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Discontinued Operations | 9 Months Ended
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Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Note 4 — Discontinued Operations On October 1, 2022, the Company entered into an Asset Purchase Agreement to sell certain assets and assign certain liabilities comprising the Link-16 TDL Business (part of the Company's government systems segment) to L3Harris in exchange for approximately $1.96 billion in cash (subject to certain adjustments), on and subject to the terms and conditions set forth therein. In accordance with ASC 205-20, the Company determined that the Link-16 TDL Business met held-for sale and discontinued operations accounting criteria at the end of the second quarter of fiscal year 2023. Accordingly, the Company classified the results of the Link-16 TDL Business as discontinued operations in its condensed consolidated statements of operations for all periods presented. Additionally, the related assets and liabilities associated with the Link-16 TDL Business are classified as held for sale and discontinued operations in the condensed consolidated balance sheets for all periods presented. On January 3, 2023, subsequent to quarter end, the Company completed the Link-16 TDL Sale for cash proceeds of approximately $1.9 billion, net of estimated transaction costs and estimated working capital and other customary adjustments. The Company anticipates recognizing a gain from the sale of the Link-16 TDL Business in the fourth quarter of fiscal year 2023 ranging from $1.5 billion to $1.6 billion net of a preliminary estimate of costs to sell and a preliminary estimate of the fair value of future services to be provided between the Company and L3Harris in connection with the Link-16 TDL Sale (as described below). The Link-16 TDL Sale substantially reduced both debt and net leverage, and allows closer alignment in investment synergies between the Company's government systems segment and its other business segments. In connection with the closing of the Link-16 TDL Sale on January 3, 2023, the Company and L3Harris entered into certain ancillary commercial agreements, including certain license agreements for the cross-licensing by each party of certain intellectual property rights relating to the Link-16 TDL Business and the Company’s retained businesses, a supply agreement with respect to the supply of certain Link-16 and related products following the closing, and certain services agreements for the provision of engineering and support services for the transition of the Link-16 TDL Business following the closing, in each case subject to the terms and conditions set forth therein. The following table presents key components of assets and liabilities that are classified as discontinued operations on the condensed consolidated balance sheets as of December 31, 2022 and March 31, 2022:
|  | As of December 31, 2022 |  |  | As of March 31, 2022 |
|  | (In thousands) |
Accounts receivable, net |  | $ | 45,230 |  |  | $ | 47,097 |
Inventories |  |  | 145,234 |  |  |  | 144,026 |
Prepaid expenses and other current assets |  |  | 9,397 |  |  |  | 6,468 |
Property, equipment, and satellites, net |  |  | 40,740 |  |  |  | 36,921 |
Operating lease right-of-use assets |  |  | 11,336 |  |  |  | 12,837 |
Goodwill |  |  | 21,203 |  |  |  | 21,403 |
Other assets |  |  | 10,264 |  |  |  | 6,350 |
Total assets of discontinued operations |  | $ | 283,404 |  |  | $ | 275,102 |
Accounts payable |  | $ | 21,107 |  |  | $ | 18,415 |
Accrued and other liabilities |  |  | 28,211 |  |  |  | 33,858 |
Non-current operating lease liabilities |  |  | 9,753 |  |  |  | 11,486 |
Other liabilities |  |  | 5,043 |  |  |  | 4,295 |
Total liabilities of discontinued operations |  | $ | 64,114 |  |  | $ | 68,054 |
The operating results of the discontinued operations only reflect revenues and expenses that are directly attributable to the Link-16 TDL Business that will be eliminated from continuing operations. The following table presents key components of “Net income (loss) from discontinued operations, net of tax” for the three and nine months ended December 31, 2022 and 2021:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | December 31, 2022 |  |  | December 31, 2021 |  |  | December 31, 2022 |  |  | December 31, 2021 |
|  | (In thousands) |
Revenues |  | $ | 62,650 |  |  | $ | 94,450 |  |  | $ | 247,069 |  |  | $ | 275,499 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |
Cost of revenues |  |  | 41,995 |  |  |  | 55,889 |  |  |  | 157,355 |  |  |  | 167,311 |
Other operating expenses |  |  | 6,878 |  |  |  | 5,303 |  |  |  | 24,062 |  |  |  | 14,570 |
Net income (loss) from discontinued operations before income taxes |  | $ | 13,777 |  |  | $ | 33,258 |  |  | $ | 65,652 |  |  | $ | 93,618 |
(Provision for) benefit from income taxes |  |  | (9,444 | ) |  |  | (6,805 | ) |  |  | (21,607 | ) |  |  | (18,497 | )
Net income (loss) from discontinued operations, net of tax |  | $ | 4,333 |  |  | $ | 26,453 |  |  | $ | 44,045 |  |  | $ | 75,121 |
The cash flows related to discontinued operations have not been segregated and are included in the condensed consolidated statements of cash flows. The following table presents key cash flow and non-cash information related to discontinued operations for the nine months ended December 31, 2022 and 2021:
|  | Nine Months Ended |
|  | December 31, 2022 |  |  | December 31, 2021 |
|  | (In thousands) |
Depreciation |  | $ | 5,909 |  |  | $ | 7,675 |
Amortization of intangible assets |  |  | 897 |  |  |  | 1,421 |
Capital expenditures |  |  | 10,950 |  |  |  | 8,742 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI https://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 + Details
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