GE HealthCare Technologies Inc

As of September 30, 2024, our Cash, cash equivalents, and restricted cash balance in the Condensed Consolidated Statements of Financial Position was $3,568 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.”

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 nine months ended September 30, 2024 was $1,042 million and included Net income from continuing operations of $1,312 million, non-cash charges primarily for depreciation and amortization of $440 million, and $711 million in outflows from incremental changes in assets and liabilities, primarily driven by company-funded benefit payments for postretirement benefit plans, an increase in inventories mainly due to inventory build to meet higher demand, and compensation and benefit payments.

Cash generated from operating activities in the nine months ended September 30, 2023 was $1,051 million and included Net income from continuing operations of $1,202 million, non-cash charges primarily for depreciation and amortization of $466 million, and $617 million in outflows from incremental changes in assets and liabilities, primarily driven by company funded benefit payments for postretirement benefit plans, a decrease in account payables, and an increase in inventories.

Investing Activities

Cash used for investing activities in the nine months ended September 30, 2024 was $674 million and primarily included additions to PP&E of $299 million related mostly to manufacturing capacity expansion and new product introductions, purchases of businesses, net of cash acquired, of $259 million related to MIM Software Inc. (“MIM Software”), and payment of $94 million for settlement of cross-currency swaps that were designated in net investment hedges. Refer to Note 7, “Acquisitions, Goodwill, and Other Intangible Assets” for additional information on the MIM Software acquisition, and Note 12, “Financial Instruments and Fair Value Measurements” for additional information on the settlement of cross-currency swaps.

Cash used for investing activities in the nine months ended September 30, 2023 was $470 million and primarily included additions to PP&E of $293 million related mostly to new product introductions, manufacturing capacity expansion, and purchases of businesses, net of cash acquired, of $147 million primarily related to Caption Health, Inc.

Financing Activities

Cash generated from financing activities in the nine months ended September 30, 2024 was $704 million and primarily included $994 million of net proceeds from the issuance of $1,000 million aggregate principal amount of senior unsecured notes due in 2029, partially offset by repayment of $150 million of our outstanding Term Loan Facility. Refer to Note 8, “Borrowings” for further information.

Cash generated from financing activities in the nine months ended September 30, 2023 was $422 million and primarily included $2,020 million of newly issued debt, partially offset by $1,317 million of transfers to GE, and $211 million of Redemption of noncontrolling interests.

Free cash flow*

Free cash flow* was $743 million for the nine months ended September 30, 2024 and primarily included $1,042 million of cash generated from operating activities, partially offset by $299 million of cash used for additions to PP&E.

Free cash flow* was $759 million for the nine months ended September 30, 2023 and primarily included $1,051 million of cash generated from operating activities, partially offset by $293 million of cash used for additions to PP&E.

Capital Expenditures

Cash used for capital expenditures was $299 million and $293 million for the nine months ended September 30, 2024 and 2023, respectively. Capital expenditures were primarily for manufacturing capacity expansion, new product introductions, and equipment and tooling for new and existing products.

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” 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.” Additionally, on April 1, 2024, we funded the acquisition of MIM Software with cash on hand. Further information regarding this acquisition is provided in Note 7, “Acquisitions, Goodwill, and Other Intangible Assets.”

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 September 30, 2024, we had $10,312 million of total debt compared to $9,442 million as of December 31, 2023. The increase in debt was due primarily to our issuance, in the third quarter of 2024, of $1,000 million aggregate principal amount of senior unsecured notes due in 2029, partially offset by a repayment of$150 million of the outstanding Term Loan Facility in the first quarter of 2024. As of September 30, 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. We plan to use the net proceeds from the debt issuance referenced above, together with cash on hand, to repay the $1,000 million aggregate principal amount outstanding of the senior unsecured notes due in November 2024.

The weighted average interest rate for the Notes and our Credit Facilities for thenine months ended September 30, 2024 was 6.05%. We had no principal debt repayments on the Notes for thenine months ended September 30, 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 September 30, 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 September 30, 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.”

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, completed a drawdown of the Term Loan Facility of$2,000 million in January 2023, and arranged $3,500 million of revolving credit facilities to further support our liquidity needs. In the third quarter of 2024, we issued $1,000 million aggregate principal amount of senior unsecured notes due in 2029. 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 October 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.