BALANCE SHEET ITEMS

6 Months Ended

Sep. 27, 2019

Balance Sheet Related Disclosures [Abstract]

Inventories

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



	As of September 27, 2019		As of March 31, 2019
	(In thousands)
Raw materials	$	2,780,646	$	2,922,101
Work-in-progress	394,282		366,135
Finished goods	546,309		434,618
	$	3,721,237	$	3,722,854

Goodwill and Other Intangible Assets

The following table summarizes the activity in the Company’s goodwill account for each of its four reporting units (which align to the Company's reportable segments) during the six-month period ended September 27, 2019:



	HRS			IEI			CEC		CTG		Total
	(In thousands)
Balance, beginning of the year	$	507,209		$	333,257		$	129,325	$	103,264	$	1,073,055
Divestitures	(1,102		)	(137		)	—		—		(1,239		)
Foreign currency translation adjustments	(9,366		)	—			—		—		(9,366		)
Balance, end of the period	$	496,741		$	333,120		$	129,325	$	103,264	$	1,062,450

The components of acquired intangible assets are as follows:



	As of September 27, 2019							As of March 31, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In thousands)
Intangible assets:
Customer-related intangibles	$	282,006	$	(118,818	)	$	163,188	$	297,306	$	(113,627	)	$	183,679
Licenses and other intangibles	254,797		(125,806		)	128,991		274,604		(127,288		)	147,316
Total	$	536,803	$	(244,624	)	$	292,179	$	571,910	$	(240,915	)	$	330,995

Goodwill is tested for impairment on an annual basis and whenever events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is below its carrying value. Recoverability of goodwill is measured at the reporting unit level by comparing the reporting unit's carrying value, including goodwill, to the fair value of the reporting unit, which typically is measured based upon, among other factors, market multiples for comparable companies as well as a discounted cash flow analysis. As previously disclosed, the date of its most recent annual impairment test the fair value of the CTG reporting unit exceeded its carrying value by 22%. The Company has assessed whether an interim impairment test should be performed on the CTG reporting unit in light of recent shortfalls in CTG’s financial performance. Management has concluded that it is more likely than not that CTG’s fair value exceeds its carrying value as of September 27, 2019, thus an interim impairment test was not completed. As the Company continues to refine its long-term strategy for the CTG reporting unit, it is reasonably possible that changes in circumstances could require management to perform an impairment test for CTG prior to the next annual impairment test date of January 1, 2020. In the event that an interim test is performed and goodwill in CTG is determined to be impaired, the resulting charge could be material to the consolidated results of operations.

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)
2020 (1)	$	30,747
2021	59,573
2022	51,229
2023	43,667
2024	42,066
Thereafter	64,897
Total amortization expense	$	292,179

____________________________________________________________


(1)	Represents estimated amortization for the remaining six-month period ending March 31, 2020.

Other Current Assets

Other current assets include approximately $357.1 million and $292.5 million as of September 27, 2019 and March 31, 2019, respectively, for the deferred purchase price receivable from the Company's Asset-Backed Securitization programs. See note 12 for additional information.

The Company participates in certain customers' supplier financing programs allowing Flex to sell its receivables to financial institutions identified by the customer. Under these programs, the financial institutions act as the customers' paying agent with respect to receivables due to the Company. Following the sale of the receivables to the financial institutions, the transferred receivables are isolated from the Company and its affiliates, and effective control of the transferred receivables is passed to the financial institutions, which have the right to pledge or sell the receivables.

During the second quarter of fiscal year 2020, certain invoices were sold and transferred to certain financial institutions under a customer's supplier financing program, that had the right to pledge or sell the receivables as of September 27, 2019. However, under the governing law in the jurisdiction of sale, the assignment of receivables is effective against third-parties only upon registration of the transferred assets with a governmental agency. The Company was not able to complete the registration of the receivables before the end of the fiscal quarter and accordingly did not account for these transactions as true sales. As a result of these transactions the Company has recorded $336.1 million of other current assets, with a corresponding amount recorded as other current liabilities, in the condensed consolidated balance sheet as of September 27, 2019, and has recorded the same amount as “other financing activities, net” in the statement of cash flows. The Company subsequently registered all of the invoices in October 2019 and the receivables were considered sold at that time.

Other Current Liabilities

Other current liabilities include customer working capital advances of $249.9 million and $266.3 million, customer-related accruals of $243.5 million and $260.1 million, and deferred revenue of $341.5 million and $271.8 million, as of September 27, 2019 and March 31, 2019, 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. Following the adoption of ASC 842, current operating lease liabilities were $119.6 million as of September 27, 2019. Further, other current liabilities include $336.1 million representing the arrangement with the financial institutions as of September 27, 2019, as further described above.