REVENUE FROM CONTRACTS WITH CUSTOMERS

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company manufactures and sells products, primarily to OEMs of light vehicles and, to a lesser extent, to other OEMs of commercial vehicles and off-highway vehicles, to certain Tier One vehicle systems suppliers and into the aftermarket. The Company’s payment terms are based on customary business practices and vary by customer type and products offered. We have evaluated the terms of our arrangements and determined that they do not contain significant financing components.

Generally, revenue is recognized upon shipment or delivery; however, a limited number of the Company’s customer arrangements for its highly customized products with no alternative use provide the Company with the right to payment during the production process. As a result, for these limited arrangements, revenue is recognized as goods are produced and control transfers to the customer using the input cost-to-cost method. The Company recorded a contract asset of $18 million and $17 million at September 30, 2022 and December 31, 2021, respectively, for these arrangements. These amounts are reflected in Prepayments and other current assets in the Company’s Condensed Consolidated Balance Sheets.

In limited instances, certain customers have provided payments in advance of receiving related products, typically at the onset of an arrangement prior to the beginning of production. These contract liabilities are reflected as Other current liabilities and Other non-current liabilities in the Condensed Consolidated Balance Sheets and were $18 million and less than $1 million at September 30, 2022 and $21 million and $1 million at December 31, 2021, respectively. These amounts are reflected as revenue over the term of

the arrangement (typically 3 to 7 years) as the underlying products are shipped and represent the Company’s remaining performance obligations as of the end of the period.

The Company continually seeks business development opportunities and at times provides customer incentives for new program awards. When the Company determines that the payments are incremental and incurred only if the new business is obtained and expects to recover these amounts from the customer over the term of the new business arrangement, the Company capitalizes these amounts. As of September 30, 2022 and December 31, 2021, the Company recorded customer incentive payments of $32 million and $36 million, respectively, in Prepayments and other current assets, and $102 million and $137 million, respectively, in Other non-current assets in the Condensed Consolidated Balance Sheets.

The following tables represent a disaggregation of revenue from contracts with customers by reporting segment and region. The balances for the three and nine months ended September 30, 2021 have been recast for inter-segment transitions of certain businesses that were completed during the three months ended June 30, 2022. Refer to Note 22, “Reporting Segments And Related Information,” to the Condensed Consolidated Financial Statements for more information.

	Three Months Ended September 30, 2022
(in millions)	Air Management		e-Propulsion & Drivetrain		Fuel Systems		Aftermarket		Total
North America	$	541	$	474	$	120	$	179	$	1,314
Europe	770		226		219		101		1,316
Asia	519		627		172		17		1,335
Other	50		—		17		28		95
Total	$	1,880	$	1,327	$	528	$	325	$	4,060
	Three Months Ended September 30, 2021
(in millions)	Air Management		e-Propulsion & Drivetrain		Fuel Systems		Aftermarket		Total
North America	$	403	$	388	$	70	$	164	$	1,025
Europe	631		183		217		114		1,145
Asia	474		524		153		16		1,167
Other	43		—		16		20		79
Total	$	1,551	$	1,095	$	456	$	314	$	3,416
	Nine Months Ended September 30, 2022
(in millions)	Air Management		e-Propulsion & Drivetrain		Fuel Systems		Aftermarket		Total
North America	$	1,515	$	1,368	$	343	$	531	$	3,757
Europe	2,293		717		691		302		4,003
Asia	1,486		1,691		444		47		3,668
Other	140		—		53		72		265
Total	$	5,434	$	3,776	$	1,531	$	952	$	11,693
	Nine Months Ended September 30, 2021
(in millions)	Air Management		e-Propulsion & Drivetrain		Fuel Systems		Aftermarket		Total
North America	$	1,272	$	1,208	$	201	$	483	$	3,164
Europe	2,202		710		794		324		4,030
Asia	1,559		1,710		455		46		3,770
Other	112		—		48		59		219
Total	$	5,145	$	3,628	$	1,498	$	912	$	11,183