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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________ 
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 2, 2021.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     .
Commission file number: 001-11311
 lear-20211002_g1.jpg
(Exact name of registrant as specified in its charter) 
_______________________________________
Delaware 13-3386776
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
21557 Telegraph Road, Southfield, MI 48033
(Address of principal executive offices)
(248) 447-1500
(Registrant’s telephone number, including area code)
_______________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 LEANew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  x
As of October 29, 2021, the number of shares outstanding of the registrant’s common stock was 59,616,561 shares.


LEAR CORPORATION
FORM 10-Q

FOR THE QUARTER ENDED OCTOBER 2, 2021

INDEX
 Page No.
Item 3 – Quantitative and Qualitative Disclosures about Market Risk (included in Item 2)

2

LEAR CORPORATION AND SUBSIDIARIES
PART I — FINANCIAL INFORMATION
ITEM 1 — CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTION TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
We have prepared the unaudited condensed consolidated financial statements of Lear Corporation and subsidiaries pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been condensed or omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to make the information presented not misleading when read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, for the year ended December 31, 2020.
The financial information presented reflects all adjustments (consisting of normal recurring adjustments) which are, in our opinion, necessary for a fair presentation of the results of operations, cash flows and financial position for the interim periods presented. These results are not necessarily indicative of a full year’s results of operations.

3

LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
October 2,
 2021(1)
December 31,
2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$1,099.1 $1,306.7 
Accounts receivable2,865.1 3,269.2 
Inventories1,766.0 1,401.1 
Other863.8 799.7 
Total current assets6,594.0 6,776.7 
LONG-TERM ASSETS:
Property, plant and equipment, net2,696.3 2,736.2 
Goodwill1,660.4 1,655.8 
Other2,095.3 2,029.9 
Total long-term assets6,452.0 6,421.9 
Total assets$13,046.0 $13,198.6 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable and drafts$2,870.0 $3,141.6 
Accrued liabilities1,875.5 1,920.9 
Current portion of long-term debt206.0 14.2 
Total current liabilities4,951.5 5,076.7 
LONG-TERM LIABILITIES:
Long-term debt2,095.8 2,300.3 
Other1,241.2 1,206.7 
Total long-term liabilities3,337.0 3,507.0 
EQUITY:
Preferred stock, 100,000,000 shares authorized (including 10,896,250 Series A convertible preferred stock authorized); no shares outstanding
  
Common stock, $0.01 par value, 300,000,000 shares authorized; 64,571,405 shares issued as of October 2, 2021 and December 31, 2020
0.6 0.6 
Additional paid-in capital1,006.9 963.6 
Common stock held in treasury, 4,957,867 and 4,519,891 shares as of October 2, 2021 and December 31, 2020, respectively, at cost
(680.6)(598.6)
Retained earnings5,098.1 4,806.8 
Accumulated other comprehensive loss(802.6)(705.1)
Lear Corporation stockholders’ equity4,622.4 4,467.3 
Noncontrolling interests135.1 147.6 
Equity4,757.5 4,614.9 
Total liabilities and equity$13,046.0 $13,198.6 
 (1)     Unaudited.
The accompanying notes are an integral part of these condensed consolidated balance sheets.
4

LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited; in millions, except share and per share data)
 Three Months EndedNine Months Ended
 October 2,
2021
October 3,
2020
October 2,
2021
October 3,
2020
Net sales$4,268.2 $4,900.1 $14,383.3 $11,802.3 
Cost of sales4,041.5 4,457.3 13,262.4 11,152.7 
Selling, general and administrative expenses163.3 147.7 503.0 442.3 
Amortization of intangible assets15.8 16.3 57.4 49.4 
Interest expense22.6 26.5 67.2 78.1 
Other (income) expense, net11.1 17.1 (28.7)54.4 
Consolidated income before provision for income taxes and equity in net (income) loss of affiliates13.9 235.2 522.0 25.4 
Provision for income taxes20.9 44.6 119.1 30.1 
Equity in net (income) loss of affiliates1.7 (6.5)(9.1)(15.9)
Consolidated net income (loss)(8.7)197.1 412.0 11.2 
Less: Net income attributable to noncontrolling interests17.8 22.7 59.6 54.3 
Net income (loss) attributable to Lear$(26.5)$174.4 $352.4 $(43.1)
Basic net income (loss) per share available to Lear common stockholders (Note 14)
$(0.44)$2.90 $5.86 $(0.72)
Diluted net income (loss) per share available to Lear common stockholders (Note 14)
$(0.44)$2.89 $5.83 $(0.72)
Cash dividends declared per share$0.50 $ $1.00 $0.77 
Average common shares outstanding59,906,531 60,159,356 60,171,402 60,260,886 
Average diluted shares outstanding59,906,531 60,330,941 60,463,401 60,260,886 
Consolidated comprehensive income (loss)
(Condensed Consolidated Statements of Equity)
$(83.0)$290.7 $315.8 $(49.2)
Less: Comprehensive income attributable to
noncontrolling interests
18.3 33.0 60.9 60.9 
Comprehensive income (loss) attributable to Lear$(101.3)$257.7 $254.9 $(110.1)
The accompanying notes are an integral part of these condensed consolidated statements.
5

LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited; in millions, except share and per share data)
Three Months Ended October 2, 2021
Common StockAdditional Paid-In CapitalCommon Stock Held in TreasuryRetained EarningsAccumulated Other Comprehensive Loss, Net of TaxLear Corporation Stockholders' Equity
Balance at July 3, 2021$0.6 $973.6 $(618.6)$5,155.1 $(727.8)$4,782.9 
Comprehensive income (loss):
Net income (loss)— — — (26.5)— (26.5)
Other comprehensive income (loss)— — — — (74.8)(74.8)
Total comprehensive income (loss)— — — (26.5)(74.8)(101.3)
Stock-based compensation— 15.6 — — — 15.6 
Net issuance of 55,882 shares held in treasury in settlement of stock-based compensation
— (10.9)7.1 — — (3.8)
Repurchase of 419,903 shares of common stock at average price of $164.56 per share
— — (69.1)— — (69.1)
Dividends declared to Lear Corporation stockholders— — — (30.5)— (30.5)
Dividends declared to noncontrolling interest holders—    — — 
Affiliate transaction— 28.6 — — — 28.6 
Balance at October 2, 2021$0.6 $1,006.9 $(680.6)$5,098.1 $(802.6)$4,622.4 

Nine Months Ended October 2, 2021
Common StockAdditional Paid-In CapitalCommon Stock Held in TreasuryRetained EarningsAccumulated Other Comprehensive Loss, Net of TaxLear Corporation Stockholders' Equity
Balance at January 1, 2021$0.6 $963.6 $(598.6)$4,806.8 $(705.1)$4,467.3 
Comprehensive income (loss):
Net income— — — 352.4 — 352.4 
Other comprehensive income (loss)— — — — (97.5)(97.5)
Total comprehensive income (loss)— — — 352.4 (97.5)254.9 
Stock-based compensation— 45.5 — — — 45.5 
Net issuance of 151,741 shares held in treasury in settlement of stock-based compensation
— (30.8)18.3 — — (12.5)
Repurchase of 589,717 shares of common stock at average price of $170.03 per share
— — (100.3)— — (100.3)
Dividends declared to Lear Corporation stockholders— — — (61.1)— (61.1)
Dividends declared to noncontrolling interest holders—    — — 
Affiliate transaction— 28.6 — — — 28.6 
Balance at October 2, 2021$0.6 $1,006.9 $(680.6)$5,098.1 $(802.6)$4,622.4 
The accompanying notes are an integral part of these condensed consolidated statements.
6

LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (continued)
(Unaudited; in millions, except share and per share data)
Three Months Ended October 2, 2021
Lear Corporation Stockholders' EquityNon-controlling InterestsEquity
Balance at July 3, 2021$4,782.9 $109.2 $4,892.1 
Comprehensive income (loss):
Net income (loss)(26.5)17.8 (8.7)
Other comprehensive income (loss)(74.8)0.5 (74.3)
Total comprehensive income (loss)(101.3)18.3 (83.0)
Stock-based compensation15.6 — 15.6 
Net issuance of 55,882 shares held in treasury in settlement of stock-based compensation
(3.8)— (3.8)
Repurchase of 419,903 shares of common stock at average price of $164.56 per share
(69.1)— (69.1)
Dividends declared to Lear Corporation stockholders(30.5)— (30.5)
Dividends declared to noncontrolling interest holders—   
Affiliate transaction28.6 7.6 36.2 
Balance at October 2, 2021$4,622.4 $135.1 $4,757.5 

Nine Months Ended October 2, 2021
Lear Corporation Stockholders' EquityNon-controlling InterestsEquity
Balance at January 1, 2021$4,467.3 $147.6 $4,614.9 
Comprehensive income (loss):
Net income352.4 59.6 412.0 
Other comprehensive income (loss)(97.5)1.3 (96.2)
Total comprehensive income (loss)254.9 60.9 315.8 
Stock-based compensation45.5 — 45.5 
Net issuance of 151,741 shares held in treasury in settlement of stock-based compensation
(12.5)— (12.5)
Repurchase of 589,717 shares of common stock at average price of $170.03 per share
(100.3)— (100.3)
Dividends declared to Lear Corporation stockholders(61.1)— (61.1)
Dividends declared to noncontrolling interest holders— (81.0)(81.0)
Affiliate transaction28.6 7.6 36.2 
Balance at October 2, 2021$4,622.4 $135.1 $4,757.5 
The accompanying notes are an integral part of these condensed consolidated statements.
7

LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (continued)
(Unaudited; in millions, except share and per share data)
Three Months Ended October 3, 2020
Common StockAdditional Paid-In CapitalCommon Stock Held in TreasuryRetained EarningsAccumulated Other Comprehensive Loss, Net of TaxLear Corporation Stockholders' Equity
Balance at July 4, 2020$0.6 $955.6 $(612.6)$4,447.1 $(923.0)$3,867.7 
Comprehensive income:
Net income— — — 174.4 — 174.4 
Other comprehensive income— — — — 83.3 83.3 
Total comprehensive income— — — 174.4 83.3 257.7 
Stock-based compensation— 9.1 — — — 9.1 
Net issuance of 45,531 shares held in treasury in settlement of stock-based compensation
— (7.2)6.3 (0.8)— (1.7)
Dividends declared to noncontrolling interest holders—    — — 
Balance at October 3, 2020$0.6 $957.5 $(606.3)$4,620.7 $(839.7)$4,132.8 

Nine Months Ended October 3, 2020
Common StockAdditional Paid-In CapitalCommon Stock Held in TreasuryRetained EarningsAccumulated Other Comprehensive Loss, Net of TaxLear Corporation Stockholders' Equity
Balance at January 1, 2020$0.6 $969.1 $(563.1)$4,715.8 $(772.7)$4,349.7 
Comprehensive income (loss):
Net income (loss)— — — (43.1)— (43.1)
Other comprehensive income ( loss)— — — — (67.0)(67.0)
Total comprehensive income (loss)— — — (43.1)(67.0)(110.1)
Adoption of accounting standard update 2016-13— — — (0.8)— (0.8)
Stock-based compensation— 25.5 — — — 25.5 
Net issuance of 190,978 shares held in treasury in settlement of stock-based compensation
— (37.1)26.8 (3.3)— (13.6)
Repurchase of 641,149 shares of common stock at average price of $109.22 per share
— — (70.0)— — (70.0)
Dividends declared to Lear Corporation stockholders— — — (46.8)— (46.8)
Dividends declared to noncontrolling interest holders—    — — 
Redeemable noncontrolling interest adjustment— — — (1.1)— (1.1)
Balance at October 3, 2020$0.6 $957.5 $(606.3)$4,620.7 $(839.7)$4,132.8 
The accompanying notes are an integral part of these condensed consolidated statements.



8

LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (continued)
(Unaudited; in millions, except share and per share data)
Three Months Ended October 3, 2020
Lear Corporation Stockholders' EquityNon-controlling InterestsEquityRedeemable Non-controlling Interests
Balance at July 4, 2020$3,867.7 $115.5 $3,983.2 $114.3 
Comprehensive income:
Net income174.4 22.4 196.8 0.3 
Other comprehensive income83.3 5.6 88.9 4.7 
Total comprehensive income257.7 28.0 285.7 5.0 
Stock-based compensation9.1 — 9.1 — 
Net issuance of 45,531 shares held in treasury in settlement of stock-based compensation
(1.7)— (1.7)— 
Dividends declared to noncontrolling interest holders— (0.2)(0.2)— 
Balance at October 3, 2020$4,132.8 $143.3 $4,276.1 $119.3 

Nine Months Ended October 3, 2020
Lear Corporation Stockholders' EquityNon-controlling InterestsEquityRedeemable Non-controlling Interests
Balance at January 1, 2020$4,349.7 $151.4 $4,501.1 $118.4 
Comprehensive income (loss):
Net income (loss)(43.1)57.5 14.4 (3.2)
Other comprehensive income ( loss)(67.0)3.6 (63.4)3.0 
Total comprehensive income (loss)(110.1)61.1 (49.0)(0.2)
Adoption of accounting standard update 2016-13(0.8)— (0.8)— 
Stock-based compensation25.5 — 25.5 — 
Net issuance of 190,978 shares held in treasury in settlement of stock-based compensation
(13.6)— (13.6)— 
Repurchase of 641,149 shares of common stock at average price of $109.22 per share
(70.0)— (70.0)— 
Dividends declared to Lear Corporation stockholders(46.8)— (46.8)— 
Dividends declared to noncontrolling interest holders— (69.2)(69.2)— 
Redeemable noncontrolling interest adjustment(1.1)— (1.1)1.1 
Balance at October 3, 2020$4,132.8 $143.3 $4,276.1 $119.3 
The accompanying notes are an integral part of these condensed consolidated statements.

9

LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
Nine Months Ended
October 2,
2021
October 3,
2020
Cash Flows from Operating Activities:
Consolidated net income$412.0 $11.2 
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization431.4 397.1 
Net change in recoverable customer engineering, development and tooling(78.2)(63.4)
Net change in working capital items (see below)(329.7)(138.1)
Loss on extinguishment of debt 21.1 
Other, net67.7 34.4 
Net cash provided by operating activities503.2 262.3 
Cash Flows from Investing Activities:
Additions to property, plant and equipment(405.5)(285.3)
Other, net(72.3)(11.8)
Net cash used in investing activities(477.8)(297.1)
Cash Flows from Financing Activities:
Term loan repayments(14.1)(9.4)
Revolving credit facility borrowings 1,000.0 
Revolving credit facility repayments (1,000.0)
Proceeds from the issuance of senior notes 669.1 
Redemption of senior notes (667.1)
Short-term repayments, net (14.9)
Payment of debt issuance and other financing costs (6.9)
Repurchase of common stock(99.3)(70.0)
Dividends paid to Lear Corporation stockholders(60.7)(52.0)
Dividends paid to noncontrolling interests(81.1)(45.8)
Other, net23.2 (14.8)
Net cash used in financing activities(232.0)(211.8)
Effect of foreign currency translation(5.8)(5.6)
Net Change in Cash, Cash Equivalents and Restricted Cash(212.4)(252.2)
Cash, Cash Equivalents and Restricted Cash as of Beginning of Period1,314.5 1,510.4 
Cash, Cash Equivalents and Restricted Cash as of End of Period$1,102.1 $1,258.2 
Changes in Working Capital Items:
Accounts receivable$356.3 $(416.9)
Inventories(393.2)(13.6)
Accounts payable(225.1)124.0 
Accrued liabilities and other(67.7)168.4 
Net change in working capital items$(329.7)$(138.1)
Supplementary Disclosure:
Cash paid for interest$59.8 $83.7 
Cash paid for income taxes, net of refunds received$116.3 $85.3 
The accompanying notes are an integral part of these condensed consolidated statements.
10

LEAR CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation
Lear Corporation ("Lear," and together with its consolidated subsidiaries, the "Company") and its affiliates design and manufacture automotive seating and electrical distribution systems and related components. The Company’s main customers are automotive original equipment manufacturers. The Company operates facilities worldwide.
The accompanying condensed consolidated financial statements include the accounts of Lear, a Delaware corporation, and the wholly owned and less than wholly owned subsidiaries controlled by Lear. In addition, Lear consolidates all entities, including variable interest entities, in which it has a controlling financial interest. Investments in affiliates in which Lear does not have control, but does have the ability to exercise significant influence over operating and financial policies, are accounted for under the equity method.
The Company's annual financial results are reported on a calendar year basis, and quarterly interim results are reported using a thirteen week reporting calendar.
(2) Current Operating Environment
In 2020, unprecedented industry disruptions related to the COVID-19 pandemic, particularly in the first half of the year, impacted the Company's operations in every region of the world. Although industry production has improved in the first nine months of 2021 relative to 2020, production remains below recent historic levels, and third quarter 2021 production decreased as compared to the third quarter of 2020. This is largely due to the continuing impact of the COVID-19 pandemic in 2021, particularly through supply shortages. The most significant supply shortage relates to semiconductor chips, which is impacting global industry production and resulting in cancellations of planned production. In addition, the Company is experiencing increased costs related to labor shortages and inefficiencies and ongoing costs related to personal protective equipment, all of which are likely to continue for a period of time. Increases in certain commodity costs, as well as transportation and logistics costs, are also impacting, and will continue to impact, the Company's operating results for the foreseeable future. Further, a resurgence of the COVID-19 virus or its variants, including corresponding "stay at home" or similar government orders impacting industry production, could impact the Company's financial results.
The accompanying condensed consolidated financial statements reflect estimates and assumptions made by management as of October 2, 2021, and for the nine months then ended. Such estimates and assumptions affect, among other things, the Company's goodwill; long-lived asset and indefinite-lived intangible asset valuations; inventory valuations; valuations of deferred income taxes and income tax contingencies; and credit losses related to the Company's financial instruments. Events and circumstances arising after October 2, 2021, including those resulting from the impact of the COVID-19 pandemic, will be reflected in management's estimates and assumptions in future periods.
(3) Restructuring
Restructuring costs include employee termination benefits, asset impairment charges and contract termination costs, as well as other incremental costs resulting from the restructuring actions. Employee termination benefits are recorded based on existing union and employee contracts, statutory requirements, completed negotiations and Company policy. Other incremental costs principally include equipment and personnel relocation costs. In addition to restructuring costs, the Company incurs incremental manufacturing inefficiency costs at the operating locations impacted by the restructuring actions during the related restructuring implementation period. Restructuring costs are recognized in the Company’s condensed consolidated financial statements in accordance with GAAP. Generally, charges are recorded when restructuring actions are approved and/or implemented.
In the first nine months of 2021, the Company recorded charges of $78.0 million in connection with its restructuring actions. These charges consist of $52.3 million recorded as cost of sales and $25.7 million recorded as selling, general and administrative expenses. The restructuring charges consist of employee termination costs of $60.1 million, asset impairment charges of $8.1 million and contract termination costs of $0.1 million, as well as other related costs of $9.7 million. Employee termination benefits were recorded based on existing union and employee contracts, statutory requirements, completed negotiations and Company policy. Asset impairment charges relate to the disposal of buildings, leasehold improvements and/or machinery and equipment with carrying values of $1.0 million in excess of related estimated fair values and the impairment of right-of-use assets of $7.1 million.
11

LEAR CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The Company expects to incur approximately $37 million of additional restructuring costs related to activities initiated as of October 2, 2021, and expects that the components of such costs will be consistent with its historical experience. Any future restructuring actions will depend upon market conditions, customer actions and other factors.
A summary of 2021 activity is shown below (in millions):
 Accrual at January 1, 20212021UtilizationAccrual at October 2, 2021
ChargesCashNon-cash
Employee termination benefits$134.8 $60.1 $(65.6)$(5.1)$124.2 
Asset impairment charges 8.1  (8.1) 
Contract termination costs4.2 0.1 (0.8) 3.5 
Other related costs 9.7 (9.7)  
Total$139.0 $78.0 $(76.1)$(13.2)$127.7 
(4) Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs.
A summary of inventories is shown below (in millions):
October 2,
2021
December 31,
2020
Raw materials$1,250.1 $1,051.6 
Work-in-process124.7 109.8 
Finished goods545.5 396.9 
Reserves(154.3)(157.2)
Inventories$1,766.0 $1,401.1 
(5) 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-term127.6 121.4 
Recoverable customer E&D and tooling$403.8 $333.4 
12

LEAR CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(6) Long-Lived Assets
Impairment of Long-Lived Assets
The Company monitors its long-lived assets for impairment indicators on an ongoing basis in accordance with GAAP. If impairment indicators exist, the Company performs the required impairment analysis by comparing the undiscounted cash flows expected to be generated from the long-lived assets to the related net book values. If the net book value exceeds the undiscounted cash flows, an impairment loss is measured and recognized.
The Company will continue to assess the impact of significant industry and other events on the realization of its long-lived assets.
Property, Plant and Equipment
Property, plant and equipment is stated at cost. Costs associated with the repair and maintenance of the Company’s property, plant and equipment are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency or safety of the Company’s property, plant and equipment are capitalized and depreciated over the remaining useful life of the related asset. Depreciable property is depreciated over the estimated useful lives of the assets, using principally the straight-line method.
A summary of property, plant and equipment is shown below (in millions):
October 2,
2021
December 31,
2020
Land$110.1 $114.1 
Buildings and improvements848.7 880.7 
Machinery and equipment4,445.6 4,339.2 
Construction in progress351.1 311.1 
Total property, plant and equipment5,755.5