Leases

12 Months Ended

Mar. 31, 2024

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 that typically range from less than one year to 14 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. The Company recognizes right-of-use assets and lease liabilities for such leases 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 one year to approximately 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, 2024		March 31, 2023		March 31, 2022
	(In thousands)
Lease cost:
Operating lease cost	$	105,365	$	87,627	$	68,822
Finance lease cost:
Depreciation of assets obtained under finance leases		11,824		11,947		11,961
Interest on lease liabilities		2,018		2,441		2,749
Short-term lease cost		13,990		14,410		10,514
Variable lease cost		13,214		15,261		8,752
Net lease cost	$	146,411	$	131,686	$	102,798


	As of			As of			As of
	March 31, 2024			March 31, 2023			March 31, 2022
Lease term and discount rate:
Weighted average remaining lease term (in years):
Operating leases		7.3			6.3			7.0
Finance leases	2.4			3.4				4.4

Weighted average discount rate:
Operating leases		6.2	%		5.7	%		5.4	%
Finance leases		6.3	%		6.3	%		5.4	%

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


	Fiscal Years Ended
	March 31, 2024		March 31, 2023		March 31, 2022
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	93,350	$	69,595	$	68,763
Operating cash flows from finance leases		2,074		2,449		3,024
Financing cash flows from finance leases		11,941		11,572		10,749

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	29,035	$	9,817	$	61,599
Finance leases		1,946		2,232		—

The following table presents maturities of the Company’s lease liabilities as of March 31, 2024:


	Operating Leases		Finance Leases
	(In thousands)
Expected for fiscal year 2025	$	93,650	$	13,549
Expected for fiscal year 2026		80,699		12,085
Expected for fiscal year 2027		76,013		3,031
Expected for fiscal year 2028		68,061		32
Expected for fiscal year 2029		64,977		14
Thereafter		191,140		—
Total future lease payments required		574,540		28,711
Less: interest		123,335		1,940
Total	$	451,205	$	26,771

As of March 31, 2024, the Company had $399.0 million of additional lease commitments with lease terms of four to fifteen years.