CURRENT AND LONG-TERM RECEIVABLES

3 Months Ended

Mar. 31, 2020

NOTE 4. CURRENT AND LONG-TERM RECEIVABLES



CURRENT RECEIVABLES	Consolidated						GE
(In millions)	March 31, 2020			December 31, 2019			March 31, 2020			December 31, 2019

Customer receivables(a)	$	12,877		$	12,594		$	8,920		$	9,507
Sundry receivables(b)	4,976			5,049			5,082			5,247
Allowance for losses	(929		)	(874		)	(926		)	(872		)
Total current receivables	$	16,925		$	16,769		$	13,076		$	13,883

(a) Includes receivables from Boeing due to 737 MAX temporary fleet grounding of $1,407 million and $1,397 million as of March 31, 2020 and December 31, 2019, respectively.

(b) Includes supplier advances, revenue sharing programs receivables, other non-income based tax receivables, certain intercompany balances that eliminate upon consolidation and deferred purchase price. The deferred purchase price represents our retained risk with respect to current customer receivables sold to third parties through one of the receivable facilities. The balance of the deferred purchase price held by GE Capital at March 31, 2020 and December 31, 2019 was $502 million and $421 million, respectively.

Sales of GE current customer receivables. When GE sells customer receivables to GE Capital or third parties it accelerates the receipt of cash that would otherwise have been collected from customers. In any given period, the amount of cash received from sales of customer receivables compared to the cash GE would have otherwise collected had those customer receivables not been sold represents the cash generated or used in the period relating to this activity. GE sales of customer receivables to GE Capital or third parties are made on arm's length terms and any discount related to time value of money is recognized by GE when the customer receivables are sold. As of March 31, 2020 and 2019, GE sold approximately 49% and 65%, respectively, of its gross customer receivables to GE Capital or third parties. Activity related to customer receivables sold by GE is as follows:



(In millions)	2020							2019
	GE Capital				Third Parties			GE Capital				Third Parties

Balance at January 1	$	3,087			$	6,757		$	4,386			$	7,880
GE sales to GE Capital	9,225				—			9,690				—
GE sales to third parties	—				515			—				1,376
GE Capital sales to third parties	(5,253		)		5,253			(6,591		)		6,591
Collections and other	(3,224		)		(8,005		)	(3,967		)		(8,123		)
Reclassification from long-term customer receivables	123				—			140				—
Balance at March 31	$	3,958		(a)(b)	$	4,519		$	3,657		(a)	$	7,724

(a) At March 31, 2020 and 2019, $557 million and $1,248 million, respectively, of the current receivables purchased and retained by GE Capital had been sold by GE to GE Capital with recourse (i.e., GE retains all or some risk of default). The effect on GE CFOA of claims by GE Capital on receivables sold with recourse was insignificant for the three months ended March 31, 2020 and 2019.

(b) The $871 million increase in GE current receivables purchased and retained by GE Capital in the quarter was driven by a plan to use excess liquidity in GE Capital to purchase and retain GE current receivables. GE Aviation receivables were substantially all of the increase and approximately $288 million of that increase can be attributed to lower third-party demand for certain GE Aviation receivables.

LONG-TERM RECEIVABLES. In certain circumstances, GE provides customers, primarily within our Power, Renewable Energy and Aviation businesses, with extended payment terms for the purchase of new equipment, purchases of upgrades and spare parts for our long-term service agreements. These long-term customer receivables are initially recorded at present value and have an average remaining duration of approximately three years and are included in All other assets in the consolidated Statement of Financial Position.



	Consolidated						GE
(In millions)	March 31, 2020			December 31, 2019			March 31, 2020			December 31, 2019

Long-term customer receivables(a)	$	756		$	906		$	492		$	506
Long-term sundry receivables(b)	1,437			1,504			1,647			1,834
Allowance for losses	(131		)	(128		)	(131		)	(128		)
Total long-term receivables	$	2,063		$	2,282		$	2,008		$	2,212

(a) At March 31, 2020 and December 31, 2019, GE Capital held $265 million and $400 million, respectively, of GE long-term customer receivables, of which $222 million and $312 million had been purchased with recourse (i.e., GE retains all or some risk of default). The effect on GE cash flows from operating activities (CFOA) of claims on long-term receivables sold with recourse was insignificant for the three months ended March 31, 2020 and the year ended December 31, 2019.

(b) Includes supplier advances, revenue sharing programs receivables, other non-income based tax receivables and certain intercompany balances that eliminate upon consolidation.

Sales of GE long-term customer receivables. Similar to sales of current customer receivables, sales of long-term customer receivables can result in cash generation or use in our consolidated Statement of Cash Flows. During the three months ended March 31, 2020 and 2019, GE Capital did not purchase any GE long-term customer receivables. Reductions in GE Capital outstanding GE long-term customer receivables were attributable to collections and reclassification to short-term receivables.

UNCONSOLIDATED RECEIVABLES FACILITIES. GE Capital has two revolving receivables facilities, under which customer receivables purchased from GE are sold to third parties. In the first facility, which has a program size of $3,100 million, upon the sale of receivables, we receive proceeds of cash and deferred purchase price and the Company’s remaining risk with respect to the sold receivables is limited to the balance of the deferred purchase price. In the second facility, which has a program size of $600 million, upon the sale of receivables, we receive proceeds of cash only and therefore the Company has no remaining risk with respect to the sold receivables. The program size of the second facility reduced from $1,200 million to $600 million in March 2020. Current receivables that would otherwise have been sold to third parties were retained by GE Capital to utilize available funding.

Activity related to these facilities is included in the GE Capital sales to third parties line in the sales of GE current customer receivables table above and is as follows:



Three months ended March 31 (In millions)	2020		2019

Customer receivables sold to receivables facilities	$	4,307	$	5,175
Total cash purchase price for customer receivables	4,120		5,071
Cash collections re-invested to purchase customer receivables	3,723		4,253

Non-cash increases to deferred purchase price	$	160	$	44
Cash payments received on deferred purchase price	78		61

CONSOLIDATED SECURITIZATION ENTITIES. GE Capital consolidates three variable interest entities (VIEs) that purchased customer receivables and long-term customer receivables from GE. At March 31, 2020 and December 31, 2019 these VIEs held current customer receivables of $1,619 million and $2,080 million and long-term customer receivables of $251 million and $375 million, respectively. At March 31, 2020 and December 31, 2019, the outstanding non-recourse debt under their respective debt facilities was $644 million and $1,655 million, respectively.