Revenue (Notes)

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

The Company recognizes revenue when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. A majority of the Company's revenues are recognized at a point-in-time as control is transferred at a distinct point in time per the terms of a contract. However, a portion of the Company's revenues are recognized over time as the customer simultaneously receives control as the Company performs work under a contract.

Disaggregated Revenue

Net revenues by destination for the three and nine months ended September 30 were as follows:



	Three months ended				Nine months ended
In millions	2019		2018		2019		2018
Climate
United States	$	2,474.6	$	2,223.1	$	7,015.1	$	6,345.3
Non-U.S.	996.3		1,015.6		2,877.1		2,997.0
Total Climate	$	3,470.9	$	3,238.7	$	9,892.2	$	9,342.3
Industrial
United States	$	455.2	$	411.9	$	1,310.5	$	1,277.1
Non-U.S.	418.2		380.3		1,245.3		1,153.7
Total Industrial	$	873.4	$	792.2	$	2,555.8	$	2,430.8

Net revenues by major type of good or service for the three and nine months ended September 30 were as follows:



	Three months ended				Nine months ended
In millions	2019		2018		2019		2018
Climate
Equipment	$	2,326.0	$	2,153.3	$	6,810.2	$	6,379.6
Services and parts	1,144.9		1,085.4		3,082.0		2,962.7
Total Climate	$	3,470.9	$	3,238.7	$	9,892.2	$	9,342.3
Industrial
Equipment	$	534.3	$	466.7	$	1,564.9	$	1,472.2
Services and parts	339.1		325.5		990.9		958.6
Total Industrial	$	873.4	$	792.2	$	2,555.8	$	2,430.8

Revenue from goods and services transferred to customers at a point in time accounted for approximately 85% and 84% of the Company's revenue for the nine months ended September 30, 2019 and 2018, respectively.

Contract Balances

The opening and closing balances of contract assets and contract liabilities arising from contracts with customers for the period ended September 30, 2019 and December 31, 2018 were as follows:



In millions	September 30, 2019		December 31, 2018
Contract assets	$	162.1	$	210.9
Contract liabilities	989.7		846.2

The timing of revenue recognition, billings and cash collections results in accounts receivable, contract assets, and customer advances and deposits (contract liabilities) on the Condensed Consolidated Balance Sheet. In general, the Company receives payments from customers based on a billing schedule established in its contracts. Contract assets relate to the conditional right to consideration for any completed performance under the contract when costs are incurred in excess of billings under the percentage-of-completion methodology. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities relate to payments received in advance of performance under the contract or when the Company has a right to consideration that is unconditional before it transfers a good or service to the customer. Contract liabilities are recognized as revenue as (or

when) the Company performs under the contract. During the three and nine months ended September 30, 2019, changes in contract asset and liability balances were not materially impacted by any other factors.

Approximately 7% and 52% of the contract liability balance at December 31, 2018 was recognized as revenue during the three and nine months ended September 30, 2019, respectively. Additionally, approximately 30% of the contract liability balance at September 30, 2019 was classified as noncurrent and not expected to be recognized as revenue in the next 12 months.