Revenues

6 Months Ended

Jul. 02, 2022

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

The Company recognizes revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration which it expects to receive for providing those goods or services.

Revenues for products are generally recognized upon shipment, whereas revenues for services and solution offerings are generally recognized over time by using an output or time-based method, assuming all other criteria for revenue recognition have been met. Revenues for software are recognized either upon delivery or over time using a time-based method, depending upon how control is transferred to the customer. In cases where a bundle of products, services, solutions and/or software are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control.

Disaggregation of Revenue

The following table presents our Net sales disaggregated by product category for each of our segments, AIT and EVM, for the three and six months ended July 2, 2022 and July 3, 2021 (in millions):

	Three Months Ended
	July 2, 2022						July 3, 2021
Segment	Tangible Products		Services and Software		Total		Tangible Products		Services and Software		Total
AIT	$	422	$	24	$	446	$	390	$	24	$	414
EVM	837		185		1,022		802		164		966
Corporate, eliminations(1)	—		—		—		—		(3)		(3)
Total	$	1,259	$	209	$	1,468	$	1,192	$	185	$	1,377
	Six Months Ended
	July 2, 2022						July 3, 2021
Segment	Tangible Products		Services and Software		Total		Tangible Products		Services and Software		Total
AIT	$	792	$	48	$	840	$	797	$	46	$	843
EVM	1,674		386		2,060		1,548		339		1,887
Corporate, eliminations(1)	—		—		—		—		(6)		(6)
Total	$	2,466	$	434	$	2,900	$	2,345	$	379	$	2,724

(1)Amounts included in Corporate, eliminations consist of purchase accounting adjustments.

In addition, refer to Note 18, Segment Information & Geographic Data for Net sales to customers by geographic region.

Performance Obligations

The Company’s remaining performance obligations primarily relate to repair and support services, as well as solution offerings. The aggregated transaction price allocated to remaining performance obligations for arrangements with an original term exceeding one year was $1,055 million and $1,033 million, inclusive of deferred revenue, as of July 2, 2022 and December 31, 2021, respectively. On average, remaining performance obligations as of July 2, 2022 and December 31, 2021 are expected to be recognized over a period of approximately two years.

Contract Balances

Progress on satisfying performance obligations under contracts with customers related to billed revenues is reflected on the Consolidated Balance Sheets in Accounts receivable, net. Progress on satisfying performance obligations under contracts with customers related to unbilled revenues (“contract assets”) is reflected on the Consolidated Balance Sheets as Prepaid expenses and other current assets for revenues expected to be billed within the next twelve months, and Other long-term assets for revenues expected to be billed thereafter. The total contract asset balances were $12 million and $10 million as of July 2, 2022 and December 31, 2021, respectively. These contract assets result from timing differences between billing and satisfying performance obligations, as well as the impact from the allocation of the transaction price among performance obligations for contracts that include multiple performance obligations. Contract assets are evaluated for impairment and no impairment losses have been recognized during the three and six months ended July 2, 2022 and July 3, 2021, respectively.

Deferred revenue on the Consolidated Balance Sheets consists of payments and billings in advance of our performance. The combined short-term and long-term deferred revenue balances were $731 million and $695 million as of July 2, 2022 and December 31, 2021, respectively. During the three and six months ended July 2, 2022, the Company recognized $108 million and $237 million in revenue, which was previously included in the beginning balance of deferred revenue as of December 31, 2021. During the three and six months ended July 3, 2021, the Company recognized $75 million and $185 million in revenue, which was previously included in the beginning balance of deferred revenue as of December 31, 2020.