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, 2024
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer
NOTE 2. REVENUE FROM CONTRACTS WITH CUSTOMERS
Long-term Maintenance Agreements
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 December 31, 2024, was $5.4 billion. We expect to recognize the related revenue of $2.5 billion over the next 12 months and $2.9 billion over periods up to 10 years. See NOTE 13,"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:
December 31,
In millions 2024 2023
Unbilled revenue $ 403  $ 303 
Deferred revenue 2,412  2,186 
We recognized revenue of $850 million and $733 million in 2024 and 2023, respectively, that was included in the deferred revenue balance at the beginning of each year.
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 2024 2023 2022
United States $ 19,422  $ 19,302  $ 15,833 
China 2,948  3,115  2,390 
India 1,779  1,678  1,392 
Other international 9,953  9,970  8,459 
Total net sales $ 34,102  $ 34,065  $ 28,074 
Segment Revenue
Engine segment external sales by market were as follows:
Years ended December 31,
In millions 2024 2023 2022
Heavy-duty truck $ 3,320  $ 3,391  $ 2,995 
Medium-duty truck and bus 3,100  2,622  2,412 
Light-duty automotive 1,585  1,748  1,704 
Total on-highway 8,005  7,761  7,111 
Off-highway 982  1,113  1,088 
Total sales $ 8,987  $ 8,874  $ 8,199 
Components segment external sales by business were as follows:
Years ended December 31,
In millions 2024 2023 2022
Drivetrain and braking systems $ 4,731  $ 4,822  $ 1,879 
Emission solutions 3,180  3,425  3,086 
Components and software 1,106  1,225  1,030 
Automated transmissions 588  714  593 
Atmus 289 
(1)
 1,345  1,259 
Total sales $ 9,894  $ 11,531  $ 7,847 
 (1) Included sales through the March 18, 2024, divestiture. See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.
Beginning in the second quarter of 2024, we realigned certain businesses within our Components segment to be consistent with how our segment leader now monitors performance. We reorganized the businesses to combine the engine components and software and electronics businesses into the newly formed components and software business. In addition, we rebranded our axles and brakes business as drivetrain and braking systems. We began reporting results for these changes within our Components segment effective April 1, 2024, and reflected these changes in the historical periods presented. The change had no impact on our consolidated results.
Distribution segment external sales by region were as follows:
Years ended December 31,
In millions 2024 2023 2022
North America $ 7,617  $ 7,054  $ 5,948 
Asia Pacific 1,243  1,091  1,011 
Europe 1,179  848  914 
China 469  424  351 
India 310  264  217 
Africa and Middle East 268  294  250 
Latin America 266  224  210 
Total sales $ 11,352  $ 10,199  $ 8,901 
Distribution segment external sales by product line were as follows:
Years ended December 31,
In millions 2024 2023 2022
Parts $ 3,966  $ 4,052  $ 3,809 
Power generation 3,961  2,496  1,767 
Service 1,747  1,664  1,555 
Engines 1,678  1,987  1,770 
Total sales $ 11,352  $ 10,199  $ 8,901 
Power Systems segment external sales by product line were as follows:
Years ended December 31,
In millions 2024 2023 2022
Power generation $ 1,896  $ 1,698  $ 1,658 
Industrial 1,130  970  843 
Generator technologies 474  457  450 
Total sales $ 3,500  $ 3,125  $ 2,951