Payment terms

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)DSAThe DSA business provides a full suite of integrated drug discovery services directed at the identification, screening and selection of a lead compound for drug development and offers a full range of safety assessment services including bioanalysis, drug metabolism, pharmacokinetics, toxicology and pathology. DSA services revenue is generally recognized over time using the cost-to-cost or right to invoice measures of progress, primarily representing fixed fee service contracts and per unit service contracts, respectively.ManufacturingThe Manufacturing business includes Microbial Solutions, which provides in vitro (non-animal) lot-release testing products, microbial detection products, and species identification services; Biologics Solutions (Biologics), which performs specialized testing of biologics (Biologics Testing Solutions) as well as contract development and manufacturing products and services (CDMO); and Avian Vaccine Services (Avian), which supplies specific-pathogen-free chicken eggs and chickens. Species identification service revenue is generally recognized at a point in time as identifications are completed by the Company. Biologics service revenue is generally recognized over time using the cost-to-cost measure of progress. Microbial Solutions and Avian product sales are generally recognized at a point in time when the customer obtains control of the product, which may be upon shipment or upon delivery based on the contractual shipping terms of a contract.Transaction Price Allocated to Future Performance ObligationsThe Company discloses the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of September 24, 2022. Excluded from the disclosure is the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less (ii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed and (iii) service revenue recognized in accordance with ASC 842, “Leases” (see additional disclosure for Other Performance Obligations). The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) as of September 24, 2022:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Revenue Expected to be Recognized in Future Periods |
|  | Less than 1 Year |  | 1 to 3 Years |  | 4 to 5 Years |  | Beyond 5 Years |  | Total |
|  | (in thousands) |
| DSA | $ | 609,960  |  |  | $ | 461,386  |  |  | $ | 72,772  |  |  | $ | 4,130  |  |  | $ | 1,148,248  |  |
| Manufacturing | 113  |  |  | 8  |  |  | —  |  |  | —  |  |  | 121  |  |
| Total | $ | 610,073  |  |  | $ | 461,394  |  |  | $ | 72,772  |  |  | $ | 4,130  |  |  | $ | 1,148,369  |  |

Contract Balances from Contracts with CustomersThe timing of revenue recognition, billings and cash collections results in billed receivables (client receivables), contract assets (unbilled revenue), and contract liabilities (current and long-term deferred revenue and customer contract deposits) on the unaudited condensed consolidated balance sheets. The Company’s payment terms are generally 30 days in the United States and consistent with prevailing practice in international markets. A contract asset is recorded when a right to consideration in exchange for goods or services transferred to a customer is conditioned other than the passage of time. Client receivables are recorded separately from contract assets since only the passage of time is required before consideration is due. A contract liability is recorded when consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met. The following table provides information about client receivables, contract assets, and contract liabilities from contracts with customers:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | September 24, 2022 |  | December 25, 2021 |
|  | (in thousands) |
| Balances from contracts with customers: |  |  |  |
| Client receivables | $ | 580,626  |  |  | $ | 489,452  |  |
| Contract assets (unbilled revenue) | 199,977  |  |  | 160,609  |  |
| Contract liabilities (current and long-term deferred revenue) | 275,634  |  |  | 240,281  |  |
| Contract liabilities (customer contract deposits) | 76,904  |  |  | 59,512  |  |

When the Company does not have the unconditional right to advanced billings, both advanced client payments and unpaid 15
