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Supplemental Balance Sheet Details | 3 Months Ended
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Apr. 03, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Supplemental Balance Sheet Details |
6. SUPPLEMENTAL BALANCE SHEET DETAILS
Accounts Receivable
In millions | April 3, 2022 |  | January 2, 2022
Trade accounts receivable, gross | $ | 617 |  |  | $ | 651 |
Allowance for credit losses | (3) |  |  | (3) |
Total accounts receivable, net | $ | 614 |  |  | $ | 648 |
Inventory
In millions | April 3, 2022 |  | January 2, 2022
Raw materials | $ | 170 |  |  | $ | 144 |
Work in process | 340 |  |  | 333 |
Finished goods | 32 |  |  | 32 |
Inventory, gross | 542 |  |  | 509 |
Inventory reserve | (77) |  |  | (78) |
Total inventory, net | $ | 465 |  |  | $ | 431 |
Accrued Liabilities
In millions | April 3, 2022 |  | January 2, 2022
Contract liabilities, current portion | $ | 232 |  |  | $ | 234 |
Accrued compensation expenses | 181 |  |  | 241 |
Accrued taxes payable | 91 |  |  | 98 |
Operating lease liabilities, current portion | 72 |  |  | 71 |
Liability-classified equity incentive awards | 24 |  |  | 11 |
Other, including warranties (a) | 100 |  |  | 106 |
Total accrued liabilities | $ | 700 |  |  | $ | 761 |
(a) Changes in the reserve for product warranties were as follows:
In millions | Q1 2022 |  | Q1 2021 |  |  |  |
Balance at beginning of period | $ | 22 |  |  | $ | 13 |  |  |  |  |
Additions charged to cost of product revenue | 6 |  |  | 8 |  |  |  |  |
Repairs and replacements | (7) |  |  | (6) |  |  |  |  |
Balance at end of period | $ | 21 |  |  | $ | 15 |  |  |  |  |
We generally provide a one-year warranty on instruments. Additionally, we provide a warranty on consumables through the expiration date, which generally ranges from six to twelve months after the manufacture date. At the time revenue is recognized, an accrual is established for estimated warranty expenses based on historical experience as well as anticipated product performance. We periodically review the warranty reserve for adequacy and adjust the warranty accrual, if necessary, based on actual experience and estimated costs to be incurred. Warranty expense is recorded as a component of cost of product revenue. Derivative Financial Instruments We are exposed to foreign exchange rate risks in the normal course of business and use derivative financial instruments to partially offset this exposure. We do not use derivative financial instruments for speculative or trading purposes. Foreign exchange contracts are carried at fair value in other current assets, other assets, accrued liabilities, or other long-term liabilities, as appropriate, on the condensed consolidated balance sheets. We use foreign exchange forward contracts to manage foreign currency risks related to monetary assets and liabilities denominated in currencies other than the U.S. dollar. These derivative financial instruments have terms of one month or less and are not designated as hedging instruments. Changes in fair value of these derivatives are recognized in other expense, net, along with the re-measurement gain or loss on the foreign currency denominated assets or liabilities. As of April 3, 2022, we had foreign exchange forward contracts in place to hedge exposures in the euro, Japanese yen, Australian dollar, Canadian dollar, Singapore dollar, Chinese Yuan Renminbi, and British pound. As of April 3, 2022 and January 2, 2022, the total notional amounts of outstanding forward contracts in place for these foreign currency purchases were $458 million and $462 million, respectively. We also use foreign currency forward contracts to hedge portions of our foreign currency exposure associated with forecasted revenue transactions. These derivative financial instruments have terms up to 24 months and are designated as cash flow hedges. Changes in fair value of our cash flow hedges are recorded as a component of accumulated other comprehensive income and are reclassified to revenue in the same period the underlying hedged transactions are recorded. We regularly review the effectiveness of our cash flow hedges and consider them to be ineffective if it becomes probable that the forecasted transactions will not occur in the identified period. Changes in fair value of the ineffective portions of our cash flow hedges, if any, will be recognized in other expense, net. As of April 3, 2022, we had foreign currency forward contracts in place to hedge exposures associated with forecasted revenue transactions denominated in the euro, Japanese yen, Australian dollar, and Canadian dollar. As of April 3, 2022 and January 2, 2022, the total notional amounts of outstanding cash flow hedge contracts in place for these foreign currency purchases were $462 million and $450 million, respectively

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- Definition The entire disclosure for supplemental balance sheet disclosures, including descriptions and amounts for assets, liabilities, and equity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -URI http://asc.fasb.org/topic&trid=2122208 + Details
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