GE HealthCare Technologies (GEHC) - 2022 Q4 - Annual Report

Corporate Governance and Compliance - The company will incur additional costs and demands on management's time associated with being an independent, publicly traded company, including costs related to corporate governance and public financial reporting [229]. - The company is required to comply with Section 404 of the Sarbanes Oxley Act, necessitating annual management assessments of internal control effectiveness, which may require system upgrades and additional staffing [230]. - Provisions in the company's bylaws may discourage takeovers and limit stockholder power, potentially affecting acquisition opportunities [243]. Financial Condition and Debt - The company has incurred indebtedness due to the Spin-Off from GE, and its ability to service this debt will depend on future cash generation from operations [233]. - GE retains a 19.9% economic interest in the company, and its potential sale of shares could lead to stock price volatility [240]. - The company evaluates cash dividends for stockholders, but future payments may be limited by its indebtedness and financial condition [241]. - Future equity issuances for acquisitions or employee compensation may dilute existing shareholders' interests [242]. - The company may face challenges accessing capital markets on favorable terms due to market volatility and credit rating changes [236]. - The company’s total consolidated cash will be held overseas, which may complicate funding for U.S. financial obligations [236]. Market and Operational Risks - The company is exposed to market risks primarily from changes in interest rates and foreign currency exchange rates, which may impact future income and cash flows [370]. - As of December 31, 2022, the company incurred $8,250 million of fixed-rate debt, with a variable interest rate exposure from a $2,000 million Term Loan Facility, comprising approximately 20% of total debt obligations [375]. - A hypothetical change of interest rates by 100 basis points would increase or decrease annual interest expense by approximately $20 million [375]. - The company relies on supplies of certain raw materials, including helium, iodine, and rare earth minerals, which are subject to volatile pricing and availability [376]. - Disruptions in deliveries or production, including those caused by natural disasters or public health emergencies, can significantly impact the company's operations and cash flows [378]. Hedging and Currency Management - The company uses cross-currency swap derivative contracts to hedge translation exposure of net investments in foreign operations against adverse movements in exchange rates [374]. - The effective portion of cash flow hedges is offset in separate components of equity, while ineffectiveness is recognized in earnings [372]. - The company manages interest expense using a mixture of fixed-rate and variable-rate debt to mitigate interest rate risk [375]. - The global nature of the company's customer base allows for natural offsets of certain income and costs denominated in foreign currencies [373]. - The company employs cash flow hedging to reduce the effects of foreign currency rate changes on purchase and sale contracts [372].