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 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.

On January 3, 2023, subsequent to quarter end, the Company completed the Link-16 TDL Sale for cash proceeds of approximately $1.9 billion, net of estimated transaction costs and estimated working capital and other customary adjustments. The Company anticipates recognizing a gain from the sale of the Link-16 TDL Business in the fourth quarter of fiscal year 2023 ranging from $1.5 billion to $1.6 billion net of a preliminary estimate of costs to sell and a preliminary estimate of the fair value of future services to be provided between the Company and L3Harris in connection with the Link-16 TDL Sale (as described below).

The Link-16 TDL Sale substantially reduced both debt and net leverage, and allows closer alignment in investment synergies between the Company's government systems segment and its other business segments.

In connection with the closing of the Link-16 TDL Sale on January 3, 2023, the Company and L3Harris entered into certain ancillary commercial agreements, including certain license agreements 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, a supply agreement with respect to the supply of certain Link-16 and related products following the closing, and certain services agreements for the provision of engineering and support services for 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 December 31, 2022 and March 31, 2022:


	As of December 31, 2022		As of March 31, 2022
	(In thousands)
Accounts receivable, net	$	45,230	$	47,097
Inventories		145,234		144,026
Prepaid expenses and other current assets		9,397		6,468
Property, equipment, and satellites, net		40,740		36,921
Operating lease right-of-use assets		11,336		12,837
Goodwill		21,203		21,403
Other assets		10,264		6,350
Total assets of discontinued operations	$	283,404	$	275,102

Accounts payable	$	21,107	$	18,415
Accrued and other liabilities		28,211		33,858
Non-current operating lease liabilities		9,753		11,486
Other liabilities		5,043		4,295
Total liabilities of discontinued operations	$	64,114	$	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 nine months ended December 31, 2022 and 2021:


	Three Months Ended						Nine Months Ended
	December 31, 2022			December 31, 2021			December 31, 2022			December 31, 2021
	(In thousands)
Revenues	$	62,650		$	94,450		$	247,069		$	275,499
Operating expenses:
Cost of revenues		41,995			55,889			157,355			167,311
Other operating expenses		6,878			5,303			24,062			14,570
Net income (loss) from discontinued operations before income taxes	$	13,777		$	33,258		$	65,652		$	93,618
(Provision for) benefit from income taxes		(9,444	)		(6,805	)		(21,607	)		(18,497	)
Net income (loss) from discontinued operations, net of tax	$	4,333		$	26,453		$	44,045		$	75,121

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 nine months ended December 31, 2022 and 2021:


	Nine Months Ended
	December 31, 2022		December 31, 2021
	(In thousands)
Depreciation	$	5,909	$	7,675
Amortization of intangible assets		897		1,421
Capital expenditures		10,950		8,742