Revenue

9 Months Ended

Sep. 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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Primary geographical markets(1):
United States	$	933	$	986	$	2,862	$	2,918
Europe	457		470		1,428		1,403
Canada	130		131		410		381
Other	132		164		421		464
Total Revenues	$	1,652	$	1,751	$	5,121	$	5,166
Major product and services lines:
Equipment	$	386	$	390	$	1,197	$	1,070
Supplies, paper and other sales(2)	258		300		802		879
Maintenance agreements(3)	395		420		1,223		1,295
Service arrangements(4)	482		487		1,476		1,451
Rental and other	85		103		276		315
Financing	46		51		147		156
Total Revenues	$	1,652	$	1,751	$	5,121	$	5,166
Sales channels:
Direct equipment lease(5)	$	216	$	146	$	691	$	425
Distributors & resellers(6)	240		318		761		877
Customer direct	188		226		547		647
Total Sales	$	644	$	690	$	1,999	$	1,949

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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 $135 and $131 at September 30, 2023 and December 31, 2022, respectively. The majority of the balance at September 30, 2023 will be amortized to revenue over 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. 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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Incremental direct costs of obtaining a contract	$	15	$	15	$	49	$	43
Amortization of incremental direct costs	16		17		48		51

The balance of deferred incremental direct costs net of accumulated amortization at September 30, 2023 and December 31, 2022 was $126 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 September 30, 2023 and December 31, 2022 was $7 and $10, respectively. The related amortization was $3 and $4 for the nine months ended September 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.