Quarterly report pursuant to Section 13 or 15(d)

REVENUE RECOGNITION LONG-TERM CONTRACTS AND DEFERRED AND UNBILLED REVENUE

v3.22.2
REVENUE RECOGNITION LONG-TERM CONTRACTS AND DEFERRED AND UNBILLED REVENUE
 6 Months Ended
Jun. 30, 2022
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 June 30, 2022, was $723 million. We expect to recognize the related revenue of $128 million over the next 12 months and $595 million over periods up to 10 years. See NOTE 11, "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,
2022		 December 31,
2021
Unbilled revenue $ 128  $ 100 
Deferred revenue, primarily extended warranty 1,723  1,705 
We recognized revenue of $176 million and $416 million for the three and six months ended June 30, 2022, compared with $133 million and $302 million for the comparable periods in 2021, 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, 2022 or July 4, 2021.
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
In millions June 30,
2022		 July 4,
2021		 June 30,
2022		 July 4,
2021
United States $ 3,788  $ 3,263  $ 7,245  $ 6,323 
China 520  832  1,173  1,789 
India 311  217  620  547 
Other international 1,967  1,799  3,933  3,544 
Total net sales $ 6,586  $ 6,111  $ 12,971  $ 12,203 
Segment Revenue
Engine segment external sales by market were as follows:
Three months ended Six months ended
In millions June 30,
2022		 July 4,
2021		 June 30,
2022		 July 4,
2021
Heavy-duty truck $ 797  $ 666  $ 1,481  $ 1,279 
Medium-duty truck and bus 620  477  1,211  960 
Light-duty automotive 425  466  912  940 
Total on-highway 1,842  1,609  3,604  3,179 
Off-highway 250  311  537  636 
Total sales $ 2,092  $ 1,920  $ 4,141  $ 3,815 
Distribution segment external sales by region were as follows:
Three months ended Six months ended
In millions June 30,
2022		 July 4,
2021		 June 30,
2022		 July 4,
2021
North America $ 1,491  $ 1,228  $ 2,862  $ 2,394 
Asia Pacific 242  226  486  439 
Europe 177  161  320  324 
China 99  74  181  159 
Russia 75  66  211  123 
Latin America 56  48  97  88 
Africa and Middle East 55  69  101  123 
India 52  41  100  90 
Total sales $ 2,247  $ 1,913  $ 4,358  $ 3,740 
Distribution segment external sales by product line were as follows:
Three months ended Six months ended
In millions June 30,
2022		 July 4,
2021		 June 30,
2022		 July 4,
2021
Parts $ 987  $ 763  $ 1,913  $ 1,517 
Power generation 440  452  838  868 
Engines 428  349  866  682 
Service 392  349  741  673 
Total sales $ 2,247  $ 1,913  $ 4,358  $ 3,740 
Components segment external sales by business were as follows:
Three months ended Six months ended
In millions June 30,
2022		 July 4,
2021		 June 30,
2022		 July 4,
2021
Emission solutions $ 767  $ 801  $ 1,575  $ 1,767 
Filtration 319  303  627  604 
Turbo technologies 195  207  392  432 
Automated transmissions 143  147  277  262 
Electronics and fuel systems 53  98  123  215 
Total sales $ 1,477  $ 1,556  $ 2,994  $ 3,280 
Power Systems segment external sales by product line were as follows:
Three months ended Six months ended
In millions June 30,
2022		 July 4,
2021		 June 30,
2022		 July 4,
2021
Power generation $ 408  $ 381  $ 807  $ 732 
Industrial 213  233  401  412 
Generator technologies 113  85  209  167 
Total sales $ 734  $ 699  $ 1,417  $ 1,311