Revenue

3 Months Ended

Mar. 31, 2024

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 March 31,
	2024		2023
Primary geographical markets(1):
United States	$	811	$	947
Europe	451		474
Canada	121		144
Other	119		150
Total Revenues	$	1,502	$	1,715
Major product and services lines:
Equipment	$	290	$	391
Supplies, paper and other sales(2)	233		268
Maintenance agreements(3)	387		409
Service arrangements(4)	473		495
Rental and other	77		100
Financing	42		52
Total Revenues	$	1,502	$	1,715
Sales channels:
Direct equipment lease(5)	$	162	$	230
Distributors & resellers(6)	215		260
Customer direct	146		169
Total Sales(7)	$	523	$	659

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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.

(7)Includes Equipment and Supplies, paper and other sales revenues.

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 $121 and $132 at March 31, 2024 and December 31, 2023, respectively. The majority of the balance at March 31, 2024 will be amortized to revenue over the next 30 months.

Contract Costs:

We incur the following contract costs as part of our revenue arrangements:

•Incremental direct costs of obtaining a contract, which are primarily 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 to Selling Expenses on a 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.

•Contract fulfillment costs, which are costs incurred for resources and assets that will be used to satisfy our future performance obligations included in our service arrangements. These costs are amortized over the contractual service period of the arrangement to cost of services.

•Contract inducements, which are capitalized and amortized as a reduction of revenue over the term of the contract.

Changes in contract costs, net are as follows:

	2024		2023
Balance at January 1st,	$	136	$	135
Customer contract costs deferred	15		16
Amortization of customer contract costs	(16)		(16)
Other(1)	(1)		(1)
Balance at March 31st,	$	134	$	134

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(1)Includes currency.

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.