BALANCE SHEET ITEMS

Inventories

The components of inventories, net of applicable lower of cost and net realizable value write-downs, were as follows:



	As of June 29, 2018		As of March 31, 2018
	(In thousands)
Raw materials	$	3,096,814	$	2,760,410
Work-in-progress	403,625		450,569
Finished goods	484,132		588,850
	$	3,984,571	$	3,799,829

Due to the adoption of ASC 606, amounts that would have been reported as inventory under prior guidance are now included in contract assets or liabilities, depending on the net position of the contract, as disclosed in note 1. As a result of this accounting change, inventories as of June 29, 2018 are $321.7 million less than they would have been, had we not adopted ASC 606. The comparative information as of March 31, 2018, has not been restated and continues to be reported under the accounting standards in effect at that time.

Goodwill and Other Intangible Assets

The following table summarizes the activity in the Company’s goodwill account for each of its four segments during the three-month period ended June 29, 2018:



	HRS			CTG		IEI		CEC		Amount
	(In thousands)
Balance, beginning of the year	$	550,983		$	107,748	$	337,707	$	124,732	$	1,121,170
Foreign currency translation adjustments (1)	(26,394		)	—		—		—		(26,394		)
Balance, end of the period	$	524,589		$	107,748	$	337,707	$	124,732	$	1,094,776


(1)	During the three-month period ended June 29, 2018, the Company recorded $26.4 million of foreign currency translation adjustments primarily related to the goodwill associated with the acquisition of Mirror Controls International ("MCi") and AGM Automotive ("AGM"), as the U.S. Dollar fluctuated against foreign currencies.

The components of acquired intangible assets are as follows:



	As of June 29, 2018							As of March 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In thousands)
Intangible assets:
Customer-related intangibles	$	303,790	$	(88,667	)	$	215,123	$	306,943	$	(79,051	)	$	227,892
Licenses and other intangibles	286,177		(110,473		)	175,704		304,007		(107,466		)	196,541
Total	$	589,967	$	(199,140	)	$	390,827	$	610,950	$	(186,517	)	$	424,433

The gross carrying amounts of intangible assets are removed when fully amortized. The estimated future annual amortization expense for intangible assets is as follows:



Fiscal Year Ending March 31,	Amount
	(In thousands)
2019 (1)	$	54,200
2020	66,514
2021	62,135
2022	53,323
2023	45,089
Thereafter	109,566
Total amortization expense	$	390,827

____________________________________________________________


(1)	Represents estimated amortization for the remaining nine-month period ending March 31, 2019.

Other Current Assets

Other current assets include approximately $287.7 million and $445.4 million as of June 29, 2018 and March 31, 2018, respectively, for the deferred purchase price receivable from the Company's Asset-Backed Securitization programs. See note 10 for additional information. Further, the Company recorded approximately $341.5 million and $321.1 million, as of June 29, 2018 and March 31, 2018, respectively, of asset held for sale primarily consisting of property and equipment and accounts receivable, in other current assets. See note 12 for additional information.

Other Assets

The Company has certain equity investments in, and notes receivable from, non-publicly traded companies which are included within other assets. The equity method of accounting is used for investments in common stock or in-substance common stock when the Company has the ability to significantly influence the operating decisions of the investee; otherwise the cost method is used. Non-majority-owned investments in entities are accounted for using the equity method when the Company has a voting percentage equal to or generally greater than 20% but less than 50%, and for non-majority-owned investments in partnerships when generally greater than 5%. The Company monitors these investments for impairment indicators and makes appropriate reductions in carrying values as required whenever events or changes in circumstances indicate that the assets may be impaired. The factors the Company considers in its evaluation of potential impairment of its investments include, but are not limited to, a significant deterioration in the earnings performance or business prospects of the investee, or factors that raise significant concerns about the investee’s ability to continue as a going concern, such as negative cash flows from operation or working capital deficiencies. Fair values of these investments, when required, are estimated using unobservable inputs, primarily comparable company multiples and discounted cash flow projections. For investments accounted for under cost method that do not have readily determinable fair values, the Company has elected, per ASU 2016-01, to measure them at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

AutoLab AI

During the first quarter of fiscal year 2019, the Company transferred existing employees and equipment with a net book value of approximately $40 million along with certain related software and Intellectual Property ("IP"), into the newly created AutoLab AI (“AutoLab”), in exchange for shares of preferred stock and a controlling financial interest in AutoLab. AutoLab is a privately held software-as-a service (SaaS) and hardware company focused on developing and deploying an automation solution worldwide. The Company has concluded that AutoLab does not qualify as a variable interest entity for purposes of evaluating whether it has a controlling financial interest.

Subsequent to the initial formation and prior to June 29, 2018, AutoLab received equity funding from third party investors and expanded the board of directors, resulting in dilution of the Company's voting interest below 50%. As a result, the Company concluded it no longer holds a controlling financial interest in AutoLab and accordingly, deconsolidated the entity.

The fair value of the Company’s non-controlling interest in AutoLab upon deconsolidation was approximately $132.1 million as of the date of deconsolidation. The Company accounts for its investment in AutoLab under the equity method, with the carrying amount included in other assets on the condensed consolidated balance sheet. The value of the Company’s interest on the date of deconsolidation was based on management’s estimate of the fair value of AutoLab at that time. Management relied on a multi-stage process which involved calculating the enterprise and equity value of AutoLab, then allocating the equity value of the entity to the Company’s securities. The enterprise value of AutoLab was estimated based on the value implied by the equity funding AutoLab received from third parties in the same period (i.e.: level 2 inputs). The Company recognized a gain on deconsolidation of approximately $91.8 million with no material tax impact, which is included in other income, net on the condensed consolidated statement of operations.

In addition, during the first quarter of fiscal year 2019, the Company leased approximately $76.5 million of fixed assets to AutoLab under a five-year lease term based on an interest rate of 0.35% per month. The leases were concluded to be sales-type leases and as such, the Company derecognized the associated assets from property and equipment, net and recorded a total net investment in the lease of $88.2 million in other current assets and non-current assets, based on the present value of lease receivables. The Company recorded an immaterial gain related to this leasing transaction, which is included in cost of sales on the condensed consolidated statement of operations.

Pro-forma financials have not been presented because the effects were not material to the Company’s condensed consolidated financial position and results of operation for all periods presented. AutoLab became a related party to the Company starting on the date of deconsolidation. The Company has engaged AutoLab as a strategic partner to develop and deploy automation solution for Flex and has entered into a 5-year subscription agreement. Subscription fees under the AutoLab agreement were immaterial for the three-month period ended June 29, 2018.

As of June 29, 2018 and March 31, 2018, the Company's investments in non-majority owned companies totaled $554.3 million and $411.1 million, respectively. The equity in the earnings or losses of the Company's equity method investments, including AutoLab, was not material to the consolidated results of operations for any period presented and is included in interest and other, net.

Other Current Liabilities

Other current liabilities include customer working capital advances of $174.0 million and $153.6 million, customer-related accruals of $414.6 million and $439.0 million, and deferred revenue of $270.6 million and $329.0 million as of June 29, 2018 and March 31, 2018, respectively. The customer working capital advances are not interest-bearing, do not have fixed repayment dates and are generally reduced as the underlying working capital is consumed in production.