Revenues

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenues

3 – Revenues

Disaggregated Revenue

Revenues are recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to receive, in exchange for those goods or services. The majority of our revenue is derived from short term contracts. Our products and services are generally sold based upon purchase orders, contracts or other legally enforceable arrangements with our customers that include fixed or determinable prices but do not generally include right of return provisions or other significant post-delivery obligations.

We lease drilling tools, artificial lift pumping equipment and other unmanned equipment to customers as operating leases. These equipment rental revenues are generally provided based on call-out work orders that include fixed per unit prices and are derived from short-term contracts. Equipment revenues recognized under ASU No. 2016-02, Leases (Topic 842) were $35 million and $66 million in the three and six months ended June 30, 2022, respectively, and $35 million and $63 million for the three and six months ended June 30, 2021, respectively.

The following table disaggregates our revenues from contracts with customers by geographic region and includes equipment rental revenues. North America in the table below consists of the U.S. and Canada.

	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2022		2021		2022		2021
Revenues by Geographic Areas:
Middle East/North Africa/Asia	$	350	$	289	$	660	$	556
North America	268		220		506		434
Latin America	265		205		492		381
Europe/Sub-Sahara Africa/Russia	181		189		344		364
Total Revenues	$	1,064	$	903	$	2,002	$	1,735

Contract Balances

The timing of our revenue recognition, billings and cash collections results in the recording of billed and unbilled accounts receivable, contract assets, customer advances and deposits (contract liabilities classified as deferred revenues). Receivables with customers are included in “Accounts Receivable, Net,” short-term contract assets are included in “Other Current Assets,” long-term contract assets are included in “Other Non-Current Assets” and contract liabilities are included in “Other Current Liabilities” on our Condensed Consolidated Balance Sheets. The following table summarizes these balances as of June 30, 2022 and December 31, 2021:

(Dollars in millions)	June 30, 2022		December 31, 2021
Total Accounts Receivables	$	930	$	825
Receivables for Product and Services in Accounts Receivable, Net	$	900	$	795
Receivables for Equipment Rentals in Account Receivable, Net	$	30	$	30
Short-Term Contract Assets in Other Current Assets	$	41	$	47
Long-term Contract Assets in Other Non-Current Assets	$	18	$	14
Contract Liabilities in Other Current Liabilities (a)	$	22	$	26

(a)Revenues recognized during the six months ended June 30, 2022 and 2021 that were included in the contract liabilities balance at the beginning of each year were $18 million and $25 million, respectively.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASU 2014-09, Revenues from Contracts with Customers (Topic 606). A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. In the following table, estimated revenue for contracts with original performance obligations greater than twelve months are expected to be recognized in the future related to performance obligations that are either unsatisfied or partially unsatisfied as of June 30, 2022.

(Dollars in millions)	2022		2023		2024		2025		Thereafter		Total
Service Revenue	$	35	$	63	$	65	$	52	$	22	$	237