Pre-Production Costs Related to Long-Term Supply Agreements

3 Months Ended

Apr. 01, 2023

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 three months of 2023 and 2022, the Company capitalized $60.1 million and $63.2 million, respectively, of pre-production E&D costs for which reimbursement is contractually guaranteed by the customer. During the first three months of 2023 and 2022, the Company also capitalized $56.3 million and $46.4 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 accompanying condensed consolidated balance sheets.

During the first three months of 2023 and 2022, the Company collected $80.2 million and $72.9 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):


	April 1, 2023		December 31, 2022
Current	$	204.3	$	175.7
Long-term	170.1		161.3
Recoverable customer E&D and tooling	$	374.4	$	337.0