Quarterly report pursuant to Section 13 or 15(d)

REVENUE RECOGNITION LONG-TERM CONTRACTS AND DEFERRED AND UNBILLED REVENUE

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REVENUE RECOGNITION LONG-TERM CONTRACTS AND DEFERRED AND UNBILLED REVENUE
 6 Months Ended
Jun. 30, 2023
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer
NOTE 2. REVENUE FROM CONTRACTS WITH CUSTOMERS
Long-term Contracts
The majority of our contracts are for a period of less than one year. We have certain arrangements, primarily long-term maintenance agreements, construction contracts and extended warranty coverage arrangements that span a period in excess of one year. The aggregate amount of the transaction price for long-term maintenance agreements and construction contracts allocated to performance obligations that were not satisfied as of June 30, 2023, was $730 million. We expect to recognize the related revenue of $232 million over the next 12 months and $498 million over periods up to 10 years. See NOTE 10, "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:
In millions June 30,
2023		 December 31,
2022
Unbilled revenue $ 299  $ 257 
Deferred revenue 1,956  1,848 
We recognized revenue of $178 million and $384 million for the three and six months ended June 30, 2023, compared with $176 million and $416 million for the comparable periods in 2022, 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 the three and six months ended June 30, 2023 or 2022.
Disaggregation of Revenue
Consolidated 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.
Three months ended Six months ended
  June 30, June 30,
In millions 2023 2022 2023 2022
United States $ 4,937  $ 3,788  $ 9,739  $ 7,245 
China 762  520  1,552  1,173 
India 413  311  824  620 
Other international 2,526  1,967  4,976  3,933 
Total net sales $ 8,638  $ 6,586  $ 17,091  $ 12,971 
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 15, "FORMATION OF ATMUS AND IPO," to our Condensed Consolidated Financial Statements for additional information.
Components segment external sales by business were as follows:
Three months ended Six months ended
June 30, June 30,
In millions 2023 2022 2023 2022
Axles and brakes $ 1,249  $ —  $ 2,521  $ — 
Emission solutions 842  767  1,781  1,575 
Atmus 341  319  683  627 
Engine components 283  223  575  463 
Automated transmissions 180  143  358  277 
Software and electronics 29  25  49  52 
Total sales $ 2,924  $ 1,477  $ 5,967  $ 2,994 
Engine segment external sales by market were as follows:
Three months ended Six months ended
June 30, June 30,
In millions 2023 2022 2023 2022
Heavy-duty truck $ 856  $ 797  $ 1,716  $ 1,481 
Medium-duty truck and bus 687  620  1,304  1,211 
Light-duty automotive 444  425  885  912 
Total on-highway 1,987  1,842  3,905  3,604 
Off-highway 276  250  610  537 
Total sales $ 2,263  $ 2,092  $ 4,515  $ 4,141 
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:
Three months ended Six months ended
June 30, June 30,
In millions 2023 2022 2023 2022
North America $ 1,783  $ 1,491  $ 3,476  $ 2,862 
Asia Pacific 265  242  504  486 
Europe 213  246  407  521 
China 112  99  213  181 
Africa and Middle East 80  61  142  111 
India 63  52  120  100 
Latin America 60  56  113  97 
Total sales $ 2,576  $ 2,247  $ 4,975  $ 4,358 
Distribution segment external sales by product line were as follows:
Three months ended Six months ended
June 30, June 30,
In millions 2023 2022 2023 2022
Parts $ 1,011  $ 987  $ 2,063  $ 1,913 
Power generation 609  440  1,100  838 
Engines 527  428  983  866 
Service 429  392  829  741 
Total sales $ 2,576  $ 2,247  $ 4,975  $ 4,358 
Power Systems segment external sales by product line were as follows:
Three months ended Six months ended
June 30, June 30,
In millions 2023 2022 2023 2022
Power generation $ 447  $ 408  $ 827  $ 807 
Industrial 218  213  407  401 
Generator technologies 129  113  239  209 
Total sales $ 794  $ 734  $ 1,473  $ 1,417