REVENUE RECOGNITION

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

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. Sales are measured at the amount of consideration the Company expects to be paid in exchange for these products or services.

The Company’s six operating segments and the following tables disaggregate sales by lines of businesses, geographic destination, market channel or end market.



	Three months ended June 30, 2019
Net sales	United States		Rest of World		Total
Electrical Products	$	1,115	$	734	$	1,849
Electrical Systems and Services	1,049		533		1,582
Hydraulics	306		392		698

	Original Equipment Manufacturers		Aftermarket, Distribution and End User
Aerospace	$	299	$	218	517

	Commercial		Passenger and Light Duty
Vehicle	$	425	$	378	803

eMobility					84

Total					$	5,533



	Three months ended June 30, 2018
Net sales	United States		Rest of World		Total
Electrical Products	$	1,033	$	773	$	1,806
Electrical Systems and Services	983		530		1,513
Hydraulics	309		414		723

	Original Equipment Manufacturers		Aftermarket, Distribution and End User
Aerospace	$	266	$	197	463

	Commercial		Passenger and Light Duty
Vehicle	$	452	$	447	899

eMobility					83

Total					$	5,487



	Six months ended June 30, 2019
Net sales	United States		Rest of World		Total
Electrical Products	$	2,162	$	1,447	$	3,609
Electrical Systems and Services	2,025		1,021		3,046
Hydraulics	596		788		1,384

	Original Equipment Manufacturers		Aftermarket, Distribution and End User
Aerospace	$	586	$	433	1,019

	Commercial		Passenger and Light Duty
Vehicle	$	856	$	757	1,613

eMobility					167

Total					$	10,838



	Six months ended June 30, 2018
Net sales	United States		Rest of World		Total
Electrical Products	$	1,993	$	1,545	$	3,538
Electrical Systems and Services	1,877		1,017		2,894
Hydraulics	606		827		1,433

	Original Equipment Manufacturers		Aftermarket, Distribution and End User
Aerospace	$	530	$	391	921

	Commercial		Passenger and Light Duty
Vehicle	$	882	$	910	1,792

eMobility					160

Total					$	10,738

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 receivables from customers were $3,585 and $3,402 at June 30, 2019 and December 31, 2018, 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 $93 and $94 at June 30, 2019 and December 31, 2018, respectively, and are recorded in Prepaid expenses and other current assets.

Changes in the deferred revenue liabilities are as follows:



	Deferred Revenue
Balance at December 31, 2018	$	248
Customer deposits and billings	440
Revenue recognized in the period	(440		)
Translation	5
Balance at June 30, 2019	$	253



	Deferred Revenue
Balance at January 1, 2018	$	227
Customer deposits and billings	463
Revenue recognized in the period	(443		)
Translation	(3		)
Balance at June 30, 2018	$	244

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 June 30, 2019 and December 31, 2018 was approximately $5.5 billion and $5.3 billion, respectively. At both June 30, 2019 and December 31, 2018, Eaton expects to recognize approximately 87% of this backlog in the next twelve months and the rest thereafter.