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
Sep. 30, 2023
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 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 September 30, 2023, was $795 million. We expect to recognize the related revenue of $334 million over the next 12 months and $461 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 September 30,
2023		 December 31,
2022
Unbilled revenue $ 296  $ 257 
Deferred revenue 2,040  1,848 
We recognized revenue of $126 million and $510 million for the three and nine months ended September 30, 2023, compared with $123 million and $539 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 nine months ended September 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 Nine months ended
  September 30, September 30,
In millions 2023 2022 2023 2022
United States (1)
$ 4,886  $ 4,226  $ 14,625  $ 11,471 
China 721  601  2,273  1,774 
India 374  358  1,198  978 
Other international (1)
2,450  2,148  7,426  6,081 
Total net sales $ 8,431  $ 7,333  $ 25,522  $ 20,304 
(1) We revised $110 million from other international to United States for both the three and nine months ended September 30, 2022.
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 Nine months ended
September 30, September 30,
In millions 2023 2022 2023 2022
Axles and brakes $ 1,177  $ 732  $ 3,698  $ 732 
Emission solutions 803  748  2,584  2,323 
Atmus 324  322  1,007  949 
Engine components 263  239  838  702 
Automated transmissions 187  159  545  436 
Software and electronics 26  20  75  72 
Total sales $ 2,780  $ 2,220  $ 8,747  $ 5,214 
Engine segment external sales by market were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2023 2022 2023 2022
Heavy-duty truck $ 885  $ 751  $ 2,601  $ 2,232 
Medium-duty truck and bus 656  583  1,960  1,794 
Light-duty automotive 451  465  1,336  1,377 
Total on-highway 1,992  1,799  5,897  5,403 
Off-highway 244  264  854  801 
Total sales $ 2,236  $ 2,063  $ 6,751  $ 6,204 
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 Nine months ended
September 30, September 30,
In millions 2023 2022 2023 2022
North America $ 1,719  $ 1,512  $ 5,195  $ 4,374 
Asia Pacific 292  258  796  744 
Europe 200  181  607  702 
China 110  89  323  270 
Africa and Middle East 77  79  219  190 
India 66  55  186  155 
Latin America 55  58  168  155 
Total sales $ 2,519  $ 2,232  $ 7,494  $ 6,590 
Distribution segment external sales by product line were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2023 2022 2023 2022
Parts $ 991  $ 942  $ 3,054  $ 2,855 
Power generation 601  428  1,701  1,266 
Engines 507  449  1,490  1,315 
Service 420  413  1,249  1,154 
Total sales $ 2,519  $ 2,232  $ 7,494  $ 6,590 
Power Systems segment external sales by product line were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2023 2022 2023 2022
Power generation $ 420  $ 425  $ 1,247  $ 1,232 
Industrial 263  226  670  627 
Generator technologies 115  122  354  331 
Total sales $ 798  $ 773  $ 2,271  $ 2,190