Revenue

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Revenues disaggregated by primary geographic markets, major product lines, and sales channels are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Primary geographical markets(1):
United States	$	982	$	992	$	1,929	$	1,932
Europe	497		467		971		933
Canada	136		135		280		250
Other	139		153		289		300
Total Revenues	$	1,754	$	1,747	$	3,469	$	3,415
Major product and services lines:
Equipment	$	420	$	366	$	811	$	680
Supplies, paper and other sales(2)	276		301		544		579
Maintenance agreements(3)	419		446		828		875
Service arrangements(4)	499		478		994		964
Rental and other	91		104		191		212
Financing	49		52		101		105
Total Revenues	$	1,754	$	1,747	$	3,469	$	3,415
Sales channels:
Direct equipment lease(5)	$	245	$	144	$	475	$	279
Distributors & resellers(6)	261		298		521		559
Customer direct	190		225		359		421
Total Sales	$	696	$	667	$	1,355	$	1,259

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(1)Geographic area data is based upon the location of the subsidiary reporting the revenue.

(2)Other sales include revenues associated with IT hardware.

(3)Includes revenues from maintenance agreements on sold equipment as well as IT services and revenues associated with service agreements sold through our channel partners.

(4)Primarily includes revenues from our Print and digital services outsourcing arrangements, including revenues from embedded operating leases in those arrangements, which were not significant.

(5)Primarily reflects sales through bundled lease arrangements.

(6)Primarily reflects sales through our two-tier distribution channels.

Contract Assets and Liabilities: We normally do not have contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time. Our contract liabilities, which represent billings in excess of revenue recognized, are primarily related to advance billings for maintenance and other services to be performed and were approximately $137 and $131 at June 30, 2023 and December 31, 2022, respectively. The majority of the balance at June 30, 2023 will be amortized to revenue over approximately the next 30 months.

Contract Costs: Incremental direct costs of obtaining a contract primarily include sales commissions paid to salespeople and agents in connection with the placement of equipment with associated post sale services arrangements. These costs are deferred and amortized on the straight-line basis over the estimated contract term, which is currently estimated to be approximately four years. We pay commensurate sales commissions upon customer renewals, therefore our amortization period is aligned to our initial contract term.

Incremental direct costs are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Incremental direct costs of obtaining a contract	$	18	$	15	$	34	$	28
Amortization of incremental direct costs	16		16		32		34

The balance of deferred incremental direct costs net of accumulated amortization at June 30, 2023 and December 31, 2022 was $127 and $125, respectively. This amount is expected to be amortized over its estimated period of benefit, which we currently estimate to be approximately four years.

We may also incur costs associated with our services arrangements to generate or enhance resources and assets that will be used to satisfy our future performance obligations included in these arrangements. These costs are considered contract fulfillment costs and are amortized over the contractual service period of the arrangement to cost of services. In addition, we provide inducements to certain customers in various forms, including contractual credits, which are capitalized and amortized as a reduction of revenue over the term of the contract. The balance of contract fulfillment costs and inducements net of accumulated amortization at June 30, 2023 and December 31, 2022 was $7 and $10, respectively. The related amortization was $2 and $2 for the three months ended June 30, 2023 and 2022, respectively, and $2 and $3 for the six months ended June 30, 2023 and 2022, respectively.

Equipment and software used in the fulfillment of service arrangements, and where the Company retains control, are capitalized and depreciated over the shorter of their useful life or the term of the contract if an asset is contract specific.