Pre-Production Costs Related to Long-Term Supply Agreements

9 Months Ended

Sep. 28, 2019

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 2019 and 2018, the Company capitalized $174.8 million and $167.6 million, respectively, of pre-production E&D costs for which reimbursement is contractually guaranteed by the customer. During the first nine months

of 2019 and 2018, the Company also capitalized $126.7 million and $121.1 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 nine months of 2019 and 2018, the Company collected $243.5 million and $277.4 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 is shown below (in millions):



	September 28, 2019		December 31, 2018
Current	$	207.4	$	160.9
Long-term	98.5		80.4
Recoverable customer E&D and tooling	$	305.9	$	241.3