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Leases
12 Months Ended
Mar. 31, 2023
Leases [Abstract]  
Leases

Note 7 — Leases

The Company’s operating leases consist primarily of leases for office space, data centers and satellite ground facilities and have remaining terms from less than one year to 10 years, some of which include renewal options, and some of which include options to terminate the leases within one year. Certain earth station leases have renewal terms that have been deemed to be reasonably certain to be exercised and as such have been recognized as part of the Company’s right-of-use assets and lease liabilities. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. In accordance with ASC 842, the Company reports operating lease right-of-use assets in operating lease right-of-use assets and the current and non-current portions of its operating lease liabilities in accrued and other liabilities and non-current operating lease liabilities, respectively.

The Company’s finance leases consist primarily of satellite lifetime Ka-band capacity leases and have remaining terms from less than one year to three years. The Company reports assets obtained under finance leases in property, equipment and satellites, net and the current and non-current portions of its finance lease liabilities in current portion of long-term debt and other long-term debt, respectively.

During the fourth quarter of fiscal year 2023, after the completion of the Link-16 TDL Sale, the Company reduced its real estate footprint as part of cost-reduction measures taken in order to right-size the Company’s remaining businesses. As a result, the Company recorded an impairment of right-of-use assets of $19.1 million and an impairment of leasehold improvements and furniture and fixtures of an insignificant amount, taking into consideration the current and anticipated future market conditions for sublease income in the markets the leases are located, recorded in the consolidated statements of operations in selling, general and administrative expenses spread across each of the Company's segments.

The components of the Company's lease costs, weighted average lease terms and discount rates are presented in the tables below:

 

 

 

Fiscal Years Ended

 

 

 

March 31, 2023

 

 

March 31, 2022

 

 

March 31, 2021

 

 

 

(In thousands)

 

Lease cost:

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

87,627

 

 

$

68,822

 

 

$

63,576

 

Finance lease cost:

 

 

 

 

 

 

 

 

 

Depreciation of assets obtained under finance leases

 

 

11,947

 

 

 

11,961

 

 

 

13,656

 

Interest on lease liabilities

 

 

2,441

 

 

 

2,749

 

 

 

3,314

 

Short-term lease cost

 

 

14,410

 

 

 

10,514

 

 

 

5,618

 

Variable lease cost

 

 

15,261

 

 

 

8,752

 

 

 

7,176

 

Net lease cost

 

$

131,686

 

 

$

102,798

 

 

$

93,340

 

 

 

 

As of

 

 

As of

 

 

As of

 

 

 

March 31, 2023

 

 

March 31, 2022

 

 

March 31, 2021

 

Lease term and discount rate:

 

 

 

 

 

 

 

 

 

Weighted average remaining lease term (in years):

 

 

 

 

 

 

 

 

 

Operating leases

 

 

6.3

 

 

 

7.0

 

 

 

7.4

 

Finance leases

 

3.4

 

 

4.4

 

 

 

5.3

 

 

 

 

 

 

 

 

 

 

 

Weighted average discount rate:

 

 

 

 

 

 

 

 

 

Operating leases

 

 

5.7

%

 

 

5.4

%

 

 

5.4

%

Finance leases

 

 

6.3

%

 

 

5.4

%

 

 

5.4

%

 

The following table details components of the consolidated statements of cash flows for operating and finance leases:

 

 

 

Fiscal Years Ended

 

 

 

March 31, 2023

 

 

March 31, 2022

 

 

March 31, 2021

 

 

 

(In thousands)

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

69,595

 

 

$

68,763

 

 

$

63,167

 

Operating cash flows from finance leases

 

 

2,449

 

 

 

3,024

 

 

 

3,108

 

Financing cash flows from finance leases

 

 

11,572

 

 

 

10,749

 

 

 

10,900

 

 

 

 

 

 

 

 

 

 

 

Right-of-use assets obtained in exchange for lease liabilities:

 

 

 

 

 

 

 

 

 

Operating leases

 

$

9,817

 

 

$

61,599

 

 

$

66,162

 

Finance leases

 

 

2,232

 

 

 

 

 

 

2,076

 

 

 

The following table presents maturities of the Company’s lease liabilities as of March 31, 2023:

 

 

 

Operating Leases

 

 

Finance Leases

 

 

 

(In thousands)

 

Expected for fiscal year 2024

 

$

67,803

 

 

$

13,230

 

Expected for fiscal year 2025

 

 

64,508

 

 

 

12,000

 

Expected for fiscal year 2026

 

 

61,466

 

 

 

12,000

 

Expected for fiscal year 2027

 

 

58,239

 

 

 

3,000

 

Expected for fiscal year 2028

 

 

50,820

 

 

 

 

Thereafter

 

 

83,618

 

 

 

 

Total future lease payments required

 

 

386,454

 

 

 

40,230

 

Less: interest

 

 

62,809

 

 

 

3,825

 

Total

 

$

323,645

 

 

$

36,405

 

 

As of March 31, 2023, the Company had $56.1 million of additional lease commitments with lease terms of three to sixteen years.