GE HealthCare Technologies Inc

As of March 31, 2024, our Cash, cash equivalents, and restricted cash balance in the Condensed Consolidated Statements of Financial Position was $2,563 million. We have historically generated positive cash flows from operating activities. Additionally, we have access to revolving credit facilities of $3,500 million in aggregate, described in detail in Note 8, “Borrowings”to the condensed consolidated financial statements.

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.

The following table summarizes our cash flows for the periods presented:

Operating Activities

Cash generated from operating activities in the three months ended March 31, 2024 was $419 million and included Net income of $388 million, non-cash charges for depreciation and amortization of $148 million, and a $116 million outflow from changes in assets and liabilities, primarily driven by company-funded benefit payments for postretirement benefit plans, annual prepayments, and an increase in inventory, partially offset by a decrease in receivables.

Cash generated from operating activities in the three months ended March 31, 2023 was $468 million and included Net income of $383 million, non-cash charges for depreciation and amortization of $157 million, and a $72 million outflow from changes in assets and liabilities, primarily driven by an increase in inventory and company-funded benefit payments for postretirement benefit plans, partially offset by an increase in contract liabilities and an increase in accounts payable.

Investing Activities

Cash used for investing activities in the three months ended March 31, 2024 was $188 million and primarily included additions to PP&E of $145 million related mostly to manufacturing capacity expansion and new product introductions.

Cash used for investing activities in the three months ended March 31, 2023 was $266 million and primarily included additions to PP&E of $143 million related mostly to new product introductions and manufacturing capacity expansion and purchases of businesses, net of cash acquired, of $127 million related to Caption Health, Inc.

Financing Activities

Cash used for financing activities in the three months ended March 31, 2024 was $153 million and primarily included a repayment of $150 million of our outstanding Term Loan Facility.

Cash generated from financing activities in the three months ended March 31, 2023 was $673 million and primarily included $2,000 million of newly issued debt, partially offset by $1,317 million of transfers to GE.

Free cash flow*

Free cash flow* was $274 million for the three months ended March 31, 2024 and primarily included $419 million of cash generated from operating activities, partially offset by $145 million of cash used for additions to PP&E.

Free cash flow* was $325 million for the three months ended March 31, 2023 and primarily included $468 million of cash generated from operating activities, partially offset by $143 million of cash used for additions to PP&E.

Capital Expenditures

Cash used for capital expenditures was $145 million and $143 million for the three months ended March 31, 2024 and 2023, respectively. Capital expenditures were primarily for manufacturing capacity expansion and equipment and tooling for existing products and 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. Information regarding our obligations under lease, debt, and other commitments 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 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. We have material cash requirements related to our pension obligations as described in Note 9, “Postretirement Benefit Plans” to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Additionally, on April 1, 2024, we funded the acquisition of MIM Software Inc. with cash on hand. Further information regarding this acquisition is provided in Note 18, “Subsequent Events” to the condensed consolidated financial statements.

Debt and Credit Facilities

As part of our capital structure, we have incurred debt. The servicing of this debt is supported by cash flows from our operations. As of March 31, 2024, we had $9,255 million of total debt compared to $9,442 million as of December 31, 2023. The decrease in debt was mainly driven by a repayment of$150 million of the outstanding Term Loan Facility in the first quarter of 2024. As of March 31, 2024, there were $1,000 million of senior notes due in November 2024 recognized within Short-term borrowings in our Condensed Consolidated Statements of Financial Position.

The weighted average interest rate for the Notes and our Credit Facilities for thethree months ended March 31, 2024 was 6.08%. We had no principal debt repayments on the Notes for thethree months ended March 31, 2024.

In addition to the Term Loan Facility, our credit facilities include a five-year senior unsecured revolving facility that provides borrowings of up to $2,500 million expiring in January 2028, and a 364-day senior unsecured revolving facility that provides borrowings of up to $1,000 million expiring in December 2024. As of March 31, 2024, 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. As of March 31, 2024, we were in compliance with the covenant requirements, including the maximum consolidated net leverage ratio.

For additional details on debt and credit facilities, see Note 8,“Borrowings” to the condensed consolidated financial statements.

Access to Capital and Credit Ratings

In connection with the Spin-Off, we accessed the capital markets and raised $10,250 million of debt by issuing$8,250 million of senior unsecured notes in November 2022, and completed a drawdown of the Term Loan Facility of$2,000 million in January 2023. In addition, we arranged $3,500 million of revolving credit facilities to further support our liquidity needs. 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. 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. Our credit ratings as of April 23, 2024 are set forth in the table below.

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. 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.