Accounts Receivable and Finance Receivables (Tables)

12 Months Ended

Jan. 01, 2022

Receivables [Abstract]

Accounts Receivable

Accounts receivable is composed of the following:

(In millions)	January 1, 2022		January 2, 2021
Commercial	$	704	$	668
U.S. Government contracts	158		155
	862		823
Allowance for credit losses	(24)		(36)
Total	$	838	$	787

Finance Receivables

Finance receivables are presented in the following table:

(In millions)	January 1, 2022		January 2, 2021
Finance receivables	$	630	$	779
Allowance for credit losses	(25)		(35)
Total finance receivables, net	$	605	$	744

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 1, 2022		January 2, 2021
Performing	$	536	$	612
Watchlist	—		74
Nonaccrual	94		93
Nonaccrual as a percentage of finance receivables	14.92%		11.94%
Current and less than 31 days past due	$	624	$	738
31-60 days past due	5		12
61-90 days past due	—		11
Over 90 days past due	1		18
60+ days contractual delinquency as a percentage of finance receivables	0.16%		3.72%

Finance Receivables By Delinquency Aging Category

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

(Dollars in millions)	January 1, 2022		January 2, 2021
Performing	$	536	$	612
Watchlist	—		74
Nonaccrual	94		93
Nonaccrual as a percentage of finance receivables	14.92%		11.94%
Current and less than 31 days past due	$	624	$	738
31-60 days past due	5		12
61-90 days past due	—		11
Over 90 days past due	1		18
60+ days contractual delinquency as a percentage of finance receivables	0.16%		3.72%

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 1, 2022		January 2, 2021
Recorded investment:
Impaired finance receivables with specific allowance for credit losses	$	33	$	46
Impaired finance receivables with no specific allowance for credit losses	61		117
Total	$	94	$	163
Unpaid principal balance	$	109	$	175
Allowance for credit losses on impaired finance receivables	4		7
Average recorded investment of impaired finance receivables	117		126

Finance Receivables and Allowance For Credit Losses Based on Impairment Evaluation

A summary of the allowance for credit 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 of leveraged leases at both January 1, 2022 and January 2, 2021, respectively, in accordance with U.S. generally accepted accounting principles.

(In millions)	January 1, 2022		January 2, 2021
Allowance for credit losses based on collective evaluation	$	21	$	28
Allowance for credit losses based on individual evaluation	4		7
Finance receivables evaluated collectively	441		521
Finance receivables evaluated individually	94		163