GE HealthCare Technologies Inc.

02/04/2026 | Press release | Distributed by Public on 02/04/2026 05:29

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial results should be read in conjunction with the consolidated financial statements and corresponding notes (the "financial statements") included elsewhere in this Annual Report on Form 10-K. The following discussion and analysis provide information management believes to be relevant to understanding the financial results of GE HealthCare Technologies Inc. and its subsidiaries ("GE HealthCare," the "Company," "our," "us," or "we") for the years ended December 31, 2025 and 2024. For additional information on the year ended December 31, 2023 and year-over-year comparisons to December 31, 2024, 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, 2024. This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances; see "Forward-Looking Statements." 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."
GE HealthCare's operations are organized and managed through four reportable segments: Imaging, Advanced Visualization Solutions ("AVS"), Patient Care Solutions ("PCS"), and Pharmaceutical Diagnostics ("PDx"), and we assessed their performance using Segment revenues and Segment EBIT. For additional information on the nature of our business and our segments, refer to Item 1, "Business" and Note 4, "Segment and Geographical Information."
On January 3, 2023, General Electric Company, which now operates as GE Aerospace ("GE"), completed the spin-off of GE HealthCare Technologies Inc. (the "Spin-Off"). Refer to Note 19, "Related Parties and Transition Services Agreement" for further information.
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. Certain columns and rows may not sum due to the use of rounded numbers. Percentages presented are calculated from the underlying whole-dollar amounts and, unless otherwise stated, represent changes year-over-year.
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.
Global Trade and Macroeconomic Environment
Throughout 2025, the U.S. imposed a variety of new tariffs on most imports from all countries in the world. This in turn prompted several countries to announce tariffs on U.S. imports. While the situation continues to be fluid, tariffs materially impacted our Operating income by approximately $245 million and cash flows by approximately $285 million for the year ended December 31, 2025, primarily the bilateral U.S. and Chinese tariffs and U.S. tariffs on all other global import suppliers. Should the tariffs continue at formally communicated levels, we expect to continue to see a material impact to our financial results. Additional tariffs or other trade restrictions by the U.S. or other countries where we do significant business, or other restrictions on specific industries, such as pharmaceuticals, could further materially impact our results in the future. While we are taking actions to mitigate the impact of tariffs, we do not expect that our mitigation actions will fully offset the additional costs or other negative impacts resulting from the tariffs.
We continue to monitor the global markets in which we operate for changes in customer behavior, changes in government spending and reimbursement, and indirect impacts from the tariffs. Should these factors dampen economic growth, slow global trade, or impact inflation, we could see adverse impacts to our business as our customers adapt to the change in economic environment. We also continue to monitor potential impacts on purchasing decisions by both public and private customers in China and other markets as a result of the current trade environment, as well as other actions related to tariffs and trade frictions, investigations, or activities that could similarly increase our costs or otherwise impact our business. In addition, if negative sentiment towards U.S. companies influences the purchasing decisions of global customers, our business could be impacted materially.
China Market
We believe the focus of government policy in China is on expanding access to healthcare. In addition, our investments to address clinical needs, localization, and commercial infrastructure should benefit our business in China in the long term. However, we continue to monitor developments in the China market, including increased competition from local companies and the prevalence of Volume Based Procurement policies, both of which have impacted our orders and revenues and may continue to do so.
Russia and Ukraine Conflict
We had $214 million and $162 million of assets in, or directly related to, Russia and Ukraine as of December 31, 2025 and December 31, 2024, respectively, none of which are subject to sanctions that impact the carrying value of the assets. We generated revenues of $353 million and $363 million from customers in these two countries for the years ended December 31, 2025 and 2024, respectively. The potential inability to repatriate earnings from these two countries will not have a material impact on our ability to operate.
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. Under the current U.S. Department of Commerce regulations, we are permitted to export, re-export, or transfer medical equipment and spare parts that meet stated criteria under a License Exception, which has eliminated the need for us to obtain individual U.S. licenses in most cases; however, licenses still may be needed for some transactions. The European Union and other countries have also expanded licensing requirements for certain spare parts, services, software, and other items. We will continue to apply for licenses to supply to these customers and to support our business in Russia, as required. The implementation of these measures affected our ability to supply customers in Russia during the years ended December 31, 2025 and 2024 and is expected to continue to do so as we confirm applicability of the U.S. License Exception to our transactions and continue to obtain licenses. There is no guarantee we will obtain all of the licenses for which we apply, that any approvals we obtain will be on a timely basis, or that our business in Russia will not be further disrupted due to evolving legal or operational considerations. We will continue to assess whether developments related to the conflict have had, or are reasonably likely to have, a material impact on the Company.
Geopolitical Conflicts
Geopolitical instability, across multiple regions, could adversely impact our operations, supply chains, and logistics. These events may result in increased costs, delays in product deliveries, and challenges in maintaining service levels in affected areas. While these events have not materially impacted our operations, we continue to monitor these developments closely.
Recent U.S. Legislation
On July 4, 2025, the One Big Beautiful Bill Act was signed into U.S. law, which includes significant changes to the federal income tax system. The changes did not have a material impact to the Company's tax provision for the year ended December 31, 2025.
Seasonality
Our revenues, operating profits, and cash flows vary from quarter to quarter. Financial results in the fourth quarter have historically been higher than in other quarters due to the spending patterns of our customers.
SUMMARY OF KEY PERFORMANCE MEASURES
Management reviews and analyzes several key performance measures including Total revenues, Operating income, Net income attributable to GE HealthCare, Earnings per share, and Cash from (used for) operating activities. 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. 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. See "Results of Operations" and "Liquidity and Capital Resources" below for further discussion on our key performance measures.
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 are provided below under "Non-GAAP Financial Measures."
___________________
*Non-GAAP Financial Measure
RESULTS OF OPERATIONS
The following tables set forth our results of operations for each of the periods presented.
Consolidated Statements of Income
For the years ended December 31
2025 2024
Sales of products $ 13,661 $ 13,075
Sales of services 6,964 6,597
Total revenues 20,625 19,672
Cost of products 8,942 8,271
Cost of services 3,436 3,196
Gross profit 8,248 8,205
Selling, general, and administrative 4,225 4,269
Research and development 1,260 1,311
Total operating expenses 5,485 5,580
Operating income 2,763 2,625
Interest and other financial charges - net 440 504
Non-operating benefit (income) costs (288) (406)
Other (income) expense - net (157) (55)
Income before income taxes
2,768 2,581
Benefit (provision) for income taxes (614) (531)
Net income 2,154 2,050
Net (income) loss attributable to noncontrolling interests (70) (57)
Net income attributable to GE HealthCare $ 2,084 $ 1,993
TOTAL REVENUES.
Revenues by Segment
For the years ended December 31
2025 2024
% change
% organic* change
Segment revenues
Imaging
$ 9,245 $ 8,855 4.4% 3.8%
AVS
5,354 5,131 4.3% 3.8%
PCS
3,086 3,125 (1.2)% (1.5)%
PDx
2,900 2,508 15.6% 8.8%
Other(1)
40 52
Total revenues
$ 20,625 $ 19,672 4.8% 3.5%
(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.
Revenues by Region
For the years ended December 31
2025 2024
% change
United States and Canada ("USCAN")
$ 9,531 $ 8,981 6.1%
Europe, the Middle East, and Africa ("EMEA")
5,425 5,051 7.4%
China region
2,251 2,360 (4.6)%
Rest of World
3,418 3,280 4.2%
Total revenues
$ 20,625 $ 19,672 4.8%
For the year ended December 31, 2025
Total revenues were $20,625 million, growing 4.8% as reported and 3.5% organically*. Sales of products increased 4.5% or $586 million primarily driven by strong growth in PDx, Imaging, and AVS revenues. Sales of services increased 5.6%or $368million primarily driven bygrowth in new and existing customer contractual agreements.
____________________
*Non-GAAP Financial Measure
The segment revenues were as follows:
•Imaging segment revenues were $9,245 million, growing 4.4% or $390 million, with growth in the USCAN and EMEA regions, partially offset by continued pressure in the China market;
•AVS segment revenues were $5,354 million, growing 4.3% or $222 million with strength in the U.S. market, partially offset by continued pressure in the China market;
•PCS segment revenues were $3,086 million, decreasing 1.2% or $38 million, largely driven by a decline in Life Support Solutions revenues; and
•PDx segment revenues were $2,900 million, growing 15.6% or $392 million as reported, driven by an increase in Organic revenue* and the acquisition of Nihon Medi-Physics Co., Ltd. ("NMP"). Organic revenue* grew 8.8% driven by continued growth in volume and price.
The regional revenues were as follows:
•USCAN revenues were $9,531 million, growing 6.1% or $550 million, largely driven by growth across AVS, Imaging, and PDx segment revenues;
•EMEA revenues were $5,425 million, growing 7.4% or $374 million with growth in Imaging, AVS, and PDx revenues, as well as favorable foreign currency impacts;
•China region revenues were $2,251 million, decreasing 4.6% or $108 million with declines in Imaging, AVS, and PCS revenues partially offset by growth in PDx revenues; and
•Rest of World revenues were $3,418 million, growing 4.2% or $138 million with growth in PDx, inclusive of NMP revenues, and Imaging revenues, partially offset by unfavorable foreign currency impacts.
OPERATING INCOME, NET INCOME ATTRIBUTABLE TO GE HEALTHCARE, ADJUSTED EBIT*, AND ADJUSTED NET INCOME*.
For the years ended December 31
2025 % of Total revenues 2024 % of Total revenues
% change
Operating income
$ 2,763 13.4% $ 2,625 13.3% 5.3%
Net income attributable to GE HealthCare 2,084 10.1% 1,993 10.1% 4.6%
Adjusted EBIT*
3,155 15.3% 3,211 16.3% (1.8)%
Adjusted net income*
2,100 10.2% 2,060 10.5% 2.0%
For the year ended December 31, 2025
Operating income was $2,763 million, an increase of $138 million and 10 basis points as a percent of Total revenues. The increase was due to the following factors:
•Gross profit increased $43 million, but decreased 170 basis points as a percent of Total revenues primarily due to an increase in both Cost of products and Cost of services as a percent of Total revenues. Cost of products sold increased $671 million or 220 basis points as a percent of Sales of products. The increase as a percent of sales was driven by cost inflation, including the impact of incremental tariffs, and investment in design follow-through, partially offset by cost productivity. Cost of services sold increased $240 million or 90 basis points as a percent of Sales of services. The increase as a percent of sales was driven by unfavorable mix within our service offerings, and cost inflation, including the impact of incremental tariffs, partially offset by an increase in pricing of our service offerings. Included in our total cost of revenues as part of our product investment was $490 million in engineering costs for design follow-through on new product introductions and product lifecycle maintenance subsequent to the initial product launch, compared to $405 million for the prior year comparable period; and
•Total operating expenses decreased $95 million, with a decrease in research and development ("R&D") investments of $51 million, driven by certain programs achieving development milestones resulting in costs to be reported under cost of revenues, and a decrease in Selling, general, and administrative ("SG&A") expense of $44 million primarily driven by a decrease in Spin-Off and separation costs, partially offset by increased investment in our commercial teams and the acquisition of NMP. R&D as a percentage of Total revenues decreased by 60 basis points and SG&A as a percentage of Total revenues decreased by 120 basis points.
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*Non-GAAP Financial Measure
Net income attributable to GE HealthCare and Net income margin were $2,084 million and 10.1%, an increase of $91 million and flat to the prior year, respectively, primarily due to the following factors:
•Operating income increased $138 million, as discussed above;
•Interest and other financial charges - net decreased $64 million primarily driven by debt repayment and continued optimization;
•Non-operating benefit income decreased $118 million primarily related to lower expected returns on plan assets and increased interest cost;
•Other income - net increased $103 million primarily driven by the remeasurement of the Company's 50% interest in NMP based on the cash consideration exchanged for acquiring the remaining 50% equity interest. For additional detail on the NMP acquisition, refer to Note 8, "Acquisitions, Goodwill, and Other Intangible Assets"; and
•Provision for income taxes increased $83 million primarily due to U.S. and foreign tax law changes partially offset by a reduction in non-recurring impacts from the Tax Matters Agreement with GE, foreign income tax reserve releases for tax years which are no longer subject to an assessment from the local taxing authorities, and the use of tax attributes from updating our global structure following the Spin-Off. In the prior year, there was a large non-recurring decrease related to the release of the France valuation allowance, partially offset by the establishment of a reserve for ongoing audits in France. For additional detail regarding our income taxes, see Note 11, "Income Taxes."
Adjusted EBIT* and Adjusted EBIT margin* were $3,155 million and 15.3%, a decrease of $56 million and 100 basis points, respectively, primarily due to an increase in Total operating expenses, excluding the impact of Spin-Off and separation costs, partially offset by an increase in Gross profit, as discussed above.
Adjusted net income* was $2,100 million, an increase of $40 million primarily due to lower Interest and other financial charges - net and lower Adjusted tax expense*, partially offset by a decrease in operating income when excluding the impact of lower Spin-Off and separation costs.
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). See Note 4, "Segment and Geographical Information" for additional information on our reportable segments, and "Results of Operations" above for discussion on segment revenue performance.
Segment EBIT
For the years ended December 31
2025 % of segment revenues 2024 % of segment revenues % change
Imaging
$ 891 9.6 % $ 962 10.9 % (7.4) %
AVS
1,175 22.0 % 1,118 21.8 % 5.2 %
PCS
209 6.8 % 347 11.1 % (39.6) %
PDx
872 30.1 % 783 31.2 % 11.4 %
For the year ended December 31, 2025
•Imaging Segment EBIT was $891 million, a decrease of $71 million due to cost inflation, including the impact of incremental tariffs, partially offset by a growth in sales volume, an increase in price, and cost productivity;
•AVS Segment EBIT was $1,175 million, an increase of $58 million due to growth in sales volume and cost productivity, partially offset by cost inflation, including the impact of incremental tariffs;
•PCS Segment EBIT was $209 million, a decrease of $137 million due to unfavorable mix, cost inflation, including the impact of incremental tariffs, and a decline in sales volume; and
•PDx Segment EBIT was $872 million, an increase of $89 million due to an increase in price and growth in sales volume, partially offset by increased investment.
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*Non-GAAP Financial Measure
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 will help investors understand our financial condition, cash flows, and operating results, and assess our future prospects. 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. Descriptions of the reported non-GAAP measures are included below.
We report Organic revenue and Organic revenue growth rate to provide management and investors with additional understanding and visibility into the underlying revenue trends of our established, ongoing operations, as well as provide insights into overall demand for our products and services. To calculate these measures, we exclude the effect of acquisitions, dispositions, and foreign currency rate fluctuations.
We report EBIT, Adjusted EBIT, Adjusted EBIT margin, Adjusted net income, and Adjusted earnings per share to provide management and investors with an additional understanding of our business by highlighting the results from ongoing operations and the underlying profitability factors, on a normalized basis. To calculate these measures we exclude, and reflect 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. We may from time to time consider excluding other non-recurring items to enhance comparability between periods. Adjusted EBIT margin is calculated by taking Adjusted EBIT divided by Total revenues for the same period.
We report Adjusted tax expense and Adjusted ETR to provide management and investors with a better understanding of the normalized tax rate applicable to our 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. We 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.
We report Free cash flow to provide management and investors with an important measure of our ability to generate cash on a normalized basis and provide insight into our 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.
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 with U.S. GAAP. The detailed reconciliations of each non-GAAP financial measure to the most directly comparable U.S. GAAP financial measure are provided below, and no single financial measure should be relied on to evaluate our business.
Organic Revenue*
For the years ended December 31
2025 2024 % change
Imaging revenues
$ 9,245 $ 8,855 4.4%
Less: Acquisitions(1)
15 -
Less: Dispositions(2)
- -
Less: Foreign currency exchange
35 -
Imaging Organic revenue*
$ 9,195 $ 8,855 3.8%
AVS revenues
$ 5,354 $ 5,131 4.3%
Less: Acquisitions(1)
- -
Less: Dispositions(2)
- -
Less: Foreign currency exchange
30 -
AVS Organic revenue*
$ 5,324 $ 5,131 3.8%
PCS revenues
$ 3,086 $ 3,125 (1.2)%
Less: Acquisitions(1)
- -
Less: Dispositions(2)
- -
Less: Foreign currency exchange
7 -
PCS Organic revenue*
$ 3,079 $ 3,125 (1.5)%
PDx revenues
$ 2,900 $ 2,508 15.6%
Less: Acquisitions(1)
154 4
Less: Dispositions(2)
- -
Less: Foreign currency exchange
21 -
PDx Organic revenue*
$ 2,724 $ 2,504 8.8%
Other revenues
$ 40 $ 52 (23.0)%
Less: Acquisitions(1)
- -
Less: Dispositions(2)
- -
Less: Foreign currency exchange
- -
Other Organic revenue*
$ 40 $ 52 (23.3)%
Total revenues
$ 20,625 $ 19,672 4.8%
Less: Acquisitions(1)
169 4
Less: Dispositions(2)
- -
Less: Foreign currency exchange
94 -
Organic revenue*
$ 20,363 $ 19,667 3.5%
(1)
Represents revenues attributable to acquisitions from the date the Company completed the transaction through the end of four quarters following the transaction, excluding the impact of Foreign currency exchange already captured in lines elsewhere.
(2)
Represents revenues attributable to dispositions for the four quarters preceding the disposition date.
__________________
*Non-GAAP Financial Measure
Adjusted EBIT*
For the years ended December 31
2025 2024
% change
Net income attributable to GE HealthCare
$ 2,084 $ 1,993 4.6%
Add: Interest and other financial charges - net
440 504
Add: Non-operating benefit (income) costs
(288) (406)
Less: Benefit (provision) for income taxes
(614) (531)
Less: Net (income) loss attributable to noncontrolling interests
(70) (57)
EBIT*
2,920 2,679 9.0%
Add: Restructuring costs(1)
120 120
Add: Acquisition and disposition-related charges (benefits)(2)
39 3
Add: Spin-Off and separation costs(3)
38 251
Add: (Gain) loss on business and asset dispositions(4)
(5) -
Add: Amortization of acquisition-related intangible assets
156 137
Add: Investment revaluation (gain) loss(5)
(112) 22
Adjusted EBIT*
$ 3,155 $ 3,211 (1.8)%
Net income margin 10.1% 10.1% - bps
Adjusted EBIT margin*
15.3% 16.3% (100) 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 from GE, including system implementations, audit and advisory fees, legal entity separation, Founders Grant equity awards, separation agreements with GE, 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 and for the year ended December 31, 2025, includes the impact from the revaluation of our existing 50% interest in NMP as part of the acquisition transaction.
Adjusted Net Income*
For the years ended December 31
2025 2024
% change
Net income attributable to GE HealthCare
$ 2,084 $ 1,993 4.6%
Add: Non-operating benefit (income) costs
(288) (406)
Add: Restructuring costs(1)
120 120
Add: Acquisition and disposition-related charges (benefits)(2)
39 3
Add: Spin-Off and separation costs(3)
43 251
Add: (Gain) loss on business and asset dispositions(4)
(5) -
Add: Amortization of acquisition-related intangible assets
156 137
Add: Investment revaluation (gain) loss(5)
(112) 22
Add: Tax effect of reconciling items(6)
(7) (42)
Add: Spin-Off and other tax adjustments(7)
72 (17)
Adjusted net income*
$ 2,100 $ 2,060 2.0%
(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 from GE, including system implementations, audit and advisory fees, legal entity separation, Founders Grant equity awards, separation agreements with GE, and other one-time costs. An adjustment is included to eliminate the associated impact on Net (income) loss attributable to noncontrolling interests for applicable costs that impact earnings attributable to noncontrolling interests.
(4)
Consists of gains and losses resulting from the sale of assets and investments.
(5)
Primarily relates to valuation adjustments for equity investments and for the year ended December 31, 2025, includes the impact from the revaluation of our existing 50% interest in NMP as part of the acquisition transaction.
(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 one-time adjustments to deferred tax balances, impacts from tax law changes, 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, and discrete tax impacts resulting from the Spin-Off and separation from GE.

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*Non-GAAP Financial Measure
Adjusted Earnings Per Share*
For the years ended December 31
(In dollars, except shares outstanding presented in millions) 2025 2024
$ change
Diluted earnings per share
$ 4.55 $ 4.34 $ 0.21
Add: Non-operating benefit (income) costs
(0.63) (0.88)
Add: Restructuring costs(1)
0.26 0.26
Add: Acquisition and disposition-related charges (benefits)(2)
0.08 0.01
Add: Spin-Off and separation costs(3)
0.09 0.55
Add: (Gain) loss on business and asset dispositions(4)
(0.01) -
Add: Amortization of acquisition-related intangible assets
0.34 0.30
Add: Investment revaluation (gain) loss(5)
(0.24) 0.05
Add: Tax effect of reconciling items(6)
(0.02) (0.09)
Add: Spin-Off and other tax adjustments(7)
0.16 (0.04)
Adjusted earnings per share*
$ 4.59 $ 4.49 $ 0.10
Diluted weighted-average shares outstanding 458 459
(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 from GE, including system implementations, audit and advisory fees, legal entity separation, Founders Grant equity awards, separation agreements with GE, and other one-time costs. An adjustment is included to eliminate the associated impact on Net (income) loss attributable to noncontrolling interests for applicable costs that impact earnings attributable to noncontrolling interests.
(4)
Consists of gains and losses resulting from the sale of assets and investments.
(5)
Primarily relates to valuation adjustments for equity investments and for the year ended December 31, 2025, includes the impact from the revaluation of our existing 50% interest in NMP as part of the acquisition transaction.
(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 one-time adjustments to deferred tax balances, impacts from tax law changes, 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, and discrete tax impacts resulting from the Spin-Off and separation from GE.
Adjusted Tax Expense* and Adjusted ETR*
For the years ended December 31
2025 2024
Benefit (provision) for income taxes
$ (614) $ (531)
Add: Tax effect of reconciling items(1)
(7) (42)
Add: Spin-Off and other tax adjustments(2)
72 (17)
Adjusted tax expense*
$ (550) $ (590)
Effective tax rate
22.2% 20.6%
Adjusted effective tax rate*
20.2% 21.8%
(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 one-time adjustments to deferred tax balances, impacts from tax law changes, 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, and discrete tax impacts resulting from the Spin-Off and separation from GE.
Free Cash Flow*
For the years ended December 31
2025 2024
% change
Cash from (used for) operating activities - continuing operations
$ 1,987 $ 1,955 1.7%
Add: Additions to PP&E and internal-use software
(482) (401)
Add: Dispositions of PP&E
- -
Free cash flow*
$ 1,505 $ 1,554 (3.2)%
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*Non-GAAP Financial Measure
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2025, our Cash, cash equivalents, and restricted cash balance in the Consolidated Statements of Financial Position was $4,512 million. We have historically generated positive cash flows from operating activities. Additionally, we have access to revolving credit facilities and a delayed draw term loan facility of $3,500 million and $750 million, respectively, in aggregate, described in detail in Note 9, "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:
Cash Flow
For the years ended December 31
2025 2024
Cash from (used for) operating activities - continuing operations $ 1,987 $ 1,955
Cash from (used for) investing activities - continuing operations (1,047) (914)
Cash from (used for) financing activities - continuing operations 617 (573)
Free cash flow*
1,505 1,554
Operating Activities
Cash generated from operating activities in the year ended December 31, 2025 was $1,987 million and included Net income of $2,154 million, adjusted for non-cash items including depreciation and amortization expense of $578 million, the gain on remeasurement of the NMP equity method investment of $97 million, and $647 million in net outflows from changes in assets and liabilities. The changes in assets and liabilities are primarily driven by company-funded benefit payments for postretirement benefit plans, an increase in receivables due to higher volume, and an increase in inventories to meet business demand in the current trade environment. This includes an impact of approximately $285 million from incremental tariffs.
Cash generated from operating activities in the year ended December 31, 2024 was $1,955 million and included Net income from continuing operations of $2,050 million, non-cash charges primarily for depreciation and amortization of $580 million, and $675 million in outflows from incremental changes in assets and liabilities, primarily driven by company-funded benefit payments for postretirement benefit plans, an increase in receivables due to higher volume, and a build in inventories.
Investing Activities
Cash used for investing activities in the year ended December 31, 2025 was $1,047 million and primarily included Additions to PP&E and internal-use software of $482 million related mostly to investments in facilities, including manufacturing capacity expansion, and new product introductions, purchases of businesses, net of cash acquired, of $378 million largely related to the acquisitions of the remaining 50% interest in NMP and 100% of the stock of icometrix NV ("icometrix"), and a payment of $178 million for settlement of cross-currency swaps that were designated as net investment hedges. Refer to Note 8, "Acquisitions, Goodwill, and Other Intangible Assets" for additional information on the NMP and icometrix acquisitions and Note 13, "Financial Instruments and Fair Value Measurements" for additional information on the settlement of cross-currency swaps.
Cash used for investing activities in the year ended December 31, 2024 was $914 million and primarily included Additions to PP&E and internal-use software of $401 million related mostly to manufacturing capacity expansion and new product introductions, purchases of businesses, net of cash acquired, of $313 million related to the MIM Software Inc. ("MIM Software") and Intelligent Ultrasound Group PLC acquisitions, and payment of $94 million for settlement of cross-currency swaps that were designated as net investment hedges. Refer to Note 8, "Acquisitions, Goodwill, and Other Intangible Assets" for additional information on the MIM Software acquisition and Note 13, "Financial Instruments and Fair Value Measurements" for additional information on the settlement of cross-currency swaps.
Financing Activities
Cash generated from financing activities in the year ended December 31, 2025 was $617 million and primarily included $2,730 million of net proceeds from the issuance of $2,750 million aggregate principal amount of senior unsecured notes, partially offset by repayment of $1,500 million of senior unsecured notes due in November 2025 and $250 million of our outstanding Term Loan Facility, and repurchase of common stock for total consideration of $200 million. Refer to Note 9, "Borrowings" and Note 12, "Shareholders' Equity" for further information.
Cash used for financing activities in the year ended December 31, 2024 was $573 million and primarily included repayment of $1,000 million aggregate principal amount of senior unsecured notes, and $400 million in repayments of the outstanding Term Loan Facility, partially offset by $995 million of net proceeds from the issuance of $1,000 million aggregate principal amount of senior unsecured notes due in 2029.
___________________
*Non-GAAP Financial Measure
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 is provided in Note 7, "Leases," Note 9, "Borrowings," and Note 14, "Commitments, Guarantees, Product Warranties, and Other Loss Contingencies." We have material cash requirements related to our pension obligations as described in Note 10, "Postretirement Benefit Plans." Additionally, on November 20, 2025, we announced an agreement to acquire Intelerad for a purchase price of $2,300 million to be paid in cash as described in Note 8, "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 December 31, 2025, we had $10,003 million of total debt compared to $8,951 million as of December 31, 2024. The increase in debt was due primarily to our issuances in the second quarter of 2025 of $650 million aggregate principal amount of senior unsecured notes due in 2031 and $850 million aggregate principal amount of senior unsecured notes due in 2035, and in the fourth quarter of 2025 of $600 million aggregate principal amount of senior unsecured notes due in 2028 and $650 million aggregate principal amount of senior unsecured notes due in 2035. The issuances were partially offset by repayments of $1,500 million aggregate principal amount outstanding of the senior unsecured notes due in November 2025 in the fourth quarter of 2025 and of $250 million of the outstanding Term Loan Facility in the first quarter of 2025.
In the fourth quarter of 2025, we entered into a Delayed Draw Term Loan Facility in an aggregate committed amount of $750 million as part of the funding for the expected acquisition of Intelerad. In addition to the Term Loan Facility and Delayed Draw Term Loan Facility, our credit facilities include a five-year senior unsecured revolving facility that provides borrowings of up to $3,000 million expiring in March 2030, and a 364-day senior unsecured revolving facility that provides borrowings of up to $500 million expiring in March 2026. As of December 31, 2025, there were no outstanding borrowings on any of the revolving facilities or the Delayed Draw Term Loan Facility. Additional information on our debt and credit facilities, including definitions of the terms used above, is included in Note 9, "Borrowings."
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 consolidated net leverage ratio. As of December 31, 2025, we were in compliance with the covenant requirements, including the maximum consolidated net leverage ratio.
Access to Capital and Credit Ratings
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.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
For a discussion of recently issued accounting standards, see Note 2, "Summary of Significant Accounting Policies."
CRITICAL ACCOUNTING ESTIMATES
Our financial results are affected by the selection and application of accounting policies and methods. We have adopted accounting policies to prepare our financial statements in conformity with U.S. GAAP.
To prepare our financial statements in accordance with U.S. 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 financial statements, and the reported amounts of our revenues and expenses during the reporting periods. Our actual results may differ from these estimates. We consider estimates to be critical (1) if we are required to make assumptions about material matters that are uncertain at the time of estimation or (2) if materially different estimates could have been made or it is reasonably likely that the accounting estimate will change from period to period. The following are areas considered to be critical and require management's judgment: Revenue Recognition, Valuation of Assets and Liabilities in Connection with Acquisitions, Pension and Other Postretirement Benefits, and Income Taxes.
See Note 2, "Summary of Significant Accounting Policies" for further information on our significant accounting policies.
REVENUE RECOGNITION.
Our revenues are recorded based on the consideration specified in customer contracts net of any sales incentives, discounts, returns, chargebacks, group purchasing organization fees, rebates, or credits, which are accounted for as estimated variable consideration. Our estimates for these deductions are based upon historical experience and consider current and forecasted market trends. We record the estimated amounts as a reduction to revenue when we recognize the related product or service sale.
Chargebacks are a form of variable consideration that occur when a contracted customer purchases through an intermediary wholesaler. The contracted customer generally purchases product from the wholesaler at its contracted price plus a mark-up. The wholesaler, in turn, charges us back for the difference between the price initially paid by the wholesaler and the contract price paid to the wholesaler by the contracted customer. 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.
The amounts of variable consideration included in the net transaction price for revenue recognition are limited to the amounts that are estimated to be probable of occurrence to avoid a material revenue reversal in a future period.
When a contract with a customer includes multiple performance obligations, the transaction price is allocated to each performance obligation based on relative standalone selling prices. In cases where observable prices for a performance obligation are not available, standalone selling prices are estimated by the Company using our pricing strategies and giving consideration to product configuration, geography, customer type, and other market-specific factors.
See Note 3, "Revenue Recognition" for further information on revenue recognition and Note 5, "Receivables" for further information on chargebacks.
VALUATION OF ASSETS AND LIABILITIES IN CONNECTION WITH ACQUISITIONS.
Our financial statements include the operations of an acquired business starting from the completion of the combination. The assets acquired and liabilities assumed, including any contingent consideration we may be liable to pay in the future, are recorded on the date of the business combination at their respective estimated fair values, with any excess of the purchase price over the estimated fair values of the net assets acquired recorded as goodwill. Our business combinations typically result in the recognition of goodwill, developed technology, and other intangible assets, which affect the amount of future period amortization expense. The fair values of acquired intangible assets and liabilities are determined using information available at the business combination date based on estimates and assumptions that are deemed reasonable. Significant assumptions vary by the class of asset or liability and the valuation technique used. These assumptions can include: the discount rates; timing; probability of achieving regulatory and commercialization milestones; inflation rate; and certain assumptions that form the basis of the forecasted results of the acquired business including revenue, costs to comply with asset retirement obligations, earnings before interest, taxes, depreciation and amortization, growth rates, royalty rates, and technology obsolescence rates. 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.
See Note 8, "Acquisitions, Goodwill, and Other Intangible Assets" for further information on our acquisitions.
PENSION AND OTHER POSTRETIREMENT BENEFITS.
Pension and other postretirement benefits are calculated using significant inputs to the actuarial models that measure pension benefit obligations and related effects on operations. Two assumptions, discount rate and expected return on assets, are important elements of plan expense and related asset and liability measurement. The Company evaluates these critical assumptions at least annually on a plan and country-specific basis. The Company periodically evaluates other assumptions involving demographic factors such as retirement age, mortality, and turnover, and updates them to reflect our experience and expectations for the future. Actual results in any given year often will differ from actuarial assumptions because of economic and other factors.
Projected benefit obligations ("PBO") are measured as the present value of expected payments. We discount those cash payments using the weighted average of market-observed yields for high-quality fixed-income securities with maturities that correspond to the expected timing of benefit payments.
A 50 basis point change in the assumed discount rate would have the following effects on the calculation of net periodic benefit costs in 2026 and PBO and accumulated postretirement benefit obligation ("APBO") as of December 31, 2025:
Discount Rate Sensitivity
U.S. Plans
International Plans
Other Postretirement Plans
50 bps increase in discount rate
Impact on PBO/APBO as of December 31, 2025
$ (827) $ (192) $ (29)
Impact on service cost and interest cost in 2026
40 3 3
50 bps decrease in discount rate
Impact on PBO/APBO as of December 31, 2025
$ 902 $ 214 $ 31
Impact on service cost and interest cost in 2026
(45) (4) (2)
The sensitivity of the net deficit to the discount rate would be lower than the projected benefit obligation sensitivity as a result of the liability hedging program incorporated in the plan's asset allocation.
To determine the expected long-term rate of return on pension plan assets, we consider current and target asset allocations, as well as historical and expected returns on various categories of plan assets. In developing future long-term return expectations for our principal benefit plans' assets, we formulate views on the future economic environment, both in the U.S. and abroad. We evaluate general market trends and historical relationships among a number of key variables that impact asset class returns such as expected earnings growth, inflation, valuations, yields, and spreads, using both internal and external sources. We also consider expected volatility by asset class and diversification across classes to determine expected overall portfolio results given current and target allocations. A 1% change in the assumed expected long-term rate of return on plan assets would increase or decrease the 2026 net periodic benefit costs of these plans by $188 million.

Our pension plan assets contain financial instruments that are measured at fair value. While the majority of these assets are valued based on quoted prices for identical or similar instruments in active markets, the fair value of certain assets is estimated using significant unobservable inputs (Level 3). These assets primarily relate to an annuity contract, real estate, and private equity investments.
We disclose in the following table postretirement plans with assets or obligations that exceed $50 million as of December 31, 2025. Refer to Note 10, "Postretirement Benefit Plans" for further details related to these plans. The value of the assets and liabilities as of December 31, 2025, are summarized in the table below.
Projected benefit obligations Fair value of plan assets Funded status - surplus (deficit)
GE HealthCare Pension Plan $ 15,519 $ 13,988 $ (1,531)
GE HealthCare Supplementary Pension Plan 1,672 - (1,672)
Other U.S. Pension Plans 1,378 743 (635)
Total U.S. Plans 18,569 14,731 (3,838)
International Plans 3,148 3,528 380
OPEB Plans(1)
908 - (908)
Total $ 22,625 $ 18,259 $ (4,365)
(1) As defined in Note 10, "Postretirement Benefit Plans."

INCOME TAXES.
Our annual tax expense is based on our income, applicable 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. Such assets arise because of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as from net operating loss and tax credit carryforwards. We evaluate the recoverability of these future tax deductions and credits by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings, taxable income in prior carryback years to the extent applicable, and available tax planning strategies. These sources of income rely heavily on estimates; we use our historical experience as well as our short- and long-range business forecasts to provide insight.
Significant judgment is required in determining our tax expense and in evaluating our tax positions, including evaluating uncertainties. We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the relevant taxing authorities based on the technical merits of the position. Our policy is to adjust these reserves when facts and circumstances change, such as the change in the technical merit of a position, or an uncertain tax position is effectively settled with the relevant taxing authority, or the statute of limitations has expired. We have provided for the amounts we believe will ultimately result from these changes; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities.
See Note 11, "Income Taxes" for further information on income taxes.
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