Intangible Assets

6 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Wireless licenses are considered indefinite-lived intangible assets. Indefinite-lived intangible assets are not subject to amortization but instead are tested for impairment annually, or more frequently if an event indicates that the asset might be impaired. There were no impairment charges related to the Company’s indefinite-lived intangible assets during the six months ended September 30, 2023.

Intangible assets consist of the following activity for the six months ended September 30, 2023 (in thousands):


	Wireless Licenses
Balance at March 31, 2023	$	202,044
Acquisitions	8,022
Sale of intangible assets	(31,798)
Exchanges – licenses received	24,146
Exchanges – licenses surrendered	(4,848)
Balance at September 30, 2023	$	197,566

Purchases of intangible assets, including refundable deposits

During the six months ended September 30, 2023 and 2022, the Company entered into agreements with several third parties in multiple U.S. markets to acquire, retune or swap wireless licenses for cash consideration (“deals”) and made Anti-Windfall Payments to the U.S. Treasury Department. The initial deposits to incumbents are recorded as prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets and are refundable if the FCC does not approve the sale, retuning or swap of the spectrum. The initial deposits are transferred to other assets or intangible assets in the Company’s Consolidated Balance Sheets, as applicable, upon meeting the relevant deal milestones. The final payments related to closed retuning or swap deals are recorded as other assets on the Company’s Consolidated Balance Sheets. The final payments for license purchases or Anti-Windfall Payments are recorded as intangible assets on the Company’s Consolidated Balance Sheets.

The purchases of intangible assets, including refundable deposits, consisted of the following activity during the six months ended September 30, 2023 and 2022 (in thousands):


	2023		2022
Refundable deposits	$	1,613	$	2,665
Retuning cost and Swaps	442		3,815
Purchases and Anti-Windfall Payments	8,022		4,748
Total	$	10,077	$	11,228

Broadband License Exchanges

During the six months ended September 30, 2023, the Company was granted by the FCC, broadband licenses for 14 counties. The Company recorded the new broadband licenses at their estimated accounting cost basis of approximately $24.1 million. In connection with receiving the broadband licenses, the Company disposed of $4.8 million, related to the value ascribed to the narrowband licenses it relinquished to the FCC for the same 14 counties. The total carrying value of narrowband licenses included the cost to acquire the original narrowband licenses, Anti-Windfall Payments paid to cover the shortfall in each county and the clearing costs. As a result of the exchange of narrowband licenses for broadband licenses, the Company recorded a gain on disposal of intangible assets of $8.5 million and $19.3 million, for the three and six months ended September 30, 2023, respectively.

During the six months ended September 30, 2022, the Company was granted by the FCC, broadband licenses for 45 counties. The Company recorded the new broadband licenses at their estimated accounting cost basis of approximately $4.9 million. In connection with receiving the broadband licenses, the Company disposed of $1.3 million, related to the value ascribed to the narrowband licenses it relinquished to the FCC for the same 45 counties. The total carrying value of narrowband licenses included the cost to acquire the original narrowband licenses, Anti-Windfall Payments paid to cover the shortfall in each county and the clearing costs. As a result of the exchange of narrowband licenses for broadband licenses, the Company recorded a gain on disposal of intangible assets of $2.9 million and $3.6 million, for the three and six months ended September 30, 2022, respectively.

Broadband License Sale

During the six months ended September 30, 2023, the Company transferred to SDG&E the San Diego County broadband license for total cumulative payments of $44.0 million net of delivery delay adjustments of $1.1 million. As a result, the Company recognized a reduction in intangible assets of $31.8 million and recorded a $7.3 million gain on sale of intangible assets on the Company’s Consolidated Statements of Operations for the three and six months ended September 30, 2023.

As part of the SDG&E Agreement, SDG&E has an option to pursue additional spectrum with the Company. In accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, the Company recorded a $4.9 million deferred gain on sale of intangible assets on the Company’s Consolidated Balance Sheets as of September 30, 2023, related to this option, which expires in September 2028.