Pre-Production Costs Related to Long-Term Supply Agreements

9 Months Ended

Sep. 28, 2024

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 2024 and 2023, the Company capitalized $225.4 million and $215.5 million, respectively, of pre-production E&D costs for which reimbursement is contractually guaranteed by the customer. During the first nine months of 2024 and 2023, the Company also capitalized $113.7 million and $121.3 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 2024 and 2023, the Company collected $287.5 million and $273.5 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):


	September 28, 2024		December 31, 2023
Current	$	311.1	$	220.2
Long-term	132.4		164.3
Recoverable customer E&D and tooling	$	443.5	$	384.5