Annual report pursuant to Section 13 and 15(d)

REVENUE RECOGNITION LONG-TERM CONTRACTS AND DEFERRED AND UNBILLED REVENUE REVENUE RECOGNITION LONG-TERM CONTRACTS AND DEFERRED AND UNBILLED REVENUE

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REVENUE RECOGNITION LONG-TERM CONTRACTS AND DEFERRED AND UNBILLED REVENUE REVENUE RECOGNITION LONG-TERM CONTRACTS AND DEFERRED AND UNBILLED REVENUE
 12 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer
NOTE 3. REVENUE FROM CONTRACTS WITH CUSTOMERS
Long-term Contracts
We have certain arrangements, primarily long-term maintenance agreements, construction contracts, product sales with associated performance obligations extending beyond a year, product sales with lead times extending beyond one year that are non-cancellable or for which the customer incurs a penalty for cancellation and extended warranty coverage arrangements that span a period in excess of one year. The aggregate amount of the transaction price for these contracts, excluding extended warranty coverage arrangements, as of December 31, 2023, was $2.1 billion. We expect to recognize the related revenue of $1.0 billion over the next 12 months and $1.1 billion over periods up to 10 years. See NOTE 14,"PRODUCT WARRANTY LIABILITY," for additional disclosures on extended warranty coverage arrangements. Our other contracts generally are for a duration of less than one year, include payment terms that correspond to the timing of costs incurred when providing goods and services to our customers or represent sales-based royalties.
Deferred and Unbilled Revenue
The following is a summary of our unbilled and deferred revenue and related activity:
December 31,
In millions 2023 2022
Unbilled revenue $ 303  $ 257 
Deferred revenue 2,186  1,848 
We recognized revenue of $733 million and $639 million in 2023 and 2022, respectively, that was included in the deferred revenue balance at the beginning of each year. We did not record any impairment losses on our unbilled revenues during 2023 or 2022.
Disaggregation of Revenue
The table below presents our consolidated sales by geographic area. Net sales attributed to geographic areas were based on the location of the customer.
Years ended December 31,
In millions 2023 2022 2021
United States (1)
$ 19,302  $ 15,833  $ 12,489 
China 3,115  2,390  3,169 
India 1,678  1,392  1,133 
Other international (1)
9,970  8,459  7,230 
Total net sales $ 34,065  $ 28,074  $ 24,021 
(1) We revised $281 million from other international to United States for the year ended December 31, 2022.
Segment Revenue
As previously announced, our Components segment reorganized its reporting structure to carve out the electronics business into the newly formed software and electronics business and combined the turbo technologies and fuel systems businesses into the newly formed engine components business. We started reporting results for the reorganized business in the first quarter of 2023 and reflected these changes for prior periods. On May 26, 2023, with the Atmus Filtration Technologies Inc. (Atmus) initial public offering (IPO), we changed the name of our Components' filtration business to Atmus. See NOTE 23, "FORMATION OF ATMUS AND IPO," for additional information.
Components segment external sales by business were as follows:
Years ended December 31,
In millions 2023 2022 2021
Axles and brakes $ 4,822  $ 1,879  $ — 
Emission solutions 3,425  3,086  3,142 
Atmus 1,345  1,259  1,171 
Engine components 1,119  946  1,019 
Automated transmissions 714  593  481 
Software and electronics 106  84  119 
Total sales $ 11,531  $ 7,847  $ 5,932 
Engine segment external sales by market were as follows:
Years ended December 31,
In millions 2023 2022 2021
Heavy-duty truck $ 3,391  $ 2,995  $ 2,511 
Medium-duty truck and bus 2,622  2,412  1,978 
Light-duty automotive 1,748  1,704  1,845 
Total on-highway 7,761  7,111  6,334 
Off-highway 1,113  1,088  1,255 
Total sales $ 8,874  $ 8,199  $ 7,589 
As previously announced, due to the indefinite suspension of operations in Russia, we reorganized the regional management structure of our Distribution segment and moved all Commonwealth of Independent States (CIS) sales into the Europe and Africa and Middle East regions. The Russian portion of prior period CIS sales moved to the Europe region. We started to report results for our new regional management structure in the first quarter of 2023 and reflected these changes for historical periods.
Distribution segment external sales by region were as follows:
Years ended December 31,
In millions 2023 2022 2021
North America $ 7,054  $ 5,948  $ 4,902 
Asia Pacific 1,091  1,011  901 
Europe 848  914  962 
China 424  351  323 
Africa and Middle East 294  250  278 
India 264  217  194 
Latin America 224  210  182 
Total sales $ 10,199  $ 8,901  $ 7,742 
Distribution segment external sales by product line were as follows:
Years ended December 31,
In millions 2023 2022 2021
Parts $ 4,052  $ 3,809  $ 3,136 
Power generation 2,496  1,767  1,754 
Engines 1,987  1,770  1,493 
Service 1,664  1,555  1,359 
Total sales $ 10,199  $ 8,901  $ 7,742 
Power Systems segment external sales by product line were as follows:
Years ended December 31,
In millions 2023 2022 2021
Power generation $ 1,698  $ 1,658  $ 1,481 
Industrial 970  843  820 
Generator technologies 457  450  349 
Total sales $ 3,125  $ 2,951  $ 2,650