REVENUE RECOGNITION

9 Months Ended

Sep. 30, 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, 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
	September 30, 2024		December 31, 2023
Contract assets	$	685	$	600
Other deferred assets	361		400
Contract and other deferred assets	1,046		1,000
Non-current contract assets(1)	93		72
Non-current other deferred assets(1)	96		96
Total contract and other deferred assets	$	1,235	$	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 September 30, 2024 and December 31, 2023, contract liabilities were approximately $2,619 million and $2,623 million, respectively, of which the non-current portion of $704 million and $705 million, respectively, was recognized in All other non-current liabilities in the Condensed Consolidated Statements of Financial Position. Revenue recognized related to the contract liabilities balance at the beginning of the year was approximately $1,381 million and $1,357 million for the nine months ended September 30, 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 right to cancel or terminate without incurring a substantive penalty. As of September 30, 2024, the aggregate amount of the contracted revenues allocated to our unsatisfied performance obligations was $14,563 million. We expect to recognize revenue as we satisfy our RPO as follows: (1) product-related RPO of $4,808 million of which 98% is expected to be recognized within two years, and the remaining thereafter; and (2) services-related RPO of $9,756 million of which 64% and 91% are expected to be recognized within two years and five years, respectively, and the remaining thereafter.