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, 2019
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer
Long-term Contracts
Most of our contracts are for a period of less than one year. We have certain 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 have not been satisfied as of December 31, 2019, was $890 million. We expect to recognize the related revenue of $241 million over the next 12 months and $649 million over periods up to 10 years. See Note 12,"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:
 
 
Years ended December 31,
In millions
 
2019
 
2018
Unbilled revenue
 
$
68

 
$
64

Deferred revenue, primarily extended warranty
 
1,354

 
1,156

We recognized revenue of $365 million and $361 million in 2019 and 2018, 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 2019 or 2018.
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.
 
 
Years ended December 31,
In millions
 
2019
 
2018
 
2017
United States
 
$
13,519

 
$
13,218

 
$
11,010

China
 
2,331

 
2,324

 
2,137

India
 
848

 
965

 
805

Other international
 
6,873

 
7,264

 
6,476

Total net sales
 
$
23,571

 
$
23,771

 
$
20,428


Segment Revenue
Engine segment external sales by market were as follows:
 
 
Years ended December 31,
In millions
 
2019
 
2018
Heavy-duty truck
 
$
2,626

 
$
2,885

Medium-duty truck and bus
 
2,244

 
2,536

Light-duty automotive
 
1,656

 
1,501

Total on-highway
 
6,526

 
6,922

Off-highway
 
1,044

 
1,080

Total sales
 
$
7,570

 
$
8,002


Distribution segment external sales by region were as follows:
 
 
Years ended December 31,
In millions
 
2019
 
2018
North America
 
$
5,513

 
$
5,331

Asia Pacific
 
875

 
851

Europe
 
528

 
536

China
 
356

 
317

Africa and Middle East
 
235

 
242

India
 
200

 
192

Latin America
 
176

 
169

Russia
 
157

 
169

Total sales
 
$
8,040

 
$
7,807


Distribution segment external sales by product line were as follows:
 
 
Years ended December 31,
In millions
 
2019
 
2018
Parts
 
$
3,278

 
$
3,222

Power generation
 
1,777

 
1,482

Engines
 
1,511

 
1,632

Service
 
1,474

 
1,471

Total sales
 
$
8,040

 
$
7,807


Components segment external sales by business were as follows:
 
 
Years ended December 31,
In millions
 
2019
 
2018
Emission solutions
 
$
2,763

 
$
2,780

Filtration
 
1,024

 
1,010

Turbo technologies
 
696

 
761

Automated transmissions
 
534

 
543

Electronics and fuel systems
 
236

 
237

Total sales
 
$
5,253

 
$
5,331


Power Systems segment external sales by product line were as follows:
 
 
Years ended December 31,
In millions
 
2019
 
2018
Power generation
 
$
1,414

 
$
1,467

Industrial
 
908

 
801

Generator technologies
 
348

 
357

Total sales
 
$
2,670

 
$
2,625