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
 6 Months Ended
Jun. 30, 2024
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, 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, as of June 30, 2024, was $2.9 billion. We expect to recognize the related revenue of $1.5 billion over the next 12 months and $1.4 billion 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 June 30,
2024		 December 31,
2023
Unbilled revenue $ 328  $ 303 
Deferred revenue 2,357  2,186 
We recognized revenue of $250 million and $498 million for the three and six months ended June 30, 2024, compared with $178 million and $384 million for the comparable periods in 2023, 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, 2024 or 2023.
Disaggregation of Revenue
Consolidated Revenue
The table below presents our consolidated net sales by geographic area based on the location of the customer:
Three months ended Six months ended
  June 30, June 30,
In millions 2024 2023 2024 2023
United States $ 5,119  $ 4,937  $ 9,904  $ 9,739 
China 747  762  1,470  1,552 
India 425  413  869  824 
Other international 2,505  2,526  4,956  4,976 
Total net sales $ 8,796  $ 8,638  $ 17,199  $ 17,091 
Segment Revenue
Beginning in the second quarter of 2024, we realigned certain businesses within our Components segment to be consistent with how our segment manager 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.
Components segment external sales by business were as follows:
Three months ended Six months ended
June 30, June 30,
In millions 2024 2023 2024 2023
Drivetrain and braking systems $ 1,255  $ 1,249  $ 2,487  $ 2,521 
Emission solutions 822  842  1,678  1,781 
Components and software 279  312  579  624 
Automated transmissions 162  180  327  358 
Atmus —  341  289 
(1)
 683 
Total sales $ 2,518  $ 2,924  $ 5,360  $ 5,967 
 (1) Included sales through the March 18, 2024, divestiture. See NOTE 14, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.
Engine segment external sales by market were as follows:
Three months ended Six months ended
June 30, June 30,
In millions 2024 2023 2024 2023
Heavy-duty truck $ 968  $ 856  $ 1,779  $ 1,716 
Medium-duty truck and bus 792  687  1,530  1,304 
Light-duty automotive 454  444  892  885 
Total on-highway 2,214  1,987  4,201  3,905 
Off-highway 254  276  507  610 
Total sales $ 2,468  $ 2,263  $ 4,708  $ 4,515 
Distribution segment external sales by region were as follows:
Three months ended Six months ended
June 30, June 30,
In millions 2024 2023 2024 2023
North America $ 1,899  $ 1,783  $ 3,621  $ 3,476 
Asia Pacific 310  265  595  504 
Europe 283  213  523  407 
China 128  112  228  213 
India 77  63  146  120 
Latin America 64  60  123  113 
Africa and Middle East 60  80  114  142 
Total sales $ 2,821  $ 2,576  $ 5,350  $ 4,975 
Distribution segment external sales by product line were as follows:
Three months ended Six months ended
June 30, June 30,
In millions 2024 2023 2024 2023
Parts $ 988  $ 1,011  $ 1,985  $ 2,063 
Power generation 950  609  1,655  1,100 
Service 447  429  852  829 
Engines 436  527  858  983 
Total sales $ 2,821  $ 2,576  $ 5,350  $ 4,975 
Power Systems segment external sales by product line were as follows:
Three months ended Six months ended
June 30, June 30,
In millions 2024 2023 2024 2023
Power generation $ 490  $ 447  $ 850  $ 827 
Industrial 278  218  516  407 
Generator technologies 120  129  230  239 
Total sales $ 888  $ 794  $ 1,596  $ 1,473