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
 9 Months Ended
Oct. 03, 2021
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 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 October 3, 2021, was $774 million. We expect to recognize the related revenue of $134 million over the next 12 months and $640 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 October 3,
2021		 December 31,
2020
Unbilled revenue $ 104  $ 114 
Deferred revenue, primarily extended warranty 1,642  1,531 
We recognized revenue of $130 million and $410 million for the three and nine months ended October 3, 2021, compared with $84 million and $290 million for the comparable periods in 2020, 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 October 3, 2021 or September 27, 2020.
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 Nine months ended
In millions October 3,
2021		 September 27,
2020		 October 3,
2021		 September 27,
2020
United States $ 3,177  $ 2,805  $ 9,500  $ 7,522 
China 679  705  2,468  2,037 
India 294  166  841  406 
Other international 1,818  1,442  5,362  4,016 
Total net sales $ 5,968  $ 5,118  $ 18,171  $ 13,981 
Segment Revenue
Engine segment external sales by market were as follows:
Three months ended Nine months ended
In millions October 3,
2021		 September 27,
2020		 October 3,
2021		 September 27,
2020
Heavy-duty truck $ 662  $ 486  $ 1,941  $ 1,226 
Medium-duty truck and bus 501  389  1,461  1,177 
Light-duty automotive 492  502  1,432  975 
Total on-highway 1,655  1,377  4,834  3,378 
Off-highway 306  240  942  755 
Total sales $ 1,961  $ 1,617  $ 5,776  $ 4,133 
Distribution segment external sales by region were as follows:
Three months ended Nine months ended
In millions October 3,
2021		 September 27,
2020		 October 3,
2021		 September 27,
2020
North America $ 1,237  $ 1,126  $ 3,631  $ 3,409 
Asia Pacific 236  195  675  577 
Europe 143  153  467  424 
Russia 86  41  209  126 
China 80  74  239  242 
Africa and Middle East 74  47  197  136 
India 48  42  138  101 
Latin America 48  37  136  108 
Total sales $ 1,952  $ 1,715  $ 5,692  $ 5,123 
Distribution segment external sales by product line were as follows:
Three months ended Nine months ended
In millions October 3,
2021		 September 27,
2020		 October 3,
2021		 September 27,
2020
Parts $ 796  $ 719  $ 2,313  $ 2,155 
Power generation 437  415  1,305  1,166 
Engines 376  278  1,058  876 
Service 343  303  1,016  926 
Total sales $ 1,952  $ 1,715  $ 5,692  $ 5,123 
Components segment external sales by business were as follows:
Three months ended Nine months ended
In millions October 3,
2021		 September 27,
2020		 October 3,
2021		 September 27,
2020
Emission solutions $ 699  $ 612  $ 2,466  $ 1,576 
Filtration 288  260  892  715 
Turbo technologies 177  163  609  463 
Automated transmissions 112  90  374  215 
Electronics and fuel systems 71  76  286  223 
Total sales $ 1,347  $ 1,201  $ 4,627  $ 3,192 
Power Systems segment external sales by product line were as follows:
Three months ended Nine months ended
In millions October 3,
2021		 September 27,
2020		 October 3,
2021		 September 27,
2020
Power generation $ 395  $ 334  $ 1,127  $ 827 
Industrial 209  167  621  477 
Generator technologies 84  66  251  191 
Total sales $ 688  $ 567  $ 1,999  $ 1,495