,552 $ 18,341 7% 8% (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.
The Credit Facilities include various customary covenants that limit, among other things, the incurrence of liens and the entry into certain fundamental change transactions by GE HealthCare. The Credit Facilities were not available to the Company or its subsidiaries until consummation of the Spin-Off. As such, there were no outstanding amounts under the Credit Facilities as of December 31, 2022.
As of December 31, 2023, there were no outstanding borrowings on either of the two revolving facilities. The Credit Facilities include various customary covenants that limit, among other things, the incurrence of liens securing debt, the entry into certain fundamental change transactions by GE HealthCare, and the maximum permitted leverage ratio.
Material Cash Requirements In the normal course of business, we enter into contracts and commitments that oblige us to make payments in the future.
Capital expenditures were primarily for manufacturing capacity expansion, and equipment and tooling for new and existing products including new product introductions. Material Cash Requirements In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future.
Our ratings may be subject to a revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating. We believe that our financing arrangements, future cash from operations, and access to capital markets will provide adequate resources to fund our future cash flow needs.
Our ratings may be subject to a revision or withdrawal at any time by the assigning rating organization, a nd each rating should be evaluated independently of any other rating.
The segment revenues performance were as follows: • Imaging segment revenues were $9,985 million for the year ended December 31, 2022, growing 6% or $552 million as reported due to an increase in Organic revenue*, partially offset by unfavorable foreign currency impacts.
The reported growth was primarily due to Sales of products growing 9% or $1,083 million as reported, with growth across all segments. The segment revenues were as follows: • Imaging segment revenues were $10,581 million, growing 6% or $596 million as reported due to an increase in Organic revenue*, partially offset by unfavorable foreign currency impacts.
Cash used for investing activities in the year ended December 31, 2022, included additions to PP&E of $310 million related primarily to new product introductions and manufacturing capacity expansion, and other investments of $92 million partially offset by dispositions of PP&E of $4 million.
Investing Activities Cash used for investing activities in the year ended December 31, 2023 was $558 million and primarily included additions to PP&E of $387 million related primarily to manufacturing capacity expansion, new product introductions, and purchases of businesses, net of cash acquired, of $147 million primarily related to Caption Health, Inc. (“Caption Health”).
Included in our total cost of revenue for the year ended December 31, 2022, as part of our product investment, was $429 million in engineering costs for design follow-through on new product introductions and product lifecycle maintenance subsequent to the initial product launch, compared to $386 million for the year ended December 31, 2021; and • Total operating expenses increased $278 million due to an increase in planned Research and development ("R&D") investments of $210 million and an increase in Selling, general, and administrative ("SG&A") expense of $68 million due to increased investment in commercial teams and marketing programs partially offset by a benefit from the remeasurement of contingent consideration related to acquisitions.
Included in our total cost of revenue as part of our product investment was $438 million in engineering costs for design follow-through on new product introductions and product lifecycle maintenance subsequent to the initial product launch, compared to $429 million for the prior year comparable period ; and • Total operating expenses increased $830 million due to an increase in Selling, general, and administrative (“SG&A”) expense of $651 million driven by increased costs associated with both the one-time stand-up and recurring operations of a standalone company and commercial and marketing investments and an increase in R&D investments of $179 million.
Organic Revenue* For the years ended December 31 2022 2021 % change Imaging revenues $ 9,985 $ 9,433 6% Less: Acquisitions (a) — — Less: Dispositions (b) — — Less: Foreign currency exchange (413) — Imaging organic revenue* $ 10,398 $ 9,433 10% Ultrasound revenues $ 3,422 $ 3,172 8% Less: Acquisitions (a) 237 — Less: Dispositions (b) — — Less: Foreign currency exchange (182) — Ultrasound organic revenue* $ 3,367 $ 3,172 6% PCS revenues $ 2,916 $ 2,915 —% Less: Acquisitions (a) — — Less: Dispositions (b) — — Less: Foreign currency exchange (73) — PCS organic revenue* $ 2,989 $ 2,915 3% PDx revenues $ 1,958 $ 2,018 (3)% Less: Acquisitions (a) 2 — Less: Dispositions (b) — — Less: Foreign currency exchange (100) — PDx organic revenue* $ 2,056 $ 2,018 2% Other revenues $ 60 $ 47 28% Less: Acquisitions (a) — — Less: Dispositions (b) — — Less: Foreign currency exchange (3) — Other organic revenue* $ 63 $ 47 34% Total revenues $ 18,341 $ 17,585 4% Less: Acquisitions (a) 239 — Less: Dispositions (b) — — Less: Foreign currency exchange (771) — Organic revenue* $ 18,873 $ 17,585 7% (a) Represents revenues attributable to acquisitions from the date we completed the transaction through the end of four quarters following the transaction.
Organic Revenue* For the years ended December 31 2023 2022 % change Imaging revenues $ 10,581 $ 9,985 6% Less: Acquisitions (1) 1 — Less: Dispositions (2) — — Less: Foreign currency exchange (144) — Imaging Organic revenue* $ 10,724 $ 9,985 7% Ultrasound revenues $ 3,457 $ 3,422 1% Less: Acquisitions (1) — — Less: Dispositions (2) — — Less: Foreign currency exchange (43) — Ultrasound Organic revenue* $ 3,500 $ 3,422 2% PCS revenues $ 3,142 $ 2,916 8% Less: Acquisitions (1) — — Less: Dispositions (2) — — Less: Foreign currency exchange (16) — PCS Organic revenue* $ 3,158 $ 2,916 8% PDx revenues $ 2,306 $ 1,958 18% Less: Acquisitions (1) — — Less: Dispositions (2) — — Less: Foreign currency exchange (14) — PDx Organic revenue* $ 2,320 $ 1,958 18% Other revenues $ 66 $ 60 10% Less: Acquisitions (1) — — Less: Dispositions (2) — — Less: Foreign currency exchange 1 — Other Organic revenue* $ 65 $ 60 8% Total revenues $ 19,552 $ 18,341 7% Less: Acquisitions (1) 1 — Less: Dispositions (2) — — Less: Foreign currency exchange (216) — Organic revenue* $ 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.
For details on the plans transferred by GE please refer to "Transition to Stand-alone Company" above. See Note 10, “Postretirement Benefit Plans” to the combined financial statements included elsewhere in this Annual Report on Form 10-K for further information on our postretirement benefit plans. INCOME TAXES.
See Note 10, “Postretirement Benefit Plans” to the consolidated and combined financial statements included elsewhere in this Annual Report on Form 10-K for further information on our postretirement benefit plans. INCOME TAXES. For periods prior to the Spin-Off, GE HealthCare is included in the combined U.S. federal, state, and foreign income tax returns of GE, where eligible.
Free cash flow We believe that Free cash flow provides management and investors with an important measure of our ability to generate cash on a normalized basis.
However, Adjusted tax expense and Adjusted effective tax rate should not be construed as inferring that our future results will be unaffected by the items for which the measure adjusts. 54 Free cash flow We believe that Free cash flow provides management and investors with an important measure of our ability to generate cash on a normalized basis.
(f) Consists of certain income tax adjustments, such as the impact of tax legislation and the establishment or reversal of significant deferred tax asset valuation allowances. ____________________ *Non-GAAP Financial Measure 56 Adjusted Earnings Per Share* For the years ended December 31 2022 2021 $ change Basic and diluted earnings per share – continuing operations $ 4.18 $ 4.91 $ (0.73) Add: Non-operating benefit (income) costs (0.01) 0.01 Add: Restructuring costs (a) 0.32 0.34 Add: Acquisition and disposition related charges (benefits) (b) (0.07) 0.03 Add: Spin-Off and separation costs (c) 0.03 — Add: (Gain)/loss of business dispositions/divestments (d) (0.00) (0.00) Add: Amortization of acquisition-related intangible assets 0.27 0.20 Add: Investment revaluation (gain)/loss (e) 0.07 (0.01) Add: Tax effect of reconciling items (0.15) (0.14) Less: Certain tax adjustments (f) — 0.17 Adjusted basic and diluted earnings per share* (g) $ 4.63 $ 5.17 $ (0.54) (a) Consists of severance, facility closures, and other charges associated with historical restructuring programs.
(6) Consists of certain income tax adjustments, including 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 and the impact of adjusting deferred tax assets and liabilities to standalone GE HealthCare tax rates. ____________________ *Non-GAAP Financial Measure 56 Adjusted Earnings Per Share* For the years ended December 31 (In dollars, except shares outstanding presented in millions) 2023 2022 $ change Diluted earnings per share – continuing operations $ 3.04 $ 4.18 $ (1.14) Add: Deemed preferred stock dividend of redeemable noncontrolling interest 0.40 — Add: Non-operating benefit (income) costs (0.83) (0.01) Add: Restructuring costs (1) 0.12 0.32 Add: Acquisition and disposition-related charges (benefits) (2) (0.03) (0.07) Add: Spin-Off and separation costs (3) 0.59 0.03 Add: (Gain) loss on business and asset dispositions (4) — (0.00) Add: Amortization of acquisition-related intangible assets 0.28 0.27 Add: Investment revaluation (gain) loss (5) (0.00) 0.07 Add: Tax effect of reconciling items 0.20 (0.15) Add: Certain tax adjustments (6) 0.17 — Adjusted earnings per share* (7) $ 3.93 $ 4.63 $ (0.70) Diluted weighted-average shares outstanding 458 454 (1) Consists of severance, facility closures, and other charges associated with restructuring programs.
Pension and Other Benefit-Related Liabilities In connection with the Spin-Off, on January 1, 2023 GE transferred certain plan liabilities and assets to GE HealthCare. The amounts related to the plans assumed by GE HealthCare on January 1, 2023, in addition to the existing GE HealthCare plans, are shown in the table below.
Pension and Other Benefit-Related Liabilities In connection with the Spin-Off, on January 1, 2023, GE HealthCare assumed a net postretirement benefit obligation of $4,045 million, in addition to the existing GE HealthCare net postretirement benefit obligation of $278 million, for a total net obligation of $4,323 million.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the combined financial statements and corresponding notes included elsewhere in this Annual Report on Form 10-K.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) Page Trends and Factors Impacting Our Performance 48 Summary of Key Performance Measures 49 Results of Operations 50 Results of Operations – Segments 53 Non-GAAP Financial Measures 54 Liquidity and Capital Resources 58 Recently Issued Accounting Pronouncements 59 Critical Accounting Estimates 59 47 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated and combined financial statements and corresponding notes included elsewhere in this Annual Report on Form 10-K.
Management also reviews and analyzes Organic revenue*, Adjusted Earnings Before Interest and Taxes (Adjusted EBIT*), Adjusted net income*, Adjusted earnings per share*, and Free cash flow*, which are non-GAAP financial measures. These measures are reviewed and analyzed in order to evaluate our business performance, identify trends affecting our business, allocate capital, and make strategic decisions, including those discussed below.
Management also reviews and analyzes Organic revenue*, Adjusted Earnings Before Interest and Taxes* (“Adjusted EBIT*”), Adjusted net income*, Adjusted tax expense*, Adjusted effective tax rate* (“Adjusted ETR*”), Adjusted earnings per share*, and Free cash flow*, which are non-GAAP financial measures.
The income tax provisions and related deferred tax assets and liabilities reflected in our combined financial statements have been estimated as if we were a separate taxpayer. Our annual tax expense is based on our income, statutory tax rates, and tax incentives available to us in the various jurisdictions in which we operate.
However, we have adopted the separate return approach for purposes of our combined financial statements. The income tax provisions and related deferred tax assets and liabilities reflected in our combined financial statements for the periods ended December 31, 2022 and 2021 have been estimated as if we were a separate taxpayer.
For additional detail regarding changes to our capital structure, see “Debt and Credit Facilities” section below. We believe our cash on hand, cash generated from operating activities, and other sources of liquidity discussed in detail below will be sufficient to meet the needs of our current and planned operations for at least the next 12 months.
We believe that our existing balance of Cash, cash equivalents, and restricted cash, future cash generated from operating activities, access to capital markets, and existing credit facilities will be sufficient to meet the needs of our current and ongoing operations, pay taxes due, service our existing debt, and fund investments in our business for at least the next 12 months.
Free Cash Flow* For the years ended December 31 2022 2021 % change Cash from (used for) operating activities – continuing operations $ 2,134 $ 1,607 33% Add: Additions to PP&E and internal-use software (310) (248) Add: Dispositions of PP&E 4 15 Add: Impact of discontinued factoring programs (a) — 1,453 Free cash flow* $ 1,828 $ 2,827 (35)% (a) Adjustment to present net cash flows from operating activities from continuing operations had we not factored receivables with GE’s Working Capital Solutions (“WCS”).
Free Cash Flow* For the years ended December 31 2023 2022 % change Cash from (used for) operating activities – continuing operations $ 2,101 $ 2,134 (2)% Add: Additions to PP&E and internal-use software (387) (310) Add: Dispositions of PP&E 1 4 Free cash flow* $ 1,715 $ 1,828 (6)% ____________________ *Non-GAAP Financial Measure 57 LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2023, our Cash, cash equivalents, and restricted cash balance was $2,504 million.
The following table summarizes our cash flows for the periods presented: ____________________ *Non-GAAP Financial Measure 57 Cash Flow For the years ended December 31 2022 2021 Cash from (used for) operating activities – continuing operations $ 2,134 $ 1,607 Cash from (used for) investing activities – continuing operations (398) (1,761) Cash from (used for) financing activities – continuing operations (822) (263) Free cash flow* 1,828 2,827 Operating Activities Cash generated from operating activities from continuing operations was $2,134 million and $1,607 million in the years ended December 31, 2022 and 2021, respectively.
The following table summarizes our cash flows for the periods presented: Cash Flow For the years ended December 31 2023 2022 Cash from (used for) operating activities – continuing operations $ 2,101 $ 2,134 Cash from (used for) investing activities – continuing operations (558) (398) Cash from (used for) financing activities – continuing operations (478) (822) Free cash flow* 1,715 1,828 Operating Activities Cash generated from operating activities in the year ended December 31, 2023 was $2,101 million and included Net income from continuing operations of $1,618 million, non-cash charges for depreciation and amortization of $610 million, and a $127 million outflow from changes in assets and liabilities, primarily driven by company-funded benefit payments for postretirement benefit plans and an increase in receivables, partially offset by lower cash taxes paid and a decrease in inventories.
We engage third-party valuation specialists who review our critical assumptions and prepare the calculations of the fair value of acquired intangible assets in connection with significant business combinations. 60 In-process research and development (“IPR&D”) acquired as part of a business combination is initially capitalized at fair value when acquired and considered an indefinite-lived intangible asset and is subject to an annual impairment test.
These assumptions are forward-looking and could be affected by future economic and market conditions. We engage third-party valuation specialists who review our critical assumptions and prepare the calculations of the fair value of acquired intangible assets in connection with significant business combinations.
RESULTS OF OPERATIONS – SEGMENTS We report our business in four reportable segments (Imaging, Ultrasound, PCS, and PDx) and we evaluate their operating performance using revenue and Segment EBIT.
GE HealthCare’s operations are organized and managed through four reportable segments: Imaging, Ultrasound, Patient Care Solutions (“PCS”), and Pharmaceutical Diagnostics (“PDx”) and we evaluate their operating performance using revenue and Segment EBIT. For additional information on the nature of our business see Item 1.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe enter into derivative financial arrangements to the extent they meet the objective described above, and we do not use derivatives for trading or speculative purpose. FOREIGN CURRENCY RISK. As a result of our global operations, we generate and incur a significant portion of our revenues and expenses in currencies other than the U.S. dollar.
Biggest changeAs a result of our global operations, we generate and incur a significant portion of our revenues and expenses, including those arising from intercompany transactions, in currencies other than the functional currency of our foreign operations creating exposure to foreign currency translation risk.
Disruptions in deliveries, capacity constraints, production disruptions up- or down-stream, price increases, or decreased availability of raw materials or commodities, including as a result of war, natural disasters, climate change-related physical and transitional risks, actual or threatened public health emergencies, or other business continuity events, adversely affect our operations and, depending on the length and severity of the disruption, can limit our ability to meet our commitments to customers or significantly impact our operating profit or cash flows. 62 ITEM 8.
Disruptions in deliveries, capacity constraints, production disruptions up- or down-stream, price increases, or decreased availability of raw materials or commodities (including as a result of war, natural disasters, climate change-related physical and transitional risks, actual or threatened public health emergencies, or other business continuity events) adversely affect our operations and, depending on the length and severity of the disruption, can limit our ability to meet our commitments to customers or significantly impact our operating profit or cash flows.
If supply of these materials is restricted or if prices increase, this could constrain our manufacturing of affected products, reduce our profit margins, or otherwise adversely affect our business, our customers, and patients that may rely on our products. Similarly, commodities and energy prices are subject to significant volatility.
If supply of these materials is restricted or if prices increase, this could constrain our manufacturing of affected products, reduce our profit margins, or otherwise adversely affect our business, our customers, and patients who may rely on our products. Similarly, commodities and energy prices are subject to significant volatility.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk primarily from changes in interest rates and foreign currency exchange rates, which may impact future income, cash flows, and fair value of our business.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk primarily from changes in interest rates, foreign currency exchange rates, commodity prices, and equity prices, which may impact future income, cash flows, and fair value of our business.
If the cost of certain commodities or of energy, shipping, or transportation increases and we are unable to pass along these costs to our customers, our profit margins would be adversely affected.
If the costs of certain commodities or of energy, shipping, or transportation increase and we are unable to pass along these costs to our customers, our profit margins would be adversely affected.
We use cash flow hedging primarily to reduce or eliminate the effects of foreign currency rate changes on purchase and sale contracts and economic hedges (which are not designated as hedges from an accounting standpoint) when we have exposures to currency exchange risk for which we are unable to meet the requirements for hedge accounting.
We use cash flow hedging primarily to reduce or eliminate the effects of foreign currency exchange rate changes on purchase and sale contracts and economic hedges when we have exposures to currency exchange risk for which we are unable to meet the requirements for hedge accounting.
The global nature of our customer base and manufacturing footprint allows for the natural offset of certain income and costs denominated in foreign currencies. See Note 2, "Summary of Significant Accounting Policies" for net gains (losses) from foreign currency transactions for the years ended December 31, 2022, 2021, and 2020.
The global nature of our customer base and manufacturing footprint allows for the natural offset of certain income and costs denominated in foreign currencies. See Note 2, “Summary of Significant Accounting Policies” for net gains (losses) from foreign currency transactions for the years ended December 31, 2023, 2022, and 2021. INTEREST RATE RISK.
The foreign currency effect arising from operating activities outside of the U.S., including the remeasurement of derivatives, can result in significant transactional foreign currency fluctuations at points in time, but generally will be offset as the underlying hedged item is recognized in earnings.
The effect arising from foreign currency transactions, including the remeasurement of derivatives mentioned above, can result in significant fluctuations at points in time, but generally will be offset as the underlying hedged item is recognized in earnings.
In certain situations, we may seek to reduce cash flow volatility associated with changes in interest rates and foreign currency exchange rates by entering into financial arrangements intended to provide a hedge against a portion of the risks associated with such volatility. We continue to have exposure to such risks to the extent they are not hedged.
In certain situations, we may seek to reduce cash flow volatility associated with changes in foreign currency exchange rates, the foreign currency risk associated with our net investment in foreign operations, or the fair value interest rate risk of our financial instruments bearing fixed interest by entering into financial arrangements intended to provide a hedge against a portion of the risks associated with such risks.
See Note 13, “Financial Instruments and Fair Value Measurements” to the combined financial statements for further information about our risk exposures, our use of derivatives, and the effects of this activity on our combined financial statements. INTEREST RATE RISK. We are exposed to changes in interest rates, which primarily impact our borrowings and cash investments.
See Note 13, “Financial Instruments and Fair Value Measurements” to the consolidated and combined financial statements for further information about our risk exposures, our use of derivatives, and the effects of this activity on our consolidated and combined financial statements. 63 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Part II. Financial Information Index
A hypothetical change of interest rates by 100 basis points would increase or decrease our annual interest expense by approximately $20 million, partially offset by the change in interest income from our cash investments. COMMODITY RISK. We rely upon supplies of certain raw materials including helium, iodine, and rare earth minerals.
A hypothetical change of interest rates by 100 basis points would increase or decrease our annual interest expense by approximately $22 million, partially offset by the change in interest income from our cash investments. We primarily manage interest rate risk by using a mix of fixed-rate and variable-rate debt that we deem appropriate.
We began operations as an independent company with approximately $1,800 million of cash, cash equivalents, and restricted cash, which are invested in short-term investments that generate income based on a variable interest rate.
As of December 31, 2023, we have $8,250 million of fixed-rate debt and $1,150 million outstanding on the Term Loan Facility which carries a variable interest rate. As of December 31, 2023, we have $2,504 million of Cash, cash equivalents, and restricted cash, which are invested in short-term investments that generate income based on variable interest rates.
We manage interest expense using a mixture of fixed-rate and variable-rate debt. As part of our 2022 funding actions, we incurred $8,250 million of fixed- rate debt as of December 31, 2022. A change in interest rates would impact the fair value of this debt, but would not directly impact our earnings or cash flows.
A change in interest rates would impact the fair value of our fixed-rate debt and would impact our earnings and cash flows associated with our floating-rate debt.
In economic hedges, the hedging derivative impact is fully recognized in earnings in current periods. In cash flow hedges, the effective portion of the hedging derivative is offset in separate components of equity and ineffectiveness is recognized in earnings. As a result of the above mitigating activities, we have been able to significantly reduce financial impact volatility from currency fluctuations.
We use net investment hedging to hedge the foreign currency risk of our net investment in foreign operations against adverse movements in exchange rates against the USD. As a result of the above mitigating activities, we have been able to significantly reduce the financial impact of volatility from currency fluctuations.
Such principal currencies include the Euro, the Chinese Yuan, the Japanese Yen, the Norwegian Krone, and the British Pound Sterling, among others. The results of operating entities reported in currencies other than the U.S. dollar are translated to the U.S. dollar at the applicable exchange rate for inclusion in our combined financial statements.
Such principal currencies include the Euro, the Chinese Renminbi, the Japanese Yen, the Norwegian Krone, and the British Pound Sterling, among others. Operating entities with functional currencies other than the USD also create exposure to foreign currency risk realized upon their sale or a complete or substantially complete liquidation.
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We use cross-currency swap derivative contracts to hedge translation exposure of net investments in foreign operations against adverse movements in exchange rates against the U.S dollar.
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We continue to have exposure to such risks to the extent they are not hedged. We enter into derivative contracts to the extent they meet the objectives described above, and not for speculative purposes. FOREIGN CURRENCY RISK.
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On January 3, 2023, we completed a $2,000 million drawdown of the Term Loan Facility, which carries a variable interest rate. As a result, the primary direct interest rate exposure on our earnings and cash flows arises from the Term Loan Facility, which currently comprises approximately 20% of our total debt obligations.
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The potential decrease in fair value of our foreign currency derivative contracts from a 10% decrease in USD spot rates against other applicable currencies would have been $13 million as of December 31, 2023. This excludes foreign currency derivative contracts designated as net investment hedges as changes in the fair value of those contracts are not expected to impact earnings.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Part II. Financial Information Index Item 8.
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The sensitivity analysis assumes a uniform weakening of USD spot rates against the other applicable currencies, compared to the actual exchange rates applied as of December 31, 2023, with all other factors remaining constant. This sensitivity analysis disregards the offsetting change in value of the underlying hedged currency exposures in earnings.
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Combined Financial Statements Page Report of Independent Registered Public Accounting Firm - Deloitte & Touche LLP ( PCAOB ID No. 34) 64 Report of Independent Registered Public Accounting Firm - (KPMG LLP, Chicago, I L , Auditor Firm ID: 185) 66 Combined Statement s of Income 67 Combined Statements of Comprehensive Income 68 Combined Statement s of Financial Position 69 Combined Statements of Changes in Equity 70 Combined Statements of Cash Flows 71 Notes to the Combined Financial Statements 72 Note 1 Organization and Basis of Presentation 72 Note 2 Summary of Significant Accounting Policies 73 Note 3 Revenue Recognition 83 Note 4 Segment and Geographical Information 83 Note 5 Receivables 85 Note 6 Financing Receivables 87 No t e 7 Leases 87 Note 8 Acquisitions, Goodwill , and Other Intangible Assets 89 Note 9 Borrowings 90 Note 10 Postretirement Benefit Plans 92 Note 11 Income T axes 96 Note 12 Accumulated Other Comprehensive ( Income ) Loss - Net 99 Note 13 Financial Instruments and Fair Value Measurements 99 Note 14 Commitments, Guarantees, Product Warranties , and Other Loss Contingencies 102 Note 15 Restructuring and Other Activities 104 Note 16 Supplemental Financial Information 104 Note 17 Related Parties 106 Note 18 Discontinued Operations 107 Note 19 Subsequent Events 108 63 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of GE HealthCare Technologies Inc.
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We are exposed to interest rate risk due to changes in benchmark interest rates, related to the fair value of our borrowings bearing fixed interest rates and variability of cash flows related to our investments and borrowings bearing variable interest rates.
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Opinion on the Financial Statements We have audited the accompanying combined statements of financial position of GE HealthCare Technologies Inc.
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We entered into interest-rate swap contracts in the fourth quarter of 2023, to synthetically convert $1,000 million of our senior unsecured notes from fixed rates to variable rates as part of our interest rate risk management strategy. 62 COMMODITY RISK. We rely upon supplies of certain raw materials including helium, iodine, and rare earth minerals.
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(the "Company") as of December 31, 2022 and 2021, the related combined statements of income, comprehensive income, changes in equity, and cash flows, for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the "financial statements").
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We may from time to time engage in hedging transactions to reduce the impact to earnings from commodity price fluctuations. The impact of commodity hedges is recognized in earnings in the applicable current period. EQUITY RISK. As of December 31, 2023, we have $269 million of deferred compensation liabilities subject to the risk of changes in equity prices.
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In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
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A change in the U.S equity markets would result in a corresponding change in the fair value of these deferred compensation liabilities, which would impact our earnings and cash flows. We may from time to time engage in hedging transactions to reduce the impact to earnings from equity price fluctuations.
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Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit.
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We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
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We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
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The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
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Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
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Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
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Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
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Income Taxes – Valuation Allowance on Deferred Tax Assets — Refer to Notes 2 and 11 to the financial statements Critical Audit Matter Description The Company recognizes deferred income taxes for tax attributes and for differences between the financial statement and tax basis of assets and liabilities at enacted statutory tax rates in effect for the years in which the deferred tax liability or asset is expected to be settled or realized.
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A valuation allowance is provided to offset deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Future realization of deferred tax assets depends on the existence of sufficient taxable income of the appropriate character.
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Sources of taxable income include future reversals of deferred tax assets and liabilities, expected future taxable income, taxable income in prior carryback years if permitted under the tax law, and tax planning strategies. The Company’s valuation allowance for deferred tax assets was $272 million as of December 31, 2022. The Company’s determination of the valuation allowance involves judgments and estimates.
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Management’s primary estimates used to determine whether deferred tax assets are more likely than not to be realized and to measure the related valuation allowances are the projected timing and pattern of future reversals of existing taxable temporary differences and the projection of future sources of taxable income.
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Auditing management’s projected timing and pattern of future reversals of existing taxable temporary differences and the projection of future sources of taxable income, which affect the recorded valuation allowances, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our income tax specialists. 64 How the Critical Audit Matter Was Addressed in the Audit With the assistance of our income tax specialists, our audit procedures related to estimated future sources of taxable income included the following, among others: • We considered relevant tax laws and regulations in evaluating the appropriateness of management’s estimates of future sources of taxable income. • We evaluated the reasonableness of management’s estimates of future sources of taxable income by comparing the estimates to historical sources of taxable income or loss. • We evaluated management’s projected timing and projected pattern of the reversals of existing taxable temporary differences. • We evaluated whether the estimated future sources of taxable income were of the appropriate character to utilize the deferred tax assets under tax law. • We evaluated management’s assessment that it is more likely than not that sufficient taxable income will be generated in the future to utilize certain net deferred tax assets. • We evaluated whether the estimates of future taxable income were consistent with evidence obtained in other areas of the audit.
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Income Taxes — Application of Separate Return Method — Refer to Notes 2 and 11 to the financial statements Critical Audit Matter Description The Company is included in certain U.S. and non – U.S. tax filings of General Electric Company, the Company’s parent company as of December 31, 2022.
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For purposes of these financial statements, the Company’s income tax provision is determined on a separate return basis as if the Company was a stand-alone entity, based on management’s interpretation of the tax regulations and rulings in numerous taxing jurisdictions.
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When calculating the income tax provision, management made certain estimates and assumptions when identifying and measuring deferred tax assets and liabilities and uncertain tax positions. The income tax provision for the Company for 2022 was $563 million. The Company’s net deferred tax asset was $1,180 million as of December 31, 2022.
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The Company’s liability for unrecognized tax benefits was $465 million as of December 31, 2022.
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Given the number of taxing jurisdictions and the complex and subjective nature of the associated tax regulations and rulings, auditing management’s application of the separate return method required a high degree of auditor judgment and increased extent of effort, including the need to involve our income tax specialists.
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How the Critical Audit Matter Was Addressed in the Audit With the assistance of our income tax specialists, our audit procedures related to management’s application of the separate return method included the following, among others: • We evaluated the completeness of the Company’s identification of deferred tax assets and liabilities by: ◦ Comparing the deferred tax assets and liabilities to those historically identified and accounted for by General Electric Company. ◦ Analyzing the deferred tax assets and liabilities attributed to allocations of assets and liabilities historically held by General Electric Company. • We selected a sample of deferred tax assets and liabilities and tested the accuracy, completeness, and classification of each selection. • We evaluated management’s computations supporting the income tax provision. • We evaluated management’s significant judgments regarding the identification and measurement of uncertain tax positions by analyzing uncertain tax positions of General Electric Company and determining which positions were attributable to the separate operations of the Company. /s/ Deloitte & Touche LLP Chicago, Illinois February 15, 2023 We have served as the Company’s auditor since 2022. 65 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors GE HealthCare Technologies Inc.
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Opinion on the Combined Financial Statements We have audited the accompanying combined statements of income, comprehensive income, changes in equity, and cash flows of GE HealthCare Technologies Inc. (a carve-out business of General Electric Company) (the Company) for the year ended December 31, 2020, and the related notes (collectively, the combined financial statements).
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In our opinion, the combined financial statements present fairly, in all material respects, the results of operations of the Company and its cash flows for the year ended December 31, 2020, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These combined financial statements are the responsibility of the Company’s management.
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Our responsibility is to express an opinion on these combined financial statements based on our audit.
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We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
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We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement, whether due to error or fraud.
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Our audit included performing procedures to assess the risks of material misstatement of the combined financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the combined financial statements.
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Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ KPMG LLP We served as the Company’s auditor from 2022 to 2022. Chicago, Illinois July 29, 2022 66

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