Derivatives

6 Months Ended

Oct. 04, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

We conduct business in numerous currencies throughout our worldwide operations, and our entities hold monetary assets or liabilities, earn revenues, or incur costs in currencies other than the entity’s functional currency. As a result, we are exposed to foreign exchange gains or losses which impacts our operating results. As part of our foreign currency risk mitigation strategy, we have entered into foreign exchange forward contracts with up to twelve months in duration. We do not use derivative financial instruments for speculative trading purposes, nor do we hedge our foreign currency exposure in a manner that entirely offsets the effects of the changes in foreign exchange rates.

To help protect the net investment in a foreign operation from adverse changes in foreign currency exchange rates, we conduct a program under which we may enter into foreign currency forward and option contracts to offset the changes in the carrying amounts of these investments due to fluctuations in foreign currency exchange rates. We exclude changes in forward points for the forward contracts from the assessment of hedge effectiveness. We recognize changes in the excluded component in other income (expense), net. As of October 4, 2019 and September 28, 2018, the fair value of these contracts was insignificant. During the six months ended October 4, 2019, a net gain of $2 million was recorded in Accumulated other comprehensive loss.

We also enter into foreign currency forward contracts to hedge foreign currency balance sheet exposure. These forward contracts are not designated as hedging instruments. As of October 4, 2019 and September 28, 2018, the fair value of these contracts was insignificant. The related loss recognized in Other expense, net in our Condensed Consolidated Statements of Operations was as follows:



	Three Months Ended						Six Months Ended
(In millions)	October 4, 2019			September 28, 2018			October 4, 2019			September 28, 2018
Foreign exchange forward contracts loss	$	(6	)	$	(2	)	$	(6	)	$	(38	)

The fair value of our foreign exchange forward contracts is presented on a gross basis in our Condensed Consolidated Balance Sheets. To mitigate losses in the event of nonperformance by counterparties, we have entered into master netting arrangements with our counterparties that allow us to settle payments on a net basis. The effect of netting on our derivative assets and liabilities was not material as of October 4, 2019 and September 28, 2018.

The notional amount of our outstanding foreign exchange forward contracts in U.S. dollar equivalent was as follows:



(In millions)	October 4, 2019		March 29, 2019
Net investment hedges
Foreign exchange forward contracts sold	$	120	$	116
Balance sheet contracts
Foreign exchange forward contracts purchased	$	410	$	963
Foreign exchange forward contracts sold	$	277	$	122