Note 11 — Segment Information

The Company’s reporting segments, comprised of the satellite services, commercial networks and government systems segments, are primarily distinguished by the type of customer and the related contractual requirements. The Company’s satellite services segment provides satellite-based broadband and related services to consumers, enterprises, commercial airlines and mobile broadband customers. The Company’s commercial networks segment develops and offers advanced satellite and wireless broadband platforms, ground networking equipment, radio frequency and advanced microwave solutions, ASIC chip design, satellite payload development and space-to-earth connectivity systems, some of which are ultimately used by the Company’s satellite services segment. The Company’s government systems segment provides global mobile broadband services to military and government users and develops and offers network-centric, internet protocol (IP)-based fixed and mobile secure communications products and solutions. The more regulated government environment is subject to unique contractual requirements and possesses economic characteristics which differ from the satellite services and commercial networks segments. The Company’s segments are determined consistent with the way management currently organizes and evaluates financial information internally for making operating decisions and assessing performance.

Segment revenues and operating profits (losses) for the three and six months ended September 30, 2017 and 2016 were as follows:


	Three Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
	(In thousands)
Revenues:
Satellite services
Product (1)	$	214		$	6,782		$	431		$	13,467
Service		147,364			149,502			299,361			295,210

Total		147,578			156,284			299,792			308,677
Commercial networks
Product		47,347			58,445			83,830			117,041
Service		8,922			7,018			17,687			13,975

Total		56,269			65,463			101,517			131,016
Government systems
Product		134,222			122,008			263,640			217,403
Service		55,005			55,403			108,169			105,192

Total		189,227			177,411			371,809			322,595
Elimination of intersegment revenues		—			—			—			—

Total revenues	$	393,074		$	399,158		$	773,118		$	762,288

Operating profits (losses):
Satellite services (1)	$	12,616		$	32,550		$	31,459		$	63,417
Commercial networks		(59,377	)		(40,868	)		(125,502	)		(79,399	)
Government systems		34,221			29,009			66,813			46,964
Elimination of intersegment operating profits		—			—			—			—

Segment operating (loss) profit before corporate and amortization of acquired intangible assets		(12,540	)		20,691			(27,230	)		30,982
Corporate		—			—			—			—
Amortization of acquired intangible assets		(3,320	)		(2,277	)		(6,580	)		(4,790	)

(Loss) income from operations	$	(15,860	)	$	18,414		$	(33,810	)	$	26,192

(1)

Product revenues and operating profits in the satellite services segment for the three and six months ended September 30, 2016 included $6.6 million and $13.2 million, respectively, relating to amounts realized under the Company’s settlement agreement entered into in fiscal year 2015 with Space Systems/Loral, Inc. and its former parent company Loral Space & Communications, Inc. As of March 31, 2017, all payments pursuant to this settlement agreement had been recorded and no further impacts to the Company’s consolidated financial statements are anticipated related to this settlement agreement.

Assets identifiable to segments include: accounts receivable, unbilled accounts receivable, inventory, acquired intangible assets and goodwill. The Company’s property and equipment, including its satellites, earth stations and other networking equipment, are assigned to corporate assets as they are available for use by the various segments throughout their estimated useful lives. Segment assets as of September 30, 2017 and March 31, 2017 were as follows:


	As of September 30, 2017		As of March 31, 2017
	(In thousands)
Segment assets:
Satellite services	$	74,234	$	81,728
Commercial networks		192,563		179,992
Government systems		322,467		326,242

Total segment assets		589,264		587,962
Corporate assets		2,698,957		2,366,691

Total assets	$	3,288,221	$	2,954,653

Other acquired intangible assets, net and goodwill included in segment assets as of September 30, 2017 and March 31, 2017 were as follows:


	Other Acquired Intangible Assets, Net				Goodwill
	As of September 30, 2017		As of March 31, 2017		As of September 30, 2017		As of March 31, 2017
	(In thousands)
Satellite services	$	19,238	$	21,843	$	13,814	$	13,579
Commercial networks		4,111		4,903		43,981		43,930
Government systems		13,447		14,931		62,797		62,367

Total	$	36,796	$	41,677	$	120,592	$	119,876

Amortization of acquired intangible assets by segment for the three and six months ended September 30, 2017 and 2016 was as follows:


	Three Months Ended				Six Months Ended
	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
	(In thousands)
Satellite services	$	2,173	$	1,105	$	4,267	$	2,209
Commercial networks		386		411		792		856
Government systems		761		761		1,521		1,725

Total amortization of acquired intangible assets	$	3,320	$	2,277	$	6,580	$	4,790