Annual report pursuant to Section 13 and 15(d)

Contract Liabilities

v3.22.4
Contract Liabilities
 12 Months Ended
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]  
Contract Liabilities
Note : Contract Liabilities
Contract liabilities consist of prepayments received on long-term prepaid customer supply agreements toward future product delivery and other revenue deferrals from regular ongoing business activity. Contract liabilities were $577 million$498 million as of December 31, 2022 ($498 million$1.9 billion as of December 25, 2021).

The following table shows the changes in contract liability balances relating to long-term prepaid customer supply agreements during 2022:
(In Millions)
Prepaid customer supply agreements balance as of December 25, 2021 $ 43 
Concession payment (950)
Prepaids utilized (633)
Prepaid customer supply agreements balance as of December 31, 2022 $ 20 
During the first quarter of 2021, we settled an agreement with our largest prepaid customer, whose prepayment balance made up $1.6 billion of our contract liability balance as of December 26, 2020. We returned $950 million to the customer and recognized $584 million in revenue for having completed performance of the prepaid customer supply agreement. The prepaid customer supply agreement is excluded from the NAND memory business and is recorded as Corporate revenue in 2022 in the "all other" category presented in "Note 3: Operating Segments" within the Consolidated Financial Statements.