REVENUE RECOGNITION

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

REVENUE RECOGNITION

Our revenues primarily consist of sales of products and services to customers. Products include equipment, imaging agents, software-related offerings, and upgrades. Services include contractual and stand-by preventative maintenance and corrective services, as well as on-demand service parts and maintenance services, extended warranties, training, and other service-type offerings. The Company recognizes revenue from contracts with customers when the customer obtains control of the underlying products or services.

CONTRACT ASSETS.

Contract assets reflect revenue recognized on contracts with customers in excess of billings based on contractual terms. Contract assets are classified as current or non-current based on the amount of time expected to lapse until the Company’s right to consideration becomes unconditional. Other deferred assets consist of costs to obtain contracts, primarily commissions, other cost deferrals for shipped products, and deferred service, labor, and direct overhead costs.

Contract and Other Deferred Assets
	As of
	March 31, 2024		December 31, 2023
Contract assets	$	577	$	600
Other deferred assets	384		400
Contract and other deferred assets	961		1,000
Non-current contract assets(1)	78		72
Non-current other deferred assets(1)	97		96
Total contract and other deferred assets	$	1,136	$	1,168

(1)Non-current contract and other deferred assets are recognized within All other non-current assets in the Condensed Consolidated Statements of Financial Position.

CONTRACT LIABILITIES.

Contract liabilities include customer advances and deposits received when orders are placed and billed in advance of completion of performance obligations. Contract liabilities are classified as current or non-current based on the periods over which remaining performance obligations (“RPO”) are expected to be satisfied with our customers.

As of March 31, 2024 and December 31, 2023, contract liabilities were approximately $2,566 million and $2,623 million, respectively, of which the non-current portion of $687 million and $705 million, respectively, was recognized in All other non-current liabilities in the Condensed Consolidated Statements of Financial Position. Contract liabilities decreased $56 million in 2024 primarily due to a decrease in customer advances. Revenue recognized related to the contract liabilities balance at the beginning of the year was approximately $741 million and $759 million for the three months ended March 31, 2024 and 2023, respectively.

REMAINING PERFORMANCE OBLIGATIONS.

RPO represents the estimated revenue expected from customer contracts that are partially or fully unperformed inclusive of amounts deferred in contract liabilities, excluding contracts, or portions thereof, that provide the customer with the ability to cancel or terminate without incurring a substantive penalty. As of March 31, 2024, the aggregate amount of the contracted revenues allocated to our unsatisfied performance obligations was $14,313 million. We expect to recognize revenue as we satisfy our RPO as follows: a) product-related RPO of $4,742 million of which 98% is expected to be recognized within two years, and the remaining thereafter; and b) services-related RPO of $9,570 million of which 65% and 94% are expected to be recognized within two years and five years, respectively, and the remaining thereafter.