CURRENT AND LONG-TERM RECEIVABLES

12 Months Ended

Dec. 31, 2020

NOTE 4. CURRENT AND LONG-TERM RECEIVABLES


	Consolidated				GE Industrial
December 31	2020		2019		2020		2019
Power	$	3,995	$	4,689	$	2,656	$	3,289
Renewable Energy	2,401		2,306		1,903		1,749
Aviation(a)	4,417		3,249		3,490		2,867
Healthcare	2,336		2,105		1,498		1,379
Corporate	310		246		293		223
Customer receivables	13,459		12,594		9,841		9,507
Sundry receivables(b)(c)	4,395		4,848		4,763		5,047
Allowance for losses(d)	(1,164)		(874)		(1,161)		(872)
Total current receivables	$	16,691	$	16,568	$	13,442	$	13,682

(a) Includes Aviation receivables from CFM due to 737 MAX temporary fleet grounding of $448 million and $1,397 million as of December 31, 2020 and 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 agreements and certain intercompany balances that eliminate upon consolidation. Revenue sharing programs 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 at December 31, 2020 and 2019, was $413 million and $421 million, respectively.

(d) GE Industrial allowance for credit losses primarily increased due to net provisions of $274 million, offset by write-offs and foreign currency impact.

Sales of GE Industrial current customer receivables. When GE Industrial sells customer receivables to GE Capital or third parties, it accelerates the receipt of cash that would have otherwise been collected from customers. In any given period, the amount of cash received from sales of customer receivables compared to the cash GE Industrial 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 Industrial sales of customer receivables to GE Capital or third parties are made on arms-length terms and any discount related to time value of money is recognized by GE Industrial when the customer receivables are sold. In our Statement of Cash Flows, receivables purchased and retained by GE Capital are reflected as cash from operating activities at GE Industrial, primarily as cash used for investing activities at GE Capital and are eliminated in consolidation. Collections on receivables purchased by GE Capital are reflected primarily as cash from investing activities at GE Capital and are reclassified to cash from operating activities in consolidation. As of December 31, 2020 and 2019, GE Industrial sold approximately 40% and 51%, respectively, of its gross customer receivables to GE Capital or third parties. Any difference between the carrying value of receivables sold and total cash collected is recognized as financing costs by GE Industrial in Interest and other financial charges in our consolidated Statement of Earnings (Loss). Costs of $264 million and $515 million were recognized during the years ended December 31, 2020 and 2019, respectively. The decrease in costs from prior year was driven by lower sales of receivables as well as lower benchmark interest rates. Activity related to customer receivables sold by GE Industrial is as follows:


	GE Capital			Third Parties		GE Capital			Third Parties
	2020					2019
Balance at January 1	$	3,087		$	6,757	$	4,386		$	7,880
GE Industrial sales to GE Capital	32,869			—		40,988			—
GE Industrial sales to third parties	—			863		—			5,286
GE Capital sales to third parties	(18,654)			18,654		(28,073)			28,073
Collections and other	(14,004)			(23,283)		(14,621)			(34,482)
Reclassification from long-term customer receivables	321			—		407			—
Balance at December 31	$	3,618	(a)	$	2,992	$	3,087	(a)	$	6,757

(a) At December 31, 2020 and 2019, $505 million and $539 million, respectively, of the current receivables purchased and retained by GE Capital, had been sold by GE Industrial to GE Capital with recourse (i.e., GE Industrial retains all or some risk of default). The effect on GE Industrial cash flows from operating activities (CFOA) of claims by GE Capital on receivables sold with recourse was insignificant for the years ended December 31, 2020 and 2019.


LONG-TERM RECEIVABLES	Consolidated				GE Industrial
December 31	2020		2019		2020		2019
Long-term customer receivables(a)	$	585	$	906	$	474	$	506
Long-term sundry receivables(b)	1,748		1,705		2,097		2,035
Allowance for losses	(142)		(128)		(142)		(128)
Total long-term receivables	$	2,191	$	2,483	$	2,430	$	2,413

(a) As of December 31, 2020 and 2019, GE Capital held $111 million and $400 million, respectively, of GE Industrial long-term customer receivables, of which $98 million and $312 million had been purchased with recourse (i.e., GE Industrial retains all or some risk of default). GE Industrial sold an insignificant amount of long-term customer receivables during the years ended December 31, 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 Industrial are sold to third parties. In the first facility, which has a program size of $2,000 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. The program size of the first facility at December 31, 2019 was $3,100 million. Under the second facility, upon the sale of receivables, we receive the proceeds of cash only and therefore the Company has no remaining risk with respect to the sold receivables. In December 2020, GE Capital did not renew the second facility. The program size of the second facility at December 31, 2019 was $1,200 million.

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


For the years ended December 31	2020		2019
Customer receivables sold to receivables facilities	$	13,591	$	21,695
Total cash purchase price for customer receivables	13,031		21,202
Cash collections re-invested to purchase customer receivables	11,567		18,012

Non-cash increases to deferred purchase price	$	481	$	257
Cash payments received on deferred purchase price	489		303

Cash payments received on deferred purchase price are reflected as cash from investing activities in both the GE Capital and consolidated columns within our Statement of Cash Flows.

CONSOLIDATED SECURITIZATION ENTITIES. GE Capital consolidates three variable interest entities (VIEs) that purchased customer receivables and long-term customer receivables from GE Industrial. At December 31, 2020 and 2019, these VIEs held current customer receivables of $1,489 million and $2,080 million and long-term customer receivables of $93 million and $375 million, respectively. At December 31, 2020 and 2019, the outstanding debt under their respective debt facilities was $892 million and $1,655 million, respectively.