REVENUE RECOGNITION

6 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

REVENUE RECOGNITION

Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services have transferred to our customers. Sales are measured at the amount of consideration the Company expects to be paid in exchange for these products or services.

The Company’s six operating segments and the following tables disaggregate sales by lines of businesses, geographic destination, market channel or end market.

	Three months ended June 30				Six months ended June 30
	2021		2020		2021		2020
Electrical Americas
Products	$	555	$	439	$	1,075	$	1,163
Systems	1,294		1,051		2,396		2,115
Total	$	1,849	$	1,490	$	3,471	$	3,278
Electrical Global
Products	$	846	$	598	$	1,559	$	1,255
Systems	572		513		1,112		1,000
Total	$	1,418	$	1,111	$	2,671	$	2,255
Hydraulics
United States	$	235	$	183	$	457	$	410
Rest of World	325		228		664		508
Total	$	560	$	411	$	1,121	$	918
Aerospace
Original Equipment Manufacturers	$	239	$	199	$	447	$	524
Aftermarket	191		149		337		369
Industrial and Other	195		113		360		248
Total	$	625	$	461	$	1,144	$	1,141
Vehicle
Commercial	$	384	$	166	$	726	$	458
Passenger and Light Duty	291		161		603		467
Total	$	675	$	327	$	1,329	$	925
eMobility	$	88	$	56	$	171	$	128
Total net sales	$	5,215	$	3,856	$	9,907	$	8,645

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (revenue recognized exceeds amount billed to the customer), and deferred revenue (advance payments and billings in excess of revenue recognized). Accounts receivables from customers were $2,958 and $2,539 at June 30, 2021 and December 31, 2020, respectively. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. Unbilled receivables were $161 and $90 at June 30, 2021 and December 31, 2020, respectively, and are recorded in Prepaid expenses and other current assets. The increase in unbilled receivables reflects higher revenue recognized and not yet billed during the quarter, and unbilled receivables from the acquisition of Cobham Mission Systems.

Changes in the deferred revenue liabilities are as follows:

	Deferred Revenue
Balance at January 1, 2021	$	257
Customer deposits and billings	570
Revenue recognized in the period	(545)
Deferred revenue from business acquisitions	99
Translation and other	(3)
Balance at June 30, 2021	$	378

	Deferred Revenue
Balance at January 1, 2020	$	234
Customer deposits and billings	464
Revenue recognized in the period	(459)
Translation	(1)
Deferred revenue reclassified to held for sale	(11)
Balance at June 30, 2020	$	227

A significant portion of open orders placed with Eaton are by original equipment manufacturers or distributors. These open orders are not considered firm as they have been historically subject to releases by customers. In measuring backlog of unsatisfied or partially satisfied obligations, only the amount of orders to which customers are firmly committed are included. Using this criterion, total backlog at June 30, 2021 was approximately $8.3 billion. At June 30, 2021, Eaton expects to recognize approximately 87% of this backlog in the next twelve months and the rest thereafter.