FINANCIAL INSTRUMENTS

9 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedges, Assets [Abstract]

Foreign Currency Contracts

The Company enters into short-term and long-term foreign currency derivative 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 institutions were not material.

As of December 31, 2023, the aggregate notional amount of the Company’s outstanding foreign currency derivative contracts was $9.8 billion as summarized below:


	Notional Contract Value in USD
Currency	Buy		Sell

Cash Flow Hedges



HUF	$	452	$	—



MXN	555		—




Other	544		9
	1,551		9
Other Foreign Currency Contracts
BRL	—		401


CNY	311		25
EUR	2,321		2,365





MXN	574		469
MYR	288		148



Other	778		544
	4,272		3,952

Total Notional Contract Value in USD	$	5,823	$	3,961

As of December 31, 2023, 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 other charges (income), net in the condensed consolidated statements of operations. As of December 31, 2023 and March 31, 2023, 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 gain was $32 million as of December 31, 2023, and is expected to be recognized primarily as a component of cost of sales in the condensed consolidated statements of operations over the next twelve-month period, except

for the USD HUF cross currency swaps.

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 current other assets and long-term other liabilities as of December 31, 2023 and March 31, 2023, respectively. The changes in fair value of 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 other charges (income), net to offset the remeasurement of the underlying HUF bond 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	December 31, 2023		March 31, 2023		Balance Sheet Location	December 31, 2023		March 31, 2023
	(In millions)
Derivatives designated as hedging instruments
Foreign currency contracts	Other current assets	$	49	$	46	Other current liabilities	$	7	$	22
Foreign currency contracts	Other assets	$	—	$	—	Other liabilities	$	11	$	88

Derivatives not designated as hedging instruments
Foreign currency contracts	Other current assets	$	22	$	26	Other current liabilities	$	19	$	19

The Company has financial instruments subject to master netting arrangements, which provide for the net settlement of all contracts with certain counterparties. The Company does not offset fair value amounts for assets and liabilities recognized for derivative instruments under these arrangements, 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.