Pre-Production Costs Related to Long-Term Supply Agreements

9 Months Ended

Oct. 02, 2021

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Pre-Production Costs Related to Long-Term Supply Agreements

The Company incurs pre-production engineering and development ("E&D") and tooling costs related to the products produced for its customers under long-term supply agreements. The Company expenses all pre-production E&D costs for which reimbursement is not contractually guaranteed by the customer. In addition, the Company expenses all pre-production tooling costs related to customer-owned tools for which reimbursement is not contractually guaranteed by the customer or for which the Company does not have a non-cancelable right to use the tooling.

During the first nine months of 2021 and 2020, the Company capitalized $197.2 million and $111.1 million, respectively, of pre-production E&D costs for which reimbursement is contractually guaranteed by the customer. During the first nine months of 2021 and 2020, the Company also capitalized $115.1 million and $130.2 million, respectively, of pre-production tooling costs related to customer-owned tools for which reimbursement is contractually guaranteed by the customer or for which the Company has a non-cancelable right to use the tooling. These amounts are included in other current and long-term assets in the condensed consolidated balance sheets.

During the first nine months of 2021 and 2020, the Company collected $253.7 million and $184.5 million, respectively, of cash related to E&D and tooling costs.

The classification of recoverable customer E&D and tooling costs related to long-term supply agreements included in the accompanying condensed consolidated balance sheets is shown below (in millions):


	October 2, 2021		December 31, 2020
Current	$	276.2	$	212.0
Long-term	127.6		121.4
Recoverable customer E&D and tooling	$	403.8	$	333.4