VIASAT: MANAGEMENT REPORT AND ANALYSIS OF THE FINANCIAL POSITION AND OPERATING RESULTS (Form 10-K)

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Company presentation

We are an innovator in communications technologies and services, focused on
making connectivity accessible, available and secure for all. Our end-to-end
platform of high-capacity Ka-band satellites, ground infrastructure and user
terminals enables us to provide cost-effective, high-speed, high-quality
broadband solutions to enterprises, consumers and government users around the
globe, whether on the ground, in the air or at sea. In addition, our government
business includes a market-leading portfolio of military tactical data link
systems, satellite communication products and services and cybersecurity and
information assurance products and services. Our product, system and service
offerings are often linked through common underlying technologies, customer
applications and market relationships. We believe that our portfolio of products
and services, combined with our vertical integration strategy and ability to
effectively cross-deploy technologies between government and commercial
applications and segments as well as across different geographic markets,
provides us with a strong foundation to sustain and enhance our leadership in
advanced communications and networking technologies.

We operate in three segments: satellite services, commercial networks and government systems.

Acquisitions

On April 30, 2021, subsequent to fiscal year end, we purchased the remaining 51%
interest in Euro Infrastructure Co. from Eutelsat for approximately €142.6
million, or approximately $172.7 million (subject to customary post-closing net
working capital and net debt adjustments). The purchase price was funded with
available cash, resulting in a cash outlay of approximately €41.6 million, or
$50.4 million, net of approximately €101.0 million, or $122.3 million, of Euro
Infrastructure Co.'s cash on hand.

On April 30, 2021, subsequent to fiscal year end, we acquired RigNet in exchange
for the issuance of approximately 4.0 million shares of our common stock and a
de minimis amount of cash in respect of fractional shares. RigNet is a leading
provider of ultra-secure, intelligent networking solutions and specialized
applications.

Given the timing of the closing of these acquisitions, we are currently in the
process of valuing the assets acquired and liabilities assumed in each of the
business combinations. Therefore, we are not yet able to provide the amounts to
be recognized for the major classes of assets acquired and liabilities assumed
and other disclosures required by ASC 805, Business Combinations. We will
disclose this and other related information in our Quarterly Report on Form 10-Q
for the quarter ending June 30, 2021.

Private placement

During the second quarter of fiscal year 2021, we issued and sold an aggregate
of 4,474,559 shares of our common stock at a purchase price of $39.11 per share
to certain accredited investors in a private placement transaction exempt from
registration under the Securities Act of 1933, as amended, resulting in net
proceeds of approximately $174.7 million after deducting offering expenses.

COVID-19[female[feminine

In March 2020, the global outbreak of COVID-19 was declared a pandemic by the
World Health Organization and a national emergency by the U.S. Government. The
COVID-19 pandemic and attempts to contain it, such as mandatory closures,
"shelter-in-place" orders and travel restrictions, have caused significant
disruptions and adverse effects on U.S. and global economies, including impacts
to supply chains, customer demand and financial markets. We have taken measures
to protect the health and safety of our employees and to work with our
customers, employees, suppliers, subcontractors, distributors, resellers and
communities to address the disruptions from the pandemic. Although our financial
results for the year ended March 31, 2021 were impacted by the pandemic, the
impact was not material to our financial position, results of operations or cash
flows in such period, with negative impacts particularly in our commercial
aviation business offset by strong demand in our fixed broadband services
business and other parts of our business. We continue to expect our diversified
businesses to provide resiliency as we enter fiscal year 2022.

Our government systems segment, which represented 47% and 49% of our total
revenues during fiscal years 2021 and 2020, respectively, continued to perform
in line with our expectations. Demand for products and services in our
government systems segment remained strong despite the evolving COVID-19
pandemic, although our government business experienced some administrative
delays on certain contractual vehicles as government customers continue to
adjust to the challenges inherent in the remote work environment resulting from
the COVID-19 pandemic.

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During fiscal year 2021, through the COVID-19 pandemic, we experienced increased
demand for our premium high-speed plans in our fixed broadband services
business, reflecting customers' increased bandwidth needs in a remote
working/distance schooling environment. However, the pandemic also caused a
severe decline in global air traffic during fiscal year 2021, which reduced
demand for our in-flight services and IFC systems in our satellite services and
commercial networks segments, respectively. While current global airline traffic
is still a fraction of the activity in fiscal year 2020, domestic airline
traffic is showing signs of improvement. As a result, our in-flight services
business showed modest improvement in the quarter ended March 31, 2021 compared
to the quarter ended December 31, 2020 with increased planes in service and
passenger volumes. We expect to continue to see negative impacts on revenues and
operating cash flows from our IFC businesses in fiscal year 2022 and potentially
beyond, but for the effects to continue to lessen over time with increases in
passenger air traffic and the return to service of additional currently inactive
aircraft. In each of fiscal years 2021 and 2020, less than 10% of our total
revenues were generated by services and products provided to commercial airlines
reported in our satellite services and commercial networks segments.

The extent of the impact of the COVID-19 pandemic on our business in fiscal year
2022 and potentially beyond will depend on many factors, including the duration
and scope of the public health emergency, the extent, duration and effectiveness
of containment actions taken, the speed and extent of vaccination programs, the
extent of disruption to important global, regional and local supply chains and
economic markets, and the impact of the pandemic on overall supply and demand,
global air travel, consumer confidence, discretionary spending levels and levels
of economic activity.

Satellite Services

Our satellite services segment uses our proprietary technology platform to
provide satellite-based high-speed broadband services around the globe for use
in commercial applications. Our proprietary Ka-band satellites are at the core
of our technology platform. The primary services offered by our satellite
services segment are comprised of:

• Fixed broadband services, which provide consumers and businesses with

high-speed Internet access and high-quality VoIP services,

mainly in United States but also in various countries Europe and

Latin America. From March 31, 2021, we provided fixed broadband services

to about 590,000 we the subscribers.

• In-flight services, which provide advanced IFC, W-IFE and aeronautical services

software services. From March 31, 2021, our IFC systems have been installed

and in service on approximately 1,480 commercial aircraft, of which,

to the impacts of the COVID-19 pandemic, approximately 200 were inactive at

end of the fiscal year. We expect approximately 1190

commercial aircraft under existing customer agreements with

airlines will be put into service with our IFC systems. However, the

the timing of installation and commissioning of additional aircraft

under existing customer agreements may be delayed due to the impacts of COVID-19.

In addition, due to the nature of commercial airline contracts, it may

does not guarantee that the planned IFC services will be activated on all

these additional commercial aircraft. See section titled “COVID-19”

        above for a discussion of the impact of the COVID-19 pandemic on our
        in-flight services business.


    •   Community Internet services, which offer innovative, affordable,

satellite connectivity in communities with little or no other means

Internet access. Services help foster digital inclusion by enabling

millions of people to connect to affordable high quality internet services

via a centralized community hotspot connected to the Internet via

Satellite. Our community Internet services are currently offered in

Mexico, and we test the services before full commercial launch

in other countries, including Brazil, Guatemala and Nigeria.

• Other mobile broadband services, which include satellite broadband

Internet services to seagoing vessels (such as offshore energy vessels,

cruise ships, ferries and consumer yachts), as well as the managed L-band

services allowing machine-to-machine (M2M) position monitoring in real time,

remote asset and operations management, and visibility into

supply chain areas.

• Advanced software and communications infrastructure services, which include

ultra-secure solutions covering global IP connectivity,

bandwidth optimized over-the-top applications, industrial

Enabling Big Data of the Internet of Things and Industry-Leading Machine

learning analysis. These services support the complete evolution of digital

activation, and mainly result from our subsequent acquisition of RigNet

until the end of the exercise.


The assets and results of operations of Euro Infrastructure Co. and RigNet,
which were acquired subsequent to fiscal year end (see discussion above), will
primarily be included in our satellite services segment (with insignificant
amounts included in our commercial networks segment), commencing with the first
quarter of fiscal year 2022.

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Commercial networks

Our commercial networks segment develops and sells a wide array of advanced
satellite and wireless products, antenna systems and terminal solutions that
support or enable the provision of high-speed fixed and mobile broadband
services. The primary products, systems, solutions and services offered by our
commercial networks segment are comprised of:

• Broadband mobile satellite communication systems, designed for use in

aircraft, seagoing vessels and land mobile systems.

• Broadband fixed satellite communication systems, including next generation

satellite network infrastructure and ground terminals.

• Antenna systems, including advanced land and airborne terminals,

antennas and gateways for terrestrial and satellite customer applications,

        mobile satellite communication, Ka-band earth stations and other
        multi-band antennas.

• Development of satellite networks, including specialized design and

technological services covering all aspects of the satellite communication system

architecture and technology.

• Space systems, including the design and development of

Ka-band satellites and associated payload technologies for our own

fleet of satellites as well as for third parties.

Government systems

Our government systems segment offers a broad array of products and services
designed to enable the collection and transmission of secure real-time digital
information and communications between fixed and mobile command centers,
intelligence and defense platforms and individuals in the field. The primary
products and services of our government systems segment include:

• Government mobile broadband products and services, which provide the military with

and government users with broadband, real-time, broadband and multimedia

        connectivity in key regions of the world, as well as line-of-sight and
        beyond-line-of-sight ISR missions.

• Government satellite communications systems, which provide a range of

Portable, mobile and fixed broadband modems, terminals, network access

        control systems and antenna systems, and include products designed for
        manpacks, aircraft, UAVs, seagoing vessels, ground-mobile vehicles and
        fixed applications.

• Secure networking, cybersecurity and information assurance products

services, which provide advanced and high-speed IP-based “Type 1” services and

HAIPE compliant encryption solutions that enable military and government

users to communicate information securely over networks, and that protect

integrity of data stored on computers and storage devices.

• Tactical data links including our BATS-D Link 16 portable radios, our STT

2-channel radios for piloted and unmanned applications, “disposable”

defense data links and our MIDS and MIDS-JTRS terminals for the military

        fighter jets.


Sources of Revenues

Revenues in our satellite services segment are primarily derived from our fixed broadband and in-flight services.

Revenues in our commercial networks and government systems segments are
primarily derived from three types of contracts: fixed-price, cost-reimbursement
and time-and-materials contracts. Fixed-price contracts (which require us to
provide products and services under a contract at a specified price) comprised
approximately 89%, 88% and 90% of our total revenues for these segments for
fiscal years 2021, 2020 and 2019, respectively. The remainder of our revenues in
these segments for such periods was derived primarily from cost-reimbursement
contracts (under which we are reimbursed for all actual costs incurred in
performing the contract to the extent such costs are within the contract ceiling
and allowable under the terms of the contract, plus a fee or profit) and from
time-and-materials contracts (which reimburse us for the number of labor hours
expended at an established hourly rate negotiated in the contract, plus the cost
of materials utilized in providing such products or services).

Our ability to grow and maintain our revenues in our commercial networks and
government systems segments has to date depended on our ability to identify and
target markets where the customer places a high priority on the technology
solution, and our ability to obtain additional sizable contract awards. Due to
the nature of this process, it is difficult to predict the probability and
timing of obtaining awards in these markets.

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Historically, a significant portion of our revenues in our commercial networks
and government systems segments has been derived from customer contracts that
include the development of products. The development efforts are conducted in
direct response to the customer's specific requirements and, accordingly,
expenditures related to such efforts are included in cost of sales when incurred
and the related funding (which includes a profit component) is included in
revenues. Revenues for our funded development from our customer contracts were
approximately 23%, 24% and 19% of our total revenues during fiscal years 2021,
2020 and 2019, respectively.

We also incur IR&D expenses, which are not directly funded by a third party.
IR&D expenses consist primarily of salaries and other personnel-related
expenses, supplies, prototype materials, testing and certification related to
R&D projects. IR&D expenses were approximately 5%, 6% and 6% of total revenues
in fiscal years 2021, 2020 and 2019, respectively. As a government contractor,
we are able to recover a portion of our IR&D expenses pursuant to our government
contracts.

Approximately 9%, 11% and 11% of our total revenues in fiscal years 2021, 2020
and 2019, respectively, were derived from international sales. Doing business
internationally creates additional risks related to global political and
economic conditions and other factors identified under the heading "Risk
Factors" in Part I, Item 1A and elsewhere in this report.

Accounting policies and critical estimates

Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America (GAAP). The preparation of these financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. We consider the policies
discussed below to be critical to an understanding of our financial statements
because their application places the most significant demands on management's
judgment, with financial reporting results relying on estimation about the
effect of matters that are inherently uncertain. We describe the specific risks
for these critical accounting policies in the following paragraphs. For all of
these policies, we caution that future events rarely develop exactly as
forecast, and even the best estimates routinely require adjustment.

Revenue recognition

We apply the five-step revenue recognition model under Accounting Standards
Update (ASU) 2014-09, Revenue from Contracts with Customers (commonly referred
to as Accounting Standards Codification (ASC) 606) to our contracts with our
customers. Under this model, we (1) identify the contract with the customer, (2)
identify our performance obligations in the contract, (3) determine the
transaction price for the contract, (4) allocate the transaction price to our
performance obligations and (5) recognize revenue when or as we satisfy our
performance obligations. These performance obligations generally include the
purchase of services (including broadband capacity and the leasing of broadband
equipment), the purchase of products, and the development and delivery of
complex equipment built to customer specifications under long-term contracts.

The timing of satisfaction of performance obligations may require judgment. We
derive a substantial portion of our revenues from contracts with customers for
services, primarily consisting of connectivity services. These contracts
typically require advance or recurring monthly payments by the customer. Our
obligation to provide connectivity services is satisfied over time as the
customer simultaneously receives and consumes the benefits provided. The measure
of progress over time is based upon either a period of time (e.g., over the
estimated contractual term) or usage (e.g., bandwidth used/bytes of data
processed). We evaluate whether broadband equipment provided to our customer as
part of the delivery of connectivity services represents a lease in accordance
with ASC 842. As discussed in Note 1 - The Company and a Summary of Its
Significant Accounting Policies - Leases to our consolidated financial
statements, for broadband equipment leased to fixed broadband customers in
conjunction with the delivery of connectivity services, we account for the lease
and non-lease components of connectivity services arrangement as a single
performance obligation as the connectivity services represent the predominant
component.

We also derive a portion of our revenues from contracts with customers to
provide products. Performance obligations to provide products are satisfied at
the point in time when control is transferred to the customer. These contracts
typically require payment by the customer upon passage of control and
determining the point at which control is transferred may require judgment. To
identify the point at which control is transferred to the customer, we consider
indicators that include, but are not limited to, whether (1) we have the present
right to payment for the asset, (2) the customer has legal title to the asset,
(3) physical possession of the asset has been transferred to the customer, (4)
the customer has the significant risks and rewards of ownership of the asset,
and (5) the customer has accepted the asset. For product revenues, control
generally passes to the customer upon delivery of goods to the customer.

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The vast majority of our revenues from long-term contracts to develop and
deliver complex equipment built to customer specifications are derived from
contracts with the U.S. Government (including foreign military sales contracted
through the U.S. Government). Our contracts with the U.S. Government typically
are subject to the Federal Acquisition Regulation (FAR) and are priced based on
estimated or actual costs of producing goods or providing services. The FAR
provides guidance on the types of costs that are allowable in establishing
prices for goods and services provided under U.S. Government contracts. The
pricing for non-U.S. Government contracts is based on the specific negotiations
with each customer. Under the typical payment terms of our U.S. Government
fixed-price contracts, the customer pays us either performance-based payments
(PBPs) or progress payments. PBPs are interim payments based on quantifiable
measures of performance or on the achievement of specified events or milestones.
Progress payments are interim payments based on a percentage of the costs
incurred as the work progresses. Because the customer can often retain a portion
of the contract price until completion of the contract, our U.S. Government
fixed-price contracts generally result in revenue recognized in excess of
billings which we present as unbilled accounts receivable on the balance sheet.
Amounts billed and due from our customers are classified as receivables on the
balance sheet. The portion of the payments retained by the customer until final
contract settlement is not considered a significant financing component because
the intent is to protect the customer. For our U.S. Government cost-type
contracts, the customer generally pays us for our actual costs incurred within a
short period of time. For non-U.S. Government contracts, we typically receive
interim payments as work progresses, although for some contracts, we may be
entitled to receive an advance payment. We recognize a liability for these
advance payments in excess of revenue recognized and present it as collections
in excess of revenues and deferred revenues on the balance sheet. An advance
payment is not typically considered a significant financing component because it
is used to meet working capital demands that can be higher in the early stages
of a contract and to protect us from the other party failing to adequately
complete some or all of its obligations under the contract.



Performance obligations related to developing and delivering complex equipment
built to customer specifications under long-term contracts are recognized over
time as these performance obligations do not create assets with an alternative
use to us and we have an enforceable right to payment for performance to date.
To measure the transfer of control, revenue is recognized based on the extent of
progress towards completion of the performance obligation. The selection of the
method to measure progress towards completion requires judgment and is based on
the nature of the products or services to be provided. We generally use the
cost-to-cost measure of progress for our contracts because that best depicts the
transfer of control to the customer which occurs as we incur costs on our
contracts. Under the cost-to-cost measure of progress, the extent of progress
towards completion is measured based on the ratio of costs incurred to date to
the total estimated costs at completion of the performance obligation.
Estimating the total costs at completion of a performance obligation requires
management to make estimates related to items such as subcontractor performance,
material costs and availability, labor costs and productivity and the costs of
overhead. When estimates of total costs to be incurred on a contract exceed
total estimates of revenue to be earned, a provision for the entire loss on the
contract is recognized in the period the loss is determined. A one percent
variance in our future cost estimates on open fixed-price contracts as of
March 31, 2021 would change our income before income taxes by an insignificant
amount.



The evaluation of transaction price, including the amounts allocated to
performance obligations, may require significant judgments. Due to the nature of
the work required to be performed on many of our performance obligations, the
estimation of total revenue, and where applicable the cost at completion, is
complex, subject to many variables and requires significant judgment. Our
contracts may contain award fees, incentive fees, or other provisions, including
the potential for significant financing components, that can either increase or
decrease the transaction price. These amounts, which are sometimes variable, can
be dictated by performance metrics, program milestones or cost targets, the
timing of payments, and customer discretion. We estimate variable consideration
at the amount to which we expect to be entitled. We include estimated amounts in
the transaction price to the extent it is probable that a significant reversal
of cumulative revenue recognized will not occur when the uncertainty associated
with the variable consideration is resolved. Our estimates of variable
consideration and determination of whether to include estimated amounts in the
transaction price are based largely on an assessment of our anticipated
performance and all information (historical, current and forecasted) that is
reasonably available to us. In the event an agreement includes embedded
financing components, we recognize interest expense or interest income on the
embedded financing components using the effective interest method. This
methodology uses an implied interest rate which reflects the incremental
borrowing rate which would be expected to be obtained in a separate financing
transaction. We have elected the practical expedient not to adjust the promised
amount of consideration for the effects of a significant financing component if
we expect, at contract inception, that the period between when we transfer a
promised good or service to a customer and when the customer pays for that good
or service will be one year or less.

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If a contract is separated into more than one performance obligation, the total
transaction price is allocated to each performance obligation in an amount based
on the estimated relative standalone selling prices of the promised goods or
services underlying each performance obligation. Estimating standalone selling
prices may require judgment. When available, we utilize the observable price of
a good or service when we sell that good or service separately in similar
circumstances and to similar customers. If a standalone selling price is not
directly observable, we estimate the standalone selling price by considering all
information (including market conditions, specific factors, and information
about the customer or class of customer) that is reasonably available.

Deferred charges to obtain or perform a contract

Under ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers, we
recognize an asset from the incremental costs of obtaining a contract with a
customer if we expect to recover those costs. The incremental costs of obtaining
a contract are those costs that we incur to obtain a contract with a customer
that we would not have incurred if the contract had not been obtained. ASC
340-40 also requires the recognition of an asset from the costs incurred to
fulfill a contract when (1) the costs relate directly to a contract or to an
anticipated contract that we can specifically identify, (2) the costs generate
or enhance our resources that will be used in satisfying (or in continuing to
satisfy) performance obligations in the future, and (3) the costs are expected
to be recovered. We recognize an asset related to commission costs incurred
primarily in our satellite services segment and recognize an asset related to
costs incurred to fulfill contracts. Costs to acquire customer contracts are
amortized over the estimated customer contract life. Costs to fulfill customer
contracts are amortized in proportion to the revenue to which the costs relate.
For contracts with an estimated amortization period of less than one year, we
expense incremental costs immediately.

Guarantee reserves

We provide limited warranties on our products for periods of up to five years.
We record a liability for our warranty obligations when we ship the products or
they are included in long-term construction contracts based upon an estimate of
expected warranty costs. Amounts expected to be incurred within 12 months are
classified as accrued liabilities and amounts expected to be incurred beyond 12
months are classified as other liabilities in the consolidated financial
statements. For mature products, we estimate the warranty costs based on
historical experience with the particular product. For newer products that do
not have a history of warranty costs, we base our estimates on our experience
with the technology involved and the types of failures that may occur. It is
possible that our underlying assumptions will not reflect the actual experience,
and, in that case, we will make future adjustments to the recorded warranty
obligation.

Real estate, equipment and satellites

Satellites and other property and equipment are recorded at cost or in the case
of certain satellites and other property acquired, the fair value at the date of
acquisition, net of accumulated depreciation. Capitalized satellite costs
consist primarily of the costs of satellite construction and launch, including
launch insurance and insurance during the period of in-orbit testing, the net
present value of performance incentive payments expected to be payable to the
satellite manufacturers (dependent on the continued satisfactory performance of
the satellites), costs directly associated with the monitoring and support of
satellite construction, and interest costs incurred during the period of
satellite construction. We also construct earth stations, network operations
systems and other assets to support our satellites, and those construction
costs, including interest, are capitalized as incurred. At the time satellites
are placed in service, we estimate the useful life of our satellites for
depreciation purposes based upon an analysis of each satellite's performance
against the original manufacturer's orbital design life, estimated fuel levels
and related consumption rates, as well as historical satellite operating trends.
We periodically review the remaining estimated useful life of our satellites to
determine if revisions to the estimated useful lives are necessary.

We own three satellites in service over North America (ViaSat-2, ViaSat-1 and
WildBlue-1) and, after acquiring the remaining interest in Euro Infrastructure
Co. subsequent to fiscal year end, we also own the KA-SAT satellite over EMEA.
In addition, we have lifetime leases of Ka-band capacity on two satellites. We
also have a global constellation of three third-generation ViaSat-3 class
satellites under construction. In addition, we own related earth stations and
networking equipment for all of our satellites. Property, equipment and
satellites, net also includes the customer premise equipment units leased to
subscribers under a retail leasing program as part of our satellite services
segment.

Leases

For contracts entered into on or after April 1, 2019, we assess at contract
inception whether the contract is, or contains, a lease. Generally, we determine
that a lease exists when (1) the contract involves the use of a distinct
identified asset, (2) we obtain the right to substantially all economic benefits
from use of the asset, and (3) we have the right to direct the use of the asset.
A lease is classified as a finance lease when one or more of the following
criteria are met: (1)

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the lease transfers ownership of the asset by the end of the lease term, (2) the
lease contains an option to purchase the asset that is reasonably certain to be
exercised, (3) the lease term is for a major part of the remaining useful life
of the asset, (4) the present value of the lease payments equals or exceeds
substantially all of the fair value of the asset or (5) the asset is of such a
specialized nature that it is expected to have no alternative use to the lessor
at the end of the lease term. A lease is classified as an operating lease if it
does not meet any of these criteria.

At the lease commencement date, we recognize a right-of-use asset and a lease
liability for all leases, except short-term leases with an original term of 12
months or less. The right-of-use asset represents the right to use the leased
asset for the lease term. The lease liability represents the present value of
the lease payments under the lease. The right-of-use asset is initially measured
at cost, which primarily comprises the initial amount of the lease liability,
less any lease incentives received. All right-of-use assets are periodically
reviewed for impairment in accordance with standards that apply to long-lived
assets. The lease liability is initially measured at the present value of the
lease payments, discounted using an estimate of our incremental borrowing rate
for a collateralized loan with the same term as the underlying leases.

Lease payments included in the measurement of lease liabilities consist of (1)
fixed lease payments for the noncancelable lease term, (2) fixed lease payments
for optional renewal periods where it is reasonably certain the renewal option
will be exercised, and (3) variable lease payments that depend on an underlying
index or rate, based on the index or rate in effect at lease commencement.
Certain of our real estate lease agreements require variable lease payments that
do not depend on an underlying index or rate established at lease commencement.
Such payments and changes in payments based on a rate or index are recognized in
operating expenses when incurred.

Lease expense for operating leases consists of the fixed lease payments
recognized on a straight-line basis over the lease term plus variable lease
payments as incurred. Lease expense for finance leases consists of the
depreciation of assets obtained under finance leases on a straight-line basis
over the lease term and interest expense on the lease liability based on the
discount rate at lease commencement. For both operating and finance leases,
lease payments are allocated between a reduction of the lease liability and
interest expense.

For broadband equipment leased to fixed broadband customers in conjunction with
the delivery of connectivity services, we have made an accounting policy
election not to separate the broadband equipment from the related connectivity
services. The connectivity services are the predominant component of these
arrangements. The connectivity services are accounted for in accordance ASC 606.
We are also a lessor for certain insignificant communications equipment. These
leases meet the criteria for operating lease classification. Lease income
associated with these leases is not material.

Impairment of long-term assets and other long-term assets (property, plant and equipment and satellites, and other assets, including goodwill)

In accordance with the authoritative guidance for impairment or disposal of
long-lived assets (ASC 360), we assess potential impairments to our long-lived
assets, including property, equipment and satellites and other assets, when
there is evidence that events or changes in circumstances indicate that the
carrying value may not be recoverable. We recognize an impairment loss when the
undiscounted cash flows expected to be generated by an asset (or group of
assets) are less than the asset's carrying value. Any required impairment loss
would be measured as the amount by which the asset's carrying value exceeds its
fair value, and would be recorded as a reduction in the carrying value of the
related asset and charged to results of operations. No material impairments were
recorded by us for fiscal years 2021, 2020 and 2019.

We account for our goodwill under the authoritative guidance for goodwill and
other intangible assets (ASC 350) and the provisions of ASU 2017-04, Simplifying
the Test for Goodwill Impairment, which we early adopted in fiscal year 2020.
Current authoritative guidance allows us to first assess qualitative factors to
determine whether it is necessary to perform the quantitative goodwill
impairment test. If, after completing the qualitative assessment, we determine
that it is more likely than not that the estimated fair value is greater than
the carrying value, we conclude that no impairment exists. Alternatively, if we
determine in the qualitative assessment that it is more likely than not that the
fair value is less than its carrying value, then we perform a quantitative
goodwill impairment test to identify both the existence of an impairment and the
amount of impairment loss, by comparing the fair value of the reporting unit
with its carrying amount, including goodwill. If the estimated fair value of the
reporting unit is less than the carrying value, then a goodwill impairment
charge will be recognized in the amount by which the carrying amount exceeds the
fair value, limited to the total amount of goodwill allocated to that reporting
unit. We test goodwill for impairment during the fourth quarter every fiscal
year and when an event occurs or circumstances change such that it is reasonably
possible that an impairment may exist.

In accordance with ASC 350, we assess qualitative factors to determine whether
goodwill is impaired. The qualitative analysis includes assessing the impact of
changes in certain factors including: (1) changes in forecasted operating
results and comparing actual results to projections, (2) changes in the industry
or our competitive environment

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since the acquisition date, (3) changes in the overall economy, our market share
and market interest rates since the acquisition date, (4) trends in the stock
price and related market capitalization and enterprise values, (5) trends in
peer companies' total enterprise value metrics, and (6) additional factors such
as management turnover, changes in regulation and changes in litigation matters.

Based on our qualitative assessment performed in the fourth quarter of fiscal 2021, we concluded that it is more likely than not that the estimated fair value of our reporting units exceeds their carrying amount at
March 31, 2021, and therefore, determined that it was not necessary to perform a quantitative goodwill impairment test.

Income taxes and valuation allowance on deferred tax assets

Management evaluates the realizability of our deferred tax assets and assesses
the need for a valuation allowance on a quarterly basis to determine if the
weight of available evidence suggests that an additional valuation allowance is
needed. In accordance with the authoritative guidance for income taxes (ASC
740), net deferred tax assets are reduced by a valuation allowance if, based on
all the available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. In the event that our estimate of
taxable income is less than that required to utilize the full amount of any
deferred tax asset, a valuation allowance is established, which would cause a
decrease to income in the period such determination is made. Our valuation
allowance against deferred tax assets increased from $42.6 million at March 31,
2020 to $47.1 million at March 31, 2021. The valuation allowance relates to
state and foreign net operating loss carryforwards, state R&D tax credit
carryforwards and foreign tax credit carryforwards.

Our analysis of the need for a valuation allowance on deferred tax assets
considered historical as well as forecasted future operating results. In
addition, our evaluation considered other factors, including our contractual
backlog, our history of positive earnings, current earnings trends assuming our
satellite services segment continues to grow, taxable income adjusted for
certain items, and forecasted income by jurisdiction. We also considered the
period over which these net deferred tax assets can be realized and our history
of not having federal tax loss carryforwards expire unused.

Accruals for uncertain tax positions are provided for in accordance with the
authoritative guidance for accounting for uncertainty in income taxes (ASC 740).
Under the authoritative guidance, we may recognize the tax benefit from an
uncertain tax position only if it is more likely than not that the tax position
will be sustained on examination by the taxing authorities, based on the
technical merits of the position. The tax benefits recognized in the financial
statements from such a position should be measured based on the largest benefit
that has a greater than 50% likelihood of being realized upon ultimate
settlement. The authoritative guidance addresses the derecognition of income tax
assets and liabilities, classification of deferred income tax assets and
liabilities, accounting for interest and penalties associated with tax
positions, and income tax disclosures.

We are subject to income taxes in the United States and numerous foreign
jurisdictions. In the ordinary course of business, there are calculations and
transactions where the ultimate tax determination is uncertain. In addition,
changes in tax laws and regulations as well as adverse judicial rulings could
adversely affect the income tax provision. We believe we have adequately
provided for income tax issues not yet resolved with federal, state and foreign
tax authorities. However, if these provided amounts prove to be more than what
is necessary, the reversal of the reserves would result in tax benefits being
recognized in the period in which we determine that provision for the
liabilities is no longer necessary. If an ultimate tax assessment exceeds our
estimate of tax liabilities, an additional charge to expense would result.

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Results of operations

The following table presents, as a percentage of total revenue, the income statement data for the periods indicated:


                                                               Fiscal Years Ended
                                                  March 31,        March 31,        March 31,
                                                     2021             2020             2019
Revenues:                                               100.0 %          100.0 %          100.0 %
Product revenues                                           46               51               53
Service revenues                                           54               49               47
Operating expenses:
Cost of product revenues                                   34               37               40
Cost of service revenues                                   35               33               34
Selling, general and administrative                        23               23               22
Independent research and development                        5                6                6
Amortization of acquired intangible assets                  -                -                -
Income (loss) from operations                               3                2               (3 )
Interest expense, net                                      (1 )             (2 )             (2 )
Income (loss) before income taxes                           1                -               (5 )
(Provision for) benefit from income taxes                  (- )              -                2
Net income (loss)                                           1                1               (3 )
Net income (loss) attributable to Viasat, Inc.              -                -               (3 )



Fiscal year 2021 compared to fiscal 2020

Revenues



                                             Fiscal Years Ended            Dollar         Percentage
                                          March 31,      March 31,        Increase         Increase
(In millions, except percentages)            2021           2020         (Decrease)       (Decrease)
Product revenues                          $  1,044.5     $  1,172.5     $     (128.1 )            (11 )%
Service revenues                             1,211.7        1,136.7             75.0                7 %
Total revenues                            $  2,256.1     $  2,309.2     $      (53.1 )             (2 )%




Our total revenues decreased by $53.1 million as a result of a $128.1 million
decrease in product revenues, partially offset by a $75.0 million increase in
service revenues. The product revenue decrease was driven primarily by decreases
of $107.0 million in our government systems segment and $21.1 million in our
commercial networks segment. The service revenue increase was due to increases
of $42.4 million in our satellite services segment and $35.2 million in our
government systems segment, partially offset by a $2.6 million decrease in our
commercial networks segment.

Cost of revenues



                                             Fiscal Years Ended            Dollar         Percentage
                                          March 31,      March 31,        Increase         Increase
(In millions, except percentages)            2021           2020         (Decrease)       (Decrease)
Cost of product revenues                  $    774.9     $    845.8     $      (70.9 )             (8 )%
Cost of service revenues                       789.4          763.9             25.5                3 %
Total cost of revenues                    $  1,564.3     $  1,609.7     $      (45.4 )             (3 )%




Cost of revenues decreased by $45.4 million due to a decrease of $70.9 million
in cost of product revenues, partially offset by a $25.5 million increase in
cost of service revenues. The cost of product revenue decrease was mainly due to
decreased revenues, causing a $92.4 million decrease in cost of product revenues
on a constant margin basis, mainly from revenue decreases in our government
systems and commercial networks segments. The decrease in cost of product
revenues was partially offset by lower margins, primarily driven by our mobile
broadband satellite communication systems products in our commercial networks
segment and our government mobile broadband products and tactical data link
products in our government systems segment. The cost of service revenue increase
primarily related to increased revenues from our fixed broadband services
business, partially offset by improved margins in our fixed broadband services
business, reflecting the strength of the low variable costs structure of our
fixed broadband services business as the business continues to scale.

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Selling, general and administrative expenses


                                               Fiscal Years Ended             Dollar         Percentage
                                           March 31,        March 31,        Increase         Increase
(In millions, except percentages)            2021             2020          

(Decrease) (Decrease) Sales, general and administrative $ 512.3 $ 523.1 (10.8) $

             (2 )%




The $10.8 million decrease in SG&A expenses was primarily due to a decrease in
selling costs of $13.4 million and a decrease in bid and proposal costs of $6.6
million, partially offset by an increase in support costs of $9.2 million. The
decrease in selling costs was mainly driven by our satellite services segment,
but was reflected across all three segments. The decrease in bid and proposal
costs was mainly from our government systems segment. The increase in support
costs reflected increases across all three segments. SG&A expenses consisted
primarily of personnel costs and expenses for business development, marketing
and sales, bid and proposal, facilities, finance, contract administration and
general management.

Independent research and development


                                                Fiscal Years Ended             Dollar         Percentage
                                            March 31,        March 31,        Increase         Increase
(In millions, except percentages)             2021             2020         

(Decrease) (Decrease) Independent research and development $ 115.8 $ 130.4 (14.6) $

            (11 )%




The $14.6 million decrease in IR&D expenses was mainly the result of a decrease
of $16.7 million in IR&D efforts in our commercial networks segment (primarily
related to next-generation satellite payload technologies and mobile broadband
satellite communication systems).

Amortization of acquired intangible assets

We amortize our acquired intangible assets from prior acquisitions over their
estimated useful lives, which range from two to ten years. The $2.1 million
decrease in amortization of acquired intangible assets in fiscal year 2021
compared to fiscal year 2020 was primarily the result of certain acquired
intangibles in our satellite services segment becoming fully amortized during
the prior fiscal year. Expected amortization expense for acquired intangible
assets for each of the following periods is as follows:



                                  Amortization
                                 (In thousands)
Expected for fiscal year 2022   $          3,300
Expected for fiscal year 2023              2,993
Expected for fiscal year 2024              2,472
Expected for fiscal year 2025                803
Expected for fiscal year 2026                  -
Thereafter                                     -
                                $          9,568




Interest income

The $1.2 million decrease in interest income for fiscal year 2021 compared to
fiscal year 2020 was primarily the result of lower interest rates during fiscal
year 2021 compared to fiscal year 2020.

Interest expense

The $6.0 million decrease in interest expense in fiscal year 2021 compared to
fiscal year 2020 was primarily due to an increase in the amount of interest
capitalized compared to the prior year period. This decrease in interest expense
was partially offset by the addition of interest expense related to the 2028
Notes, which were issued in the first quarter of fiscal year 2021.

Income taxes

The income tax provision in fiscal year 2021 primarily reflected the tax expense
from our income before income taxes, the tax expense for tax deficiencies upon
settlement of stock-based compensation during the period, and non-deductible
compensation, partially offset by benefit from federal and state R&D tax
credits. The income tax benefit in fiscal

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The year 2020 mainly reflected the tax benefit of federal and state R&D tax credits, partially offset by the tax burden of our profit before income taxes.

Segment results for 2021 compared to 2020

Satellite services segment

Revenues



                                                Fiscal Years Ended             Dollar         Percentage
                                            March 31,        March 31,        Increase         Increase
(In millions, except percentages)             2021             2020          (Decrease)       (Decrease)
Segment product revenues                   $         -      $         -     $          -                 - %
Segment service revenues                         868.9            826.6             42.4                 5 %
Total segment revenues                     $     868.9      $     826.6     $       42.4                 5 %




Our satellite services segment revenues increased by $42.4 million due to an
increase in service revenues. The increase in service revenues was primarily
driven by higher ARPU in the United States in our fixed broadband business when
compared to the prior year period, partially offset by a decrease in service
revenues from our in-flight services. The increase in ARPU reflected a higher
mix of new and existing subscribers choosing Viasat's premium highest speed
plans. The in-flight service revenue decrease was driven primarily by an 8%
decrease in the number of commercial aircraft using in-flight services through
our IFC systems as of year end as a result of the COVID-19 pandemic. In
addition, our fiscal year 2021 in-flight service revenues were impacted by the
reductions in passenger air traffic and the number of inactive installed
aircraft, as well as lower capacity on active installed aircraft as a result of
the COVID-19 pandemic.

Segment operating profit



                                                 Fiscal Years Ended              Dollar         Percentage
                                            March 31,         March 31,         Increase         Increase
(In millions, except percentages)             2021               2020          (Decrease)       (Decrease)
Segment operating profit                   $      35.9       $        7.0     $       28.8              411 %
Percentage of segment revenues                       4 %                1 %




The $28.8 million increase in our satellite services segment operating profit
was driven primarily by higher earnings contributions of $24.4 million, mainly
due to increased revenues, with significant flow through resulting in improved
margins, reflecting the strength of the low variable costs structure of our
fixed broadband services business as the business continues to scale. The
increase in operating profit was also driven by lower selling costs. This
increase was partially offset by lower margins resulting from the negative
impact of the COVID-19 pandemic on our in-flight services business and an
increase in costs related to our investments in emerging global broadband
businesses.

Commercial networks segment

Revenues



                                                Fiscal Years Ended             Dollar         Percentage
                                            March 31,        March 31,        Increase         Increase
(In millions, except percentages)             2021             2020          (Decrease)       (Decrease)
Segment product revenues                   $     268.8      $     290.0     $      (21.1 )             (7 )%
Segment service revenues                          52.0             54.6             (2.6 )             (5 )%
Total segment revenues                     $     320.9      $     344.6     $      (23.7 )             (7 )%




Our commercial networks segment revenues decreased by $23.7 million, primarily
due to a $21.1 million decrease in product revenues and a $2.6 million decrease
in service revenues. The decrease in product revenues was primarily due to a
decrease of $44.9 million in mobile broadband satellite communication systems
products due to decreased IFC terminal deliveries resulting from the severe
decline in global air traffic and resulting downturn in the commercial aviation
market as a result of the COVID-19 pandemic, as well as a decrease of $5.4
million in satellite networking development programs products. The product
revenue decrease was partially offset by increases of $22.7 million in antenna
systems products and $4.0 million in fixed satellite networks products. The
decrease in service revenues was primarily due to a $5.3 million decrease in
mobile broadband satellite communication systems services, partially offset by a
$2.9 million increase in fixed satellite network services.

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Segment operating loss



                                                Fiscal Years Ended               Dollar         Percentage
                                            March 31,         March 31,        (Increase)       (Increase)
(In millions, except percentages)              2021             2020            Decrease         Decrease
Segment operating loss                     $     (180.7 )    $    (186.9 )    $        6.1                 3 %
Percentage of segment revenues                      (56 )%           (54 )%




Our commercial networks segment operating loss decreased by $6.1 million
year-over-year. The decrease in operating loss was driven primarily by a $16.7
million decrease in IR&D expenses (primarily related to next-generation
satellite payload technologies and mobile broadband satellite communication
systems) and careful management of SG&A expenses, partially offset by lower
earnings contributions of $12.4 million, driven by decreased revenues and lower
margins from our mobile broadband satellite communication systems products.

Government systems segment

Revenues



                                              Fiscal Years Ended            Dollar         Percentage
                                           March 31,      March 31,        Increase         Increase
(In millions, except percentages)             2021           2020         (Decrease)       (Decrease)
Segment product revenues                   $    775.6     $    882.6     $     (107.0 )            (12 )%
Segment service revenues                        290.7          255.5             35.2               14 %
Total segment revenues                     $  1,066.3     $  1,138.1     $      (71.8 )             (6 )%




Our government systems segment revenues decreased by $71.8 million due to a
decrease of $107.0 million in product revenues, partially offset by an increase
of $35.2 million in service revenues. The product revenue decrease was primarily
driven by a $62.0 million decrease in government mobile broadband products, a
$37.4 million decrease in government satellite communication systems products
and a $21.2 million decrease in tactical satcom radio products. The decrease in
product revenues was partially offset by an increase of $10.1 million in
cybersecurity and information assurance products and a $3.8 million increase in
tactical data link products. Our government systems segment continued to show
some impacts from the COVID-19 pandemic, which has somewhat complicated product
manufacturing and shipments, but new government systems segment awards remained
very strong through the end of the fiscal year. The service revenue increase was
primarily due to a $20.4 million increase in government mobile broadband
services, a $5.2 million increase in tactical data link services, a $4.8 million
increase in government satellite communication systems services, a $2.5 million
increase in cybersecurity and information assurance services and a $2.2 million
increase in tactical satcom radio services. In the second half of fiscal year
2021, we experienced higher usage demand for our services across all major
government customer verticals.

Segment operating profit



                                                Fiscal Years Ended             Dollar         Percentage
                                            March 31,        March 31,        Increase         Increase
(In millions, except percentages)             2021             2020          (Decrease)       (Decrease)
Segment operating profit                   $     208.6      $     225.9     $      (17.3 )             (8 )%
Percentage of segment revenues                      20 %             20 %




The $17.3 million decrease in our government systems segment operating profit
was primarily due to lower earnings contributions of $19.8 million, primarily
due to a decrease in revenues and lower margins from our government mobile
broadband products and higher IR&D investments, partially offset by SG&A expense
management resulting in lower costs of $3.6 million.

Fiscal year 2020 compared to fiscal year 2019



For a discussion of our results of operations for fiscal year 2020 as compared
to fiscal year 2019, see "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in Part II, Item 7 of our Annual Report on
Form 10-K for the fiscal year ended March 31, 2020.

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Back

As reflected in the table below, our overall firm and funded backlog increased
during fiscal year 2021.



                                   As of                As of
                               March 31, 2021       March 31, 2020
                                          (In millions)
Firm backlog
Satellite services segment    $          633.7     $          611.3
Commercial networks segment              733.2                408.1
Government systems segment               939.4                851.3
Total                         $        2,306.3     $        1,870.7
Funded backlog
Satellite services segment    $          633.7     $          611.3
Commercial networks segment              639.6                408.1
Government systems segment               846.9                858.7
Total                         $        2,120.2     $        1,878.1




The firm backlog does not include contract options. Of the $2.3 billion in firm
backlog, a little over half is expected to be delivered during the next twelve
months, with the balance delivered thereafter. We include in our backlog only
those orders for which we have accepted purchase orders, and not anticipated
purchase orders and requests. In our satellite services segment, our backlog
includes fixed broadband service revenues under our subscriber agreements, but
does not include future recurring IFC service revenues under our agreements with
commercial airlines. As of March 31, 2021, our IFC systems were installed and in
service on approximately 1,480 commercial aircraft, of which, due to impacts of
the COVID-19 pandemic, approximately 200 were inactive at fiscal year end. While
current global airline traffic is still a fraction of the activity in fiscal
year 2020, domestic airline traffic is showing signs of improvement. As a
result, our in-flight services business showed modest improvement in the quarter
ended March 31, 2021, with increased planes in service and passenger volumes. We
expect the negative impact on our IFC business from the pandemic to continue
into fiscal year 2022 and potentially beyond due to the severe decline in global
air traffic and associated grounding of installed aircraft, but to lessen over
time with increases in passenger air traffic. We anticipate that approximately
1,190 additional commercial aircraft under existing customer agreements with
commercial airlines will be put into service with our IFC systems. However, the
timing of installation and entry into service of IFC systems on additional
aircraft under existing customer agreements may be delayed as a result of the
impact of the COVID-19 pandemic on the global airline industry. Accordingly,
there can be no assurance that all anticipated purchase orders and requests will
be placed or that anticipated IFC services will be activated.

Our total new awards exclude future revenue under recurring consumer commitment
arrangements and were approximately $2.7 billion, $2.3 billion and $2.4 billion
for fiscal years 2021, 2020 and 2019, respectively.

Backlog is not necessarily indicative of future sales. A majority of our
contracts can be terminated at the convenience of the customer. Orders are often
made substantially in advance of delivery, and our contracts typically provide
that orders may be terminated with limited or no penalties. In addition,
purchase orders may present product specifications that would require us to
complete additional product development. A failure to develop products meeting
such specifications could lead to a termination of the related contract.

Firm backlog amounts are comprised of funded and unfunded components. Funded
backlog represents the sum of contract amounts for which funds have been
specifically obligated by customers to contracts. Unfunded backlog represents
future amounts that customers may obligate over the specified contract
performance periods. Our customers allocate funds for expenditures on long-term
contracts on a periodic basis. Our ability to realize revenues from contracts in
backlog is dependent upon adequate funding for such contracts. Although we do
not control the funding of our contracts, our experience indicates that actual
contract funding has ultimately been approximately equal to the aggregate
amounts of the contracts.

Liquidity and capital resources

Overview

We have financed our operations to date primarily with cash flows from
operations, bank line of credit financing, debt financing, export credit agency
financing and equity financing. At March 31, 2021, we had $295.9 million in cash
and cash equivalents, $282.8 million in working capital, and no outstanding
borrowings and borrowing availability of $673.7 million under our Revolving
Credit Facility. On July 23, 2020, we issued and sold an aggregate of 4,474,559
shares of our common stock at a purchase price of $39.11 per share to certain
accredited investors in a private placement transaction

                                       52

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exempt from registration under the Securities Act of 1933, as amended, resulting
in net proceeds of approximately $174.7 million after deducting offering
expenses. At March 31, 2020, we had $304.3 million in cash and cash equivalents,
$441.1 million in working capital, and $390.0 million in principal amount of
outstanding borrowings and borrowing availability of $292.7 million under our
Revolving Credit Facility. We invest our cash in excess of current operating
requirements in short-term, highly liquid bank money market accounts.

Our future capital requirements will depend upon many factors, including the
timing and amount of cash required for our satellite projects and any future
broadband satellite projects we may engage in, expansion of our R&D and
marketing efforts, and the nature and timing of orders. Additionally, we will
continue to evaluate possible acquisitions of, or investments in complementary
businesses, products and technologies which may require the use of cash or
additional financing.

The general cash needs of our satellite services, commercial networks and
government systems segments can vary significantly. The cash needs of our
satellite services segment tend to be driven by the timing and amount of capital
expenditures (e.g., payments under satellite construction and launch contracts
and investments in ground infrastructure roll-out), investments in joint
ventures, strategic partnering arrangements and network expansion activities, as
well as the quality of customer, type of contract and payment terms. In our
commercial networks segment, cash needs tend to be driven primarily by the type
and mix of contracts in backlog, the nature and quality of customers, the timing
and amount of investments in IR&D activities (including with respect to
next-generation satellite payload technologies) and the payment terms of
customers (including whether advance payments are made or customer financing is
required). In our government systems segment, the primary factors determining
cash needs tend to be the type and mix of contracts in backlog (e.g., product or
service, development or production) and timing of payments (including
restrictions on the timing of cash payments under U.S. Government procurement
regulations). Other factors affecting the cash needs of our commercial networks
and government systems segments include contract duration and program
performance. For example, if a program is performing well and meeting its
contractual requirements, then its cash flow requirements are usually lower.

To further enhance our liquidity position or to finance the construction and
launch of any future satellites, acquisitions, strategic partnering
arrangements, joint ventures or other business investment initiatives, we may
obtain additional financing, which could consist of debt, convertible debt or
equity financing from public and/or private credit and capital markets. In
February 2019, we filed a universal shelf registration statement with the SEC
for the future sale of an unlimited amount of common stock, preferred stock,
debt securities, depositary shares, warrants and rights. The securities may be
offered from time to time, separately or together, directly by us, by selling
security holders, or through underwriters, dealers or agents at amounts, prices,
interest rates and other terms to be determined at the time of the offering.

To date, COVID-19 has not had a significant impact on our liquidity, cash flows
or capital resources. However, we have taken measures to mitigate the impact of
COVID-19 on our business and financial position, including deferring certain
capital expenditures, reducing discretionary expenditures and undertaking
cost-reduction actions. Given our current cash position, outlook for funds
generated from operations, borrowing availability under our Revolving Credit
Facility of $673.7 million, cash needs and debt structure, we have not
experienced to date, and do not expect to experience, any material issues with
liquidity. Although we can give no assurances concerning our future liquidity,
we believe that our current cash balances and net cash expected to be provided
by operating activities along with availability under our Revolving Credit
Facility will be sufficient to meet our anticipated operating requirements for
at least the next 12 months.

Cash flows

Cash provided by operating activities for fiscal year 2021 was $727.2 million
compared to $436.9 million for fiscal year 2020. This $290.3 million increase
was primarily driven by a $229.0 million year-over-year decrease in cash used to
fund net operating assets and our operating results (net income adjusted for
depreciation, amortization and other non-cash changes) which resulted in $61.3
million of higher cash provided by operating activities year-over-year. The
decrease in cash used to fund net operating assets during fiscal year 2021 when
compared to fiscal year 2020 was primarily due to an increase in cash inflows
year-over-year from combined billed and unbilled accounts receivable, net,
attributable to the timing of contractual milestones for certain larger
development programs in our government systems segment as well as revenue
decreases in our mobile broadband satellite communication systems products and
services business in our commercial networks and satellite services segments due
to decreased IFC terminal deliveries resulting from the severe decline in global
air traffic and resulting downturn in the commercial aviation market as a result
of the COVID-19 pandemic and an increase in our collections in excess
of revenues and deferred revenues included in accrued liabilities due to the
timing of milestone billings for certain larger development projects in our
commercial networks and government systems segments.

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Cash used in investing activities for fiscal year 2021 was $ 885.3 million
compared to $ 758.8 million for fiscal year 2020. This $ 126.5 million year-over-year increase in cash used in investing activities reflects an increase of approximately $ 118.8 million in cash used for the construction of satellites.

Cash provided by financing activities for fiscal year 2021 was $149.7 million
compared to $365.2 million for fiscal year 2020. This $215.5 million decrease in
cash provided by financing activities year-over-year reflects proceeds from
borrowings under our Revolving Credit Facility of $420.0 million in fiscal year
2020 and an increase in payments on borrowings under our Revolving Credit
Facility of $360.0 million year-over-year. This decrease was partially offset by
$400.0 million of gross proceeds from our 2028 Notes in June 2020 and $174.7
million of net proceeds from a private placement of common stock in July 2020
(after deducting offering expenses). Cash provided by financing activities for
both periods included cash received from employee stock purchase plan purchases
and the repurchase of common stock related to net share settlement of certain
employee tax liabilities in connection with the vesting of restricted stock unit
awards.

Satellite-related activities

In connection with the development of any new generation satellite design, and
the launch of any new satellite and the commencement of the related service, we
expect to incur additional operating costs that negatively impact our financial
results. For example, when ViaSat-2 was placed in service in the fourth quarter
of fiscal year 2018, this resulted in additional operating costs in our
satellite services segment during the ramp-up period prior to service launch and
in the fiscal year following service launch. These increased operating costs
included depreciation, amortization of capitalized software development, earth
station connectivity, marketing and advertising costs, logistics, customer care
and various support systems. In addition, interest expense increased during
fiscal year 2019 as we no longer capitalized the interest expense relating to
the debt incurred for the construction of ViaSat-2 and the related gateway and
networking equipment once the satellite was in service. As services using the
new satellite scaled, however, our revenue base for broadband services expanded
and we gained operating cost efficiencies, which together yielded incremental
segment earnings contributions. We anticipate that we will incur a similar cycle
of increased operating costs as we prepare for and launch commercial services on
future satellites, including our ViaSat-3 constellation, followed by increases
in revenue base and in scale. However, there can be no assurance that we will be
successful in significantly increasing revenues or achieving or maintaining
operating profit in our satellite services segment, and any such gains may also
be offset by investments in our global business.

We currently have three ViaSat-3 class satellites under construction. We have
entered into satellite construction agreements with Boeing for their
construction and purchase and the integration of our payload and technologies
into the satellites. In addition, we have entered into various other
satellite-related purchase commitments, including with respect to the provision
of launch services, satellite operation and satellite insurance. See Note 12 -
Commitments to our consolidated financial statements for information as of March
31, 2021 regarding our future minimum payments under our satellite construction
contracts and other satellite-related purchase commitments for the next five
fiscal years and thereafter. In addition, we will continue to incur costs
related to the roll-out of related earth station infrastructure to support the
ViaSat-3 constellation, the amount of which will depend, among other matters, on
the timing of roll-out and method used to procure fiber access. We believe we
have adequate sources of funding for the ViaSat-3 constellation, which include,
but are not limited to, our cash on hand, borrowing capacity and the cash we
expect to generate from operations over the next few years. Our total cash
funding may be reduced through various third-party agreements, including
potential joint service offerings and other strategic partnering arrangements.

Our IR&D investments are expected to continue through fiscal year 2022 and
beyond relating to next generation satellite network solutions and support of
our government and commercial air mobility businesses. We expect to continue to
invest in IR&D at a significant level as we continue our focus on leadership and
innovation in satellite and space technologies. However, the level of investment
in a given fiscal year will depend on a variety of factors, including the stage
of development of our satellite projects, new market opportunities and our
overall operating performance. Our total capital expenditures in fiscal year
2022 are expected to be higher than fiscal year 2021, as we have a third
ViaSat-3 class satellite under construction, as well as increased ground network
investments related to international expansion.

Long-term debt

As of March 31, 2021, the aggregate principal amount of our total outstanding
indebtedness was $1.9 billion, which was comprised of $700.0 million in
principal amount of 2025 Notes, $600.0 million in principal amount of 2027
Notes, $400.0 million in principal amount of 2028 Notes, no outstanding
borrowings under our $700.0 million Revolving Credit Facility, $98.3 million in
principal amount of outstanding borrowings under our Ex-Im Credit Facility with
a maturity date of October 15, 2025 and $56.3 million of finance lease
obligations. For information regarding our Credit Facilities and Notes, refer to
Note 6 - Senior Notes and Other Long-Term Debt to our consolidated financial
statements.

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Contractual obligations

The following table sets forth a summary of our obligations at March 31, 2021:



                                                                     For the Fiscal Years Ending
(In thousands, including interest
where applicable)                        Total           2022         2023-2024       2025-2026      Thereafter
Operating leases                      $   444,674     $    67,940     $  125,686     $   111,684     $   139,364
Finance leases                             64,575          13,567         24,008          24,000           3,000
2028 Notes                                595,000          26,000         52,000          52,000         465,000
2027 Notes                                819,375          33,750         67,500          67,500         650,625
2025 Notes                                877,188          39,375         78,750         759,063               -
Revolving Credit Facility                       -               -              -               -               -
Ex-Im Credit Facility                     104,693          21,874         42,344          40,475               -
Satellite performance incentives           32,520           5,334         10,269          11,269           5,648
Purchase commitments including
satellite-
  related agreements                    1,650,828       1,087,573        436,635          46,121          80,499
Total                                 $ 4,588,853     $ 1,295,413     $  837,192     $ 1,112,112     $ 1,344,136




We purchase components from a variety of suppliers and use several
subcontractors and contract manufacturers to provide design and manufacturing
services for our products. During the normal course of business, we enter into
agreements with subcontractors, contract manufacturers and suppliers that either
allow them to procure inventory based upon criteria defined by us or that
establish the parameters defining our requirements. We also enter into
agreements and purchase commitments with suppliers for the construction, launch,
and operation of our satellites. In certain instances, these agreements allow us
the option to cancel, reschedule and adjust our requirements based on our
business needs prior to firm orders being placed. Consequently, only a portion
of our reported purchase commitments arising from these agreements are firm,
non-cancelable and unconditional commitments.

Our consolidated balance sheets included $137.4 million and $120.9 million of
"other liabilities" as of March 31, 2021 and March 31, 2020, respectively, which
primarily consisted of the long-term portion of deferred revenues, the long-term
portion of our satellite performance incentive obligations relating to the
ViaSat-1 and ViaSat-2 satellites and our long-term warranty obligations. With
the exception of the long-term portion of our satellite performance incentive
obligations relating to the ViaSat-1 and ViaSat-2 satellites (which is included
under "Satellite performance incentives"), these remaining liabilities have been
excluded from the above table as the timing and/or the amount of any cash
payment is uncertain. See Note 12 - Commitments to our consolidated financial
statements for additional information regarding satellite performance incentive
obligations relating to the ViaSat-1 and ViaSat-2 satellites. See Note 14 -
Product Warranty to our consolidated financial statements for a discussion of
our product warranties.

Off-balance sheet arrangements

We did not have any significant off-balance sheet arrangements at March 31, 2021 as defined in Article 303 (a) (4) of the SK Regulation, except as indicated under “Contractual obligations” above or described in the notes to our consolidated financial statements included in this report.

Recent authoritative tips

For information regarding recently adopted and issued accounting pronouncements,
see Note 1 - The Company and a Summary of Its Significant Accounting Policies to
the consolidated financial statements.

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