Pre-Production Costs Related to Long-Term Supply Agreements

3 Months Ended

Apr. 04, 2020

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 2020 and 2019, the Company capitalized $50.4 million and $58.8 million, respectively, of pre-production E&D costs for which reimbursement is contractually guaranteed by the customer. During the first three months of 2020 and 2019, the Company also capitalized $54.1 million and $47.0 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 2020 and 2019, the Company collected $66.8 million and $95.8 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):



	April 4, 2020		December 31, 2019
Current	$	185.7	$	157.2
Long-term	118.9		113.8
Recoverable customer E&D and tooling	$	304.6	$	271.0