FINANCIAL INSTRUMENTS

3 Months Ended

Jul. 02, 2021

Derivative Instruments and Hedges, Assets [Abstract]

Foreign Currency Contracts

The Company enters into short-term and long-term foreign currency derivatives contracts, including forward, swap, and options contracts to hedge only those currency exposures associated with certain assets and liabilities, primarily accounts receivable and accounts payable, and cash flows denominated in non-functional currencies. Gains and losses on the Company's derivative contracts are designed to offset losses and gains on the assets, liabilities and transactions hedged, and accordingly, generally do not subject the Company to risk of significant accounting losses. The Company hedges committed exposures and does not engage in speculative transactions. The credit risk of these derivative contracts is minimized since the contracts are with large financial institutions and accordingly, fair value adjustments related to the credit risk of the counterparty financial institution were not material.

As of July 2, 2021, the aggregate notional amount of the Company’s outstanding foreign currency derivative contracts was $9.1 billion as summarized below:


	Foreign Currency Amount		Notional Contract Value in USD
Currency	Buy	Sell	Buy		Sell
	(In millions)
Cash Flow Hedges

CNY	3,886	—	$	601	$	—
EUR	34	60	41		71
HUF	36,601	—	124		—


JPY	33,525	—	300		—
MXN	6,191	—	311		—
MYR	428	102	103		24



Other	N/A	N/A	176		37
			1,656		132
Other Foreign Currency Contracts
BRL	16	496	3		99
CAD	110	65	89		52

CNY	4,236	706	655		109
EUR	1,675	1,812	1,989		2,158
GBP	55	77	76		106
HUF	59,137	54,761	200		185
ILS	473	—	145		—


MXN	6,470	5,032	325		253
MYR	738	277	177		66

SEK	497	584	59		68
SGD	91	49	68		37
Other	N/A	N/A	233		111
			4,019		3,244

Total Notional Contract Value in USD			$	5,675	$	3,376

As of July 2, 2021, the fair value of the Company’s short-term foreign currency contracts was included in other current assets or other current liabilities, as applicable, in the condensed consolidated balance sheets. Certain of these contracts are designed to economically hedge the Company’s exposure to monetary assets and liabilities denominated in a non-functional currency and are not accounted for as hedges under the accounting standards. Accordingly, changes in the fair value of these instruments are recognized in earnings during the period of change as a component of interest and other, net in the condensed consolidated statements of operations. As of July 2, 2021 and March 31, 2021, the Company also has included net deferred gains and losses in accumulated other comprehensive loss, a component of shareholders’ equity in the condensed consolidated balance sheets, relating to changes in fair value of its foreign currency contracts that are accounted for as cash flow hedges. Deferred gains were immaterial as of July 2, 2021, and are expected to be recognized primarily as a component of cost of sales in the condensed consolidated statements of operations primarily over the next twelve-month period, except for the USD JPY cross currency swap, which is further discussed below.

The Company entered into a USD JPY cross currency swap to hedge the foreign currency risk on the JPY term loan due April 2024, and the fair value of the cross currency swap was included in other assets as of July 2, 2021. The changes in fair value of the USD JPY cross currency swap are reported in accumulated other comprehensive loss, with the impact of the excluded component reported in interest and other, net. In addition, a corresponding amount is reclassified out of accumulated other comprehensive loss to interest and other, net to offset the remeasurement of the underlying JPY loan principal which also impacts the same line.

The following table presents the fair value of the Company’s derivative instruments utilized for foreign currency risk management purposes:


	Fair Values of Derivative Instruments
	Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
	Balance Sheet Location	July 2, 2021		March 31, 2021		Balance Sheet Location	July 2, 2021		March 31, 2021
	(In millions)
Derivatives designated as hedging instruments
Foreign currency contracts	Other current assets	$	23	$	23	Other current liabilities	$	12	$	16
Foreign currency contracts	Other assets	$	1	$	5	Other liabilities	$	—	$	—

Derivatives not designated as hedging instruments
Foreign currency contracts	Other current assets	$	28	$	31	Other current liabilities	$	30	$	32

The Company has financial instruments subject to master netting arrangements, which provide for the net settlement of all contracts with a single counterparty. The Company does not offset fair value amounts for assets and liabilities recognized for derivative instruments under these arrangements, and as such, the asset and liability balances presented in the table above reflect the gross amounts of derivatives in the condensed consolidated balance sheets. The impact of netting derivative assets and liabilities is not material to the Company’s financial position for any of the periods presented.