FINANCIAL INSTRUMENTS

3 Months Ended

Jul. 01, 2022

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, accounts payable, debt, 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 1, 2022, the aggregate notional amount of the Company’s outstanding foreign currency derivative contracts was $11.8 billion as summarized below:


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

CNY	3,038	—	$	454	$	—

HUF	138,710	—	415		—

ILS	352	—	102		—
JPY	33,525	—	300		—
MXN	6,829	—	339		—
MYR	540	94	123		21



Other	N/A	N/A	176		120
			1,909		141
Other Foreign Currency Contracts
BRL	9	867	2		166
CAD	115	68	89		53

CNY	4,598	688	688		102
EUR	3,003	2,838	3,165		2,984
GBP	165	201	201		244
HUF	78,890	67,113	209		178
ILS	376	166	109		48
INR	10,003	—	126		—

MXN	8,137	5,983	404		297
MYR	1,003	343	228		78


SGD	102	55	73		39
Other	N/A	N/A	149		146
			5,443		4,335

Total Notional Contract Value in USD			$	7,352	$	4,476

As of July 1, 2022, 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 1, 2022 and March 31, 2022, 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 $45 million as of July 1, 2022, 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 in April 2019 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 current liabilities and other liabilities as of July 1, 2022. Additionally, the Company entered into USD HUF cross currency swaps in December 2021 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 current liabilities and other liabilities as of July 1, 2022. 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. 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	July 1, 2022		March 31, 2022		Balance Sheet Location	July 1, 2022		March 31, 2022
	(In millions)
Derivatives designated as hedging instruments
Foreign currency contracts	Other current assets	$	18	$	22	Other current liabilities	$	49	$	35
Foreign currency contracts	Other assets	$	—	$	—	Other liabilities	$	116	$	61

Derivatives not designated as hedging instruments
Foreign currency contracts	Other current assets	$	26	$	21	Other current liabilities	$	41	$	26

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.