Accounts Receivable and Finance Receivables (Tables)

9 Months Ended

Oct. 02, 2021

Receivables [Abstract]

Accounts Receivable

Accounts receivable is composed of the following:

(In millions)	October 2, 2021		January 2, 2021
Commercial	$	671	$	668
U.S. Government contracts	131		155
	802		823
Allowance for credit losses	(29)		(36)
Total accounts receivable, net	$	773	$	787

Finance Receivables

Finance receivables are presented in the following table:

(In millions)	October 2, 2021		January 2, 2021
Finance receivables	$	621	$	779
Allowance for credit losses	(25)		(35)
Total finance receivables, net	$	596	$	744

Finance Receivables Categorized Based On Credit Quality Indicators

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

(Dollars in millions)	October 2, 2021		January 2, 2021
Performing	$	511	$	612
Watchlist	—		74
Nonaccrual	110		93
Nonaccrual as a percentage of finance receivables	17.71%		11.94%
Current and less than 31 days past due	$	604	$	738
31-60 days past due	5		12
61-90 days past due	3		11
Over 90 days past due	9		18
60+ days contractual delinquency as a percentage of finance receivables	1.93%		3.72%

Finance Receivables By Delinquency Aging Category

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

(Dollars in millions)	October 2, 2021		January 2, 2021
Performing	$	511	$	612
Watchlist	—		74
Nonaccrual	110		93
Nonaccrual as a percentage of finance receivables	17.71%		11.94%
Current and less than 31 days past due	$	604	$	738
31-60 days past due	5		12
61-90 days past due	3		11
Over 90 days past due	9		18
60+ days contractual delinquency as a percentage of finance receivables	1.93%		3.72%

Finance Receivables and Allowance For Credit Losses Based on Impairment Evaluation

A summary of finance receivables and the allowance for credit losses, based on the results of our impairment evaluation, is provided below. The finance receivables included in this table specifically exclude leveraged leases in accordance with U.S. generally accepted accounting principles.

(In millions)	October 2, 2021		January 2, 2021
Finance receivables evaluated collectively	$	416	$	521
Finance receivables evaluated individually	110		163
Allowance for credit losses based on collective evaluation	21		28
Allowance for credit losses based on individual evaluation	4		7
Impaired finance receivables with specific allowance for credit losses	$	34	$	46
Impaired finance receivables with no specific allowance for credit losses	76		117
Unpaid principal balance of impaired finance receivables	124		175
Allowance for credit losses on impaired finance receivables	4		7
Average recorded investment of impaired finance receivables	123		126