Gravity Analytica

GE HealthCare reports third quarter 2024 financial results

GEHCV 10.30.2024

SERA-AI Powered Highlights

Drug:flurpiridaz F18 Flyrcado

Diseases:coronary artery disease

Date of Upcoming Event:2024-10-30

Name of Upcoming Event:ASTRO 2024

Full Press Release SEC Filings Our GEHCV Tweets

About Gravity Analytica

Recent Filings

12.12.2024 - 8-K Current report

Revenue growth was 1% year-over-year; Organic revenue growth* was 1%
Net income margin was 9.7% versus 7.8% for the prior year; Adjusted earnings before interest and taxes (EBIT) margin* was 16.3% versus 15.4%
Diluted earnings per share (EPS) were$1.02versus$0.83for the prior year; Adjusted EPS* was$1.14versus$0.99
Cash flow from operating activities was$742 millionversus$650 millionfor the prior year; Free cash flow* was$651 millionversus$570 million
Company raises low end of full-year 2024 Adjusted EBIT margin* and Adjusted EPS* guidance with continued execution; trending toward the lower end of Organic revenue growth* range

CHICAGO--(BUSINESS WIRE)--Oct. 30, 2024--GE HealthCare(Nasdaq: GEHC) today reported financial results for the third quarter endedSeptember 30, 2024.

GE HealthCarePresident and CEOPeter Arduinisaid, “In the third quarter, we reported sales and orders growth of 1% globally. Both sales and orders grew in the mid-single digits excludingChina, with particular strength in theU.S.across all segments.Pharmaceutical Diagnosticsalso delivered solid performance, driven by healthy procedure volumes. Ongoing lean initiatives across the organization are delivering better value to patients and customers and have resulted in robust margin expansion.”

Third quarter 2024 total company financial performance

Revenues of$4.9 billionincreased 1% on both a reported and Organic* basis year-over-year. Positive revenue growth in theU.S.and inPharmaceutical Diagnostics(PDx) was offset by continued market softness inChina.
Total company book-to-bill was 1.04 times. Total company orders increased 1% organically year-over-year.
Net income attributable toGE HealthCarewas$470 millionversus$375 millionfor the prior year, and Adjusted EBIT* was$795 millionversus$744 million.
Net income margin was 9.7% versus 7.8% for the prior year, up 190 basis points (bps). Adjusted EBIT margin* was 16.3% versus 15.4%, up 90 bps as both measures saw benefits from productivity and price.
Diluted EPS was$1.02versus$0.83, up$0.20from the prior year. Adjusted EPS* was$1.14versus$0.99, up$0.15from the prior year as both measures saw improved EBIT and lower tax expense.
Cash flow from operating activities was$742 million, up$92 millionyear-over-year. Free cash flow* was$651 million, up$81 millionyear-over-year.

Third quarter 2024 segment financial performance(Unaudited)

EffectiveJuly 1, 2024, Image Guided Therapies, previously part of the Imaging segment, was realigned to the Ultrasound segment to better match its clinical usage and realize stronger business and customer impact by providing the right image guidance in the right care setting. The Ultrasound segment was subsequently renamed Advanced Visualization Solutions (AVS). Historical segment financial information presented herein has been recast to conform to the new reportable segments structure. The Company is providing recast financial information for fiscal years 2022, 2023, and the six months ended 2024 via a Form 8-K filed today with theU.S. Securities and Exchange Commission.

*Segment($ in millions)***	Imaging	Advanced VisualizationSolutions	Patient CareSolutions	PharmaceuticalDiagnostics
Segment Revenues	$2,229	$1,216	$779	$625
YoY % change	—%	—%	2%	6%
YoY % Organic* change	(1)%	—%	2%	7%
Segment EBIT	$287	$232	$82	$193
YoY % change	18%	(9)%	3%	16%
Segment EBIT Margin	12.9%	19.0%	10.6%	30.9%
YoY change	200 bps	(190) bps	10 bps	270 bps
YoY refers to year-over-year comparison on a recast basis

Growth and innovation

Mr. Arduinicontinued, “The recent FDA approval of our FlyrcadoTM (flurpiridaz F18) injection in theU.S.is an important moment in molecular imaging as we continue to address unmet patient needs and advance more precise, personalized care. Flyrcado is a first-of-its-kind PET myocardial perfusion imaging (MPI) agent for the detection of coronary artery disease. This milestone achievement has the potential to expand clinical and patient access to PET MPI.”

Recent innovation and commercial highlights

2024 Guidance

Today, the Company updates full-year 2024 guidance as follows:

Organic revenue growth* trending toward the lower end of the range of 1% to 2% year-over-year, given the continuedChinamarket softness
Adjusted EBIT margin* in the range of 15.8% to 16.0%, reflecting an expansion of 70 to 90 basis points versus 2023 Adjusted EBIT margin* of 15.1%; this compares to prior guidance of 15.7% to 16.0%
Adjusted effective tax rate (ETR)* trending toward the lower end of the 23% to 25% range, given additional tax incentives recognized in third quarter 2024
Adjusted EPS* in the range of$4.25to$4.35, representing 8% to 11% growth versus Adjusted EPS* of$3.93for 2023; this compares with prior range of$4.20to$4.35
Free cash flow* of approximately$1.8 billion

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

Financial rounding

Certain columns and rows in this document may not sum due to the use of rounded numbers. Percentages presented are calculated from the underlying whole-dollar amounts.

Condensed Consolidated Statements of Income (Unaudited)
	For the three months endedSeptember 30						For the nine months endedSeptember 30
*(In millions, except per share amounts)*		2024			2023			2024			2023
Sales of products	$	3,201		$	3,186		$	9,454		$	9,530
Sales of services		1,662			1,636			4,899			4,816
Total revenues		4,863			4,822			14,353			14,346
Cost of products		2,033			2,076			6,045			6,197
Cost of services		805			811			2,378			2,383
Gross profit		2,026			1,935			5,930			5,766
Selling, general, and administrative		1,034			996			3,139			3,130
Research and development		316			322			967			890
Total operating expenses		1,350			1,318			4,106			4,020
Operating income		676			617			1,824			1,746
Interest and other financial charges – net		130			138			383			411
Non-operating benefit (income) costs		(102	)		(94	)		(306	)		(332	)
Other (income) expense – net		(9	)		(63	)		(1	)		(85	)
Income from continuing operations before income taxes		658			636			1,747			1,752
Benefit (provision) for income taxes		(168	)		(250	)		(435	)		(550	)
Net income from continuing operations		490			386			1,312			1,202
Income (loss) from discontinued operations, net of taxes		—			(4	)		—			(4	)
Net income		490			382			1,312			1,198
Net (income) loss attributable to noncontrolling interests		(19	)		(7	)		(40	)		(33	)
Net income attributable toGE HealthCare		470			375			1,272			1,165
Deemed preferred stock dividend of redeemable noncontrolling interest		—			—			—			(183	)
Net income attributable toGE HealthCarecommon stockholders	$	470		$	375		$	1,272		$	982

Earnings per share from continuing operations attributable toGE HealthCarecommon stockholders:
Basic	$	1.03		$	0.83		$	2.79		$	2.17
Diluted		1.02			0.83			2.77			2.16
Earnings per share attributable toGE HealthCarecommon stockholders:
Basic	$	1.03		$	0.82		$	2.79		$	2.16
Diluted		1.02			0.82			2.77			2.15
Weighted-average number of shares outstanding:
Basic		457			455			456			455
Diluted		459			458			459			458

Condensed Consolidated Statements of Financial Position (Unaudited)
	As of
*(In millions, except share and per share amounts)*	September 30, 2024			December 31, 2023
Cash, cash equivalents, and restricted cash	$	3,568		$	2,504
Receivables – net of allowances of$104and$98		3,418			3,525
Due from related parties		6			32
Inventories		2,124			1,960
Contract and other deferred assets		1,046			1,000
All other current assets		476			389
Current assets		10,638			9,410
Property, plant, and equipment – net		2,539			2,500
Goodwill		13,138			12,936
Other intangible assets – net		1,132			1,253
Deferred income taxes		4,309			4,474
All other non-current assets		2,098			1,881
Total assets	$	33,855		$	32,454
Short-term borrowings	$	1,007		$	1,006
Accounts payable		2,911			2,947
Due to related parties		7			99
Contract liabilities		1,915			1,918
Current compensation and benefits		1,422			1,518
All other current liabilities		1,409			1,493
Current liabilities		8,670			8,981
Long-term borrowings		9,306			8,436
Non-current compensation and benefits		5,388			5,782
Deferred income taxes		59			68
All other non-current liabilities		1,920			1,877
Total liabilities		25,343			25,144
Commitments and contingencies
Redeemable noncontrolling interests		177			165
Common stock, par value$0.01per share, 1,000,000,000 shares authorized, 457,144,443 shares issued as ofSeptember 30, 2024; 455,342,290 shares issued as ofDecember 31, 2023		5			5
Treasurystock, at cost, 291,053 shares as ofSeptember 30, 2024and 0 shares as ofDecember 31, 2023		(25	)		—
Additional paid-in capital		6,551			6,493
Retained earnings		2,558			1,326
Accumulated other comprehensive income (loss) – net		(771	)		(691	)
Total equity attributable toGE HealthCare		8,317			7,133
Noncontrolling interests		18			12
Total equity		8,335			7,145
Total liabilities, redeemable noncontrolling interests, and equity	$	33,855		$	32,454

Condensed Consolidated Statements of Cash Flows (Unaudited)
	For the nine months endedSeptember 30
*(In millions)*		2024			2023
Net income	$	1,312		$	1,198
Less: Income (loss) from discontinued operations, net of taxes		—			(4	)
Net income from continuing operations	$	1,312		$	1,202
Adjustments to reconcile Net income from continuing operations to Cash from (used for) operating activities
Depreciation of property, plant, and equipment		203			188
Amortization of intangible assets		237			278
Gain on fair value remeasurement of contingent consideration		(19	)		(17	)
Net periodic postretirement benefit plan (income) expense		(271	)		(291	)
Postretirement plan contributions		(257	)		(259	)
Share-based compensation		92			81
Provision for income taxes		435			550
Cash paid during the year for income taxes		(375	)		(375	)
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Receivables		83			(82	)
Due from related parties		24			9
Inventories		(157	)		(85	)
Contract and other deferred assets		(33	)		(75	)
Accounts payable		3			(93	)
Due to related parties		(72	)		(87	)
Contract liabilities		(25	)		69
Current compensation and benefits		(97	)		37
All other operating activities - net		(41	)		1
Cash from (used for) operating activities – continuing operations		1,042			1,051
Cash flows – investing activities
Additions to property, plant and equipment and internal-use software		(299	)		(293	)
Dispositions of property, plant, and equipment		—			1
Purchases of businesses, net of cash acquired		(259	)		(147	)
Purchases of investments		(33	)		(21	)
All other investing activities - net		(83	)		(10	)
Cash from (used for) investing activities – continuing operations		(674	)		(470	)
Cash flows – financing activities
Net increase (decrease) in borrowings (maturities of 90 days or less)		—			(9	)
Newly issued debt, net of debt issuance costs (maturities longer than 90 days)		994			2,020
Repayments and other reductions (maturities longer than 90 days)		(162	)		(9	)
Dividends paid to stockholders		(41	)		(28	)
Redemption of noncontrolling interests		—			(211	)
Net transfers (to) fromGE		—			(1,317	)
Proceeds from stock issued under employee benefit plans		31			31
Taxes paid related to net share settlement of equity awards		(90	)		(31	)
All other financing activities - net		(28	)		(24	)
Cash from (used for) financing activities – continuing operations		704			422
Cash from (used for) operating activities – discontinued operations		(4	)		—
Effect of foreign currency rate changes on cash, cash equivalents, and restricted cash		(2	)		(34	)
Increase (decrease) in cash, cash equivalents, and restricted cash		1,066			969
Cash, cash equivalents, and restricted cash at beginning of year		2,506			1,451
Cash, cash equivalents, and restricted cash as ofSeptember 30	$	3,572		$	2,420

Supplemental disclosure of cash flows information
Cash paid during the year for interest	$	(339	)	$	(318	)
Non-cash investing activities
Acquired but unpaid property, plant, and equipment	$	72		$	80

Non-GAAP Financial Measures

The non-GAAP financial measures presented in this press release are supplemental measures of GE HealthCare’s performance and its liquidity that the Company believes will help investors understand its financial condition, cash flows, and operating results, and assess its future prospects. When read in conjunction with the Company’sU.S.GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in GE HealthCare’s underlying businesses and can be used by management as one basis for making financial, operational, and planning decisions. Descriptions of the reported non-GAAP measures are included below.

The Company reports Organic revenue and Organic revenue growth rate to provide management and investors with additional understanding and visibility into the underlying revenue trends of the Company’s established, ongoing operations, as well as provide insights into overall demand for its products and services. To calculate these measures, the Company excludes the effect of acquisitions, dispositions, and foreign currency rate fluctuations.

The Company reports EBIT, Adjusted EBIT, Adjusted EBIT margin, Adjusted net income, Adjusted net income margin, and Adjusted earnings per share to provide management and investors with additional understanding of its business by highlighting the results from ongoing operations and the underlying profitability factors, on a normalized basis. To calculate these measures the Company excludes, and reflects in the detailed reconciliations below, the following adjustments as applicable: Interest and other financial charges - net, Net (income) loss attributable to noncontrolling interests, Non-operating benefit (income) costs, Benefit (provision) for income taxes and certain tax related adjustments, and certain non-recurring and/or non-cash items.GE HealthCaremay from time to time consider excluding other non-recurring items to enhance comparability between periods. Adjusted EBIT margin and Adjusted net income margin are calculated by taking Adjusted EBIT, or Adjusted net income, divided by Total revenues for the same period.

The Company reports Adjusted tax expense and Adjusted effective tax rate (“Adjusted ETR”) to provide investors with a better understanding of the normalized tax rate applicable to the business and provide more consistent comparability across periods. Adjusted tax expense excludes the income tax related to the pre-tax income adjustments included as part of Adjusted net income and certain income tax adjustments, such as adjustments to deferred tax assets or liabilities. The Company may from time to time consider excluding other non-recurring tax items to enhance comparability between periods. Adjusted ETR is Adjusted tax expense divided by income before income taxes less the pre-tax income adjustments referenced above.

The Company reports Free cash flow and Free cash flow conversion to provide management and investors with an important measure of the ability to generate cash on a normalized basis and provide insight into the Company’s flexibility to allocate capital. Free cash flow is Cash from (used for) operating activities - continuing operations including cash flows related to the additions and dispositions of property, plant, and equipment (“PP&E”) and additions of internal-use software. Free cash flow does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the capital required for debt repayments. Free cash flow conversion is calculated by taking Free cash flow divided by Adjusted net income.

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. In order to compensate for the discussed limitations, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance withU.S.GAAP. The detailed reconciliations of each non-GAAP financial measure to the most directly comparableU.S.GAAP financial measure are provided below, and no single financial measure should be relied on to evaluate our business.

Non-GAAP Financial Reconciliations

Organic Revenue*
Unaudited	For the three months endedSeptember 30							For the nine months endedSeptember 30
*($ in millions)*		2024			2023	% change			2024			2023	% change
Imaging revenues	$	2,229		$	2,236	—	%	$	6,462		$	6,552	(1	)%
Less: Acquisitions(1)		16			—				29			—
Less: Dispositions(2)		—			—				—			—
Less: Foreign currency exchange		(8	)		—				(65	)		—
Imaging Organic revenue*	$	2,220		$	2,236	(1	)%	$	6,497		$	6,552	(1	)%
AVS revenues	$	1,216		$	1,214	—	%	$	3,692		$	3,712	(1	)%
Less: Acquisitions(1)		—			—				—			—
Less: Dispositions(2)		—			—				—			—
Less: Foreign currency exchange		(2	)		—				(22	)		—
AVS Organic revenue*	$	1,218		$	1,214	—	%	$	3,713		$	3,712	—	%
PCS revenues	$	779		$	764	2	%	$	2,298		$	2,315	(1	)%
Less: Acquisitions(1)		—			—				—			—
Less: Dispositions(2)		—			—				—			—
Less: Foreign currency exchange		—			—				(4	)		—
PCS Organic revenue*	$	779		$	764	2	%	$	2,302		$	2,315	(1	)%
PDx revenues	$	625		$	589	6	%	$	1,862		$	1,715	9	%
Less: Acquisitions(1)		—			—				—			—
Less: Dispositions(2)		—			—				—			—
Less: Foreign currency exchange		(5	)		—				(13	)		—
PDx Organic revenue*	$	630		$	589	7	%	$	1,876		$	1,715	9	%
Other revenues	$	15		$	19	(22	)%	$	39		$	52	(25	)%
Less: Acquisitions(1)		—			—				—			—
Less: Dispositions(2)		—			—				—			—
Less: Foreign currency exchange		—			—				—			—
Other Organic revenue*	$	15		$	19	(21	)%	$	39		$	52	(25	)%
Total revenues	$	4,863		$	4,822	1	%	$	14,353		$	14,346	—	%
Less: Acquisitions(1)		16			—				29			—
Less: Dispositions(2)		—			—				—			—
Less: Foreign currency exchange		(15	)		—				(104	)		—
Organic revenue*	$	4,863		$	4,822	1	%	$	14,427		$	14,346	1	%

(1)	Represents revenues attributable to acquisitions from the date the Company completed the transaction through the end of four quarters following the transaction.
(2)	Represents revenues attributable to dispositions for the four quarters preceding the disposition date.

Adjusted EBIT*
Unaudited	For the three months endedSeptember 30								For the nine months endedSeptember 30
*($ in millions)*		2024			2023		% change			2024			2023		% change
Net income attributable toGE HealthCare	$	470		$	375		25	%	$	1,272		$	1,165		9	%
Add: Interest and other financial charges – net		130			138					383			411
Add: Non-operating benefit (income) costs		(102	)		(94	)				(306	)		(332	)
Less: Benefit (provision) for income taxes		(168	)		(250	)				(435	)		(550	)
Less: Income (loss) from discontinued operations, net of taxes		—			(4	)				—			(4	)
Less: Net (income) loss attributable to noncontrolling interests		(19	)		(7	)				(40	)		(33	)
EBIT*	$	685		$	680		1	%	$	1,825		$	1,831		—	%
Add: Restructuring costs(1)		22			3					90			34
Add: Acquisition and disposition-related charges (benefits)(2)		(4	)		(14	)				(7	)		(15	)
Add: Spin-Off and separation costs(3)		56			45					182			175
Add: (Gain) loss on business and asset dispositions(4)		1			—					—			—
Add: Amortization of acquisition-related intangible assets		34			32					100			95
Add: Investment revaluation (gain) loss(5)		1			(2	)				26			(1	)
Adjusted EBIT*	$	795		$	744		7	%	$	2,217		$	2,119		5	%
Net income margin		9.7	%		7.8	%	190 bps			8.9	%		8.1	%	70 bps
Adjusted EBIT margin*		16.3	%		15.4	%	90 bps			15.4	%		14.8	%	70 bps

(1)	Consists of severance, facility closures, and other charges associated with restructuring programs.
(2)	Consists of legal, consulting, and other transaction and integration fees, and adjustments to contingent consideration, as well as other purchase accounting related charges and other costs directly related to the transactions.
(3)	Costs incurred in the Spin-Off and separation fromGE, including system implementations, audit and advisory fees, legal entity separation, Founders Grant equity awards, separation agreements withGE, and other one-time costs.
(4)	Consists of gains and losses resulting from the sale of assets and investments.
(5)	Primarily relates to valuation adjustments for equity investments.

Adjusted Net Income*
Unaudited	For the three months endedSeptember 30								For the nine months endedSeptember 30
*($ in millions)*		2024			2023		% change			2024			2023		% change
Net income attributable toGE HealthCare	$	470		$	375		25	%	$	1,272		$	1,165		9	%
Add: Non-operating benefit (income) costs		(102	)		(94	)				(306	)		(332	)
Add: Restructuring costs(1)		22			3					90			34
Add: Acquisition and disposition-related charges (benefits)(2)		(4	)		(14	)				(7	)		(15	)
Add: Spin-Off and separation costs(3)		56			45					182			175
Add: (Gain) loss on business and asset dispositions(4)		1			—					—			—
Add: Amortization of acquisition-related intangible assets		34			32					100			95
Add: Investment revaluation (gain) loss(5)		1			(2	)				26			(1	)
Add: Tax effect of reconciling items(6)		(3	)		(4	)				(26	)		(3	)
Add: Spin-Off and other tax adjustments(7)		46			106					60			136
Less: Income (loss) from discontinued operations, net of taxes		—			(4	)				—			(4	)
Adjusted net income*	$	521		$	451		16	%	$	1,393		$	1,258		11	%
Adjusted net income margin*		10.7	%		9.4	%	140 bps			9.7	%		8.8	%	90 bps

(1)	Consists of severance, facility closures, and other charges associated with restructuring programs.
(2)	Consists of legal, consulting, and other transaction and integration fees, and adjustments to contingent consideration, as well as other purchase accounting related charges and other costs directly related to the transactions.
(3)	Costs incurred in the Spin-Off and separation fromGE, including system implementations, audit and advisory fees, legal entity separation, Founders Grant equity awards, separation agreements withGE, and other one-time costs.
(4)	Consists of gains and losses resulting from the sale of assets and investments.
(5)	Primarily relates to valuation adjustments for equity investments.
(6)	The tax effect of reconciling items is calculated using the statutory tax rate, taking into consideration the nature of the items and the relevant taxing jurisdiction.
(7)	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, the impact of adjusting deferred tax assets and liabilities to stand-aloneGE HealthCaretax rates, and the impact of tax legislation changes. As of the third quarter of 2024 this line additionally includes discrete tax impacts resulting from the Spin-Off and separation fromGEpreviously reported under Tax effect of reconciling items.

Adjusted Earnings Per Share*
Unaudited	For the three months endedSeptember 30								For the nine months endedSeptember 30
*(In dollars, except shares outstanding presented in millions)*		2024			2023		$ change			2024			2023		$ change
Diluted earnings per share – continuing operations	$	1.02		$	0.83		$	0.20	$	2.77		$	2.16		$	0.61
Add: Deemed preferred stock dividend of redeemable noncontrolling interest		—			—					—			0.40
Add: Non-operating benefit (income) costs		(0.22	)		(0.21	)				(0.67	)		(0.73	)
Add: Restructuring costs(1)		0.05			0.01					0.20			0.07
Add: Acquisition and disposition-related charges (benefits)(2)		(0.01	)		(0.03	)				(0.02	)		(0.03	)
Add: Spin-Off and separation costs(3)		0.12			0.10					0.40			0.38
Add: (Gain) loss on business and asset dispositions(4)		0.00			—					—			—
Add: Amortization of acquisition-related intangible assets		0.08			0.07					0.22			0.21
Add: Investment revaluation (gain) loss(5)		0.00			(0.00	)				0.06			(0.00	)
Add: Tax effect of reconciling items(6)		(0.01	)		(0.01	)				(0.06	)		(0.01	)
Add: Spin-Off and other tax adjustments(7)		0.10			0.23					0.13			0.30
Adjusted earnings per share*	$	1.14		$	0.99		$	0.15	$	3.04		$	2.75		$	0.29
Diluted weighted-average shares outstanding		459			458					459			458

(1)	Consists of severance, facility closures, and other charges associated with restructuring programs.
(2)	Consists of legal, consulting, and other transaction and integration fees, and adjustments to contingent consideration, as well as other purchase accounting related charges and other costs directly related to the transactions.
(3)	Costs incurred in the Spin-Off and separation fromGE, including system implementations, audit and advisory fees, legal entity separation, Founders Grant equity awards, separation agreements withGE, and other one-time costs.
(4)	Consists of gains and losses resulting from the sale of assets and investments.
(5)	Primarily relates to valuation adjustments for equity investments.
(6)	The tax effect of reconciling items is calculated using the statutory tax rate, taking into consideration the nature of the items and the relevant taxing jurisdiction.
(7)	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, the impact of adjusting deferred tax assets and liabilities to stand-aloneGE HealthCaretax rates, and the impact of tax legislation changes. As of the third quarter of 2024 this line additionally includes discrete tax impacts resulting from the Spin-Off and separation fromGEpreviously reported under Tax effect of reconciling items.

Adjusted Tax Expense* and Adjusted ETR*
Unaudited	For the three months endedSeptember 30						For the nine months endedSeptember 30
*($ in millions)*		2024			2023			2024			2023
Benefit (provision) for income taxes	$	(168	)	$	(250	)	$	(435	)	$	(550	)
Add: Tax effect of reconciling items(1)		(3	)		(4	)		(26	)		(3	)
Add: Spin-Off and other tax adjustments(2)		46			106			60			136
Adjusted tax expense*	$	(124	)	$	(148	)	$	(401	)	$	(417	)
Effective tax rate		25.5	%		39.3	%		24.9	%		31.4	%
Adjusted effective tax rate*		18.7	%		24.4	%		21.9	%		24.4	%

(1)

The tax effect of reconciling items is calculated using the statutory tax rate, taking into consideration the nature of the items and the relevant taxing jurisdiction.

(2)

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, the impact of adjusting deferred tax assets and liabilities to stand-aloneGE HealthCaretax rates, and the impact of tax legislation changes. As of the third quarter of 2024 this line additionally includes discrete tax impacts resulting from the Spin-Off and separation fromGEpreviously reported under Tax effect of reconciling items.

Free Cash Flow*
Unaudited	For the three months endedSeptember 30								For the nine months endedSeptember 30
*($ in millions)*		2024			2023		% change			2024			2023		% change
Cash from (used for) operating activities – continuing operations	$	742		$	650		14	%	$	1,042		$	1,051		(1	)%
Add: Additions to PP&E and internal-use software		(90	)		(80	)				(299	)		(293	)
Add: Dispositions of PP&E		—			—					—			1
Free cash flow*	$	651		$	570		14	%	$	743		$	759		(2	)%

Non-GAAP Financial Measures in Outlook

GE HealthCarecalculates forward-looking non-GAAP financial measures, including Organic revenue growth, Adjusted EBIT margin, Adjusted ETR, Adjusted EPS, and Free cash flow based on internal forecasts that omit certain amounts that would be included in GAAP financial measures.GE HealthCaredoes not provide reconciliations of these forward-looking non-GAAP financial measures to the respective GAAP metrics as it is unable to predict with reasonable certainty and without unreasonable effort certain items such as the impact of changes in currency exchange rates, impacts associated with business acquisitions or dispositions, timing and magnitude of restructuring activities, and revaluation of strategic investments, amongst other items. The timing and amounts of these items are uncertain and could have a substantial impact on GE HealthCare’s results in accordance with GAAP.

Key Performance Indicators

Management uses the following metrics to provide a leading indicator of current business demand from customers for products and services.

Organic orders growth: Rate of change period-over-period of contractual commitments with customers to provide specified goods or services for an agreed upon price, and excluding the effects of: (1) recent acquisitions and dispositions with less than a full year of comparable orders; and (2) foreign currency exchange rate fluctuations in order to present orders on a constant currency basis.
Book-to-bill: Total orders divided by Total revenues within a given financial period (e.g., quarter or FY).

Conference Call and Webcast Information

GE HealthCarewill discuss its results during its live earnings call today,October 30, 2024at8:30 am ET/7:30 am CT. The webcast and accompanying slide presentation containing financial information can be accessed by visiting the investor section of the website athttps://investor.gehealthcare.com/news-events/events. An archived version of the webcast will be available on the website after the call.

Forward-looking Statements

This release contains forward-looking statements. These forward-looking statements might be identified by words, and variations of words, such as “will,” “expect,” “may,” “would,” “could,” “plan,” “believe,” “anticipate,” “intend,” “estimate,” “potential,” “position,” “forecast,” “target,” “guidance,” “outlook,” and similar expressions. These forward-looking statements may include, but are not limited to, statements about our business and expected financial performance, financial condition, and results of operations, including revenue, revenue growth, profit, taxes, earnings per share, and cash flows, and the Company’s outlook; and the Company’s strategy, innovation, and investments. These forward-looking statements involve risks and uncertainties, many of which are beyond the Company’s control. Factors that could cause the Company’s actual results to differ materially from those described in its forward-looking statements include, but are not limited to, operating in highly competitive markets; the Company’s ability to successfully complete strategic transactions; the actions or inactions of third parties with whom the Company partners and the various collaboration, licensing, and other partnerships and alliances the Company has with third parties; demand for the Company’s products, services, or solutions and factors that affect that demand; management of the Company’s supply chain and the Company’s ability to cost-effectively secure the materials it needs to operate its business; disruptions in the Company’s operations; changes in third-party and government reimbursement processes, rates, contractual relationships, and mix of public and private payers, including related to government shutdowns; the delayedChinastimulus and the ongoing anti-corruption campaign; the Company’s ability to attract and/or retain key personnel and qualified employees; global geopolitical and economic instability, including as a result of the conflict betweenUkraineandRussia, the conflict in theMiddle East, and the actions in theRed Searegion; public health crises, epidemics, and pandemics and their effects on the Company’s business; maintenance and protection of the Company’s intellectual property rights, as well as maintenance of successful research and development efforts with respect to commercially successful products and technologies; the impact of potential information technology, cybersecurity or data security breaches; compliance with the various legal, regulatory, tax, privacy, and other laws to which the Company is subject, such as the Foreign Corrupt Practices Act and similar anti-corruption and anti-bribery laws globally, and related changes, claims, inquiries, investigations, or actions; the Company’s ability to control increases in healthcare costs and any subsequent effect on demand for the Company’s products, services, or solutions; the impacts related to the Company’s increasing focus on and investment in cloud, edge, artificial intelligence, and software offerings; the impact of potential product liability claims; environmental, social, and governance matters; the Company’s ability to operate effectively as an independent, publicly-traded company; and the Company’s level of indebtedness, as well as its general ability to comply with covenants under its debt instruments and any related effect on the Company’s business. Please also see the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year endedDecember 31, 2023filed with theU.S. Securities and Exchange Commissionand any updates or amendments it makes in future filings. There may be other factors not presently known to the Company or which it currently considers to be immaterial that could cause the Company’s actual results to differ materially from those projected in any forward-looking statements the Company makes. The Company does not undertake any obligation to update or revise its forward-looking statements except as required by applicable law or regulation.

AboutGE HealthCare Technologies Inc.

GE HealthCareis a leading global medical technology, pharmaceutical diagnostics, and digital solutions innovator, dedicated to providing integrated solutions, services, and data analytics to make hospitals more efficient, clinicians more effective, therapies more precise, and patients healthier and happier. Serving patients and providers for more than 125 years,GE HealthCareis advancing personalized, connected, and compassionate care, while simplifying the patient’s journey across the care pathway. Together our Imaging, Advanced Visualization Solutions, Patient Care Solutions, andPharmaceutical Diagnosticsbusinesses help improve patient care from diagnosis, to therapy, to monitoring. We are a$19.6 billionbusiness with approximately 51,000 colleagues working to create a world where healthcare has no limits.

Follow us onLinkedIn,X,Facebook,Instagram, andInsightsfor the latest news, or visit our websitehttps://www.gehealthcare.comfor more information.

* Non-GAAP financial measure.

View source version onbusinesswire.com:https://www.businesswire.com/news/home/20241029247090/en/

Investor Relations Contact:Carolynne Borders+1-631-662-4317carolynne.borders@gehealthcare.com

Media Contact:Jennifer Fox+1-414-530-3027jennifer.r.fox@gehealthcare.com

Source:GE HealthCare

Please be aware that the following content has been generated by an AI system and may contain errors, inconsistencies, or outdated information. It is provided as-is without any warranties or guarantees of accuracy. We strongly recommend using this content as a starting point for further research and consultation with relevant experts or authorities. We disclaim any liability for damages or losses resulting from the use or reliance on this content.Please note that this is a beta version of the Gravity Analytica LLC’s AI Service which isstill undergoing final testing before its official release. Theplatform, its software and all content found on it are provided on an“as is” and “as available” basis. Gravity Analytica LLC does not give any warranties,whether express or implied, as to the suitability or usability of thisservice, webpage, or its software or any of its content.Should you encounter any bugs, glitches, lack of functionality orother problems on the website, please let us know immediately so wecan rectify these accordingly. Your help in this regard is greatlyappreciated! You can write to us at this addressteam@gravityanalytica.com