REVENUE RECOGNITION

3 Months Ended

Mar. 31, 2022

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. Control is transferred when the customer has the ability to direct the use of and obtain benefits from the goods or services. Sales are measured at the amount of consideration the Company expects to be paid in exchange for these products or services.

The following table provides disaggregated sales by lines of businesses, geographic destination, market channel or end market, as applicable, for the Company's operating segments:

	Three months ended March 31
(In millions)	2022		2021
Electrical Americas
Products	$	603	$	520
Systems	1,288		1,102
Total	$	1,891	$	1,622
Electrical Global
Products	$	876	$	713
Systems	561		540
Total	$	1,437	$	1,253
Hydraulics
United States	$	—	$	222
Rest of World	—		339
Total	$	—	$	561
Aerospace
Original Equipment Manufacturers	$	293	$	208
Aftermarket	221		146
Industrial and Other	204		165
Total	$	718	$	519
Vehicle
Commercial	$	402	$	342
Passenger and Light Duty	269		312
Total	$	671	$	654
eMobility	$	126	$	83
Total net sales	$	4,843	$	4,692

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 receivable from customers were $3,216 million and $2,896 million at March 31, 2022 and December 31, 2021, 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 $194 million and $187 million at March 31, 2022 and December 31, 2021, respectively, and are recorded in Prepaid expenses and other current assets. The increase in unbilled receivables reflects higher revenue recognized from increased business activity in 2022.

Changes in the deferred revenue liabilities are as follows:

(In millions)	Deferred Revenue
Balance at January 1, 2022	$	422
Customer deposits and billings	342
Revenue recognized in the period	(334)
Translation	(2)
Balance at March 31, 2022	$	428

(In millions)	Deferred Revenue
Balance at January 1, 2021	$	257
Customer deposits and billings	276
Revenue recognized in the period	(262)
Translation and other	(3)
Balance at March 31, 2021	$	268

Deferred revenue liabilities of $401 million and $395 million as of March 31, 2022 and December 31, 2021, respectively, were included in Other current liabilities with the remaining balance presented in Other noncurrent liabilities.

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 March 31, 2022 was approximately $9.3 billion. At March 31, 2022, approximately 87% of this backlog is targeted for delivery to customers in the next twelve months and the rest thereafter.