Quarterly report [Sections 13 or 15(d)]

REVENUE RECOGNITION DISAGGREGATION OF REVENUES

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REVENUE RECOGNITION DISAGGREGATION OF REVENUES
 9 Months Ended
Sep. 30, 2025
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer
NOTE 2. 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, at September 30, 2025, was $6.0 billion. We expect to recognize the related revenue of $3.1 billion over the next 12 months and $2.9 billion 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 September 30,
2025		 December 31,
2024
Unbilled revenue $ 444  $ 403 
Deferred revenue 2,719  2,412 
We recognized revenue of $222 million and $814 million for the three and nine months ended September 30, 2025, compared with $184 million and $682 million for the comparable periods in 2024, 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 nine months ended September 30, 2025 or 2024.
Disaggregation of Revenue
Consolidated Revenue
The table below presents our consolidated net sales by geographic area based on the location of the customer:
Three months ended Nine months ended
  September 30, September 30,
In millions 2025 2024 2025 2024
United States $ 4,663  $ 4,825  $ 14,278  $ 14,729 
China 844  727  2,449  2,197 
India 447  416  1,288  1,285 
Other international 2,363  2,488  7,119  7,444 
Total net sales $ 8,317  $ 8,456  $ 25,134  $ 25,655 
Segment Revenue
Engine segment external sales by market were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2025 2024 2025 2024
Heavy-duty truck $ 540  $ 781  $ 1,921  $ 2,560 
Medium-duty truck and bus 533  806  1,909  2,336 
Light-duty automotive 583  400  1,490  1,292 
Total on-highway 1,656  1,987  5,320  6,188 
Off-highway 266  228  804  735 
Total sales $ 1,922  $ 2,215  $ 6,124  $ 6,923 
Components segment external sales by business were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2025 2024 2025 2024
Drivetrain and braking systems $ 916  $ 1,131  $ 3,066  $ 3,618 
Emission solutions 702  759  2,270  2,437 
Components and software 281  249  888  828 
Automated transmissions 87  148  327  475 
Atmus —  —  —  289 
(1)
Total sales $ 1,986  $ 2,287  $ 6,551  $ 7,647 
(1) Included sales through the March 18, 2024, divestiture. See NOTE 15, "ATMUS DIVESTITURE," for additional information.
Distribution segment external sales by region were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2025 2024 2025 2024
North America $ 2,200  $ 1,947  $ 6,373  $ 5,568 
Asia Pacific 311  342  831  937 
Europe 273  307  865  830 
China 121  118  357  346 
Latin America 98  71  231  194 
India 93  77  256  223 
Africa and Middle East 74  80  193  194 
Total sales $ 3,170  $ 2,942  $ 9,106  $ 8,292 
Distribution segment external sales by product line were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2025 2024 2025 2024
Power generation $ 1,246  $ 1,088  $ 3,536  $ 2,743 
Parts 1,014  1,000  3,051  2,985 
Service 494  453  1,349  1,305 
Engines 416  401  1,170  1,259 
Total sales $ 3,170  $ 2,942  $ 9,106  $ 8,292 
Power Systems segment external sales by product line were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2025 2024 2025 2024
Power generation $ 623  $ 499  $ 1,652  $ 1,349 
Industrial 323  293  905  809 
Generator technologies 180  120  495  350 
Total sales $ 1,126  $ 912  $ 3,052  $ 2,508