FINANCIAL INSTRUMENTS

9 Months Ended

Dec. 31, 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 December 31, 2021, the aggregate notional amount of the Company’s outstanding foreign currency derivative contracts was $11.2 billion as summarized below:


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

CNY	3,458	—	$	543	$	—

HUF	141,043	—	438		—


JPY	33,525	—	300		—
MXN	6,660	—	324		—
MYR	461	226	110		54



Other	N/A	N/A	272		62
			1,987		116
Other Foreign Currency Contracts
BRL	—	647	—		114
CAD	98	61	77		48

CNY	5,378	1,843	840		290
EUR	2,548	2,355	2,893		2,674
GBP	66	89	89		120
HUF	59,796	48,268	183		148
ILS	318	25	102		8


MXN	7,605	5,731	370		279
MYR	958	305	229		73

SEK	642	736	71		81
SGD	105	58	77		43
Other	N/A	N/A	216		106
			5,147		3,984

Total Notional Contract Value in USD			$	7,134	$	4,100

As of December 31, 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 December 31, 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 loss was $22.9 million as of December 31, 2021, and is 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, and the USD HUF cross currency swaps, which are 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 liabilities as of December 31, 2021. Additionally, the Company entered into USD HUF cross currency swaps to hedge the foreign currency risk on the HUF bonds due December 2031, and the fair value of the cross currency swaps was included in other liabilities as of December 31, 2021. The changes in fair value of both the USD JPY cross currency swap and the USD HUF cross currency swaps are reported in accumulated other comprehensive loss, with the impact of the excluded component reported in interest and other, net. In addition, corresponding amounts are reclassified out of accumulated other comprehensive loss to interest and other, net to offset the remeasurement of the underlying JPY loan principal and HUF bond principal, which also impact 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	December 31, 2021		March 31, 2021		Balance Sheet Location	December 31, 2021		March 31, 2021
	(In millions)
Derivatives designated as hedging instruments
Foreign currency contracts	Other current assets	$	19	$	23	Other current liabilities	$	19	$	16
Foreign currency contracts	Other assets	$	—	$	5	Other liabilities	$	37	$	—

Derivatives not designated as hedging instruments
Foreign currency contracts	Other current assets	$	19	$	31	Other current liabilities	$	11	$	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.