CURRENT AND LONG-TERM RECEIVABLES

9 Months Ended

Sep. 30, 2020

NOTE 4. CURRENT AND LONG-TERM RECEIVABLES


CURRENT RECEIVABLES	Consolidated				GE
(In millions)	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Customer receivables(a)	$	13,862	$	12,594	$	9,500	$	9,507
Sundry receivables(b)(c)	4,652		5,049		4,861		5,247
Allowance for credit losses(d)	(1,212)		(874)		(1,210)		(872)
Total current receivables	$	17,302	$	16,769	$	13,151	$	13,883

(a) Includes Aviation receivables from CFM International (CFM) due to 737 MAX temporary fleet grounding of $801 million and $1,397 million as of September 30, 2020 and December 31, 2019, respectively. During 2020, CFM and Boeing reached an agreement to secure payment terms for engines delivered in 2019 and 2020, net of progress collections. Based on the agreement, the receivable is expected to be collected from Boeing through the first quarter of 2021.

(b) Includes supplier advances, revenue sharing programs receivables in our Aviation business, other non-income based tax receivables, primarily value-added tax related to our operations in various countries outside of the U.S., receivables from disposed businesses, including receivables for transactional services agreements and certain intercompany balances that eliminate upon consolidation. Revenue sharing program receivables in Aviation are amounts due from third parties who participate in engine programs by developing and supplying certain engine components through the life of the program. The participants share in program revenues, receive a share of customer progress payments and share costs related to discounts and warranties.

(c) Consolidated current receivables include deferred purchase price which 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 as of September 30, 2020 and December 31, 2019 was $480 million and $421 million, respectively.

(d) GE allowance for credit losses primarily increased due to net new provisions of $313 million, offset by write-offs and foreign currency impact.

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 September 30, 2020 and 2019, GE sold approximately 45% and 54%, respectively, of its gross customer receivables to GE Capital or third parties. Activity related to customer receivables sold by GE is as follows:


	2020					2019
(In millions)	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	24,630			—		30,243			—
GE sales to third parties	—			1,063		—			4,206
GE Capital sales to third parties	(13,757)			13,757		(20,505)			20,505
Collections and other	(9,805)			(18,119)		(10,606)			(26,209)
Reclassification from long-term customer receivables	207			—		265			—
Balance at September 30	$	4,362	(a)	$	3,458	$	3,782	(a)	$	6,382

(a) At September 30, 2020 and 2019, $640 million and $707 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 cash flows from operating activities (CFOA) of claims by GE Capital on receivables sold with recourse was insignificant for the nine months ended September 30, 2020 and 2019.


LONG-TERM RECEIVABLES	Consolidated				GE
(In millions)	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Long-term customer receivables(a)	$	673	$	906	$	483	$	506
Long-term sundry receivables(b)	1,525		1,504		1,726		1,834
Allowance for credit losses	(140)		(128)		(140)		(128)
Total long-term receivables	$	2,058	$	2,282	$	2,069	$	2,212

(a) As of September 30, 2020 and December 31, 2019, GE Capital held $190 million and $400 million, respectively, of GE long-term customer receivables, of which $173 million and $312 million had been purchased with recourse (i.e., GE retains all or some risk of default). GE sold an insignificant amount of long-term customer receivables during the nine months ended September 30, 2020 and 2019.

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

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 $2,500 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 $800 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 sizes of the first facility and the second facility at December 31, 2019 were $3,100 million and $1,200 million, respectively.

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:


Nine months ended September 30 (In millions)	2020		2019
Customer receivables sold to receivables facilities	$	10,570	$	16,062
Total cash purchase price for customer receivables	10,060		15,702
Cash collections re-invested to purchase customer receivables	8,865		13,287

Non-cash increases to deferred purchase price	$	446	$	170
Cash payments received on deferred purchase price	388		270

CONSOLIDATED SECURITIZATION ENTITIES. GE Capital consolidates three variable interest entities (VIEs) that purchased customer receivables and long-term customer receivables from GE. At September 30, 2020 and December 31, 2019, these VIEs held current customer receivables of $1,646 million and $2,080 million and long-term customer receivables of $190 million and $375 million, respectively. At September 30, 2020 and December 31, 2019, the outstanding non-recourse debt under their respective debt facilities was $452 million and $1,655 million, respectively.