Accounts Receivable and Finance Receivables (Tables)

9 Months Ended

Oct. 01, 2022

Receivables [Abstract]

Accounts Receivable

Accounts receivable is composed of the following:

(In millions)	October 1, 2022		January 1, 2022
Commercial	$	778	$	704
U.S. Government contracts	82		158
	860		862
Allowance for credit losses	(24)		(24)
Total accounts receivable, net	$	836	$	838

Finance Receivables

Finance receivables are presented in the following table:

(In millions)	October 1, 2022		January 1, 2022
Finance receivables	$	590	$	630
Allowance for credit losses	(24)		(25)
Total finance receivables, net	$	566	$	605

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 1, 2022		January 1, 2022
Performing	$	540	$	536
Nonaccrual	50		94
Nonaccrual as a percentage of finance receivables	8.47%		14.92%
Current and less than 31 days past due	$	580	$	624
31-60 days past due	5		5
61-90 days past due	4		—
Over 90 days past due	1		1
60+ days contractual delinquency as a percentage of finance receivables	0.85%		0.16%

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 1, 2022		January 1, 2022
Performing	$	540	$	536
Nonaccrual	50		94
Nonaccrual as a percentage of finance receivables	8.47%		14.92%
Current and less than 31 days past due	$	580	$	624
31-60 days past due	5		5
61-90 days past due	4		—
Over 90 days past due	1		1
60+ days contractual delinquency as a percentage of finance receivables	0.85%		0.16%

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 1, 2022		January 1, 2022
Finance receivables evaluated collectively	$	454	$	441
Finance receivables evaluated individually	50		94
Allowance for credit losses based on collective evaluation	21		21
Allowance for credit losses based on individual evaluation	3		4
Impaired finance receivables with specific allowance for credit losses	$	17	$	33
Impaired finance receivables with no specific allowance for credit losses	33		61
Unpaid principal balance of impaired finance receivables	64		109
Allowance for credit losses on impaired finance receivables	3		4
Average recorded investment of impaired finance receivables	72		117