Revenue recognition

6 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue recognition

Revenue recognition

Revenue is derived primarily from the sale of products in a variety of mobile, industrial and aerospace markets. A majority of the Company’s revenues are recognized at a point in time. However, a portion of the Company’s revenues are recognized over time.

Diversified Industrial Segment revenues by technology platform:

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2022		2021		2022		2021
Motion Systems	$	913,415	$	843,655	$	1,819,429	$	1,672,327
Flow and Process Control	1,173,260		1,103,404		2,377,724		2,188,827
Filtration and Engineered Materials	1,451,709		1,259,144		2,828,004		2,515,200
Total	$	3,538,384	$	3,206,203	$	7,025,157	$	6,376,354

Aerospace Systems Segment revenues by primary market:

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2022		2021		2022		2021
Commercial original equipment manufacturer ("OEM")	$	383,038	$	213,095	$	647,348	$	422,655
Commercial aftermarket	351,606		125,768		556,246		239,044
Military OEM	234,057		181,126		404,728		355,106
Military aftermarket	167,726		98,388		274,107		194,230
Total	$	1,136,427	$	618,377	$	1,882,429	$	1,211,035

Upon completing the acquisition ("Acquisition") of Meggitt plc ("Meggitt"), we reviewed the disaggregation of revenue disclosure for the Aerospace Systems Segment and believe that disaggregation by primary market provides more meaningful information than disaggregation by product platform.

Total Company revenues by geographic region based on the Company's selling operation's location:

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2022		2021		2022		2021
North America	$	3,079,738	$	2,421,073	$	5,914,658	$	4,806,047
Europe	942,070		753,171		1,696,002		1,515,141
Asia Pacific	599,135		607,190		1,187,533		1,175,324
Latin America	53,868		43,146		109,393		90,877
Total	$	4,674,811	$	3,824,580	$	8,907,586	$	7,587,389

The majority of revenues from the Aerospace Systems Segment are generated from sales to customers within North America.

Contract balances

Contract assets and contract liabilities are reported on a contract-by-contract basis. Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. Payments from customers are received based on the terms established in the contract with the customer.

Total contract assets and contract liabilities are as follows:

	December 31, 2022		June 30, 2022
Contract assets, current (included within Prepaid expenses and other)	$	115,698	$	28,546
Contract assets, noncurrent (included within Investments and other assets)	26,813		794
Total contract assets	142,511		29,340
Contract liabilities, current (included within Other accrued liabilities)	(228,462)		(60,472)
Contract liabilities, noncurrent (included within Other liabilities)	(111,405)		(2,225)
Total contract liabilities	(339,867)		(62,697)
Net contract liabilities	$	(197,356)	$	(33,357)

Net contract liabilities at December 31, 2022 increased from the June 30, 2022 amount primarily due to acquiring Meggitt's contract liabilities in excess of Meggitt's contract assets. During the six months ended December 31, 2022, approximately $29 million of revenue was recognized that was included in the contract liabilities at June 30, 2022.

Remaining performance obligations

Our backlog represents written firm orders from a customer to deliver products and, in the case of blanket purchase orders, only includes the portion of the order for which a schedule or release has been agreed to with the customer. We believe our backlog represents our unsatisfied or partially unsatisfied performance obligations. Backlog at December 31, 2022 was $10.6 billion, of which approximately 84 percent is expected to be recognized as revenue within the next 12 months and the balance thereafter.