Accounts Receivable and Finance Receivables (Tables)

9 Months Ended

Oct. 03, 2020

Receivables [Abstract]

Accounts receivable

Accounts receivable is composed of the following:

(In millions)	October 3, 2020		January 4, 2020
Commercial	$	761	$	835
U.S. Government contracts	152		115
​	913		950
Allowance for credit losses	(41)		(29)
Total accounts receivable, net	$	872	$	921

Finance receivables

Finance receivables are presented in the following table:

(In millions)	October 3, 2020		January 4, 2020
Finance receivables	$	725	$	707
Allowance for credit losses	(32)		(25)
Total finance receivables, net	$	693	$	682

Financing 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 3, 2020		January 4, 2020
Performing	$	560	$	664
Watchlist	107		4
Nonaccrual	58		39
Nonaccrual as a percentage of finance receivables	8.00%		5.52%
Current and less than 31 days past due	$	683	$	637
31-60 days past due	9		53
61-90 days past due	2		7
Over 90 days past due	31		10
60+ days contractual delinquency as a percentage of finance receivables	4.55%		2.40%

Financing receivable 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 3, 2020		January 4, 2020
Performing	$	560	$	664
Watchlist	107		4
Nonaccrual	58		39
Nonaccrual as a percentage of finance receivables	8.00%		5.52%
Current and less than 31 days past due	$	683	$	637
31-60 days past due	9		53
61-90 days past due	2		7
Over 90 days past due	31		10
60+ days contractual delinquency as a percentage of finance receivables	4.55%		2.40%

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 3, 2020		January 4, 2020
Finance receivables evaluated collectively	$	461	$	564
Finance receivables evaluated individually	157		39
Allowance for credit losses based on collective evaluation	26		22
Allowance for credit losses based on individual evaluation	6		3
Impaired finance receivables with no related allowance for credit losses	$	120	$	22
Impaired finance receivables with related allowance for credit losses	37		17
Unpaid principal balance of impaired finance receivables	166		50
Allowance for credit losses on impaired loans	6		3
Average recorded investment of impaired finance receivables	116		40