On October 1, 2022, the Company entered into an Asset Purchase Agreement to sell certain assets and assign certain liabilities comprising the Link-16 TDL Business (part of the Company's government systems segment) to L3Harris Technologies, Inc. in exchange for approximately $1.96 billion in cash (subject to certain adjustments), on and subject to the terms and conditions set forth therein. In accordance with ASC 205-20, the Company determined that the Link-16 TDL Business met held-for sale and discontinued operations accounting criteria at the end of the second quarter of fiscal year 2023. Accordingly, the Company classified the results of the Link-16 TDL Business as discontinued operations in its condensed consolidated statements of operations for all periods presented. Additionally, the related assets and liabilities associated with the Link-16 TDL Business are classified as held for sale and discontinued operations in the condensed consolidated balance sheets for all periods presented.

The Company expects the Link-16 TDL Sale to substantially reduce both debt and net leverage, and to allow closer alignment in investment synergies between the Company's government systems segment and its other business segments. The Link-16 TDL Sale is expected to close in the first half of calendar year 2023 and is subject to the satisfaction or waiver of customary closing conditions, including the expiration or termination of any required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

In connection with the closing of the Link-16 TDL Sale, the Company and L3Harris Technologies, Inc. will enter into certain ancillary commercial agreements, including an intellectual property license agreement for the cross-licensing by each party of certain intellectual property rights relating to the Link-16 TDL Business and the Company’s retained businesses, certain supply agreements with respect to the supply of certain Link-16 and related products following the closing, and a transition services agreement for the provision of certain services to support the transition of the Link-16 TDL Business following the closing, in each case subject to the terms and conditions set forth therein.

The following table presents key components of assets and liabilities that are classified as discontinued operations on the condensed consolidated balance sheets as of September 30, 2022 and March 31, 2022:


	As of September 30, 2022		As of March 31, 2022
	(In thousands)
Accounts receivable, net	$	60,748	$	47,097
Inventories		137,304		144,026
Prepaid expenses and other current assets		7,108		6,468
Property, equipment, and satellites, net		37,878		36,921
Operating lease right-of-use assets		11,835		12,837
Goodwill		20,993		21,403
Other assets		9,383		6,350
Total assets of discontinued operations	$	285,249	$	275,102

Accounts payable	$	18,534	$	18,415
Accrued and other liabilities		33,137		33,858
Non-current operating lease liabilities		10,336		11,486
Other liabilities		5,477		4,295
Total liabilities of discontinued operations	$	67,484	$	68,054

The operating results of the discontinued operations only reflect revenues and expenses that are directly attributable to the Link-16 TDL Business that will be eliminated from continuing operations. The following table presents key components of “Net income (loss) from discontinued operations, net of tax” for the three and six months ended September 30, 2022 and 2021:


	Three Months Ended						Six Months Ended
	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
	(In thousands)
Revenues	$	88,128		$	92,197		$	194,917		$	186,277
Operating expenses:
Cost of revenues		54,090			54,603			120,448			113,737
Other operating expenses		8,198			4,878			17,184			9,267
Net income (loss) from discontinued operations before income taxes	$	25,840		$	32,716		$	57,285		$	63,273
(Provision for) benefit from income taxes		(679	)		(6,236	)		(13,493	)		(12,529	)
Net income (loss) from discontinued operations, net of tax	$	25,161		$	26,480		$	43,792		$	50,744

The cash flows related to discontinued operations have not been segregated and are included in the condensed consolidated statements of cash flows. The following table presents key cash flow and non-cash information related to discontinued operations for the six months ended September 30, 2022 and 2021:


	Six Months Ended
	September 30, 2022		September 30, 2021
	(In thousands)
Depreciation	$	5,909	$	5,152
Amortization of intangible assets		897		1,091
Capital expenditures		7,731		6,782