Accounts Receivable and Finance Receivables (Tables)

12 Months Ended

Jan. 02, 2021

Receivables [Abstract]

Accounts Receivable

Accounts receivable is composed of the following:

(In millions)	January 2, 2021		January 4, 2020
Commercial	$	668	$	835
U.S. Government contracts	155		115
	823		950
Allowance for doubtful accounts	(36)		(29)
Total	$	787	$	921

Finance Receivables

Finance receivables are presented in the following table:

(In millions)	January 2, 2021		January 4, 2020
Finance receivables	$	779	$	707
Allowance for losses	(35)		(25)
Total finance receivables, net	$	744	$	682

Financing Receivables Categorized Based on Credit Quality Indicators

Finance receivables categorized based on the credit quality indicators and by delinquency aging category are  summarized as follows:

(Dollars in millions)	January 2, 2021		January 4, 2020
Performing	$	612	$	664
Watchlist	74		4
Nonaccrual	93		39
Nonaccrual as a percentage of finance receivables	11.94%		5.52%
Less than 31 days past due	$	738	$	637
31-60 days past due	12		53
61-90 days past due	11		7
Over 90 days past due	18		10
60+ days contractual delinquency as a percentage of finance receivables	3.72%		2.40%

Financing Receivables Categorized Based on Credit Quality Indicators

Finance receivables categorized based on the credit quality indicators and by delinquency aging category are  summarized as follows:

(Dollars in millions)	January 2, 2021		January 4, 2020
Performing	$	612	$	664
Watchlist	74		4
Nonaccrual	93		39
Nonaccrual as a percentage of finance receivables	11.94%		5.52%
Less than 31 days past due	$	738	$	637
31-60 days past due	12		53
61-90 days past due	11		7
Over 90 days past due	18		10
60+ days contractual delinquency as a percentage of finance receivables	3.72%		2.40%

Summary of impaired finance receivables, excluding leveraged leases, and the average recorded investment

A summary of impaired finance receivables, excluding leveraged leases, and the average recorded investment is provided below:

(In millions)	January 2, 2021		January 4, 2020
Recorded investment:
Impaired loans with specific allowance for losses	$	46	$	17
Impaired loans with no specific allowance for losses	117		22
Total	$	163	$	39
Unpaid principal balance	$	175	$	50
Allowance for losses on impaired loans	7		3
Average recorded investment	126		40

Summary of finance receivables and allowance for loan losses based on impairment evaluation, excluding leveraged leases

A summary of the allowance for losses on finance receivables based on how the underlying finance receivables are evaluated for impairment, is provided below.  The finance receivables reported in this table exclude $95 million and $104 million of leveraged leases at January 2, 2021 and January 4, 2020, respectively, in accordance with U.S. generally accepted accounting principles.

(In millions)	January 2, 2021		January 4, 2020
Allowance based on collective evaluation	$	28	$	22
Allowance based on individual evaluation	7		3
Finance receivables evaluated collectively	521		564
Finance receivables evaluated individually	163		39