GE HealthCare Technologies Inc

RESULTS OF OPERATIONS

The following tables set forth our results of operations for each of the periods presented.

TOTAL REVENUES.

(1) Financial information not presented within the reportable segments, shown within the Other category, represents HealthCare Financial Services which does not meet the definition of an operating segment.

Total revenues were $4,777 million, growing 3% as reported and 4% organically*. Sales of products increased 2% or $71 million with strong growth in USCAN, led by PDx and Imaging segment revenues. Sales of services increased 3% or $56 million primarily driven by growth in new and existing customer contractual agreements.

The segment revenues were as follows:

•Imaging segment revenues were $2,140 million, growing 4% or $77 million, with growth across all regions, led by Molecular Imaging and Computed Tomography (“MI/CT”) and Magnetic Resonance (“MR”) product lines;

•AVS segment revenues were $1,239 million, growing 1% or $12 million, with strength in the U.S. market largely offset by unfavorable foreign currency impacts and continued pressure in the China market.

•PCS segment revenues were $753 million, growing 1% or $6 million, driven by strength in the U.S., including growth in Monitoring Solutions, largely offset by declines in Anesthesia revenues due to market timing and unfavorable foreign currency impacts; and

•PDx segment revenues were $632 million, growing 6% or $33 million driven by continued growth in price and volume.

The regional revenues were as follows:

•USCAN revenues were $2,237 million, growing 7% or $143 million with growth across all segment revenues, led by strong growth in PDx and Imaging revenues;

•EMEA revenues were $1,174 million, flat to the prior year, with growth in PDx and Imaging revenues offset by unfavorable foreign currency impacts;

•China region revenues were $593 million, decreasing 1% or $4 million due to a decrease in AVS revenues and unfavorable foreign currency impacts, largely offset by growth in PDx and Imaging revenues; and

•Rest of World revenues were $773 million, decreasing 2% or $12 million due to unfavorable foreign currency impacts, partially offset by growth in Imaging revenues.

OPERATING INCOME, NET INCOME ATTRIBUTABLE TO GE HEALTHCARE, ADJUSTED EBIT*, AND ADJUSTED NET INCOME*.

Operating income was $629 million, an increase of $89 million and 160 basis points as a percent of Total revenues. The increase was due to the following factors:

•Gross profit increased $111 million or 120 basis points as a percent of Total revenues primarily due to a reduction in Cost of products sold as a percent of Total revenues. Cost of products sold decreased $4 million or 160 basis points as a percent of Sales of products. The decrease as a percent of sales was driven primarily by cost productivity, partially offset by unfavorable mix within our product offerings and cost inflation. Cost of services sold increased $20 million but decreased 40 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 unfavorable mix within our service offerings. Included in our total cost of revenue as part of our product investment was $96 million in engineering costs for design follow-through on new product introductions and product lifecycle maintenance subsequent to the initial product launch, compared to $101 million for the prior year comparable period; and

•Total operating expenses increased $21 million primarily due to an increase in Research and Development (“R&D”) investments of $20 million and an increase in Selling, general, and administrative (“SG&A”) expense of $2 million primarily driven by increased investment in our commercial teams, largely offset by a decrease in Spin-Off and separation costs. As a result, SG&A as a percentage of Total revenues decreased by 60 basis points and R&D as a percentage of Total revenues increased by 20 basis points.

Net income attributable to GE HealthCare and Net income margin were $564 million and 11.8%, an increase of $190 million and 380 basis points, respectively, primarily due to the following factors:

•Operating income increased $89 million, as discussed above;

•Interest and other financial charges – net decreased $12 million primarily driven by repayments made on the Term Loan Facility;

•Non-operating benefit income decreased $28 million primarily due to lower expected returns on plan assets;

•Other income – net increased $107 million primarily driven by the remeasurement of the Company’s 50% interest in Nihon Medi-Physics Co., Ltd (“NMP”) based on the cash consideration exchanged for acquiring the remaining 50% equity interest. For additional detail on the NMP acquisition, refer to Note 7, “Acquisitions, Goodwill, and Other Intangible Assets”; and

•Provision for income taxes decreased $20 million primarily due to the release of income tax reserves in a foreign jurisdiction for tax years which are no longer subject to an assessment from the local taxing authorities. For additional detail regarding our income taxes, see Note 10, “Income Taxes.”

Adjusted EBIT* and Adjusted EBIT margin* were $715 million and 15.0%, an increase of $33 million and 30 basis points, respectively, primarily due to an increase in Gross profit, partially offset by an increase in operating expenses.

Adjusted net income* was $464 million, an increase of $51 million primarily due to the increase in Gross profit and lower Interest and other financial charges – net, partially offset by an increase in operating expenses.