Segment Information

12 Months Ended

Mar. 31, 2019

Note 14 — 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 residential customers, customers accessing our services via our Community and Urban Wi-Fi hotspot distribution channels, 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, 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 fiscal years ended March 31, 2019, March 31, 2018 and March 31, 2017 were as follows:

	Fiscal Years Ended
	March 31, 2019			March 31, 2018			March 31, 2017
	(In thousands)
Revenues:
Satellite services
Product (1)	$	—		$	664		$	27,711
Service		684,205			588,623			601,936
Total		684,205			589,287			629,647
Commercial networks
Product		383,547			198,034			211,458
Service		44,857			35,187			33,149
Total		428,404			233,221			244,607
Government systems
Product		709,144			556,849			474,767
Service		246,505			215,268			210,316
Total		955,649			772,117			685,083
Elimination of intersegment revenues		—			—			—
Total revenues	$	2,068,258		$	1,594,625		$	1,559,337
Operating profits (losses):
Satellite services (1)	$	(64,321	)	$	12,018		$	131,085
Commercial networks		(166,613	)		(229,105	)		(180,496	)
Government systems (2)		179,969			137,131			96,658
Elimination of intersegment operating profits		—			—			—
Segment operating (loss) profit before corporate and amortization of acquired intangible assets		(50,965	)		(79,956	)		47,247
Corporate		—			—			—
Amortization of acquired intangible assets		(9,655	)		(12,231	)		(10,788	)
(Loss) income from operations	$	(60,620	)	$	(92,187	)	$	36,459

(1)

Product revenues and operating profits in the satellite services segment included $26.8 million for the fiscal year ended March 31, 2017, relating to amounts realized under the Company’s settlement agreement entered into in fiscal year 2015 with SS/L and its former parent company Loral. 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.

(2)

Operating profits for the government systems segment reflected $11.8 million of SG&A expenses for the fiscal year ended March 31, 2017, relating to uncharacterized damages and penalties in connection with the False Claims Act civil investigation related to the Company’s 52% majority-owned subsidiary TrellisWare. In the fourth quarter of fiscal year 2018, the TrellisWare investigation was settled and the accrued amount of loss contingency was paid out in full. See Note 12.

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 March 31, 2019 and March 31, 2018 were as follows:

	As of March 31, 2019		As of March 31, 2018
	(In thousands)
Segment assets:
Satellite services	$	85,907	$	66,830
Commercial networks		183,200		211,447
Government systems		408,422		337,451
Total segment assets		677,529		615,728
Corporate assets		3,237,758		2,798,381
Total assets	$	3,915,287	$	3,414,109

Other acquired intangible assets, net and goodwill included in segment assets as of March 31, 2019 and 2018 were as follows:

	Other Acquired Intangible Assets, Net				Goodwill
	As of March 31, 2019		As of March 31, 2018		As of March 31, 2019		As of March 31, 2018
	(In thousands)
Satellite services	$	10,453	$	16,580	$	13,617	$	13,991
Commercial networks		1,798		3,340		43,933		44,011
Government systems		10,050		11,942		64,169		63,083
Total	$	22,301	$	31,862	$	121,719	$	121,085

Amortization of acquired intangible assets by segment for the fiscal years ended March 31, 2019, March 31, 2018 and March 31, 2017 was as follows:

	Fiscal Years Ended
	March 31, 2019		March 31, 2018		March 31, 2017
	(In thousands)
Satellite services	$	4,857	$	7,622	$	5,866
Commercial networks		1,542		1,563		1,679
Government systems		3,256		3,046		3,243
Total amortization of acquired intangible assets	$	9,655	$	12,231	$	10,788

Revenue information by geographic area for the fiscal years ended March 31, 2019, March 31, 2018 and March 31, 2017 was as follows:

	Fiscal Years Ended
	March 31, 2019		March 31, 2018		March 31, 2017
	(In thousands)
U.S. customers	$	1,836,304	$	1,403,473	$	1,352,002
Non U.S. customers (each country individually insignificant)		231,954		191,152		207,335
Total revenues	$	2,068,258	$	1,594,625	$	1,559,337

The Company distinguishes revenues from external customers by geographic area based on customer location.

The net book value of long-lived assets located outside the United States was $70.4 million at March 31, 2019 and $53.4 million at March 31, 2018.