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 nine months ended December 31, 2017 and 2016 were as follows:


	Three Months Ended						Nine Months Ended
	December 31, 2017			December 31, 2016			December 31, 2017			December 31, 2016
	(In thousands)
Revenues:
Satellite services
Product (1)	$	233		$	7,114		$	664		$	20,581
Service		144,310			152,978			443,671			448,188

Total		144,543			160,092			444,335			468,769
Commercial networks
Product		47,073			46,878			130,903			163,919
Service		8,463			7,633			26,150			21,608

Total		55,536			54,511			157,053			185,527
Government systems
Product		128,651			115,582			392,291			332,985
Service		53,107			50,445			161,276			155,637

Total		181,758			166,027			553,567			488,622
Elimination of intersegment revenues		—			—			—			—

Total revenues	$	381,837		$	380,630		$	1,154,955		$	1,142,918

Operating profits (losses):
Satellite services (1)	$	1,681		$	34,846		$	33,140		$	98,263
Commercial networks		(53,505	)		(48,598	)		(179,007	)		(127,997	)
Government systems		29,675			24,118			96,488			71,082
Elimination of intersegment operating profits		—			—			—			—

Segment operating (loss) profit before corporate and amortization of acquired intangible assets		(22,149	)		10,366			(49,379	)		41,348
Corporate		—			—			—			—
Amortization of acquired intangible assets		(3,177	)		(2,775	)		(9,757	)		(7,565	)

(Loss) income from operations	$	(25,326	)	$	7,591		$	(59,136	)	$	33,783

(1)

Product revenues and operating profits in the satellite services segment for the three and nine months ended December 31, 2016 included $6.8 million and $20.0 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 December 31, 2017 and March 31, 2017 were as follows:


	As of December 31, 2017		As of March 31, 2017
	(In thousands)
Segment assets:
Satellite services	$	69,884	$	81,728
Commercial networks		181,229		179,992
Government systems		312,432		326,242

Total segment assets		563,545		587,962
Corporate assets		2,752,062		2,366,691

Total assets	$	3,315,607	$	2,954,653

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


	Other Acquired Intangible Assets, Net				Goodwill
	As of December 31, 2017		As of March 31, 2017		As of December 31, 2017		As of March 31, 2017
	(In thousands)
Satellite services	$	17,449	$	21,843	$	13,876	$	13,579
Commercial networks		3,725		4,903		43,969		43,930
Government systems		12,688		14,931		62,837		62,367

Total	$	33,862	$	41,677	$	120,682	$	119,876

Amortization of acquired intangible assets by segment for the three and nine months ended December 31, 2017 and 2016 was as follows:


	Three Months Ended				Nine Months Ended
	December 31, 2017		December 31, 2016		December 31, 2017		December 31, 2016
	(In thousands)
Satellite services	$	2,031	$	1,605	$	6,297	$	3,814
Commercial networks		385		411		1,178		1,267
Government systems		761		759		2,282		2,484

Total amortization of acquired intangible assets	$	3,177	$	2,775	$	9,757	$	7,565