Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock, $0.0001 par value, as of January ~~22, 2021~~21, 2022 was ~~68,505,328.~~74,393,040.


	As of December 31, 2020		As of March 31, 2020			As of December 31, 2021			As of March 31, 2021
	(In thousands)					(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	317,344	$	304,309		$	166,032		$	295,949
Accounts receivable, net		202,792		330,698			363,013			238,652
Inventories		334,919		294,416			353,993			336,672
Prepaid expenses and other current assets		112,548		116,281			144,833			119,960
Total current assets		967,603		1,045,704			1,027,871			991,233

Property, equipment and satellites, net		2,973,733		2,586,735			3,603,181			3,050,483
Operating lease right-of-use assets		331,066		308,441			344,499			340,456
Other acquired intangible assets, net		11,079		14,439			237,850			9,568
Goodwill		122,448		121,197			190,907			122,300
Other assets		842,777		807,352			682,486			835,427
Total assets	$	5,248,706	$	4,883,868		$	6,086,794		$	5,349,467
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	122,342	$	183,601		$	251,335		$	145,134
Accrued and other liabilities		485,565		391,190			505,702			532,831
Current portion of long-term debt		33,735		29,788			29,590			30,472
Total current liabilities		641,642		604,579			786,627			708,437

Senior notes		1,682,523		1,285,497			1,685,484			1,683,264
Other long-term debt		121,225		536,166			463,908			119,420
Non-current operating lease liabilities		303,950		286,550			317,941			313,762
Other liabilities		152,040		120,934			157,104			137,350
Total liabilities		2,901,380		2,833,726			3,411,064			2,962,233
Commitments and contingencies (Note 8)
Equity:
Viasat, Inc. stockholders’ equity
Common stock		7		6			7			7
Paid-in capital		2,070,353		1,788,456			2,397,903			2,092,595
Retained earnings		241,707		245,373			262,710			249,064
Accumulated other comprehensive income (loss)		6,614		(6,048	)
Accumulated other comprehensive (loss) income							(26,170	)		9,803
Total Viasat, Inc. stockholders’ equity		2,318,681		2,027,787			2,634,450			2,351,469
Noncontrolling interest in subsidiary		28,645		22,355			41,280			35,765
Total equity		2,347,326		2,050,142			2,675,730			2,387,234
Total liabilities and equity	$	5,248,706	$	4,883,868		$	6,086,794		$	5,349,467


	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	December 31, 2020			December 31, 2019			December 31, 2020			December 31, 2019			December 31, 2021			December 31, 2020			December 31, 2021			December 31, 2020
	(In thousands, except per share data)												(In thousands, except per share data)
Revenues:
Product revenues	$	266,514		$	303,090		$	773,128		$	873,535		$	316,143		$	266,514		$	918,073		$	773,128
Service revenues		309,045			285,134			887,197			843,982			403,574			309,045			1,167,858			887,197
Total revenues		575,559			588,224			1,660,325			1,717,517			719,717			575,559			2,085,931			1,660,325
Operating expenses:
Cost of product revenues		196,895			214,098			576,677			634,113			237,481			196,895			691,549			576,677
Cost of service revenues		194,394			190,132			587,494			564,675			262,640			194,394			750,991			587,494
Selling, general and administrative		132,394			136,005			378,884			388,528			170,222			132,394			481,106			378,884
Independent research and development		28,803			32,164			83,970			99,952			37,316			28,803			112,309			83,970
Amortization of acquired intangible assets		1,313			1,856			4,171			5,920			7,531			1,313			20,859			4,171
Income from operations		21,760			13,969			29,129			24,329			4,527			21,760			29,117			29,129
Other income (expense):
Interest income		114			179			474			1,517			386			114			520			474
Interest expense		(7,880	)		(9,276	)		(27,194	)		(29,990	)		(5,411	)		(7,880	)		(17,796	)		(27,194	)
Income (loss) before income taxes		13,994			4,872			2,409			(4,144	)
Other income, net														—			—			4,118			—
(Loss) income before income taxes														(498	)		13,994			15,959			2,409
(Provision for) benefit from income taxes		(7,008	)		3,911			(573	)		8,731			(3,492	)		(7,008	)		3,469			(573	)
Equity in income of unconsolidated affiliate, net		774			1,807			788			4,328
Net income		7,760			10,590			2,624			8,915
Equity in income (loss) of unconsolidated affiliate, net														—			774			(256	)		788
Net (loss) income														(3,990	)		7,760			19,172			2,624
Less: net income attributable to noncontrolling interest, net of tax		1,000			4,114			6,290			10,713			2,623			1,000			5,526			6,290
Net income (loss) attributable to Viasat, Inc.	$	6,760		$	6,476		$	(3,666	)	$	(1,798	)
Basic net income (loss) per share attributable to Viasat, Inc. common stockholders	$	0.10		$	0.10		$	(0.06	)	$	(0.03	)
Diluted net income (loss) per share attributable to Viasat, Inc. common stockholders	$	0.10		$	0.10		$	(0.06	)	$	(0.03	)
Shares used in computing basic net income (loss) per share		67,995			61,813			65,704			61,405
Shares used in computing diluted net income (loss) per share		68,668			62,916			65,704			61,405
Net (loss) income attributable to Viasat, Inc.													$	(6,613	)	$	6,760		$	13,646		$	(3,666	)
Basic net (loss) income per share attributable to Viasat, Inc. common stockholders													$	(0.09	)	$	0.10		$	0.19		$	(0.06	)
Diluted net (loss) income per share attributable to Viasat, Inc. common stockholders													$	(0.09	)	$	0.10		$	0.18		$	(0.06	)
Shares used in computing basic net (loss) income per share														73,917			67,995			73,004			65,704
Shares used in computing diluted net (loss) income per share														73,917			68,668			74,348			65,704
Comprehensive income (loss):
Net income	$	7,760		$	10,590		$	2,624		$	8,915
Net (loss) income													$	(3,990	)	$	7,760		$	19,172		$	2,624
Other comprehensive income (loss), net of tax:
Unrealized gain on hedging, net of tax		—			184			—			232
Foreign currency translation adjustments, net of tax		9,047			(2,371	)		12,662			(6,091	)		(9,297	)		9,047			(35,973	)		12,662
Other comprehensive income (loss), net of tax		9,047			(2,187	)		12,662			(5,859	)
Comprehensive income		16,807			8,403			15,286			3,056
Other comprehensive (loss) income, net of tax														(9,297	)		9,047			(35,973	)		12,662
Comprehensive (loss) income														(13,287	)		16,807			(16,801	)		15,286
Less: comprehensive income attributable to noncontrolling interest, net of tax		1,000			4,114			6,290			10,713			2,623			1,000			5,526			6,290
Comprehensive income (loss) attributable to Viasat, Inc.	$	15,807		$	4,289		$	8,996		$	(7,657	)
Comprehensive (loss) income attributable to Viasat, Inc.													$	(15,910	)	$	15,807		$	(22,327	)	$	8,996


	Nine Months Ended						Nine Months Ended
	December 31, 2020			December 31, 2019			December 31, 2021			December 31, 2020
	(In thousands)						(In thousands)
Cash flows from operating activities:
Net income	$	2,624		$	8,915		$	19,172		$	2,624
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		241,935			207,950			304,145			241,935
Amortization of intangible assets		50,181			47,159			65,343			50,181
Stock-based compensation expense		64,967			64,236			64,676			64,967
Loss on disposition of fixed assets		29,841			33,578			32,383			29,841
Other non-cash adjustments		3,611			(9,394	)		(932	)		3,611
Increase (decrease) in cash resulting from changes in operating assets and liabilities:
Increase (decrease) in cash resulting from changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		123,374			(23,596	)		(58,166	)		123,374
Inventories		(39,988	)		(47,897	)		(14,717	)		(39,988	)
Other assets		24,017			4,075			25,141			24,017
Accounts payable		(39,004	)		8,384			49,718			(39,004	)
Accrued liabilities		102,603			16,596			(59,135	)		102,603
Other liabilities		(6,787	)		(16,644	)		(41,250	)		(6,787	)
Net cash provided by operating activities		557,374			293,362			386,378			557,374
Cash flows from investing activities:
Purchase of property, equipment and satellites		(655,672	)		(548,225	)		(671,207	)		(655,672	)
Cash paid for patents, licenses and other assets		(47,164	)		(49,613	)		(41,041	)		(47,164	)
Proceeds from insurance claims on ViaSat-2 satellite		—			2,277
Payments related to acquisition of businesses, net of cash acquired								(138,668	)		—
Net cash used in investing activities		(702,836	)		(595,561	)		(850,916	)		(702,836	)
Cash flows from financing activities:
Proceeds from debt borrowings		400,000			110,000			440,000			400,000
Payments of debt borrowings		(414,604	)		(27,142	)		(97,784	)		(414,604	)
Payment of debt issuance costs		(5,060	)		(2,479	)		—			(5,060	)
Proceeds from issuance of common stock under equity plans		19,101			38,093			20,549			19,101
Purchase of common stock in treasury (immediately retired) related to tax withholdings for stock-based compensation		(13,013	)		(28,268	)		(22,165	)		(13,013	)
Proceeds from common stock issued in private placement, net of issuance costs		174,749			—			—			174,749
Other financing activities		(4,280	)		(1,746	)		(2,340	)		(4,280	)
Net cash provided by financing activities		156,893			88,458			338,260			156,893
Effect of exchange rate changes on cash		1,604			(182	)		(3,639	)		1,604
Net increase (decrease) in cash and cash equivalents		13,035			(213,923	)
Net (decrease) increase in cash and cash equivalents								(129,917	)		13,035
Cash and cash equivalents at beginning of period		304,309			261,701			295,949			304,309
Cash and cash equivalents at end of period	$	317,344		$	47,778		$	166,032		$	317,344
Non-cash investing and financing activities:
Capital expenditures not paid for							$	73,705		$	22,224
Right-of-use assets obtained in exchange for operating lease liabilities	$	55,717		$	17,900		$	36,422		$	55,717
Right-of-use assets obtained in exchange for finance lease liabilities	$	1,931		$	72,711
Issuance of common stock in connection with acquisition							$	207,169		$	—

	Viasat, Inc. Stockholders
	Common Stock																	Viasat, Inc. Stockholders
	Number of Shares Issued		Amount		Paid-in Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest in Subsidiary		Total			Common Stock
																		Number of Shares Issued		Amount		Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest in Subsidiary		Total
																		(In thousands, except share data)
For the Three Months Ended December 31, 2021
Balance at September 30, 2021																			73,398,078	$	7	$	2,382,356		$	269,323		$	(16,873	)	$	38,657	$	2,673,470
Exercise of stock options																			24,850		—		1,456			—			—			—		1,456
Issuance of stock under Employee Stock Purchase Plan																			272,503		—		10,317			—			—			—		10,317
Stock-based compensation																			—		—		24,197			—			—			—		24,197
RSU awards vesting, net of shares withheld for taxes which have been retired																			697,472		—		(20,423	)		—			—			—		(20,423	)
Net (loss) income																			—		—		—			(6,613	)		—			2,623		(3,990	)
Other comprehensive loss, net of tax																			—		—		—			—			(9,297	)		—		(9,297	)
Balance at December 31, 2021																			74,392,903	$	7	$	2,397,903		$	262,710		$	(26,170	)	$	41,280	$	2,675,730
	(In thousands, except share data)
For the Three Months Ended December 31, 2020
Balance at September 30, 2020		67,532,869	$	7	$	2,047,525		$	234,947	$	(2,433	)	$	27,645	$	2,307,691			67,532,869	$	7	$	2,047,525		$	234,947		$	(2,433	)	$	27,645	$	2,307,691
Issuance of stock under Employee Stock Purchase Plan		356,523		—		9,895			—		—			—		9,895			356,523		—		9,895			—			—			—		9,895
Stock-based compensation		—		—		25,199			—		—			—		25,199			—		—		25,199			—			—			—		25,199
RSU awards vesting, net of shares withheld for taxes which have been retired		614,936		—		(12,266	)		—		—			—		(12,266	)		614,936		—		(12,266	)		—			—			—		(12,266	)
Net income		—		—		—			6,760		—			1,000		7,760			—		—		—			6,760			—			1,000		7,760
Other comprehensive income, net of tax		—		—		—			—		9,047			—		9,047			—		—		—			—			9,047			—		9,047
Balance at December 31, 2020		68,504,328	$	7	$	2,070,353		$	241,707	$	6,614		$	28,645	$	2,347,326			68,504,328	$	7	$	2,070,353		$	241,707		$	6,614		$	28,645	$	2,347,326

For the Three Months Ended December 31, 2019
Balance at September 30, 2019		61,352,560	$	6	$	1,751,924		$	237,311	$	1,666		$	14,929	$	2,005,836
Exercise of stock options		33,642		—		2,033		—		—			—			2,033
Issuance of stock under Employee Stock Purchase Plan		145,367		—		9,044		—		—			—			9,044
Stock-based compensation	—			—		25,135		—		—			—			25,135
RSU awards vesting, net of shares withheld for taxes which have been retired		591,689		—		(25,140	)	—		—			—			(25,140	)
Net income	—			—	—				6,476	—				4,114		10,590
Other comprehensive loss, net of tax	—			—	—			—			(2,187	)	—			(2,187	)
Balance at December 31, 2019		62,123,258	$	6	$	1,762,996		$	243,787	$	(521	)	$	19,043	$	2,025,311

	Viasat, Inc. Stockholders
	Common Stock																		Viasat, Inc. Stockholders
	Number of Shares Issued		Amount		Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest in Subsidiary		Total			Common Stock
																			Number of Shares Issued		Amount		Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest in Subsidiary			Total
																			(In thousands, except share data)
For the Nine Months Ended December 31, 2021
Balance at March 31, 2021																				68,529,133	$	7	$	2,092,595		$	249,064		$	9,803		$	35,765		$	2,387,234
Exercise of stock options																				27,107		—		1,526			—			—			—			1,526
Issuance of stock under Employee Stock Purchase Plan																				586,203		—		19,023			—			—			—			19,023
Stock-based compensation																				—		—		75,267			—			—			—			75,267
Shares issued in settlement of certain accrued employee compensation liabilities																				457,130		—		24,488			—			—			—			24,488
RSU awards vesting, net of shares withheld for taxes which have been retired																				793,141		—		(22,165	)		—			—			—			(22,165	)
Shares issued in connection with acquisition of business																				4,000,189		—		207,169			—			—			—			207,169
Other																				—		—		—			—			—			(11	)		(11	)
Net income																				—		—		—			13,646			—			5,526			19,172
Other comprehensive loss, net of tax																				—		—		—			—			(35,973	)		—			(35,973	)
Balance at December 31, 2021																				74,392,903	$	7	$	2,397,903		$	262,710		$	(26,170	)	$	41,280		$	2,675,730
	(In thousands, except share data)
For the Nine Months Ended December 31, 2020
Balance at March 31, 2020		62,147,140	$	6	$	1,788,456		$	245,373		$	(6,048	)	$	22,355	$	2,050,142			62,147,140	$	6	$	1,788,456		$	245,373		$	(6,048	)	$	22,355		$	2,050,142
Issuance of stock under Employee Stock Purchase Plan		638,792		—		19,101			—			—			—		19,101			638,792	—			19,101			—		—			—				19,101
Common stock issued in private placement, net of issuance costs		4,474,559		1		174,748			—			—			—		174,749			4,474,559		1		174,748			—		—			—				174,749
Stock-based compensation		—		—		75,655			—			—			—		75,655			—	—			75,655			—		—			—				75,655
Shares issued in settlement of certain accrued employee compensation liabilities		580,846		—		25,406			—			—			—		25,406			580,846	—			25,406			—		—			—				25,406
RSU awards vesting, net of shares withheld for taxes which have been retired		662,991		—		(13,013	)		—			—			—		(13,013	)		662,991	—			(13,013	)		—		—			—				(13,013	)
Net (loss) income		—		—		—			(3,666	)		—			6,290		2,624			—	—			—			(3,666	)		—			6,290			2,624
Other comprehensive income, net of tax		—		—		—			—			12,662			—		12,662			—	—			—			—			12,662			—			12,662
Balance at December 31, 2020		68,504,328	$	7	$	2,070,353		$	241,707		$	6,614		$	28,645	$	2,347,326			68,504,328	$	7	$	2,070,353		$	241,707		$	6,614		$	28,645		$	2,347,326

For the Nine Months Ended December 31, 2019
Balance at March 31, 2019		60,550,093	$	6	$	1,656,819		$	245,585		$	5,338		$	8,330	$	1,916,078
Exercise of stock options		335,373	—			20,743		—			—			—			20,743
Issuance of stock under Employee Stock Purchase Plan		311,137	—			17,350		—			—			—			17,350
Stock-based compensation	—		—			73,523		—			—			—			73,523
Shares issued in settlement of certain accrued employee compensation liabilities		255,615	—			22,829		—			—			—			22,829
RSU awards vesting, net of shares withheld for taxes which have been retired		671,040	—			(28,268	)	—			—			—			(28,268	)
Net (loss) income	—		—		—				(1,798	)	—				10,713		8,915
Other comprehensive loss, net of tax	—		—		—			—				(5,859	)	—			(5,859	)
Balance at December 31, 2019		62,123,258	$	6	$	1,762,996		$	243,787		$	(521	)	$	19,043	$	2,025,311

Note 1 — Basis of Presentation

The accompanying condensed consolidated balance sheet at December 31, ~~2020,~~2021, the condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended December 31, ~~2020~~2021 and ~~2019,~~2020, the condensed consolidated statements of cash flows for the nine months ended December 31, ~~2020~~2021 and ~~2019~~2020 and the condensed consolidated statements of equity for the three and nine months ended December 31, ~~2020~~2021 and ~~2019~~2020 have been prepared by the management of Viasat, Inc. (also referred to hereafter as the Company or Viasat), and have not been audited. These financial statements have been prepared on the same basis as the audited consolidated financial statements for the fiscal year ended March 31, ~~2020~~2021 and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the Company’s results for the periods presented. These financial statements should be read in conjunction with the financial statements and notes thereto for the fiscal year ended March 31, ~~2020~~2021 included in the Company’s Annual Report on Form 10-K. Interim operating results are not necessarily indicative of operating results for the full year. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP).

The Company’s condensed consolidated financial statements include the assets, liabilities and results of operations of Viasat, its wholly owned subsidiaries and its majority-owned subsidiary, TrellisWare Technologies, Inc. (TrellisWare). During the first quarter of fiscal year 2022, the Company completed the acquisitions of the remaining 51% interest in Euro Broadband Infrastructure Sàrl (EBI) and RigNet, Inc. (RigNet) (see Note 12 – Acquisitions for more information). The acquisitions were accounted for as purchases and accordingly, the condensed consolidated financial statements include the operating results of EBI and RigNet from the dates of acquisition.

All significant intercompany amounts have been eliminated. Investments in entities in which the Company can exercise significant influence, but does not own a majority equity interest or otherwise control, are accounted for using the equity method and are included as investment in unconsolidated affiliate in other assets (long-term) on the condensed consolidated balance sheets.

On November 8, 2021, the Company entered into a Share Purchase Agreement to combine with Connect Topco Limited, a private company limited by shares and incorporated in Guernsey (Inmarsat), with the shareholders of Inmarsat and certain management and employees who hold options and shares of a subsidiary of Inmarsat whose options and shares will be exchanged for shares of Inmarsat prior to closing (collectively, the Sellers). Pursuant to the Share Purchase Agreement, the Company will purchase all of the issued and outstanding shares of Inmarsat from the Sellers upon the terms and subject to the conditions set forth therein (the Inmarsat Transaction) (see Note 12 – Acquisitions for more information).

During the second quarter of fiscal year 2021, the Company issued and sold an aggregate of 4,474,559 shares of the Company’s common stock at a purchase price of ~~$39.11~~$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~~$174.7 million after deducting offering expenses.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information and actual results could differ from those estimates. Significant estimates made by management include revenue recognition, stock-based compensation, allowance for doubtful accounts, valuation of goodwill and other intangible assets, patents, orbital slots and other licenses, software development, property, equipment and satellites, long-lived assets, contingencies and income taxes including the valuation allowance on deferred tax assets.

Revenue recognition

The Company applies the five-step model under Accounting Standards Codification (ASC) 606 to its contracts with its customers. Under this model the Company (1) identifies the contract with the customer, (2) identifies its performance obligations in the contract, (3) determines the transaction price for the contract, (4) allocates the transaction price to its performance obligations and (5) recognizes revenue when or as it satisfies its performance obligations. These performance obligations generally include the purchase of services (including broadband capacity and the leasing of

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broadband equipment), the purchase of products, and the development and delivery of complex equipment built to customer specifications under long-term contracts.

Performance obligations

The timing of satisfaction of performance obligations may require judgment. The Company derives a substantial portion of its revenues from contracts with customers for services, primarily consisting of connectivity services. These contracts typically require advance or recurring monthly payments by the customer. The Company’s 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). The Company evaluates whether broadband equipment provided to its customers as part of the delivery of connectivity services represents a lease in accordance with ASC 842. As discussed further below under “Leases - Lessor accounting”, for broadband equipment leased to consumer broadband

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customers in conjunction with the delivery of connectivity services, the Company accounts for the lease and non-lease components of connectivity service arrangements as a single performance obligation as the connectivity services represent the predominant component.

The Company also derives a portion of its 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, the Company considers indicators that include, but are not limited to, whether (1) the Company has 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.

The vast majority of the Company’s 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). The Company’s 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 the Company’s U.S. Government fixed-price contracts, the customer pays the Company 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, the Company’s U.S. Government fixed-price contracts generally result in revenue recognized in excess of billings which the Company presents as unbilled accounts receivable on the balance sheet. Amounts billed and due from the Company’s 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 the Company’s U.S. Government cost-type contracts, the customer generally pays the Company for its actual costs incurred within a short period of time. For non-U.S. Government contracts, the Company typically receives interim payments as work progresses, although for some contracts, the Company may be entitled to receive an advance payment. The Company recognizes a liability for these advance payments in excess of revenue recognized and presents 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 the Company from the other party failing to adequately complete some or all of its obligations under the contract.

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progress for its contracts because that best depicts the transfer of control to the customer which occurs as the Company incurs costs on its 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.

Contract costs on U.S. Government contracts are subject to audit and review by the Defense Contracting Management Agency (DCMA), the Defense Contract Audit Agency (DCAA), and other U.S. Government agencies, as well as negotiations with U.S. Government representatives. The Company’s incurred cost audits by the DCAA have not been concluded for fiscal years ~~2019~~2020 or ~~2020.~~2021. As of December 31, ~~2020,~~2021, the DCAA had completed its incurred cost audit for fiscal years 2004, 2016 and ~~2016~~2019 and approved the Company’s incurred costs for those fiscal years, as well as approved the

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Company’s incurred costs for fiscal years 2005 through 2015, 2017 and 2018 without further audit based on the determination of low risk. Although the Company has recorded contract revenues subsequent to fiscal year ~~2018~~2019 based upon an estimate of costs that the Company believes will be approved upon final audit or review, the Company does not know the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed the Company’s estimates, its profitability would be adversely affected. As of December 31, ~~2020~~2021 and March 31, ~~2020,~~2021, the Company had $~~8.8~~12.1 million and $~~7.8~~10.3 million, respectively, in contract-related reserves for its estimate of potential refunds to customers for potential cost adjustments on several multi-year U.S. Government cost reimbursable contracts (see Note 8 — Commitments and Contingencies for more information).

Evaluation of transaction price

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 the Company’s performance obligations, the estimation of total revenue, and, where applicable, the cost at completion, is complex, subject to many variables and requires significant judgment. The Company’s 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. The Company estimates variable consideration at the amount to which it expects to be entitled. The Company includes 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. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company. In the event an agreement includes embedded financing components, the Company recognizes 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. The Company has elected the practical expedient not to adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

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, the Company utilizes the observable price of a good or service when the Company sells that good or service separately in similar circumstances and to similar customers. If a standalone selling price is not directly observable, the Company estimates 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.

Transaction price allocated to remaining performance obligations

The Company’s remaining performance obligations represent the transaction price of firm contracts and orders for which work has not been performed. The Company includes in its remaining performance obligations only those contracts and orders for which it has accepted purchase orders. Remaining performance obligations associated with the Company’s

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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subscribers for fixed consumer and business broadband services in its satellite services segment exclude month-to-month service contracts in accordance with a practical expedient and are estimated using a portfolio approach in which the Company reviews all relevant promotional activities and calculates the remaining performance obligation using the average service component for the portfolio and the average time remaining under the contract. The Company’s future recurring in-flight connectivity service contracts in its satellite services segment do not have minimum service purchase requirements and therefore are not included in the Company’s remaining performance obligations. As of December 31, ~~2020,~~2021, the aggregate amount of the transaction price allocated to remaining performance obligations was ~~$2.4~~$2.1 billion, of which the Company expects to recognize a little over half over the next ~~twelve~~12 months, with the balance recognized ~~thereafter.~~thereafter.

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~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

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Disaggregation of revenue

The Company operates and manages its business in 3 reportable segments: satellite services, commercial networks and government systems. Revenue is disaggregated by products and services, customer type, contract type, and geographic area, respectively, as the Company believes this approach best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.

The following sets forth disaggregated reported revenue by segment and product and services for the three and nine months ended December 31, ~~2020~~2021 and ~~2019:~~2020:


	Three Months Ended December 31, 2020								Three Months Ended December 31, 2021
	Satellite Services		Commercial Networks		Government Systems		Total Revenues		Satellite Services		Commercial Networks		Government Systems		Total Revenues
	(In thousands)								(In thousands)
Product revenues	$	—	$	75,690	$	190,824	$	266,514	$	—	$	123,059	$	193,084	$	316,143
Service revenues		220,789		14,409		73,847		309,045		309,711		16,618		77,245		403,574
Total revenues	$	220,789	$	90,099	$	264,671	$	575,559	$	309,711	$	139,677	$	270,329	$	719,717

	Nine Months Ended December 31, 2020								Nine Months Ended December 31, 2021
	Satellite Services		Commercial Networks		Government Systems		Total Revenues		Satellite Services		Commercial Networks		Government Systems		Total Revenues
	(In thousands)								(In thousands)
Product revenues	$	—	$	197,560	$	575,568	$	773,128	$	—	$	343,525	$	574,548	$	918,073
Service revenues		638,660		38,561		209,976		887,197		883,938		49,554		234,366		1,167,858
Total revenues	$	638,660	$	236,121	$	785,544	$	1,660,325	$	883,938	$	393,079	$	808,914	$	2,085,931

	Three Months Ended December 31, 2019								Three Months Ended December 31, 2020
	Satellite Services		Commercial Networks		Government Systems		Total Revenues		Satellite Services		Commercial Networks		Government Systems		Total Revenues
	(In thousands)								(In thousands)
Product revenues	$	—	$	73,182	$	229,908	$	303,090	$	—	$	75,690	$	190,824	$	266,514
Service revenues		211,700		11,544		61,890		285,134		220,789		14,409		73,847		309,045
Total revenues	$	211,700	$	84,726	$	291,798	$	588,224	$	220,789	$	90,099	$	264,671	$	575,559

	Nine Months Ended December 31, 2019								Nine Months Ended December 31, 2020
	Satellite Services		Commercial Networks		Government Systems		Total Revenues		Satellite Services		Commercial Networks		Government Systems		Total Revenues
	(In thousands)								(In thousands)
Product revenues	$	—	$	212,226	$	661,309	$	873,535	$	—	$	197,560	$	575,568	$	773,128
Service revenues		614,232		39,520		190,230		843,982		638,660		38,561		209,976		887,197
Total revenues	$	614,232	$	251,746	$	851,539	$	1,717,517	$	638,660	$	236,121	$	785,544	$	1,660,325

Revenues from the U.S. Government as an individual customer comprised approximately ~~28%~~24% and ~~30%~~26% of total revenues for the three and nine months ended December 31, 2021, respectively, and approximately 28% and 30% of total revenues for the three and nine months ended December 31, 2020, respectively, ~~and approximately 30% of total revenues for both the three and nine months ended December 31, 2019,~~ mainly reported within the government systems segment. Revenues from the Company’s other customers, mainly reported within the commercial networks and satellite services segments, comprised approximately ~~72%~~76% and ~~70%~~74% of total revenues for the three and nine months

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ended December 31, 2021, respectively, and approximately 72% and 70% of total revenues for the three and nine months ended December 31, 2020, ~~respectively, and approximately 70% of total revenues for both the three and nine months ended December 31, 2019.~~respectively.

The Company’s satellite services segment revenues are primarily derived from the Company’s fixed broadband services, in-flight services and ~~in-flight services.~~advanced software and communication infrastructure services (acquired through the RigNet acquisition).

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~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

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Revenues in the Company’s 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 the Company to provide products and services under a contract at a specified price) comprised approximately ~~91%~~91% and ~~88%~~90% of the Company’s total revenues for these segments for the three and nine months ended December 31, 2021, respectively, and approximately 91% and 88% of the Company’s total revenues for these segments for the three and nine months ended December 31, 2020, ~~respectively, and approximately 89% of the Company’s total revenues for these segments for both the three and nine months ended December 31, 2019.~~respectively. The remainder of the Company’s revenues in these segments for such periods was derived primarily from cost-reimbursement contracts (under which the Company is 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 (under which the Company is reimbursed 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).

Historically, a significant portion of the Company’s revenues in its 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 the Company’s funded development from its customer contracts were approximately ~~20%~~24% and ~~23%~~23% of its total revenues for the three and nine months ended December 31, 2021, respectively, and approximately 20% and 23% of its total revenues for the three and nine months ended December 31, 2020, ~~respectively, and approximately 24% and 23% of its total revenues for the three and nine months ended December 31, 2019,~~ respectively.

Contract balances

Contract balances consist of contract assets and contract liabilities. A contract asset, or with respect to the Company, an unbilled accounts receivable, is recorded when revenue is recognized in advance of the Company’s right to bill and receive consideration, typically resulting from sales under long-term contracts. Unbilled accounts receivable are generally expected to be billed and collected within one year. The unbilled accounts receivable will decrease as provided services or delivered products are billed. The Company receives payments from customers based on a billing schedule established in the Company’s contracts.

When consideration is received in advance of the delivery of goods or services, a contract liability, or with respect to the Company, collections in excess of revenues or deferred revenues, is recorded. Reductions in the collections in excess of revenues or deferred revenues will be recorded as the Company satisfies the performance obligations.

The following table presents contract assets and liabilities as of December 31, ~~2020~~2021 and March 31, ~~2020:~~2021:


	As of December 31, 2020		As of March 31, 2020		As of December 31, 2021		As of March 31, 2021
	(In thousands)				(In thousands)
Unbilled accounts receivable	$	60,951	$	75,661	$	102,110	$	70,785
Collections in excess of revenues and deferred revenues		206,807		123,019		180,854		216,594
Deferred revenues, long-term portion		97,485		80,802		89,083		84,654

Unbilled accounts receivable ~~decreased $14.7~~increased $31.3 million during the nine months ended December 31, ~~2020,~~2021, primarily driven by ~~an increase in billings~~revenue recognized in the Company’s ~~government systems segment.~~commercial networks segment in excess of billings. The acquisition of RigNet contributed $17.5 million of unbilled accounts receivable.

Collections in excess of revenues and deferred revenues ~~increased $83.8~~decreased $35.7 million during the nine months ended December 31, ~~2020,~~2021, primarily driven by revenue recognized in excess of advances on goods or services received in ~~excess of revenue recognized in~~ the Company’s commercial networks segment.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

During the three and nine months ended December 31, ~~2020,~~2021, the Company recognized revenue of ~~$7.6~~$47.7 million and ~~$82.2~~$169.7 million, respectively, that was previously included in the Company’s collections in excess of revenues and deferred revenues at March 31, ~~2020.~~2021. During the three and nine months ended December 31, ~~2019,~~2020, the Company recognized revenue of ~~$13.5~~$7.6 million and ~~$84.7~~$82.2 million, respectively, that was previously included in the Company’s collections in excess of revenues and deferred revenues at March 31, ~~2019.~~2020.

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~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

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Property, equipment and satellites

Satellites and other property and equipment, including internally developed software, 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 incentives expected to be payable to 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. The Company also constructs earth stations, network operations systems and other assets to support its satellites, and those construction costs, including interest, are capitalized as incurred. At the time satellites are placed in service, the Company estimates the useful life of its 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. The Company periodically reviews the remaining estimated useful life of its satellites to determine if revisions to estimated useful lives are necessary. Costs incurred for additions to property, equipment and satellites, together with major renewals and betterments, are capitalized and depreciated over the remaining life of the underlying asset. Costs incurred for maintenance, repairs and minor renewals and betterments are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed from the accounts and any resulting gain or loss is recognized in operations, which for the periods presented, primarily related to losses incurred for unreturned customer premise equipment (CPE). The Company computes depreciation using the straight-line method over the estimated useful lives of the assets ranging from two to ~~17 years.~~38 years. Leasehold improvements are capitalized and amortized using the straight-line method over the shorter of the lease term or the life of the improvement.

Costs related to internally developed software for internal uses are capitalized after the preliminary project stage is complete and are amortized over the estimated useful lives of the assets, which are approximately three to seven ~~years.~~years. Capitalized costs for internal-use software are included in p~~roperty,~~property, equipment and satellites, net in the Company’s condensed consolidated balance sheets.

Interest expense is capitalized on the carrying value of assets under construction, in accordance with the authoritative guidance for the capitalization of interest (ASC 835-20). With respect to the ~~ViaSat-3 class~~construction of satellites, gateway and networking equipment and other assets under construction, the Company capitalized ~~$21.8~~$25.8 million and ~~$57.7~~$74.2 million of interest expense for the three and nine months ended December 31, ~~2020,~~2021, respectively, and ~~$14.3~~$21.8 million and ~~$38.6~~$57.7 million for the three and nine months ended December 31, ~~2019,~~2020, respectively.

The Company owns three satellites in service over North America (ViaSat-2, ViaSat-1 and WildBlue-1) and, after acquiring the remaining interest in EBI during the first quarter of fiscal year 2022, the Company also owns the KA-SAT satellite over Europe, Middle East, and Africa (EMEA). In addition, the Company has lifetime leases of Ka-band capacity on two satellites. The Company also has a global constellation of three third-generation ViaSat-3 class satellites under construction. In addition, the Company owns related earth stations and networking equipment for all of its satellites. The Company procures indoor and outdoor CPE units leased to subscribers under a retail leasing program as part of the Company’s satellite services segment, which are reflected in investing activities and property, equipment and satellites, net in the accompanying condensed consolidated financial statements. The Company depreciates the satellites, earth stations and networking equipment, CPE units and related installation costs over their estimated useful lives. The total cost and accumulated depreciation of CPE units included in property, equipment and satellites, net,, as of December 31, ~~2020~~2021 were ~~$410.9~~$397.4 million and ~~$186.8~~$203.8 million, respectively. The total cost and accumulated depreciation of CPE units included in property, equipment and satellites, net,, as of March 31, ~~2020~~2021 were ~~$399.3~~$409.9 million and ~~$165.7~~$193.7 million, respectively.

On June 1, 2017, the Company’s second-generation ViaSat-2 satellite was successfully launched into orbit. In the fourth quarter of fiscal year 2018, shortly before the launch of commercial broadband services on the satellite, the Company reported an antenna deployment issue. The Company worked with the satellite manufacturer to determine the root cause of the antenna deployment issue, potential corrective measures, and resulting damage. In the second quarter of fiscal year 2019, the root cause analysis was completed. Based on that analysis, during the second quarter of fiscal year 2019, the Company recorded a reduction to the carrying value of the ViaSat-2 satellite of $177.4 million, with a corresponding insurance receivable of $177.4 million, based on the Company’s estimated ViaSat-2 output capabilities as compared to the anticipated, potential and configured capacity of the ViaSat-2 satellite. During fiscal years 2019 and 2020, the Company received an aggregate of $188.0 million of insurance proceeds related to the ViaSat-2 satellite. The ViaSat-2 satellite was primarily financed by the Company’s direct loan facility with the Export-Import Bank of the United States for ViaSat-2 (the Ex-Im Credit Facility) (see Note 6 — Senior Notes and Other Long-Term Debt for more

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~(UNAUDITED)~~

information). Pursuant to the terms of the Ex-Im Credit Facility, the proceeds received from the insurance claims for ViaSat-2 were used to pay down outstanding borrowings under the Ex-Im Credit Facility.(UNAUDITED)

Occasionally, the Company may enter into finance lease arrangements for various machinery, equipment, computer-related equipment, software, furniture, fixtures, or satellites. The Company records amortization of assets leased under finance lease arrangements within depreciation expense (see Note 1 — Basis of Presentation – Leasesfor more information).The Company’s finance leases consist primarily of satellite lifetime Ka-band capacity leases and have remaining terms from less than one year to ~~six years.~~five years. The Company reports assets obtained under finance leases in property, equipment and satellites, net and the current and non-current portions of its finance lease liabilities in current portion of long-term debt and other long-term debt, respectively.

Leases

~~Leases~~

Lessee accounting

For contracts entered into on or after April 1, 2019, the Company assesses at contract inception whether the contract is, or contains, a lease. Generally, the Company determines that a lease exists when (1) the contract involves the use of a distinct identified asset, (2) the Company obtains the right to substantially all economic benefits from use of the asset, and (3) the Company has 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) 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, the Company recognizes 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 the Company’s 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 the Company’s 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.

The Company’s operating leases consist primarily of leases for office space, data centers and satellite ground facilities and have remaining terms from less than one year to ~~twelve~~11 years, some of which include renewal options, and some of which include options to terminate the leases within one year. Certain earth station leases have renewal terms that have been deemed to be reasonably certain to be exercised and as such have been recognized as part of the Company’s right-of-use assets and lease liabilities. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company recognized right-of-use assets and lease liabilities for such leases in connection with its adoption of ASC 842 as of April 1, 2019. The Company reports operating lease right-of-use assets in operating lease right-of-use assets and the current and non-current portions of its operating lease liabilities in accrued and other liabilities and non-current operating lease liabilities, respectively.

~~VIASAT, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(UNAUDITED)~~

Lessor accounting

For broadband equipment leased to fixed broadband customers in conjunction with the delivery of connectivity services, the Company has made an accounting policy election not to separate the broadband equipment from the related

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

connectivity services. The connectivity services are the predominant component of these arrangements. The connectivity services are accounted for in accordance with ASC 606. The Company is 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.

Patents, orbital slots and other licenses

The Company capitalizes the costs of obtaining or acquiring patents, orbital slots and other licenses. Amortization of intangible assets that have finite lives is provided for by the straight-line method over the shorter of the legal or estimated economic life. Total capitalized costs of ~~$3.4 million and $3.3~~$3.5 million related to patents were included in other assets as of both December 31, ~~2020~~2021 and March 31, ~~2020, respectively.~~2021. The Company capitalized costs of ~~$53.8~~$64.1 million and ~~$39.5~~$53.8 million related to acquiring and obtaining orbital slots and other licenses included in other assets as of December 31, ~~2020~~2021 and March 31, ~~2020,~~2021, respectively. Accumulated amortization related to these assets was ~~$4.1~~$5.0 million and ~~$3.7~~$4.4 million as of December 31, ~~2020~~2021 and March 31, ~~2020,~~2021, respectively. Amortization expense related to these assets was an insignificant amount for the three and nine months ended December 31, ~~2020~~2021 and ~~2019.~~2020. If a patent, orbital slot or other license is rejected, abandoned or otherwise invalidated, the unamortized cost is expensed in that period. During the three and nine months ended December 31, ~~2020~~2021 and ~~2019,~~2020, the Company did not write off any significant costs due to abandonment or impairment.

Debt issuance costs

Debt issuance costs are amortized and recognized as interest expense using the effective interest rate method, or, when the results are not materially different, on a straight-line basis over the expected term of the related debt. During the nine months ended December 31, 2021 and 2020, 0 debt issuance costs and ~~2019, $5.1~~$5.1 million ~~and 0~~of debt issuance costs were capitalized, respectively. Unamortized debt issuance costs related to extinguished debt are expensed at the time the debt is extinguished and recorded in loss on extinguishment of debt in the condensed consolidated statements of operations and comprehensive income (loss). Debt issuance costs related to the Company’s revolving credit facility (the Revolving Credit Facility) are recorded in prepaid expenses and other current assets and in other long-term assets in the condensed consolidated balance sheets in accordance with the authoritative guidance for imputation of interest (ASC 835-30). Debt issuance costs related to the Company’s 5.625% Senior Notes due 2025 (the 2025 Notes), the Company’s 5.625% Senior Secured Notes due 2027 (the 2027 Notes), the Company’s 6.500% Senior Notes due 2028 (the 2028 Notes and, together with the 2025 Notes and the 2027 Notes, the Notes) and the Ex-Im Credit Facility are recorded as a direct deduction from the carrying amount of the related debt, consistent with debt discounts, in accordance with the authoritative guidance for imputation of interest (ASC 835-30).

Software development

Costs of developing software for sale are charged to independent research and development expense when incurred, until technological feasibility has been established. Software development costs incurred from the time technological feasibility is reached until the product is available for general release to customers are capitalized and reported at the lower of unamortized cost or net realizable value. Once the product is available for general release, the software development costs are amortized based on the ratio of current to future revenue for each product with an annual minimum equal to straight-line amortization over the remaining estimated economic life of the product, generally within five ~~years.~~years. Capitalized costs, net, of ~~$239.1~~$223.1 million and ~~$242.7~~$237.1 million related to software developed for resale were included in other assets as of December 31, ~~2020~~2021 and March 31, ~~2020,~~2021, respectively. The Company capitalized ~~$13.0~~$8.7 million and ~~$41.5~~$29.6 million of costs related to software developed for resale for the three and nine months ended December 31, 2021, respectively. The Company capitalized $13.0 million and $41.5 million of costs related to software developed for resale for the three and nine months ended December 31, 2020, respectively. ~~The Company~~Amortization expense for capitalized ~~$13.4~~software development costs was $14.5 million and ~~$37.0~~$43.6 million ~~of costs related to software developed for resale~~ for the three and nine months ended December 31, ~~2019, respectively. Amortization expense for capitalized software development costs was $17.1~~2021, respectively, and $17.1 million and ~~$45.1~~$45.1 million for the three and nine months ended December 31, 2020, ~~respectively, and $13.9 million and $39.6 million for the three and nine months ended December 31, 2019,~~ respectively.

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Self-insurance liabilities

The Company has self-insurance plans to retain a portion of the exposure for losses related to employee medical benefits and workers’ compensation. The self-insurance plans include policies which provide for both specific and aggregate stop-loss limits. The Company utilizes internal actuarial methods as well as other historical information for the purpose of estimating ultimate costs for a particular plan year. Based on these actuarial methods, along with currently available information and insurance industry statistics, the Company has recorded self-insurance liability for its plans of ~~$6.9 million and $6.2~~$6.9 million in accrued and other liabilities in the condensed consolidated balance sheets as of both December 31, ~~2020~~2021 and March 31, ~~2020, respectively.~~2021. The Company’s estimate, which is subject to inherent variability, is based on average claims experience in the Company’s industry and its own experience in terms of frequency and severity of claims, including asserted and unasserted claims incurred but not reported, with no explicit provision for adverse fluctuation from year to year. This variability may lead to ultimate payments being either greater or less than the amounts presented above. Self-insurance liabilities have been classified as a current liability in accrued and other liabilities in accordance with the estimated timing of the projected payments.

Indemnification provisions

In the ordinary course of business, the Company includes indemnification provisions in certain of its contracts, generally relating to parties with which the Company has commercial relations. Pursuant to these agreements, the Company will indemnify, hold harmless and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party, including but not limited to losses relating to third-party intellectual property claims. To date, there have not been any material costs incurred in connection with such indemnification clauses. The Company’s insurance policies do not necessarily cover the cost of defending indemnification claims or providing indemnification, so if a claim was filed against the Company by any party that the Company has agreed to indemnify, the Company could incur substantial legal costs and damages. A claim would be accrued when a loss is considered probable and the amount can be reasonably estimated. At December 31, ~~2020~~2021 and March 31, ~~2020,~~ 2021, 0 such amounts were accrued related to the aforementioned provisions.

Noncontrolling interests

A noncontrolling interest represents the equity interest in a subsidiary that is not attributable, either directly or indirectly, to the Company and is reported as equity of the Company, separately from the Company’s controlling interest. Revenues, expenses, gains, losses, net income (loss) and other comprehensive income (loss) are reported in the condensed consolidated financial statements at the consolidated amounts, which include the amounts attributable to both the controlling and noncontrolling interest.

Investments in unconsolidated affiliate — equity method

Investments in entities in which the Company can exercise significant influence, but does not own a majority equity interest or otherwise control, are accounted for using the equity method and are included as investment in unconsolidated affiliate in other assets (long-term) on the condensed consolidated balance sheets. The Company records its share of the results of such entities within equity in income (loss) of unconsolidated affiliate, net on the condensed consolidated statements of operations and comprehensive income (loss). The Company monitors such investments for other-than-temporary impairment by considering factors including the current economic and market conditions and the operating performance of the entities and records reductions in carrying values when necessary. The fair value of privately held investments is estimated using the best available information as of the valuation date, including current earnings trends, undiscounted cash flows, quoted stock prices of comparable public companies, and other company specific information, including recent financing rounds.

Common stock held in treasury

As of December 31, ~~2020~~2021 and March 31, ~~2020,~~2021, the Company had 0 shares of common stock held in treasury.

During the three months ended December 31, ~~2020~~2021 and ~~2019,~~2020, the Company issued ~~963,565~~1,091,363 and ~~932,074~~963,565 shares of common stock, respectively, based on the vesting terms of certain restricted stock unit agreements. During the nine months ended December 31, ~~2020~~2021 and ~~2019,~~2020, the Company issued ~~1,028,535~~1,220,370 and ~~1,047,557~~1,028,535 shares of common stock, respectively, based on the vesting terms of certain restricted stock unit agreements. In order for employees to satisfy minimum statutory employee tax withholding requirements related to the issuance of common stock underlying these restricted stock unit agreements, during the three months ended December 31, ~~2020~~2021 and ~~2019,~~2020, the Company

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

repurchased ~~348,629~~393,891 and ~~340,385~~348,629 shares of common stock, respectively, at cost and with a total value of $~~12.3~~20.4 million and ~~$25.1~~$12.3 million, respectively. During the nine months ended December 31, ~~2020~~2021 and ~~2019,~~2020, the Company repurchased ~~365,544~~427,229 and ~~376,517~~365,544 shares of common stock, respectively, at cost and with a total value of $~~13.0~~22.2 million and $~~28.3~~13.0 million, respectively. Although shares withheld for employee withholding taxes are technically not issued, they are treated as common stock repurchases for accounting purposes (with such shares deemed to be repurchased and then immediately retired), as they reduce the number of shares that otherwise would have been issued upon vesting of the restricted stock units. These retired shares remain as authorized stock and are considered to be unissued. The retirement of treasury stock had no impact on the Company’s total consolidated stockholders’ equity.

Stock-based compensation

In accordance with the authoritative guidance for share-based payments (ASC 718), the Company measures stock-based compensation cost at the grant date, based on the estimated fair value of the award. Expense for restricted stock units and stock options is recognized on a straight-line basis over the employee’s requisite service period. Expense for total shareholder return (TSR) performance stock options that vest is recognized regardless of the actual TSR outcome achieved and is recognized on a graded-vesting basis. The Company accounts for forfeitures as they occur.The Company recognized ~~$21.7~~$21.4 million and ~~$65.0~~$64.7 million of stock-based compensation expense for the three and nine months ended December 31, 2021, respectively. The Company recognized $21.7 million and $65.0 million of stock-based compensation expense for the three and nine months ended December 31, 2020, respectively. The Company ~~recognized $21.9 million~~recognizes excess tax benefits or deficiencies on vesting or settlement of awards as discrete items within income tax benefit or provision within net income (loss) and ~~$64.2 million of stock-based compensation expense for~~ the ~~three and nine months ended December 31, 2019, respectively.~~related cash flows are classified within operating activities.

Income taxes

Accruals for uncertain tax positions are provided for in accordance with the authoritative guidance for accounting for uncertainty in income taxes (ASC 740). The Company 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 for accounting for uncertainty in income taxes also provides guidance on 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. The Company’s policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense.

Ordinarily, the Company calculates its provision for income taxes at the end of each interim reporting period on the basis of an estimated annual effective tax rate adjusted for tax items that are discrete to each period. However, when a reliable estimate cannot be made, the Company computes its provision for income taxes using the actual effective tax rate (discrete method) for the year-to-date period. The Company’s effective tax rate is highly influenced by the amount of its research and development (R&D) tax credits. A small change in estimated annual pretax income (loss) can produce a significant variance in the annual effective tax rate given the Company’s expected amount of R&D tax credits. This variability provides an unreliable estimate of the annual effective tax rate. As a result, and in accordance with the authoritative guidance for accounting for income taxes in interim periods, the Company has computed its provision for income taxes for the three and nine months ended December 31, ~~2020~~2021 and ~~2019~~2020 by applying the actual effective tax rate to the pretax income (loss) for the three-month and nine-month periods.

A deferred income tax asset or liability is established for the expected future tax consequences resulting from differences in the financial reporting and tax bases of assets and liabilities and for the expected future tax benefit to be derived from tax credit and loss carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

~~VIASAT, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(UNAUDITED)~~

Recent authoritative guidance

In ~~June 2016,~~December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments — Credit Losses (ASC 326). ASU 2016-13 requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model (referred to as the current expected credit loss model). It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to ASC 326, Financial Instruments — Credit Losses (ASC 326), which clarifies that impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to ASC 326, Financial Instruments — Credit Losses, in May 2019, the FASB issued ASU 2019-05, Financial Instruments — Credit Losses (ASC 326) Targeted Relief, in November 2019, the FASB issued ASU 2019-11, Codification Improvements to ASC 326, Financial Instruments — Credit Losses, in February 2020, the FASB issued ASU 2020-02, Financial Instruments — Credit Losses (ASC 326) and Leases (ASC 842) Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to ASU 2016-02, Leases (ASC 842) and in March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments. These recently issued ASUs do not change the core principle of the guidance in ASU 2016-13 but rather are intended to clarify and improve operability of certain topics included within ASU 2016-13. ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02, and ASU 2020-03 have the same effective date and transition requirements as ASU 2016-13. The Company adopted the new guidance in the first quarter of fiscal year 2021 using the modified retrospective approach with application of the model to the Company’s accounts receivables. Under the new standard, the Company is required to recognize estimated credit losses expected to occur over the estimated life or remaining contractual life of an asset using a broader range of information including past events, current conditions and consideration of supportable forecasts about future economic conditions. The adoption of the standard had an insignificant ~~impact on the Company’s consolidated financial statements and disclosures.~~

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (ASC 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The Company adopted the new guidance in the first quarter of fiscal year 2021 and the guidance did not have a material impact on the Company’s consolidated financial statements and disclosures.

~~In December 2019, the FASB issued ASU~~ 2019-12, Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various areas related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. ~~ASU 2019-12 is effective for~~The Company adopted the ~~Company beginning~~new guidance in the first quarter of fiscal year 2022 ~~with early adoption permitted. The Company is currently evaluating~~on a prospective basis and as a result upon purchase of the ~~impact~~remaining 51% interest in EBI from Eutelsat (see Note 12 — Acquisitions for more information), and assertion to permanently

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

reinvest future earnings, the deferred tax liability recorded for EBI’s outside basis difference of ~~this standard on its~~$8.1 million was reversed and recorded in the first quarter of fiscal year 2022 as an income tax benefit in the condensed consolidated ~~financial~~ statements of operations and ~~disclosures.~~comprehensive income (loss).

In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities (ASC 321), Investments – Equity Method and Joint Ventures (ASC 323) and Derivatives and Hedging (ASC 815). ASU 2020-01 clarifies the interaction of the accounting for equity securities under ASC 321 and investments accounted for under the equity method of accounting under ASC 323, and the accounting for certain forward contracts and purchased options accounted for under ASC 815. The new standard will become effective for the Company beginning in fiscal year 2022, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides temporary optional guidance to ease the potential accounting burden associated with the transition away from reference rates (such as the London Interbank Offered Rate) that are expected to be discontinued. ASU 2020-04 was effective upon issuance and can be applied for a limited time through December 31, 2022. The Company adopted the new guidance ~~upon issuance with no impact to the Company consolidated financial statements and disclosures.~~

In May 2020, the SEC adopted Amendments to Financial Disclosures about Acquired and Disposed Businesses (the Final Rule). The Final Rule amends SEC rules related to separate financial statements of acquired businesses, and, among other things, revises the income test by adding a revenue component, which is one of the tests used to determine whether a subsidiary of an acquired or disposed business is significant. The Final Rule reduces the anomalous result that registrants with marginal or break-even net income (loss) may be more likely to have subsidiaries deemed significant

~~VIASAT, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(UNAUDITED)~~

~~where they otherwise would not. The Final Rule became effective on January 1, 2021, with early adoption permitted. The Company early adopted the provisions of the Final Rule~~ in the first quarter of fiscal year ~~2021. The~~2022 on a prospective basis and the guidance did not have a material impact on the Company’s consolidated financial statements and disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (ASC 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). ASU 2020-06 simplifies the accounting for convertible instruments by removing the beneficial conversion and cash conversion accounting models for convertible instruments and removes certain settlement conditions that are required for contracts to qualify for equity classification. This new standard also simplifies the diluted earnings per share calculations by requiring that an entity use the if-converted method for convertible instruments and requires that the effect of potential share settlement be included in diluted earnings per share calculations when an instrument may be settled in cash or shares. The new standard requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity’s financial statements, and information about events, conditions, and circumstances that can affect how to assess the amount or timing of an entity’s future cash flows related to those instruments. The new standard will become effective for the Company beginning in fiscal year 2023, with early adoption ~~permitted, but no earlier than fiscal year 2022.~~permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

In October 2020, the FASB issued ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs. ASU 2020-08 clarifies that a company should reevaluate whether a callable debt security is within the scope of ASC paragraph 310-20-35-33 for each reporting period. The ~~new standard will become effective for~~Company adopted the ~~Company beginning in fiscal year 2022. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.~~

~~In October 2020, the FASB issued ASU 2020-09, Debt (ASC 740) to update the SEC~~new guidance in the ~~Codification related to~~first quarter of fiscal year 2022 on a prospective basis and the ~~Final Rule (issued in March 2020). The SEC~~ guidance in the Codification has updated financial disclosures about guarantors and issuers of guaranteed securities and affiliates whose securities collateralize a registrant’s securities. The final rules, among other things, allow omission of financial statements with respect to guaranteed securities when certain criteria are met and became effective on January 4, 2021. The guidance doesdid not have a material impact on the Company’s consolidated financial statements and disclosures.

~~VIASAT, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(UNAUDITED)~~

In October ~~2020,~~2021, the FASB issued ASU ~~2020-10, Codification Improvements, which is related~~2021-08, Business Combinations (ASC 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires contract assets and contract liabilities acquired in a business combination to ~~a project by~~be recognized in accordance with ASC 606 as if the FASB to facilitate codification updates for technical corrections, clarifications and other minor improvements that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities.acquirer had originated the contracts. The ~~new standard contains amendments that affect a wide variety of topics in the ASC. The various amendments in this~~ new standard will become effective for the Company beginning in fiscal year ~~2022,~~2024, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (ASC 832): Disclosures by Business Entities about Government Assistance. ASU 2021-10 requires annual disclosures when an entity accounts for a transaction with a government by applying a grant or contribution accounting model by analogy to other accounting guidance. The new standard will become effective for the Company beginning in fiscal year 2023, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

Note 2 — Composition of Certain Balance Sheet Captions


	As of December 31, 2021			As of March 31, 2021
	(In thousands)
Accounts receivable, net:
Billed	$	268,013		$	172,559
Unbilled		102,110			70,785
Allowance for doubtful accounts		(7,110	)		(4,692	)
	$	363,013		$	238,652
Inventories:
Raw materials	$	103,845		$	98,338
Work in process		76,184			71,875
Finished goods		173,964			166,459
	$	353,993		$	336,672
Prepaid expenses and other current assets:
Prepaid expenses	$	102,826		$	94,405
Other		42,007			25,555
	$	144,833		$	119,960
Property, equipment and satellites, net:
Equipment and software (estimated useful life of 3-7 years)	$	1,671,024		$	1,505,697
CPE leased equipment (estimated useful life of 4-5 years)		397,416			409,942
Furniture and fixtures (estimated useful life of 7 years)		60,076			57,433
Leasehold improvements (estimated useful life of 2-17 years)		155,603			149,324
Buildings (estimated useful life of 12-38 years)		12,405			8,923
Land		3,978			2,291
Construction in progress		335,174			219,482
Satellites (estimated useful life of 7-17 years)		1,060,656			969,952
Satellite Ka-band capacity obtained under finance leases (estimated useful life of 7-11 years)		173,480			173,467
Satellites under construction		1,708,565			1,338,408
		5,578,377			4,834,919
Less: accumulated depreciation and amortization		(1,975,196	)		(1,784,436	)
	$	3,603,181		$	3,050,483
Other acquired intangible assets, net:
Technology (weighted average useful life of 7 years)	$	150,559		$	78,185
Contracts and customer relationships (weighted average useful life of 10 years)		167,294			55,161
Satellite co-location rights (weighted average useful life of 9 years)		8,600			8,600
Trade name (weighted average useful life of 7 years)		32,042			5,940
Other (weighted average useful life of 11 years)		22,388			3,663
		380,883			151,549
Less: accumulated amortization		(143,033	)		(141,981	)
	$	237,850		$	9,568
Other assets:
Investment in unconsolidated affiliate	$	—		$	176,938
Deferred income taxes		289,181			273,288
Capitalized software costs, net		223,142			237,100
Patents, orbital slots and other licenses, net		62,553			52,889
Other		107,610			95,212
	$	682,486		$	835,427
Accrued and other liabilities:
Collections in excess of revenues and deferred revenues	$	180,854		$	216,594
Accrued employee compensation		83,017			87,153
Accrued vacation		49,134			59,509
Warranty reserve, current portion		5,009			6,693
Operating lease liabilities		50,049			48,896
Other		137,639			113,986
	$	505,702		$	532,831
Other liabilities:
Deferred revenues, long-term portion	$	89,083		$	84,654
Warranty reserve, long-term portion		5,699			5,193
Satellite performance incentive obligations, long-term portion		19,568			22,191
Deferred income taxes		15,160			—
Other		27,594			25,312
	$	157,104		$	137,350

As of
December 31, 2020

As of
March 31, 2020

(In thousands)

Accounts receivable, net:

Billed

$
145,323

$
260,431

Unbilled

60,951

75,661

Allowance for doubtful accounts

(3,482
)

(5,394
)

$
202,792

$
330,698

Inventories:

Raw materials

$
95,872

$
83,353

Work in process

68,071

59,429

Finished goods

170,976

151,634

$
334,919

$
294,416

Prepaid expenses and other current assets:

Prepaid expenses

$
82,455

$
84,872

Other

30,093

31,409

$
112,548

$
116,281

Property, equipment and satellites, net:

Equipment and software (estimated useful life of 3-7 years)

$
1,424,548

$
1,229,926

CPE leased equipment (estimated useful life of 4-5 years)

410,879

399,343

Furniture and fixtures (estimated useful life of 7 years)

57,582

54,688

Leasehold improvements (estimated useful life of 2-17 years)

144,214

137,287

Building (estimated useful life of 12 years)

8,923

8,923

Land

2,291

2,291

Construction in progress

230,172

220,703

Satellites (estimated useful life of 12-17 years)

969,952

969,952

Satellite Ka-band capacity obtained under finance leases (estimated useful life of 7-11 years)

173,322

171,801

Satellites under construction

1,264,177

906,720

4,686,060

4,101,634

Less: accumulated depreciation and amortization

(1,712,327
)

(1,514,899
)

$
2,973,733

$
2,586,735

Other acquired intangible assets, net:

Technology (weighted average useful life of 6 years)

$
91,804

$
89,228

Contracts and customer relationships (weighted average useful life of 7 years)

103,724

103,114

Satellite co-location rights (weighted average useful life of 9 years)

8,600

8,600

Trade name (weighted average useful life of 3 years)

5,940

5,940

Other (weighted average useful life of 8 years)

6,421

6,399

216,489

213,281

Less: accumulated amortization

(205,410
)

(198,842
)

$
11,079

$
14,439

Other assets:

Investment in unconsolidated affiliate

$
168,787

$
160,204

Deferred income taxes

277,734

276,331

Capitalized software costs, net

239,104

242,741

Patents, orbital slots and other licenses, net

53,058

39,135

Other

104,094

88,941

$
842,777

$
807,352

Accrued and other liabilities:

Collections in excess of revenues and deferred revenues

$
206,807

$
123,019

Accrued employee compensation

61,479

72,654

Accrued vacation

53,758

48,963

Warranty reserve, current portion

6,115

6,233

Operating lease liabilities

49,370

42,146

Other

108,036

98,175

$
485,565

$
391,190

Other liabilities:

Deferred revenues, long-term portion

$
97,485

$
80,802

Warranty reserve, long-term portion

5,766

5,410

Satellite performance incentive obligations, long-term portion

23,005

24,349

Other

25,784

10,373

$
152,040

$
120,934

Note 6 — Senior Notes and Other Long-Term Debt

Total long-term debt consisted of the following as of December 31, ~~2020~~2021 and March 31, ~~2020:~~2021:


	As of December 31, 2020			As of March 31, 2020			As of December 31, 2021			As of March 31, 2021
	(In thousands)						(In thousands)
2028 Notes	$	400,000		$	—		$	400,000		$	400,000
2027 Notes		600,000			600,000			600,000			600,000
2025 Notes		700,000			700,000			700,000			700,000
Revolving Credit Facility		—			390,000			370,000			—
Ex-Im Credit Facility		98,261			117,913			78,609			98,261
Finance lease obligations (see Note 1)		61,927			64,956			48,227			56,336
Total debt		1,860,188			1,872,869			2,196,836			1,854,597
Unamortized discount and debt issuance costs		(22,705	)		(21,418	)		(17,854	)		(21,441	)
Less: current portion of long-term debt		33,735			29,788			29,590			30,472
Total long-term debt	$	1,803,748		$	1,821,663		$	2,149,392		$	1,802,684

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Revolving Credit Facility

As of December 31, ~~2020,~~2021, the Revolving Credit Facility provided a ~~$700.0~~$700.0 million revolving line of credit (including up to ~~$150.0~~$150.0 million of letters of credit), with a maturity date of January 18, ~~2024.~~2024. At December 31, ~~2020,~~2021, the Company had 0$370.0 million in principal amount of outstanding borrowings under the Revolving Credit Facility and ~~$35.9~~$58.9 million outstanding under standby letters of credit, leaving borrowing availability under the Revolving Credit Facility as of December 31, ~~2020~~2021 of ~~$664.1~~$271.1 million.

Borrowings under the Revolving Credit Facility bear interest, at the Company’s option, at either (1) the highest of the Federal Funds rate plus 0.50%, the Eurodollar rate plus 1.00%, or the administrative agent’s prime rate as announced from time to time, or (2) the Eurodollar rate, plus, in the case of each of (1) and (2), an applicable margin that is based on the Company’s total leverage ratio. As of December 31, 2021, the weighted average effective interest rate on the Company’s outstanding borrowings under the Revolving Credit Facility was 1.86%. The Company has capitalized certain amounts of interest expense on the Revolving Credit Facility in connection with the construction of various assets during the construction period. The Revolving Credit Facility is required to be guaranteed by certain significant domestic subsidiaries of the Company (as defined in the Revolving Credit Facility) and secured by substantially all of the Company’s and any such subsidiaries’ assets. As of December 31, ~~2020,~~2021, none of the Company’s subsidiaries guaranteed the Revolving Credit Facility.

The Revolving Credit Facility contains financial covenants regarding a maximum total leverage ratio and a minimum interest coverage ratio. In addition, the Revolving Credit Facility contains covenants that restrict, among other things, the Company’s ability to sell assets, make investments and acquisitions, make capital expenditures, grant liens, pay dividends and make certain other restricted payments. The Company was in compliance with its financial covenants under the Revolving Credit Facility as of December 31, ~~2020.~~2021.

On November 23, 2021, the Company amended the Revolving Credit Facility to, among other matters, permit the consummation of the Inmarsat Transaction and provide additional covenant flexibility following the completion of the Inmarsat Transaction. These amendments will become effective at and are conditional upon the closing of the Inmarsat Transaction.

~~VIASAT, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(UNAUDITED)~~

Ex-Im Credit Facility

The Ex-Im Credit Facility originally provided a ~~$362.4~~$362.4 million senior secured direct loan facility, which was fully drawn. Of the ~~$362.4~~$362.4 million in principal amount of borrowings made under the Ex-Im Credit Facility, ~~$321.2~~$321.2 million was used to finance up to ~~85%~~85% of the costs of construction, launch and insurance of the ViaSat-2 satellite and related goods and services (including costs incurred on or after September 18, 2012), with the remaining ~~$41.2~~$41.2 million used to finance the total exposure fees incurred under the Ex-Im Credit Facility (which included all previously accrued completion exposure fees). As of December 31, ~~2020,~~2021, the Company had ~~$98.3~~$78.6 million in principal amount of outstanding borrowings under the Ex-Im Credit Facility.

Borrowings under the Ex-Im Credit Facility bear interest at a fixed rate of ~~2.38%~~2.38%, payable semi-annually in arrears. The effective interest rate on the Company’s outstanding borrowings under the Ex-Im Credit Facility, which takes into account timing and amount of borrowings and payments, exposure fees, debt issuance costs and other fees, is ~~4.54%~~4.54%. Borrowings under the Ex-Im Credit Facility are required to be repaid in 16 semi-annual principal installments, which commenced on April 15, 2018, with a maturity date of October 15, ~~2025.~~2025. Pursuant to the terms of the Ex-Im Credit Facility, certain insurance proceeds related to the ViaSat-2 satellite must be used to pay down outstanding borrowings under the Ex-Im Credit Facility upon receipt. During fiscal years 2019 and 2020, the Company received an aggregate of $188.0 million of insurance proceeds related to the ViaSat-2 satellite, all of which were used to pay down outstanding borrowings under the Ex-Im Credit Facility upon receipt (see Note 1 — Basis of Presentation – Property, equipment and satellites for more information). The Ex-Im Credit Facility is guaranteed by Viasat and is secured by first-priority liens on the ViaSat-2 satellite and related assets, as well as a pledge of the capital stock of the borrower under the facility.

The Ex-Im Credit Facility contains financial covenants regarding Viasat’s maximum total leverage ratio and minimum interest coverage ratio. In addition, the Ex-Im Credit Facility contains covenants that restrict, among other things, the Company’s ability to sell assets, make investments and acquisitions, make capital expenditures, grant liens, pay dividends and make certain other restricted payments. The Company was in compliance with its financial covenants under the Ex-Im Credit Facility as of December 31, ~~2020.~~2021.

Borrowings under the Ex-Im Credit Facility are recorded as current portion of long-term debt and as other long-term debt, net of unamortized discount and debt issuance costs, in the Company’s condensed consolidated financial statements. The discount of ~~$42.3~~$42.3 million (consisting of the initial ~~$6.0~~$6.0 million pre-exposure fee, ~~$35.3~~$35.3 million of

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

completion exposure fees, and other customary fees) and deferred financing cost associated with the issuance of the borrowings under the Ex-Im Credit Facility are amortized to interest expense on an effective interest rate basis over the weighted average term of the Ex-Im Credit Facility and in accordance with the related payment obligations.

Senior Notes

Senior Notes due 2028

In June 2020, the Company issued ~~$400.0~~$400.0 million in principal amount of 2028 Notes in a private placement to institutional buyers. The 2028 Notes were issued at face value and are recorded as long-term debt, net of debt issuance costs, in the Company’s condensed consolidated financial statements. The 2028 Notes bear interest at the rate of ~~6.500%~~6.500% per year, payable semi-annually in cash in arrears, which interest payments commenced in January 2021. Debt issuance costs associated with the issuance of the 2028 Notes are amortized to interest expense on a straight-line basis over the term of the 2028 Notes, the results of which are not materially different from the effective interest rate basis.

The 2028 Notes are required to be guaranteed on an unsecured senior basis by each of the Company’s existing and future subsidiaries that guarantees the Revolving Credit Facility. As of December 31, ~~2020,~~2021, none of the Company’s subsidiaries guaranteed the 2028 Notes. The 2028 Notes are the Company’s general senior unsecured obligations and rank equally in right of payment with all of the Company’s existing and future unsecured unsubordinated debt. The 2028 Notes are effectively junior in right of payment to the Company’s existing and future secured debt, including under the Credit Facilities and the 2027 Notes (to the extent of the value of the assets securing such debt), are structurally subordinated to all existing and future liabilities (including trade payables) of the Company’s subsidiaries that do not guarantee the 2028 Notes, and are senior in right of payment to all of the Company’s existing and future subordinated indebtedness.

The indenture governing the 2028 Notes limits, among other things, the Company’s and its restricted subsidiaries’ ability to: incur, assume or guarantee additional debt; issue redeemable stock and preferred stock; pay dividends, make distributions or redeem or repurchase capital stock; prepay, redeem or repurchase subordinated debt; make loans and

~~VIASAT, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(UNAUDITED)~~

investments; grant or incur liens; restrict dividends, loans or asset transfers from restricted subsidiaries; sell or otherwise dispose of assets; enter into transactions with affiliates; reduce the Company’s satellite insurance; and consolidate or merge with, or sell substantially all of their assets to, another person.

Prior to July 15, 2023, the Company may redeem up to 40% of the 2028 Notes at a redemption price of ~~106.500%~~106.500% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the redemption date, from the net cash proceeds of specified equity offerings. The Company may also redeem the 2028 Notes prior to July 15, 2023, in whole or in part, at a redemption price equal to ~~100%~~100% of the principal amount thereof plus the applicable premium and any accrued and unpaid interest, if any, thereon to the redemption date. The applicable premium is calculated as the greater of: (i) 1.0% of the principal amount of such 2028 Notes and (ii) the excess, if any, of (a) the present value at such date of redemption of (1) the redemption price of such 2028 Notes on July 15, 2023 plus (2) all required interest payments due on such 2028 Notes through July 15, 2023 (excluding accrued but unpaid interest to the date of redemption), computed using a discount rate equal to the treasury rate (as defined under the indenture governing the 2028 Notes) plus 50 basis points, over (b) the then-outstanding principal amount of such 2028 Notes. The 2028 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on July 15, 2023 at a redemption price of ~~103.250%~~103.250%, during the 12 months beginning on July 15, 2024 at a redemption price of ~~101.625%~~101.625%, and at any time on or after July 15, 2025 at a redemption price of ~~100%~~100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date.

In the event a change of control triggering event occurs (as defined in the indenture governing the 2028 Notes), each holder will have the right to require the Company to repurchase all or any part of such holder’s 2028 Notes at a purchase price in cash equal to ~~101%~~101% of the aggregate principal amount of the 2028 Notes repurchased, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

Senior Secured Notes due 2027

In March 2019, the Company issued ~~$600.0~~$600.0 million in principal amount of 2027 Notes in a private placement to institutional buyers. The 2027 Notes were issued at face value and are recorded as long-term debt, net of debt issuance costs, in the Company’s condensed consolidated financial statements. The 2027 Notes bear interest at the rate of ~~5.625%~~5.625% per year, payable semi-annually in cash in arrears, which interest payments commenced in October 2019. Debt issuance

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

costs associated with the issuance of the 2027 Notes are amortized to interest expense on a straight-line basis over the term of the 2027 Notes, the results of which are not materially different from the effective interest rate basis.

The 2027 Notes are required to be guaranteed on a senior secured basis by each of the Company’s existing and future subsidiaries that guarantees the Revolving Credit Facility. As of December 31, ~~2020,~~2021, none of the Company’s subsidiaries guaranteed the 2027 Notes. The 2027 Notes are secured, equally and ratably with the Revolving Credit Facility and any future parity lien debt, by liens on substantially all of the Company’s assets.

The 2027 Notes are the Company’s general senior secured obligations and rank equally in right of payment with all of its existing and future unsubordinated debt. The 2027 Notes are effectively senior to all of the Company’s existing and future unsecured debt (including the 2025 Notes and the 2028 Notes) as well as to all of any permitted junior lien debt that may be incurred in the future, in each case to the extent of the value of the assets securing the 2027 Notes. The 2027 Notes are effectively subordinated to any obligations that are secured by liens on assets that do not constitute a part of the collateral securing the 2027 Notes, are structurally subordinated to all existing and future liabilities (including trade payables) of the Company’s subsidiaries that do not guarantee the 2027 Notes (including obligations of the borrower under the Ex-Im Credit Facility), and are senior in right of payment to all of the Company’s existing and future subordinated indebtedness.

The indenture governing the 2027 Notes limits, among other things, the Company’s and its restricted subsidiaries’ ability to: incur, assume or guarantee additional debt; issue redeemable stock and preferred stock; pay dividends, make distributions or redeem or repurchase capital stock; prepay, redeem or repurchase subordinated debt; make loans and investments; grant or incur liens; restrict dividends, loans or asset transfers from restricted subsidiaries; sell or otherwise dispose of assets; enter into transactions with affiliates; reduce the Company’s satellite insurance; and consolidate or merge with, or sell substantially all of their assets to, another person.

Prior to April 15, 2022, the Company may redeem up to 40% of the 2027 Notes at a redemption price of ~~105.625%~~105.625% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the redemption date, from the net cash proceeds of specified equity offerings.The Company may also redeem the 2027 Notes prior to April 15, 2022, in whole or in part, at a redemption price equal to ~~100%~~100% of the principal amount thereof plus the applicable premium and any accrued and unpaid interest, if any, thereon to the redemption date. The applicable premium is calculated as the greater of: (i) 1.0% of the principal amount of such 2027 Notes and (ii) the excess, if any, of (a) the present value at such date of redemption of (1) the redemption price of such 2027 Notes on April 15, 2022 plus (2) all required interest payments due on such 2027 Notes through April 15, 2022 (excluding accrued but unpaid interest to the date of redemption), computed using a discount rate equal to the treasury rate (as defined under the indenture governing the 2027 Notes) plus 50 basis points, over (b) the then-outstanding principal amount of such 2027 Notes. The 2027 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on April 15, 2022 at a redemption price of ~~102.813%~~102.813%, during the 12 months beginning on April 15, 2023 at a redemption price of ~~101.406%~~101.406%, and at any time on or after April 15, 2024 at a redemption price of ~~100%~~100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date.

~~VIASAT, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(UNAUDITED)~~

In the event a change of control triggering event occurs (as defined in the indenture governing the 2027 Notes), each holder will have the right to require the Company to repurchase all or any part of such holder’s 2027 Notes at a purchase price in cash equal to ~~101%~~101% of the aggregate principal amount of the 2027 Notes repurchased, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

Senior Notes due 2025

In September 2017, the Company issued ~~$700.0~~$700.0 million in principal amount of 2025 Notes in a private placement to institutional buyers. The 2025 Notes were issued at face value and are recorded as long-term debt, net of debt issuance costs, in the Company’s condensed consolidated financial statements. The 2025 Notes bear interest at the rate of ~~5.625%~~5.625% per year, payable semi-annually in cash in arrears, which interest payments commenced in March 2018. Debt issuance costs associated with the issuance of the 2025 Notes are amortized to interest expense on a straight-line basis over the term of the 2025 Notes, the results of which are not materially different from the effective interest rate basis.

The 2025 Notes are required to be guaranteed on an unsecured senior basis by each of the Company’s existing and future subsidiaries that guarantees the Revolving Credit Facility. As of December 31, ~~2020,~~2021, none of the Company’s subsidiaries guaranteed the 2025 Notes. The 2025 Notes are the Company’s general senior unsecured obligations and rank equally in right of payment with all of the Company’s existing and future unsecured unsubordinated debt. The 2025

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Notes are effectively junior in right of payment to the Company’s existing and future secured debt, including under the Credit Facilities and the 2027 Notes (to the extent of the value of the assets securing such debt), are structurally subordinated to all existing and future liabilities (including trade payables) of the Company’s subsidiaries that do not guarantee the 2025 Notes, and are senior in right of payment to all of the Company’s existing and future subordinated indebtedness.

The indenture governing the 2025 Notes limits, among other things, the Company’s and its restricted subsidiaries’ ability to: incur, assume or guarantee additional debt; issue redeemable stock and preferred stock; pay dividends, make distributions or redeem or repurchase capital stock; prepay, redeem or repurchase subordinated debt; make loans and investments; grant or incur liens; restrict dividends, loans or asset transfers from restricted subsidiaries; sell or otherwise dispose of assets; enter into transactions with affiliates; reduce the Company’s satellite insurance; and consolidate or merge with, or sell substantially all of their assets to, another person.

The 2025 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on September 15, 2020 at a redemption price of 102.813%, during the 12 months beginning on September 15, 2021 at a redemption price of 101.406%, and at any time on or afterprior to September 15, 2022 at a redemption price of ~~100%~~101.406%, and at any time thereafter at a redemption price of 100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date.

In the event a change of control triggering event occurs (as defined in the indenture governing the 2025 Notes), each holder will have the right to require the Company to repurchase all or any part of such holder’s 2025 Notes at a purchase price in cash equal to ~~101%~~101% of the aggregate principal amount of the 2025 Notes repurchased, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

The Company has contracts with various U.S. Government agencies. Accordingly, the Company is routinely subject to audit and review by the DCMA, the DCAA and other U.S. Government agencies of its performance on government contracts, indirect rates and pricing practices, accounting and management internal control business systems, and compliance with applicable contracting and procurement laws, regulations and standards. An adverse outcome to a review or audit or other failure to comply with applicable contracting and procurement laws, regulations and standards could result in material civil and criminal penalties and administrative sanctions being imposed on the Company, which may include termination of contracts, forfeiture of profits, triggering of price reduction clauses, suspension of payments, significant customer refunds, fines and suspension, or a prohibition on doing business with U.S. Government agencies. In addition, if the Company fails to obtain an “adequate” determination of its various accounting and management internal control business systems from applicable U.S. Government agencies or if allegations of impropriety are made against it, the Company could suffer serious harm to its business or its reputation, including its ability to bid on new contracts or receive contract renewals and its competitive position in the bidding process. The Company’s incurred cost audits by the DCAA have not been concluded for fiscal years ~~2019~~2020 or ~~2020.~~2021. As of December 31, ~~2020,~~2021, the DCAA had completed its incurred cost audit for fiscal years 2004, 2016 and ~~2016~~2019 and approved the Company’s incurred costs for those fiscal years, as well as approved the Company’s incurred costs for fiscal years 2005 through 2015, 2017 and 2018 without further audit based on the determination of low risk. Although the Company has recorded contract revenues subsequent to fiscal year ~~2018~~2019 based upon an estimate of costs that the Company believes will be approved upon final audit or review, the

Company does not know the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed the Company’s estimates, its profitability would be adversely affected. As of December 31, ~~2020~~2021 and March 31, ~~2020,~~2021, the Company had $~~8.8~~12.1 million and $~~7.8~~10.3 million, respectively, in contract-related reserves for its estimate of potential refunds to customers for potential cost adjustments on several multi-year U.S. Government cost reimbursable contracts. This reserve is classified as either an element of accrued liabilities or as a reduction of unbilled accounts receivable based on the status of the related contracts.

For the three and nine months ended December 31, ~~2020,~~2021, the Company’s gross unrecognized tax benefits increased by ~~$5.1~~$6.7 million and ~~$12.0~~$13.1 million, ~~respectively.~~respectively, including interest and penalties of an insignificant amount, which were included as a component of the provision for income taxes. In the next 12 months it is reasonably possible that the amount of unrecognized tax benefits will not change significantly.

Inaccordance with the authoritative guidance for share-based payments (ASC 718), the Company recognizes excess tax benefits or deficiencies on vesting or settlement of awards as an income tax benefit or expense within net income (loss) and the related cash flows classified within operating activities. In accordance with ASU 2016-09, during interim periods, excess tax benefits or deficiencies are recognized in income tax expense as discrete items in the reporting period in which they occur.

Note 10 — Equity Method Investments and Related-Party Transactions

Euro Broadband Infrastructure Sàrl

In March 2017, the Company acquired a ~~49%~~49% interest in ~~Euro Broadband Infrastructure Sàrl (Euro Infrastructure Co.)~~EBI for ~~$139.5~~$139.5 million as part of the consummation of the Company’s strategic partnering arrangement with Eutelsat. ~~The~~On April 30, 2021, EBI became a consolidated subsidiary when the Company purchased the remaining 51% interest in EBI from Eutelsat (see Note 12 — Acquisitions — EBI for more information).

Prior to the purchase of the remaining 51% interest on April 30, 2021, the Company’s investment in ~~Euro Infrastructure Co. is~~EBI was accounted for under the equity method and the total investment including basis difference allocated to tangible assets, identifiable intangible assets, deferred income taxes and goodwill, iswas classified as a single line item, as an investment in unconsolidated affiliate, onin the Company’s condensed consolidated balance sheets. Because the underlying net assets in ~~Euro Infrastructure Co.~~EBI and the related excess carrying value of investment over the proportionate share of net assets ~~are~~was denominated in Euros, foreign currency translation gains or losses ~~impact~~impacted the recorded value of the Company’s investment. ~~The Company recorded a foreign currency translation gain, net of tax, of approximately $4.4 million and $5.9 million for~~Prior to the three and nine months ended December 31, 2020, respectively, in accumulated other comprehensive income (loss). The Company recorded foreign currency translation losses, net of tax, of approximately $4.2 million and $5.0 million forpurchase, the three and nine months ended December 31, 2019, respectively, in accumulated other comprehensive income (loss). The Company records its proportionate share of the results of Euro Infrastructure Co., and any related basis difference amortization expense, within equity in income (loss) of unconsolidated affiliate, net, one quarter in arrears. Accordingly, the Company included its share of the results of Euro Infrastructure Co. for the three and nine months ended September 30, 2020 in its condensed consolidated financial statements for the three and nine months ended December 31, 2020, respectively, and the Company included its share of the results of Euro Infrastructure Co. for the three and nine months ended September 30, 2019 in its condensed consolidated financial statements for the three and nine months ended December 31, 2019, respectively. The Company’s investment in ~~Euro Infrastructure Co. is~~EBI was presented at cost of investment plus its accumulated proportional share of income or loss, including amortization of the difference in the historical basis of the Company’s contribution, less any distributions it has received. ~~On November 18, 2020, the Company entered into an agreement to purchase the remaining 51% interest in Euro Infrastructure Co. from Eutelsat (see Note 12 — Acquisitions for more information).~~

~~VIASAT, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(UNAUDITED)~~

The difference between the Company’s carrying value of its investment in ~~Euro Infrastructure Co.~~EBI and its proportionate share of the net assets of ~~Euro Infrastructure Co.~~EBI as of ~~December 31, 2020 and~~ March 31, ~~2020~~2021 is summarized as follows:

	As of December 31, 2020			As of March 31, 2020
	(In thousands)						As of March 31, 2021
Carrying value of investment in Euro Infrastructure Co.	$	168,787		$	160,204

Carrying value of investment in EBI							$	176,938
Less: proportionate share of net assets of Euro Infrastructure Co.		152,231			144,769			159,394
Excess carrying value of investment over proportionate share of net assets	$	16,556		$	15,435		$	17,544
The excess carrying value has been primarily assigned to:
Goodwill	$	22,838		$	21,777		$	23,978
Identifiable intangible assets		8,231			8,799			8,332
Tangible assets		(15,504	)		(16,142	)		(15,781	)
Deferred income taxes		991			1,001			1,015
	$	16,556		$	15,435		$	17,544

~~The~~As of March 31, 2021, the identifiable intangible assets ~~have~~had useful lives of up to 11 years and a weighted average useful life of approximately ten years, and tangible assets ~~have~~had useful lives of up to 11 years and a weighted average useful life of approximately 11 years. Goodwill is not deductible for tax purposes.

The Company’s share of ~~income~~earnings on its investment in ~~Euro Infrastructure Co.~~EBI was0ne and an insignificant amount for the three and nine months ended December 31, ~~2020,~~2021, respectively, and ~~$1.8 million and $4.3 million~~an insignificant amount for both the three and nine months ended December 31, ~~2019, respectively,~~2020, consisting of the Company’s share of equity in ~~Euro Infrastructure Co.’s~~EBI’s income (loss), including amortization of the difference in the historical basis of the Company’s contribution.Prior to the purchase of the remaining 51% interest on April 30, 2021, the Company recorded its proportionate share of the results of EBI, and any related basis difference amortization expense, within equity in income of unconsolidated affiliate, net, one quarter in arrears. Subsequent to April

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

30, 2021, the results of EBI have been included within the consolidated results of the Company and will no longer be recorded in arrears with no material impact.

Since acquiring its initial interest in ~~Euro Infrastructure Co.,~~EBI through the purchase date, the Company ~~has~~ recorded ~~$11.2~~$10.4 million in retained earnings of undistributed cumulative earnings in equity interests, net of tax, as of ~~December 31, 2020.~~April 30, 2021.

~~VIASAT, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(UNAUDITED)~~

Related-party transactions

Transactions with the equity method investee are considered related-party transactions. In the first quarter of fiscal year 2022, the Company acquired the remaining 51% interest in its former equity method investee, EBI. Refer to Note 12 — Acquisitions — EBI for further information. The following tables set forth the material related-party transactions entered into between ~~Euro Infrastructure Co.~~EBI and its subsidiaries, on the one hand, and the Company and its subsidiaries, on the other hand, in the ordinary course of business for the time periods presented:


	Three Months Ended		Nine Months Ended
	December 31, 2020		December 31, 2020
	(In thousands)
Revenue – EBI	$	8,319	$	9,743
Expense – EBI		4,163		12,331
Cash received – EBI		1,773		9,995
Cash paid – EBI		7,867		20,947


	As of March 31, 2021

Collections in excess of revenues and deferred revenues – EBI	$	6,013

Three Months Ended

Nine Months Ended

December 31, 2020

December 31, 2019

December 31, 2020

December 31, 2019

(In thousands)

Revenue – Euro Infrastructure Co.

$
8,319

$
*

$
9,743

$
8,469

Expense – Euro Infrastructure Co.

4,163

1,815

12,331

10,720

Cash received – Euro Infrastructure Co.

1,773

6,253

9,995

8,605

Cash paid – Euro Infrastructure Co.

7,867

3,198

20,947

10,654

As of
December 31, 2020

As of
March 31, 2020

(In thousands)

Collections in excess of revenues and deferred
revenues – Euro Infrastructure Co.

$
6,084

$
5,832

Accounts payable – Euro Infrastructure Co.

*

5,446

*Amount was ~~insignificant~~insignificant..

Note 11 — Segment Information

The Company’s reporting segments, comprised of the satellite services, commercial networks and government systems segments, are primarily distinguished by the type of customer and the related contractual requirements. The Company’s satellite services segment provides satellite-based broadband and related services to residential customers, Community Internet hotspot users, enterprises, commercial airlines and other mobile broadband customers. The Company’s commercial networks segment develops and offers advanced satellite and wireless broadband platforms, ground networking equipment, radio frequency and advanced microwave solutions, Application-Specific Integrated Circuit chip design, satellite payload development and space-to-earth connectivity systems, some of which are ultimately used by the Company’s satellite services segment. The Company’s government systems segment provides global mobile broadband services to military and government users and develops and offers network-centric, internet protocol-based fixed and mobile secure communications products and solutions. The more regulated government environment is subject to unique contractual requirements and possesses economic characteristics which differ from the satellite services and commercial networks segments. The Company’s segments are determined consistent with the way management currently organizes and evaluates financial information internally for making operating decisions and assessing performance.

3029

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Segment revenues and operating profits (losses) for the three and nine months ended December 31, ~~2020~~2021 and ~~2019~~2020 were as follows:


	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	December 31, 2020			December 31, 2019			December 31, 2020			December 31, 2019			December 31, 2021			December 31, 2020			December 31, 2021			December 31, 2020
	(In thousands)												(In thousands)
Revenues:
Satellite services
Product	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Service		220,789			211,700			638,660			614,232			309,711			220,789			883,938			638,660
Total		220,789			211,700			638,660			614,232			309,711			220,789			883,938			638,660
Commercial networks
Product		75,690			73,182			197,560			212,226			123,059			75,690			343,525			197,560
Service		14,409			11,544			38,561			39,520			16,618			14,409			49,554			38,561
Total		90,099			84,726			236,121			251,746			139,677			90,099			393,079			236,121
Government systems
Product		190,824			229,908			575,568			661,309			193,084			190,824			574,548			575,568
Service		73,847			61,890			209,976			190,230			77,245			73,847			234,366			209,976
Total		264,671			291,798			785,544			851,539			270,329			264,671			808,914			785,544
Elimination of intersegment revenues	—			—				—		—				—		—				—			—
Total revenues	$	575,559		$	588,224		$	1,660,325		$	1,717,517		$	719,717		$	575,559		$	2,085,931		$	1,660,325

Operating profits (losses):
Satellite services	$	11,457		$	3,600		$	21,083		$	6,648		$	14,152		$	11,457		$	43,711		$	21,083
Commercial networks		(39,028	)		(46,917	)		(135,785	)		(143,559	)		(44,572	)		(39,028	)		(127,601	)		(135,785	)
Government systems		50,644			59,142			148,002			167,160			42,478			50,644			133,866			148,002
Elimination of intersegment operating profits		—		—				—		—				—		—				—		—
Segment operating profit before corporate and amortization of acquired intangible assets		23,073			15,825			33,300			30,249			12,058			23,073			49,976			33,300
Corporate		—		—				—		—				—		—				—		—
Amortization of acquired intangible assets		(1,313	)		(1,856	)		(4,171	)		(5,920	)		(7,531	)		(1,313	)		(20,859	)		(4,171	)
Income from operations	$	21,760		$	13,969		$	29,129		$	24,329		$	4,527		$	21,760		$	29,117		$	29,129

Assets identifiable to segments include: accounts receivable, unbilled accounts receivable, inventory, acquired intangible assets and goodwill. The Company’s property and equipment, including its satellites, earth stations and other networking equipment, are assigned to corporate assets as they are available for use by the various segments throughout their estimated useful lives. Segment assets as of December 31, ~~2020~~2021 and March 31, ~~2020~~2021 were as follows:


	As of December 31, 2021		As of March 31, 2021
	(In thousands)
Segment assets:
Satellite services	$	437,337	$	64,048
Commercial networks		228,416		168,334
Government systems		477,909		470,389
Total segment assets		1,143,662		702,771
Corporate assets		4,943,132		4,646,696
Total assets	$	6,086,794	$	5,349,467

As of
December 31, 2020

As of
March 31, 2020

(In thousands)

Segment assets:

Satellite services

$
57,706

$
86,252

Commercial networks

169,946

188,269

Government systems

439,794

484,237

Total segment assets

667,446

758,758

Corporate assets

4,581,260

4,125,110

Total assets

$
5,248,706

$
4,883,868

3130

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Other acquired intangible assets, net and goodwill included in segment assets as of December 31, ~~2020~~2021 and March 31, ~~2020~~2021 were as follows:


	Other Acquired Intangible Assets, Net				Goodwill				Other Acquired Intangible Assets, Net				Goodwill
	As of December 31, 2020		As of March 31, 2020		As of December 31, 2020		As of March 31, 2020		As of December 31, 2021		As of March 31, 2021		As of December 31, 2021		As of March 31, 2021
	(In thousands)								(In thousands)
Satellite services	$	6,499	$	7,368	$	13,955	$	13,489	$	235,240	$	5,738	$	82,567	$	13,814
Commercial networks		—		257		44,146		43,981		—		—		44,083		44,044
Government systems		4,580		6,814		64,347		63,727		2,610		3,830		64,257		64,442
Total	$	11,079	$	14,439	$	122,448	$	121,197	$	237,850	$	9,568	$	190,907	$	122,300

Amortization of acquired intangible assets by segment for the three and nine months ended December 31, ~~2020~~2021 and ~~2019~~2020 was as follows:


	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019		December 31, 2021		December 31, 2020		December 31, 2021		December 31, 2020
	(In thousands)								(In thousands)
Satellite services	$	557	$	678	$	1,612	$	2,383	$	7,231	$	557	$	19,650	$	1,612
Commercial networks		—		384		257		1,156		—		—		—		257
Government systems		756		794		2,302		2,381		300		756		1,209		2,302
Total amortization of acquired intangible assets	$	1,313	$	1,856	$	4,171	$	5,920	$	7,531	$	1,313	$	20,859	$	4,171

Revenues by geographic area for the three and nine months ended December 31, ~~2020~~2021 and ~~2019~~2020 were as follows:


	Three Months Ended		Nine Months Ended		Three Months Ended		Nine Months Ended
	December 31, 2020		December 31, 2020		December 31, 2021		December 31, 2021
	(In thousands)				(In thousands)
U.S. customers	$	512,439	$	1,523,969	$	616,682	$	1,782,459
Non-U.S. customers (each country individually insignificant)		63,120		136,356		103,035		303,472
Total revenues	$	575,559	$	1,660,325	$	719,717	$	2,085,931

	Three Months Ended		Nine Months Ended		Three Months Ended		Nine Months Ended
	December 31, 2019		December 31, 2019		December 31, 2020		December 31, 2020
	(In thousands)				(In thousands)
U.S. customers	$	523,455	$	1,521,022	$	512,439	$	1,523,969
Non-U.S. customers (each country individually insignificant)		64,769		196,495		63,120		136,356
Total revenues	$	588,224	$	1,717,517	$	575,559	$	1,660,325

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

N~~ote~~Note 12 — Acquisitions

Inmarsat Transaction

On November ~~18, 2020,~~8, 2021, the Company entered into ~~an agreement~~a Share Purchase Agreement with the Sellers to combine Viasat with Inmarsat. Pursuant to the Share Purchase Agreement, the Company will purchase all of the ~~remaining 51% interest in Euro Infrastructure Co.~~issued and outstanding shares of Inmarsat from ~~Eutelsat for €140.0 million~~the Sellers upon the terms and subject to ~~customary net working capital~~the conditions set forth therein. The total consideration payable by the Company under the Share Purchase Agreement consists of $850.0 million in cash, subject to adjustments, and ~~net debt adjustments. The purchase price is expected to be funded with available cash, resulting in a cash outlay of €50.0~~approximately 46.36 million ~~after consideration of approximately €90.0 million of Euro Infrastructure Co.’s cash on hand. Consummation~~unregistered shares of the ~~acquisition~~Company’s common stock.

The closing of the Inmarsat Transaction is subject to customary closing conditions, including receipt of regulatory approvals and ~~is expected to close~~clearances, and approval by the stockholders of the Company of the issuance of shares in the ~~fourth quarter~~transaction and an amendment to the Company’s certificate of ~~fiscal year 2021.~~incorporation to increase the number of shares of common stock authorized for issuance. The ~~initial accounting~~Share Purchase Agreement contains certain termination rights for ~~this acquisition will begin after~~both the ~~closing~~Company and certain of the ~~acquisition.~~Sellers and further provides that, upon termination of the Share Purchase Agreement under certain

3231

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

~~On December 20, 2020,~~circumstances, the Company ~~entered into an Agreement~~may be obligated to pay a termination fee of up to $200.0 million or to reimburse certain out-of-pocket expenses of certain Sellers up to $40.0 million.

The Company has obtained financing commitments for $2.3 billion of new debt facilities in connection with the Inmarsat Transaction (which may be secured and/or unsecured), a portion of which is to be raised between the signing and ~~Plan~~closing of ~~Merger with RigNet, Inc. (RigNet), pursuant~~the Inmarsat Transaction to fund the Company’s standalone growth expenditures. The Company also plans to assume $2.1 billion in principal amount of Inmarsat senior secured bonds and the outstanding indebtedness under Inmarsat’s $2.4 billion senior secured credit facilities. The Company had also obtained commitments of $3.2 billion to backstop certain amendments required under the Credit Facilities and Inmarsat’s $2.4 billion senior secured credit facilities, which amendments have been obtained under the Revolving Credit Facility and Inmarsat’s $2.4 billion senior secured credit facilities.

Euro Broadband Infrastructure Sàrl

On April 30, 2021, the Company ~~has agreed~~acquired the remaining 51% interest in EBI, a broadband services provider, from Eutelsat. By completing the acquisition, the Company gained 100% ownership and control of EBI and the KA-SAT satellite over EMEA and related ground infrastructure, which is expected to ~~acquire RigNet in exchange for total consideration equal to~~facilitate the ~~value of 0.1845 shares~~diversification of the Company’s ~~common stock~~business portfolio in Europe, while establishing operations, distribution and sales of satellite-based broadband services, ahead of the anticipated ViaSat-3 (EMEA) satellite launch. The benefits and additional opportunities of the acquisition were among the factors that contributed to a purchase price resulting in the recognition of preliminary estimated goodwill, which was recorded within the Company’s satellite services segment. The goodwill recognized is not deductible for ~~each share~~U.S. and foreign income tax purposes.

Prior to the acquisition date, the Company owned a 49% interest in EBI and accounted for the investment using the equity method of ~~RigNet common stock outstanding on~~accounting (see Note 10 – Equity Method Investments and Related-Party Transactions for more information). The acquisition of the remaining equity interest in EBI was accounted for as a step acquisition in accordance with the authoritative guidance for business combinations (ASC 805). Accordingly, the Company allocated the purchase price of the acquired company to the net tangible assets and intangible assets acquired based upon their preliminary estimated fair values. The Company remeasured the previously held equity method investment to its fair value based upon a valuation of the acquired business, as of the date of ~~consummation~~acquisition. The Company considered multiple factors in determining the fair value of the ~~acquisition.~~ previously held equity method investment, including, (i) the price negotiated with the selling shareholder for the remaining 51% interest in EBI and (ii) an income valuation model (discounted cash flow). As a result of the equity method investment remeasurement, recognition of previously unrecognized foreign currency gain and settlement of insignificant preexisting relationships, the Company recognized an insignificant total net gain included in other income, net, in the condensed consolidated statements of operations and comprehensive income (loss) in the first quarter of fiscal year 2022.

The purchase price of $327.4 million was primarily comprised of $167.0 million of cash, net of what is currently estimated to be an immaterial amount of estimated purchase price consideration to be settled among the parties over the next 24 months (up to plus or minus €20.0 million, or approximately $22.6 million, see Note 3 — Fair Value Measurements for more information) from the closing date (which after consideration of approximately $121.7 million of EBI’s cash on hand, resulted in a net cash outlay of approximately $51.0 million) and the fair value of previously held equity method investment of approximately $160.4 million.

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

The purchase price allocation is preliminary primarily due to the finalization of the Company’s valuation analysis and review of various tax attributes. The preliminary purchase price allocation of the acquired assets and assumed liabilities based on the estimated fair values as of April 30, 2021, slightly adjusted since the close of the acquisition, primarily between goodwill, identifiable intangible assets and property, equipment and satellites, is as follows:


	(In thousands)
Current assets	$	154,479
Property, equipment and satellites		108,696
Identifiable intangible assets		26,574
Goodwill		42,488
Other assets		1,028
Total assets acquired	$	333,265
Total liabilities assumed	$	(5,914	)
Total consideration transferred	$	327,351

Amounts assigned to identifiable intangible assets are preliminary and are being amortized on a straight-line basis over their estimated useful lives (which approximates the economic pattern of benefit) and are as follows as of April 30, 2021:


	Preliminary		Estimated Weighted
	Fair Value		Average Useful Life
	(In thousands)		(In years)
Customer relationships	$	17,877		8
Other		7,851		7
Trade name		846		2
Total identifiable intangible assets	$	26,574		8

At the closing of the acquisition, EBI became a wholly owned subsidiary of the Company and EBI’s operations have been included in the Company’s condensed consolidated financial statements in the Company’s satellite services segment commencing on the acquisition date.

As EBI’s results of operations are not material to the Company’s consolidated results of operations, pro forma results of operations for this acquisition have not been presented.

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

RigNet, isInc.

On April 30, 2021, the Company completed the acquisition of all outstanding shares of RigNet, a publicly held leading provider of ultra-secure, intelligent networking solutions and specialized applications. The acquisition of RigNet is beneficial to the Company ~~will pay substantially all~~as it enables the Company to expand into new and adjacent industries, including renewable energy, transportation, maritime, mining and other enterprise markets. These benefits and additional opportunities were among the factors that contributed to a purchase price resulting in the recognition of preliminary estimated goodwill, which was recorded within the Company’s satellite services segment. The goodwill recognized is not deductible for U.S. and foreign income tax purposes.

The consideration transferred of approximately $317.9 million was primarily comprised of $207.2 million of the ~~merger consideration~~at the closing of the acquisition in newly issued shares of the Company’s common stock, with cash amounts to be paid to RigNet stockholders in lieu of any fractional shares of the Company’s common stock. Consummation of the acquisition is subject to the expiration or termination of review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, receipt of certain other material regulatory consents and approvals, absence of a material adverse effect with respect to the Company’s or RigNet’s business or financial condition and other customary closing conditions, and is expected to close in the first quarter of fiscal year 2022. The initial accounting for this acquisition will begin after the closing of the acquisition.

~~The transaction implies an enterprise~~fair value ~~for RigNet~~ of approximately $221.8 million, based on the closing price of the Company’s common stock and the number of RigNet shares of common stock outstanding as of the date of the agreement and RigNet’s net debt as of September 30, 2020 (which consisted of approximately $92.2 million in principal amount of RigNet debt, net of cash). Assuming no material change in the number of RigNet shares outstanding at the closing, and no closing adjustments, and taking into account expected treatment of equity-based awards at the closing of the transaction, the Company would issue approximately 4.0 million shares of the Company’s common stock issued at the closing ~~(which would have comprised~~date, $107.3 million related to the pay down of outstanding borrowings of RigNet’s revolving credit facility, a de minimis amount in cash consideration in respect of fractional shares to the former shareholders of RigNet and an insignificant amount of other consideration. In connection with the RigNet acquisition, the Company recorded merger-related transaction costs of an insignificant amount and approximately ~~5.5%~~$7.2 million, respectively, for the three and nine months ended December 31, 2021, included in selling, general and administrative expenses.

The purchase price allocation is preliminary primarily due to the finalization of the Company’s ~~outstanding common stock had~~valuation analysis and review of various tax attributes. The preliminary purchase price allocation of the acquired assets and assumed liabilities based on the estimated fair values as of April 30, 2021 is as follows:


	(In thousands)
Current assets	$	88,166
Property, equipment and satellites		63,191
Identifiable intangible assets		221,540
Goodwill		29,132
Other assets		13,350
Total assets acquired	$	415,379
Current liabilities		(66,006	)
Other long-term liabilities		(31,433	)
Total liabilities assumed	$	(97,439	)
Total consideration transferred	$	317,940


	Preliminary		Estimated Weighted
	Fair Value		Average Useful Life
	(In thousands)		(In years)
Technology	$	85,440		8
Customer relationships		101,920		12
Trade name		25,540		8
Other		8,640		12
Total identifiable intangible assets	$	221,540		10

In connection with the acquisition, ~~been consummated on~~the Company assumed a contingent liability associated with a RigNet predecessor subsidiary of approximately $13.8 million, which represented the maximum amount payable under the terms of the agreement. As of December 31, ~~2020).~~2021, 0 amount remains payable as the maximum amount payable was paid during the first and second quarters of fiscal year 2022.

VIASAT, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

The condensed consolidated financial statements include the operating results of RigNet from the date of acquisition. Since the acquisition date, the Company recorded approximately $52.2 million and $131.4 million in revenue for the three and nine months ended December 31, 2021, respectively, and $7.0 million and $23.2 million of net losses for the three and nine months ended December 31, 2021, respectively, with respect to the RigNet business primarily in the Company’s satellite services segment (with a portion included in its commercial networks segment) in the condensed consolidated statements of operations.

Unaudited Pro Forma Financial Information

The unaudited financial information in the table below summarizes the combined results of operations for the Company and RigNet on a pro forma basis, as though the companies had been combined as of the beginning of the prior fiscal year, April 1, 2020. The pro forma information is presented for informational purposes only and may not be indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the related fiscal periods. The pro forma financial information for the three-month and nine-month periods ended December 31, 2021, and December 31, 2020 include the business combination accounting effects primarily related to the amortization and depreciation changes from acquired intangible and tangible assets, acquisition-related transaction costs and related tax effects.


	Three Months Ended						Nine Months Ended
	December 31, 2021			December 31, 2020			December 31, 2021		December 31, 2020
	(In thousands)
Total revenues	$	719,717		$	622,606		$	2,097,548	$	1,809,485
Net (loss) income attributable to Viasat, Inc.	$	(6,613	)	$	(4,308	)	$	9,222	$	(47,628	)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements are based on current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. We use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” variations of such words and similar expressions to identify forward-looking statements. In addition, statements that refer to the proposed Inmarsat Transaction (as defined below) and any statements regarding the expected timing, benefits, synergies, growth opportunities and other financial and operating benefits thereof, the closing of the Inmarsat Transaction and timing or satisfaction of regulatory and other closing conditions, or the anticipated operations, financial position, liquidity, performance, prospects or growth and scale opportunities of the combined company; the impact of the novel coronavirus (COVID-19) pandemic on our business; our expectations regarding an end to the pandemic and a lessening of its effects on our business, including expectations for increased airline passenger traffic and in-flight connectivity (IFC) growth; projections of earnings, revenue, costs or other financial items; anticipated growth and trends in our business or key markets; future economic conditions and performance; the anticipated benefits of our acquisitions of RigNet, Inc. (RigNet) and Euro Broadband Infrastructure Sàrl (EBI); the development, customer acceptance and anticipated performance of technologies, products or services; satellite construction and launch activities; the performance and anticipated benefits of our ViaSat-2 and ViaSat-3 class satellites and any future satellite we may construct or acquire; the ~~impacts on overall coverage area, planned services and financial results of the identified antenna deployment issue on the ViaSat-2 satellite; the~~ expected completion, capacity, service, coverage, service speeds and other features of our satellites, and the timing, cost, economics and other benefits associated therewith; anticipated subscriber growth; plans, objectives and strategies for future operations; ~~our pending acquisitions of RigNet, Inc. (RigNet) and the remaining 51% interest in Euro Broadband Infrastructure Sàrl (Euro Infrastructure Co.);~~international growth opportunities; the number of ~~in-flight connectivity (IFC) systems anticipated to be activated~~additional aircraft under existing contracts with commercial ~~airlines;~~airlines anticipated to be put into service with our IFC systems; and other characterizations of future events or circumstances, are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ materially include: risks and uncertainties related to the Inmarsat Transaction, including the failure to obtain, or delays in obtaining, required regulatory approvals or clearances; the risk that any such approval may result in the imposition of conditions that could adversely affect Viasat, the combined company or the expected benefits of the Inmarsat Transaction; the failure to satisfy any of the closing conditions to the Inmarsat Transaction on a timely basis or at all; any adverse impact on the business of Viasat or Inmarsat as a result of uncertainty surrounding the Inmarsat Transaction; the nature, cost and outcome of any legal proceedings related to the Inmarsat Transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement for the Inmarsat Transaction, including in circumstances requiring Viasat to pay a termination fee; the risk that Viasat’s stock price may decline significantly if the Inmarsat Transaction is not consummated; the failure to obtain the necessary debt financing arrangements set forth in the commitment letters received in connection with the Inmarsat Transaction; risks that the Inmarsat Transaction disrupts current plans and operations or diverts management’s attention from its ongoing business; the effect of the announcement of the Inmarsat Transaction on the ability of Viasat to retain and hire key personnel and maintain relationships with its customers, suppliers and others with whom it does business; the ability of Viasat to successfully integrate Inmarsat operations, technologies and employees; the ability to realize anticipated benefits and synergies of the Inmarsat Transaction, including the expectation of enhancements to Viasat’s products and services, greater revenue or growth opportunities, operating efficiencies and cost savings; the ability to ensure continued performance and market growth of the combined company’s business; our ability to realize the anticipated benefits of the ViaSat-2 and ViaSat-3 class satellites and any future satellite we may construct or acquire; unexpected expenses related to our satellite projects; our ability to successfully implement our business plan for our broadband services on our anticipated timeline or at all; capacity constraints in our business in the lead-up to the launch of services on our ViaSat-3 satellites; risks associated with the construction, launch and operation of satellites, including the effect of any anomaly, operational failure or degradation in satellite performance; the impact of the COVID-19 pandemic on our business, suppliers, consumers, customers, and employees or the overall economy; our ability to realize the anticipated benefits of our acquisitions or strategic partnering ~~arrangements;~~arrangements, including the RigNet and EBI acquisitions; our ability to successfully develop, introduce and sell new technologies, products and services; audits by the U.S. Government; changes in the global business environment and economic conditions; delays in approving U.S. Government budgets and cuts in government defense expenditures; our reliance on U.S. Government contracts, and on a small number of contracts which account for a significant percentage of our revenues; reduced demand for products and services as a result of continued constraints on capital spending by customers; changes in relationships with, or the financial condition of, key customers or suppliers; our reliance on a limited number of third parties to manufacture and supply our products; increased competition; introduction of new technologies and other factors affecting the communications and defense industries generally; the effect of adverse regulatory changes (including changes affecting spectrum availability or permitted uses) on our ability to

sell or deploy our products and services; changes in the way others use spectrum; our inability to access additional spectrum, use spectrum for additional purposes, and/or operate satellites at additional orbital locations; competing uses of the same spectrum or orbital locations that we utilize or seek to utilize; the effect of recent changes to U.S. tax laws; our level of indebtedness and ability to comply with applicable debt covenants; our involvement in litigation, including intellectual property claims and litigation to protect our proprietary technology; our dependence on a limited number of key employees; and other factors identified under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2020,~~2021, under the heading “Risk Factors” in Part II, Item 1A of this report, elsewhere in this report and our other filings with the Securities and Exchange Commission (the SEC). Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.

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, military 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 diversification strategy—anchored in a broad portfolio of products and ~~services, combined with~~ services—our vertical integration ~~strategy~~approach and our ability to effectively cross-deploy technologies between government and commercial applications and segments as well as across different geographic markets, ~~provides~~provide us with a strong foundation to sustain and enhance our leadership in advanced communications and networking technologies. Viasat, Inc. was incorporated in California in 1986, and reincorporated as a Delaware corporation in 1996.

We conduct our business through three segments: satellite services, commercial networks and government systems.

On November ~~18, 2020,~~8, 2021, we entered into ~~an agreement~~a Share Purchase Agreement to combine with Connect Topco Limited, a private company limited by shares and incorporated in Guernsey (Inmarsat), with the shareholders of Inmarsat and certain management and employees who hold options and shares of a subsidiary of Inmarsat whose options and shares will be exchanged for shares of Inmarsat prior to closing (collectively, the Sellers). Pursuant to the Share Purchase Agreement, we will purchase all of the ~~remaining 51% interest in Euro Infrastructure Co.~~issued and outstanding shares of Inmarsat from ~~Eutelsat for €140.0 million~~the Sellers upon the terms and subject to ~~customary net working capital~~the conditions set forth therein (the Inmarsat Transaction). Our board of directors has unanimously approved the Share Purchase Agreement and ~~net debt adjustments.~~ the proposed Inmarsat Transaction.

The ~~purchase price is expected~~total consideration payable by us under the Share Purchase Agreement consists of $850.0 million in cash, subject to ~~be funded with available cash, resulting in a cash outlay~~adjustments, and approximately 46.36 million unregistered shares of ~~€50.0 million, net of approximately €90.0 million of Euro Infrastructure Co.’s cash on hand. Consummation~~our common stock.

The closing of the ~~acquisition~~Inmarsat Transaction is subject to customary closing conditions, including receipt of regulatory approvals and clearances, and approval by our stockholders of the issuance of shares in the Inmarsat Transaction and an amendment to our certificate of incorporation to increase the number of shares of common stock authorized for issuance. The Share Purchase Agreement contains certain termination rights for both us and certain of the Sellers and further provides that, upon termination of the Share Purchase Agreement under certain circumstances, we may be obligated to pay a termination fee of up to $200.0 million or to reimburse certain out-of-pocket expenses of certain Sellers up to $40.0 million.

We have obtained financing commitments for $2.3 billion of new debt facilities in connection with the Inmarsat Transaction (which may be secured and/or unsecured), a portion of which is to be raised between the signing and closing of the Inmarsat Transaction to fund our standalone growth expenditures. We also plan to assume $2.1 billion in principal amount of Inmarsat senior secured bonds and the outstanding indebtedness under Inmarsat’s $2.4 billion senior secured credit facilities. We had also obtained commitments of $3.2 billion to backstop certain amendments required under the Revolving Credit Facility and Ex-Im Credit Facility and Inmarsat’s $2.4 billion senior secured credit facilities, which amendments had been obtained under the Revolving Credit Facility and Inmarsat’s $2.4 billion senior secured credit facilities as of the date of this report.

For more detail about the Inmarsat Transaction, please see our Current Report on Form 8-K filed with the SEC on November 8, 2021.

On April 30, 2021, we completed our acquisition of the remaining 51% interest in EBI, a satellite broadband internet service provider in Europe, Middle East and Africa (EMEA), from Eutelsat. The acquisition is expected to ~~close~~facilitate the diversification of our business portfolio in Europe, while establishing operations, distribution and sales of satellite-based broadband services, ahead of the ~~fourth quarter~~anticipated ViaSat-3 (EMEA) satellite launch. We paid approximately $167.0 million in cash, net of ~~fiscal year 2021.~~

~~On December 20, 2020, we entered into~~what is currently estimated to be an ~~Agreement~~immaterial amount of estimated purchase price consideration (resulting in a cash outlay of approximately $51.0 million, net of approximately $121.7 million of EBI’s cash on hand) and ~~Plan of Merger with RigNet, pursuant to which we have agreed to acquire RigNet in exchange for total consideration equal to~~ the fair value of ~~0.1845 shares~~previously held equity method investment of ~~our common stock for each share~~approximately $160.4 million. In connection with the acquisition, we remeasured the previously held equity method investment to its fair value as of ~~RigNet common stock outstanding on~~ the date of ~~consummation~~the acquisition, recognized previously unrecognized foreign currency gain and settlement of insignificant preexisting relationships, and as a result recorded an insignificant total net gain included in other income, net in the ~~acquisition.~~condensed consolidated statements of operations and comprehensive income (loss).

On April 30, 2021, we completed our acquisition of RigNet, is a leading provider of ultra-secure, intelligent networking solutions and specialized applications. ~~We will pay substantially all of the merger consideration at the closing of~~In connection with the acquisition, ~~in newly~~we issued shares of our common stock, with cash amounts to be paid to RigNet stockholders in lieu of any fractional shares of our common stock. Consummation of the acquisition is subject to the expiration or termination of review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, receipt of certain other material regulatory consents and approvals, absence of a material adverse effect with respect to our or RigNet’s business or financial condition and other customary closing conditions, and is expected to close in the first quarter of fiscal year 2022. The initial accounting for this acquisition will begin after the closing of the acquisition.

The transaction implies an enterprise value for RigNet of approximately $221.8 million, based on the closing price of our common stock and the number of RigNet shares of common stock outstanding as of the date of the agreement and RigNet’s net debt as of September 30, 2020 (which consisted of approximately $92.2 million in principal amount of RigNet debt, net of cash). Assuming no material change in the number of RigNet shares outstanding at the closing, and no closing adjustments, and taking into account expected treatment of equity-based awards at the closing of the transaction, we would issue approximately 4.0 million shares of our common stock ~~at the closing (which would have comprised~~to RigNet former shareholders, paid down $107.3 million of outstanding borrowings of RigNet’s revolving credit facility, paid a de minimis amount of cash in respect of fractional shares and paid an insignificant amount of other consideration. We retained approximately ~~5.5%~~$20.6 million of ~~our outstanding common stock had the acquisition been consummated~~RigNet’s cash on ~~December 31, 2020).~~hand.

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.

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 three and nine months ended December 31, ~~2020 continued to be~~2021 were impacted by the pandemic, the impact was not material to our financial position, results of operations or cash flows in ~~those~~such periods, with continued negative impacts particularly in our commercial ~~air~~aviation business offset by strong ~~performance~~demand in our fixed broadband services business and other parts of our business. We continue to expect our diversified businesses to provide resiliency for the remainder of fiscal year ~~2021.~~2022.

Our government systems segment, which represented ~~46%~~38% and ~~47%~~39% of our total revenues during the three and nine months ended December 31, ~~2020,~~2021, 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 continued to experience some administrative delays on certain contractual vehicles ~~as government customers continue to adjust to~~reflecting the challenges inherent in the remote work environment resulting from the COVID-19 pandemic.

~~Since mid-March 2020,~~During the pandemic, we ~~have~~ experienced ~~an uptick in demand for our fixed broadband services in the United States, with net subscriber additions for our services fiscal year to date and~~ increased demand for our premium ~~highest speed plans. We also continue to participate~~high-speed plans in ~~certain federal and state programs to ensure~~ our ~~residential and small~~fixed broadband services business, ~~customers~~reflecting customers’ increased bandwidth needs in ~~the United States have access to connectivity during the pandemic.~~a remote working/distance schooling environment. However, the ~~COVID-19~~

pandemic ~~continues to impact~~also caused a severe decline in global air traffic, which reduced demand for our ~~higher-margin~~ in-flight services ~~business~~ and ~~our mobile broadband satellite communications system business~~IFC systems in our satellite services and commercial networks segments, ~~respectively, due to the severe decline~~respectively. While domestic airline traffic increased during calendar year 2021 (with increased planes in ~~global air traffic~~service and ~~resulting downturn in the commercial aviation market. While current~~higher passenger volumes), global airline traffic is still a fraction of ~~the prior year activity, our in-flight services business showed modest improvement compared to the quarter ended September 30, 2020 with increased planes in service and passenger volumes.~~pre-pandemic activity. We expect to continue to see negative impacts on revenues and operating cash flows from our IFC businesses in the ~~fourth quarter~~remainder of fiscal year ~~2021~~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 fiscal year 2020, prior to the pandemic, 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 the remainder of fiscal year ~~2021~~2022 and 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~~efficacy 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.

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.~~platform, and we also have access to a number of Ka-band and Ku-band satellites in service globally. We own three Ka-band satellites in service over North ~~America:~~America, including our second-generation ViaSat-2 satellite (launched in 2017), our first-generation ViaSat-1 satellite (launched in 2011) and the WildBlue-1 satellite (launched in 2007), and we own the KA-SAT satellite over EMEA. In addition, we have lifetime leases of Ka-band capacity on two ~~satellites, jointly own the KA-SAT satellite~~satellites—one over ~~Europe, Middle East~~North America and ~~Africa (EMEA), and have access to additional Ka-band capacity on partner satellites around the globe through various arrangements with third parties.~~a second one over EMEA. We also have a global constellation of three third-generation ViaSat-3 class satellites under construction. We expect our ViaSat-3 constellation, once in service, to enable us to deliver affordable connectivity across most of the world.

The primary services offered by our satellite services segment are comprised of:

~~Following the consummation of our pending acquisitions of Euro Infrastructure Co. and RigNet (see discussion above), the~~The assets and results of operations of ~~Euro Infrastructure Co.~~our recent acquisitions, EBI and RigNet, ~~will be~~are primarily included in our satellite services ~~segment.~~segment (with insignificant amounts included in our commercial networks segment).

~~We are a leading end-to-end network technology and equipment supplier in broadband satellite markets. In addition to developing our own proprietary high-capacity Ka-band satellite systems, our~~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. We design, develop and produce space system solutions for multiple orbital regimes, including geostationary (GEO), ~~mid~~medium earth orbit (MEO) and low earth orbit (LEO). The primary products, systems, solutions and services offered by our commercial networks segment are comprised of:

~~We are a leading provider of innovative communications and cybersecurity products and solutions to the U.S. Government~~ and other ~~military~~multi-band antennas.

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:

Our satellite services segment revenues are primarily derived from our fixed broadband services, in-flight services and ~~in-flight services.~~advanced software and communication infrastructure services (acquired through the RigNet acquisition).

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 91% ~~and 89%~~ of our total revenues for these segments for both the three months ended December 31, 2021 and 2020, and ~~2019, respectively,~~approximately 90% and ~~approximately~~ 88% ~~and 89%~~ of our total revenues for these segments for the nine months ended December 31, ~~2020~~2021 and ~~2019,~~2020, 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.

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 ~~20%~~24% and ~~24%~~20% of our

total revenues for the three months ended December 31, ~~2020~~2021 and ~~2019,~~2020, respectively, and approximately 23% of our total revenues for both the nine months ended December 31, ~~2020~~2021 and ~~2019.~~2020.

We also incur independent research and development (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 research and development (R&D) projects. IR&D expenses were approximately 5% of total revenues during both the three months ended December 31, ~~2020~~2021 and ~~2019,~~2020, and approximately 5% ~~and 6%~~ of total revenues during both the nine months ended December 31, ~~2020~~2021 and ~~2019, respectively.~~2020. As a government contractor, we are able to recover a portion of our IR&D expenses pursuant to our government contracts.

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our condensed 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.

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 – Basis of Presentation – Leases to our condensed 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.

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 December 31, ~~2020~~2021 would change our income (loss) 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.

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.

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 condensed 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.

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 EBI in the first quarter of fiscal year 2022, 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.

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) 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.

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-lived and other long-term assets (property, 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 the three and nine months ended December 31, ~~2020~~2021 and ~~2019.~~2020.

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. ~~ASU 2017-04 simplifies how we test goodwill for impairment by removing Step 2 from the goodwill impairment test.~~ 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. IfAlternatively, 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 ~~reporting unit exceeds its estimated fair value, we compare~~amount of impairment loss, by comparing the fair value of the reporting unit towith its carrying ~~value.~~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 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.

Furthermore, in addition to qualitative analysis, we believe it is appropriate to conduct a quantitative analysis periodically as a prudent review of our reporting unit goodwill fair values. We performed this analysis as of December 31, 2019, our annual impairment test date. Our quantitative analysis estimates the fair values of the reporting units using

discounted cash flows and other indicators of fair value. The forecast of future cash flow is based on our best estimate of each reporting unit’s future revenue and operating costs, based primarily on existing firm orders, expected future orders, contracts with suppliers, labor resources, general market conditions, and other relevant factors. Based on a quantitative analysis for fiscal year 2020, we concluded that estimated fair values of our reporting units significantly exceed their respective carrying values.

Based on our qualitative ~~and quantitative~~ assessment performed during the fourth quarter of fiscal year ~~2020 and the additional qualitative and quantitative considerations as of March 31, 2020 in light of the significant decline in our market capitalization following the COVID-19 outbreak,~~2021, we concluded that it was more likely than not that the estimated fair value of our reporting units exceeded their carrying value as of March 31, ~~2020.~~2021, and therefore, determined it was not necessary to perform a quantitative goodwill impairment test.

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~~$47.1 million at March 31, ~~2020~~2021 to ~~$48.0~~$74.5 million at December 31, ~~2020.~~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.

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

Three Months Ended December 31, ~~2020~~2021 vs. Three Months Ended December 31, ~~2019~~2020

Our total revenues ~~decreased~~increased by ~~$12.7~~$144.2 million as a result of a ~~$36.6 million decrease in product revenues, partially offset by a $23.9~~$94.5 million increase in service revenues and a $49.6 million increase in product revenues. The ~~product~~service revenue ~~decrease~~increase was driven ~~primarily~~ by ~~a decrease~~increases of ~~$39.1~~$88.9 million in our satellite services segment, $3.4 million in our government systems segment ~~partially offset~~and $2.2 million in our commercial networks segment. The product revenue increase was driven primarily by a ~~$2.5~~$47.4 million increase in our commercial networks ~~segment. The service revenue~~segment and a $2.3 million increase ~~was~~in our government systems segment.

Cost of revenues increased $108.8 million due to increases of ~~$12.0~~$68.2 million in ~~our government systems segment, $9.1 million in our satellite services segment~~cost of service revenues and ~~$2.9 million in our commercial networks segment.~~

~~Cost of revenues decreased $12.9 million due to a decrease of $17.2~~$40.6 million in cost of product revenues. The cost of service revenue increase was primarily due to increased service revenues, ~~partially offset by~~mainly from our satellite services segment, causing a ~~$4.3~~$59.5 million increase in cost of service ~~revenues.~~revenues on a constant margin basis. The increase in cost of service revenues was also driven by lower margins, primarily in fixed broadband services in our satellite services segment. The increase in cost of product ~~revenue decrease primarily related to decreased~~revenues was mostly driven by increased product revenues, causing a ~~$25.8~~$36.7 million ~~decrease~~increase in cost of product revenues on a constant margin basis, mainly in our ~~government systems segment. The decrease in cost of product revenues was partially offset by lower margins, driven by our government~~ mobile broadband ~~products and tactical satcom radio~~satellite communication systems products in our ~~government systems~~commercial networks segment. ~~The increase in cost of service revenues was primarily due to increased revenues from our government systems and satellite services segment.~~

The ~~$3.6~~$37.8 million ~~decrease~~increase in selling, general and administrative (SG&A) expenses ~~was~~reflected an increase in support costs of $26.3 million, driven primarily by ~~decreases~~acquisition-related expenses of ~~$3.0~~approximately $11.8 million related to the Inmarsat Transaction as well as support costs related to RigNet, which was acquired during the first quarter of fiscal year 2022. The increase in SG&A expenses was also driven by $10.7 million of higher selling costs, ~~and $1.3 million in bid and proposal costs. The decrease in selling costs was~~ reflected primarily in our satellite services and ~~commercial networks segments, and the decrease in bid and proposal costs related primarily to our~~ government systems ~~segment.~~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.

The ~~$3.4~~$8.5 million ~~decrease~~increase in IR&D expenses was ~~mainly~~primarily the result of a ~~decrease of $4.4~~$5.9 million ~~in IR&D efforts~~increase in our commercial networks segment (primarily related to ~~a decrease in IR&D expenses related to~~ next-generation satellite payload ~~technologies)~~technologies and commercial aeronautical broadband programs) and a $2.6 million increase in our government systems segment (primarily related to the development of next-generation dual band mobility solutions and the advancement of integrated government satellite communications platforms).

We amortize our acquired intangible assets from prior acquisitions over their estimated useful lives, which range from two to ~~ten~~20 years. The ~~insignificant decrease~~$6.2 million increase in amortization of acquired intangible assets in the third quarter of fiscal year ~~2021~~2022 compared to the prior year period was primarily related to the amortization of new intangibles acquired as a result of ~~certain~~the acquisition of RigNet and of the remaining 51% interest in EBI in April 2021. The current and expected amortization expense for acquired ~~intangibles in our commercial networks and satellite services segments becoming fully amortized during~~intangible assets for each of the ~~prior fiscal year.~~following periods is as follows:

~~The slight decrease in interest~~Interest income for the three months ended December 31, ~~2020~~2021 was relatively flat compared to the prior year ~~period was mainly the result of lower interest rates during the third quarter of fiscal year 2021 compared to the prior year~~ period.

The ~~$1.4~~$2.5 million decrease in interest expense for the three months ended December 31, ~~2020~~2021 compared to the prior year period was primarily the result of an increase in the amount of interest capitalized during the third quarter of fiscal year ~~2021~~2022 compared to the ~~period~~prior year period, partially offset by an increase in interest expense attributable to higher borrowings under our ~~6.500% Senior Notes due 2028 (the 2028 Notes), which were issued in~~Revolving Credit Facility compared to the ~~first quarter of fiscal~~prior year ~~2021.~~period.

For the three months ended December 31, 2021, we recorded an income tax provision of $3.5 million, resulting in an effective tax rate of negative 701%. For the three months ended December 31, 2020, we recorded an income tax provision of $7.0 million, resulting in an effective tax rate of 50%. ~~For the three months ended December 31, 2019, we recorded an income tax benefit of $3.9 million, resulting in an effective tax benefit rate of negative 80%.~~ The effective tax rates for ~~the~~such periods differed from the U.S. statutory rate primarily due to the benefit of federal and state R&D tax ~~credits. In addition, the effective tax rate for the three months ended December 31, 2020 included~~credits and the expense for tax deficiencies upon settlement of stock-based compensation during the ~~period.~~periods.

Ordinarily, the effective tax rate at the end of an interim period is calculated using an estimate of the annual effective tax rate expected to be applicable for the full fiscal year. However, when a reliable estimate cannot be made, we compute our provision for income taxes using the actual effective tax rate (discrete method) for the year-to-date period. Our effective tax rate is highly influenced by the amount of our R&D tax credits. A small change in estimated annual pretax income (loss) can produce a significant variance in the annual effective tax rate given our expected amount of R&D tax credits. This variability provides an unreliable estimate of the annual effective tax rate. As a result, and in accordance with the authoritative guidance for accounting for income taxes in interim periods, we have computed our provision for income

taxes for the three months ended December 31, ~~2020~~2021 and ~~2019~~2020 by applying the actual effective tax rates to the (loss) income for the three-month periods.

Segment Results for the Three Months Ended December 31, ~~2020~~2021 vs. Three Months Ended December 31, ~~2019~~2020

Our satellite services segment revenues increased by ~~$9.1~~$88.9 million for the three months ended December 31, 2021 compared to the prior year period due to an increase in service revenues. The increase in service revenues was primarily ~~driven by~~attributable to the ~~expansion~~acquisition of RigNet, which closed in the first quarter of fiscal year 2022, as well as increases in our in-flight services and fixed broadband ~~services and higher average revenue per fixed broadband subscriber~~businesses. The acquisition of RigNet contributed approximately $43.1 million of service revenues in the ~~United States (ARPU) when compared to the prior year period, partially offset by a decrease in service revenues from our in-flight services. Total subscribers at~~three months ended December 31, ~~2020 were approximately 596,000 compared to 586,000 subscribers at December 31, 2019.~~2021. 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~~of $34.4 million was driven primarily by ~~a 14% decrease~~an increase in the number of commercial aircraft ~~using~~receiving our in-flight services through our IFC systems, as the number of ~~quarter end~~aircraft in service increased, passenger air traffic continued to increase and aircraft that were previously inactive as a result of the COVID-19 ~~pandemic. In addition, our~~pandemic continued to return to service. The increase in fixed broadband service revenues was primarily attributable to the acquisition of the remaining 51% interest in EBI, which also closed during the first quarter of fiscal year 2022, with EBI contributing approximately $10.7 million of service revenues in the third quarter of fiscal year 2021 in-flight service revenues continued to be impacted by reduced passenger air traffic, the number of inactive installed aircraft and lower capacity on active installed aircraft as a result of the COVID-19 pandemic.2022.

The ~~$7.9~~$2.7 million increase in ~~our~~ satellite services segment operating profit was driven primarily by higher earnings contributions of ~~$6.2~~$25.4 million, primarily due to an increase in revenues and improved margins from our ~~fixed broadband~~in-flight services ~~reflecting the strength of the low variable costs structure of our fixed broadband services business~~ as the business ~~continues~~continued to scale. The increase in our satellite services segment operating profit was ~~also due to a decrease in~~partially offset by higher SG&A costs of ~~$1.9 million. This~~$22.7 million (mainly attributable to RigNet, which was ~~partially offset by lower margins resulting from~~acquired during the ~~negative impact~~first quarter of ~~the COVID-19 pandemic on our in-flight services business and an increase in costs~~fiscal year 2022, as well as acquisition-related expenses related to ~~our investments in emerging global broadband businesses.~~the Inmarsat Transaction).

Our commercial networks segment revenues increased by ~~$5.4~~$49.6 million, due to a ~~$2.9~~$47.4 million increase in product revenues and a $2.2 million increase in service ~~revenues and a $2.5 million~~revenues. The increase in product ~~revenues.~~revenues was primarily due to increases of $32.7 million in mobile broadband satellite communication systems products, related to additional IFC terminal deliveries. There were also increases of $13.3 million in antenna systems products and $9.0 million in RigNet products, partially offset by a $10.0 million decrease in fixed satellite networks products. The increase in service revenues was primarily driven by an increase in fixed satellite network services. The increase in product revenues was primarily due to increases of $7.5 million in antenna systems products and $4.1 million in fixed satellite networks products, partially offset by a decrease of $8.2 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.services.

The ~~$7.9~~$5.5 million ~~reduction~~increase in ~~our~~ commercial networks segment operating loss was driven ~~primarily~~ by a ~~$4.4~~$5.9 million ~~decrease~~increase in IR&D expenses (primarily related to next-generation satellite payload ~~technologies)~~technologies and commercial aeronautical broadband programs) and a $3.7 million increase in SG&A costs. The increase in commercial networks segment operating loss was partially offset by higher earnings contributions of ~~$3.3~~$4.0 million, primarily due to higher revenues and improved margins in our ~~fixed~~mobile broadband satellite ~~networks services.~~communication products.

Our government systems segment revenues ~~decreased~~increased by ~~$27.1~~$5.7 million due to a ~~decrease~~$3.4 million increase in service revenues and a $2.3 million increase in product revenues. The service revenue increase was primarily due to a $5.9 million increase in government satellite communication systems services and a $1.7 million increase in cybersecurity and information assurance services, offset by decreases of ~~$39.1~~$3.4 million in ~~product revenues, partially offset by an increase of $12.0~~tactical data link services and $1.3 million in ~~service revenues.~~tactical satcom radio services. The ~~decrease~~increase in product revenues was mainly due to a ~~$23.9~~$7.2 million increase in tactical satcom radio products and a $3.0 million increase in tactical data link products, offset by a $6.4 million decrease in government mobile broadband products and a ~~$22.6~~$1.9 million decrease in tactical satcom radio products and a $6.6 million decrease in government satellite communication systems products, partially offset by an $8.4 million increase in tactical data link products and a $5.9 million increase in cybersecurity and information assurance products. Our government systems segment continued to show some impacts from the COVID-19 pandemic, ~~which has somewhat complicated~~due to complications in product manufacturing and shipments, but new government systems segment awards remained ~~very~~ strong through the end of the third quarter of fiscal year 2021. The service revenue increase was primarily due to an $8.2 million increase in government mobile broadband services, a $2.0 million increase in tactical satcom radio services and a $2.0 million increase in tactical data link services.2022.

The ~~$8.5~~$8.2 million decrease in our government systems segment operating profit was ~~primarily due~~driven by an $11.5 million increase in SG&A costs and a $2.6 million increase in IR&D expenses (primarily related to ~~lower~~the development of next-generation dual band mobility solutions and the advancement of integrated government satellite communications platforms). The decrease in operating profit was partially offset by higher earnings contributions of ~~$9.2~~$5.9 million, primarily due to ~~a decrease~~an increase in revenues and improved margins in our ~~government mobile broadband products,~~ tactical satcom radio products and ~~government satellite communication systems products, and lower margins from our government mobile broadband products and~~ tactical ~~satcom radio~~data link products. ~~This decrease was partially offset by lower SG&A costs of $1.5 million.~~

Nine Months Ended December 31, ~~2020~~2021 vs. Nine Months Ended December 31, ~~2019~~2020

Our total revenues ~~decreased~~grew by ~~$57.2~~$425.6 million as a result of a ~~$100.4 million decrease in product revenues, partially offset by a $43.2~~$280.7 million increase in service ~~revenues. The decrease~~revenues and a $144.9 million increase in product ~~revenues was driven primarily by decreases of $85.7 million in our government systems segment and $14.7 million in our commercial networks segment.~~revenues. The service revenue increase was due to increases of ~~$24.4~~$245.3 million in our satellite services segment, ~~and $19.7~~$24.4 million in our government systems segment and $11.0 million in our commercial networks segment. The increase in product revenues was driven primarily by a $146.0 million increase in our commercial networks segment, slightly offset by a $1.0 million decrease in our government systems segment.

Cost of revenues ~~decreased~~increased by ~~$34.6~~$278.4 million due to ~~a decrease~~increases of ~~$57.4~~$163.5 million in cost of service revenues and $114.9 million in cost of product revenues. The cost of service revenue increase primarily related to increased service revenues, ~~partially offset by an~~mainly from our in-flight services business, causing a $185.9 million increase ~~of $22.8 million~~ in cost of service ~~revenues.~~revenues on a constant margin basis. The increase in cost of service revenues was partially offset by improved margins in our in-flight services business. The cost of product revenue ~~decrease~~increase was ~~mainly~~ due to ~~decreased~~increased product revenues, causing a ~~$72.9~~$108.1 million ~~decrease~~increase in cost of product revenues on a constant margin basis, mainly from ~~revenue decreases~~our mobile broadband satellite communication systems products in our commercial networks segment and our tactical data link products in our government systems and commercial networks segments. 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.segment.

The ~~$9.6~~$102.2 million ~~decrease~~increase in SG&A expenses ~~was primarily due to a decrease in selling costs of $10.5 million and a decrease in bid and proposal costs of $5.8 million, partially offset by~~reflected an increase in support costs of ~~$6.7 million.~~$71.0 million, mainly related to RigNet, which was acquired during the first quarter of fiscal year 2022, as well as acquisition-related expenses related to the Inmarsat Transaction and acquisitions of RigNet and the remaining 51% interest in EBI. The ~~decrease~~increase in SG&A expenses was also driven by higher selling costs ~~was~~of $28.6 million, reflected primarily in ~~all three segments, but was mainly driven by~~ our satellite services ~~segment. The decrease in~~and government systems segments, and higher bid and proposal costs ~~was mainly from our government systems segment. The increase in support costs was primarily driven by our government systems and commercial networks segments.~~of $2.7 million. 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.

The ~~$16.0~~$28.3 million ~~decrease~~increase in IR&D expenses was mainly the result of ~~a decrease~~an increase of ~~$13.7~~$17.2 million in IR&D efforts in our commercial networks segment (primarily related to ~~a decrease in IR&D expenses related to~~ next-generation satellite payload technologies) and ~~a decrease~~an increase of ~~$2.3~~$11.1 million in our government systems segment (primarily related to ~~a decrease in IR&D expenses related to~~the advancement of integrated government satellite communication platforms and the development of next-generation dual band mobility solutions).

We amortize our acquired intangible assets from prior acquisitions over their estimated useful lives, which range from two to ~~ten~~20 years. The ~~$1.7~~$16.7 million ~~decrease~~increase in amortization of acquired intangible assets in the first nine months of fiscal year ~~2021~~2022 compared to the prior year period was primarily related to the amortization of new intangibles acquired as a result of ~~certain~~the acquisition of RigNet and of the remaining 51% interest in EBI in April 2021. The current and expected amortization expense for acquired ~~intangibles in our satellite services and commercial networks segments becoming fully amortized during~~intangible assets for each of the ~~last twelve months.~~following periods is as follows:

~~The $1.0 million decrease in interest~~Interest income for the nine months ended December 31, ~~2020~~2021 was relatively flat compared to the prior year ~~period was the result of lower interest rates during the first nine months of fiscal year 2021 compared to the prior year~~ period.

The ~~$2.8~~$9.4 million decrease in interest expense in the nine months ended December 31, ~~2020~~2021 compared to the prior year period was primarily due to an increase in the amount of interest capitalized during the first nine months of fiscal year ~~2021~~2022 compared to the prior year ~~period. This decrease~~period, partially offset by an increase in interest expense ~~was partially offset by the addition of interest expense relating~~attributable to ~~the~~our 6.500% Senior Notes due 2028 ~~Notes,~~(the 2028 Notes), which were issued in the first quarter of fiscal year 2021.

For the nine months ended December 31, 2021, we recorded an income tax benefit of $3.5 million, resulting in an effective tax benefit rate of negative 22%. The effective tax rate for the period differed from the U.S. statutory rate due primarily to the benefit of federal and ~~higher outstanding borrowings under our Revolving Credit Facility (even though outstanding borrowings were repaid~~state R&D tax credits, the reversal of a deferred tax liability recorded for EBI’s outside basis difference upon assertion made during the first quarter of fiscal year ~~2021 with proceeds from~~2022 to indefinitely reinvest future earnings and the ~~issuance~~expense for tax deficiencies upon settlement of stock-based compensation during the ~~2028 Notes in June 2020).~~

period. For the nine months ended December 31, 2020, we recorded an income tax provision of an insignificant amount, resulting in an effective tax rate of 24%. ~~For the nine months ended December 31, 2019, we recorded an income tax benefit of $8.7 million, resulting in an effective tax benefit rate of 211%.~~ The effective tax rates for the ~~periods~~period differed from the U.S. statutory rate due primarily to ~~the benefit of federal and state R&D tax credits. In addition, the effective tax rate for the nine months ended December 31, 2020 included~~ the expense for tax deficiencies upon settlement of stock-based compensation during the ~~period.~~period and the benefit of federal and state R&D tax credits.

Segment Results for the Nine Months Ended December 31, ~~2020~~2021 vs. Nine Months Ended December 31, ~~2019~~2020

Our satellite services segment revenues increased by ~~$24.4~~$245.3 million due to an increase in service revenues. The increase in service revenues was primarily attributable to the acquisition of RigNet in April 2021, as well as increases in our in-flight services and fixed broadband businesses. The acquisition of RigNet contributed approximately $113.0 million of service revenues in the nine months ended December 31, 2021. The increase in in-flight service revenue of $72.9 million was driven primarily by an increase in the ~~expansion~~number of commercial aircraft receiving our in-flight services through our IFC systems, as the number of aircraft in service increased, passenger air traffic increased and aircraft that were previously inactive as a result of the COVID-19 pandemic returned to service. The increase in fixed broadband service revenues was primarily attributable to the acquisition of the remaining 51% interest in EBI, during the first quarter of fiscal year 2022, with EBI contributing approximately $30.6 million of service revenues in the first nine months of fiscal year 2022. In addition, the increase in fixed broadband services ~~and higher ARPU when compared to the prior year period, partially offset~~was also driven by a decrease in service revenues from our in-flight services. Total subscribers at December 31, 2020 were approximately 596,000 compared to 586,000 subscribers at December 31, 2019. The increase in ARPU reflected a higher mix of new and existing subscribers choosing ~~Viasat’s~~our premium highest speed plans. The in-flight service revenue decrease was driven primarily by a 14% decrease in the number of commercial aircraft using in-flight services through our IFC systems as of quarter end as a result of the COVID-19 pandemic. In addition, our first nine months of fiscal year 2021 in-flight service revenues continued to be impacted by reduced passenger air traffic, the number of inactive installed aircraft and lower capacity on active installed aircraft as a result of the COVID-19 pandemic.

The ~~$14.4~~$22.6 million increase in our satellite services segment operating profit was driven primarily by ~~lower selling~~higher earnings contributions of $94.3 million, mainly due to an increase in revenues and ~~support costs and increased revenues with significant flow through resulting in~~ improved margins ~~reflecting the strength of the low variable costs structure of~~from our ~~fixed broadband~~in-flight services ~~business~~ as the business ~~continues~~continued to scale. ~~This~~The increase in operating profit was ~~partially~~ offset by ~~lower margins resulting from~~higher SG&A costs of $72.0 million, mostly driven by RigNet, which was acquired during the ~~negative impact~~first quarter of ~~the COVID-19 pandemic on our in-flight services business and an increase in costs~~fiscal year 2022, as well as $14.6 million of acquisition-related expenses incurred during fiscal year 2022 related to ~~our investments~~the Inmarsat Transaction and acquisitions of RigNet and the remaining 51% interest in ~~emerging global broadband businesses.~~EBI.

Our commercial networks segment revenues ~~decreased~~increased by ~~$15.6~~$157.0 million, ~~primarily~~ due to a ~~$14.7~~$146.0 million ~~decrease~~increase in product revenues and ~~a $1.0~~an $11.0 million ~~decrease~~increase in service revenues. The ~~decrease~~increase in product revenues was primarily due to ~~a decrease~~increases of ~~$34.8~~$100.2 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 $3.9 million in satellite networking development programs products. The product revenue decrease was partially offset by increases of $16.3$39.6 million in antenna systems products and ~~$5.8~~$18.3 million in RigNet products in connection with the acquisition of RigNet in the first quarter of fiscal year 2022. This was slightly offset by a $14.4 million decrease in fixed satellite networks products. The ~~decrease~~increase in service revenues was primarily ~~due to a $4.0 million decrease in~~driven by our mobile broadband satellite communication systems ~~services, partially offset by an increase of $3.0 million in fixed satellite network~~ services.

~~Our~~The $8.2 million reduction in our commercial networks ~~segment operating loss decreased by $7.8 million year-over-year. The decrease in~~ operating loss was driven primarily by higher earnings contributions of $30.8 million, primarily due to higher revenues and improved margins in our mobile broadband satellite communications systems products, offset by a ~~$13.7~~$17.2 million ~~decrease~~increase in IR&D expenses (primarily related to next-generation satellite payload technologies)~~, partially offset by lower earnings contributions of $5.5~~ and a $5.1 million ~~driven by decreased revenues and lower margins related to our mobile broadband satellite communication systems products.~~increase in SG&A costs.

Our government systems segment revenues ~~decreased~~increased by ~~$66.0~~$23.4 million due to ~~a decrease~~an increase of ~~$85.7~~$24.4 million in ~~product~~service revenues, partially offset by ana $1.0 million decrease in product revenues. The service revenue increase was primarily due to increases of ~~$19.7~~$13.1 million in ~~service revenues.~~government mobile broadband services, $12.9 million in government satellite communication systems services, $5.4 million in cybersecurity and information assurance services and $1.8 million in tactical satcom radio services, offset by a $7.7 million decrease in tactical data link services. The product revenue decrease was primarily driven by an $11.8 million decrease in government satellite communication systems products, a ~~$47.9~~$7.9 million decrease in government mobile broadband products, a ~~$26.8 million decrease in government satellite communication systems products and a $23.8~~$3.9 million decrease in tactical satcom radio products and a $1.1 million decrease in cybersecurity and information assurance products. The decrease in product revenues was partially offset by an increase of ~~$7.2~~$23.1 million ~~in cybersecurity and information assurance products and a $6.1 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~~due to complications in product manufacturing and shipments, but new government systems segment awards remained ~~very~~ strong ~~through~~in the ~~third quarter~~first nine months of the fiscal year. The service revenue increase was primarily due to a $12.8 million increase in government mobile broadband services, a $4.0 million increase in tactical data link services and a $1.5 million increase in tactical satcom radio services.

The ~~$19.2~~$14.1 million decrease in our government systems segment operating profit was ~~primarily due to lower~~driven by a $25.2 million increase in SG&A costs and an $11.1 million increase in IR&D investments. The decrease in operating profit was partially offset by higher earnings contributions of ~~$22.9~~$22.1 million, primarily due to ~~a decrease~~an increase in revenues ~~and lower margins from~~in our ~~government mobile broadband~~tactical data link products and ~~tactical satcom radio products, partially offset by lower IR&D costs of $2.3 million.~~government satellite communication systems services.

As reflected in the table below, our overall firm and funded backlog ~~increased~~decreased during the first nine months of fiscal year ~~2021.~~2022.

The firm backlog does not include contract options. Of the ~~$2.4~~$2.1 billion in firm backlog, a little over half is expected to be delivered during the next ~~twelve~~12 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 December 31, ~~2020, we had~~2021, our IFC systems were installed and in service on approximately ~~1,430~~1,880 commercial aircraft, of which, due to impacts of the COVID-19 pandemic, approximately ~~250~~80 were inactive at quarter end.While current global airline traffic is still a fraction of the ~~prior~~activity in fiscal year ~~activity,~~2020, domestic airline traffic continued to show signs of improvement. As a result, our in-flight services business showed modest improvement in the ~~quarter~~three months ended December 31, 2021, with increased planes in service

and passenger volumes. We expect the negative impact on our IFC business from the COVID-19 pandemic to continue through the remainder of fiscal year ~~2021~~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 ~~our IFC services will be activated on~~that approximately ~~1,010~~860 additional commercial aircraft under existing customer agreements with commercial ~~airlines.~~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 $568.9 million and $2.0 billion for the three and nine months ended December 31, 2021, respectively, compared to approximately $643.4 million and $2.1 billion for the three and nine months ended December 31, 2020, ~~respectively, compared to approximately $577.4 million and $1.8 billion for the three and nine months ended December 31, 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.

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 December 31, ~~2020,~~2021, we had ~~$317.3~~$166.0 million in cash and cash equivalents, ~~$326.0~~$241.2 million in working capital, and $370.0 million in principal amount of outstanding borrowings and

borrowing availability of $271.1 million under our Revolving Credit Facility. 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 ~~$664.1~~$673.7 million under our Revolving Credit Facility. ~~On July 23, 2020,~~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. 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.

In connection with the Inmarsat Transaction, we have obtained financing commitments for $2.3 billion of new debt facilities (which may be secured and/or unsecured), a portion of which is to be raised between the signing and closing of the Inmarsat Transaction to fund our standalone growth expenditures. We currently anticipate incurring $700.0 million of such additional debt facilities in the form of term loan borrowings that would be secured on a pari passu basis with borrowings under our Revolving Credit Facility and the 2027 Notes, with the remainder incurred as unsecured indebtedness. However, the total amount and mix of indebtedness incurred under these commitments may change, including in the event available cash from other sources is higher than expected. We also plan to assume $2.1 billion in principal amount of Inmarsat senior secured bonds and the outstanding indebtedness under Inmarsat’s $2.4 billion senior secured credit facilities. We had also obtained commitments of $3.2 billion to backstop certain amendments required under the Revolving Credit Facility and Ex-Im Credit Facility and Inmarsat’s $2.4 billion senior secured credit facilities, which amendments had been obtained under the Revolving Credit Facility and Inmarsat’s $2.4 billion senior secured credit facilities as of the date of this report.

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 other 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,~~From time to time, we ~~filed a~~file universal shelf registration ~~statement~~statements with the SEC for the future sale of an unlimited amount of common stock, preferred stock, debt securities, depositary shares, warrants and ~~rights. The~~rights, which 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, remaining borrowing availability under our Revolving Credit Facility of ~~$664.1~~$271.1 million, cash needs, ~~and~~ debt structure and financing commitments related to the Inmarsat Transaction, 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 provided by operating activities for the first nine months of fiscal year ~~2021~~2022 was ~~$557.4~~$386.4 million compared to ~~$293.4~~$557.4 million in the prior year period. This ~~$264.0~~$171.0 million ~~increase~~decrease was primarily driven by a ~~$223.3~~$262.6 million year-over-year ~~decrease~~increase in cash used to fund net operating assets, ~~and~~partially offset by our operating results (net income adjusted for depreciation, amortization and other non-cash charges) which resulted in ~~$40.7~~$91.6 million of higher cash provided by operating activities year-over-year. The ~~decrease~~increase in cash used to fund net operating assets during the first nine months of fiscal year ~~2021~~2022 when compared to the prior year period was primarily due to ~~an increase~~a decrease in cash inflows year-over-year from combined billed and unbilled accounts receivable, net, primarily attributable to ~~the timing of contractual milestones~~increased billings for ~~certain larger development programs~~IFC terminals in our ~~government systems segment as well as revenue decreases in our in-flight services business in our satellite services~~commercial networks segment and ~~an increase~~a decrease in cash inflows year-over-year from our collections in excess of revenues and deferred revenues included in accrued liabilities primarily due to the timing of milestone billings for certain larger development projects in our commercial networks ~~segment~~segment..

Cash used in investing activities for the first nine months of fiscal year ~~2021~~2022 was ~~$702.8~~$850.9 million compared to ~~$595.6~~$702.8 million in the prior year period. This ~~$107.3~~$148.1 million increase in cash used in investing activities year-over-year reflects ~~an increase of $105.2~~$138.7 million in cash used for ~~ViaSat-3 constellation construction.~~the RigNet and EBI acquisitions in the first quarter of fiscal year 2022 and a remaining increase of approximately $10.3 million mainly related to cash used for the construction of earth stations and network operation systems.

Cash provided by financing activities for the first nine months of fiscal year ~~2021~~2022 was ~~$156.9~~$338.3 million compared to ~~$88.5~~$156.9 million for the prior year period. This ~~$68.4~~$181.4 million increase in cash provided by financing activities year-over-year was ~~primarily related~~mainly due to a decrease in payments of debt borrowings of $320.0 million year-over-year, partially offset by $174.7 million in net proceeds from a private placement of common stock in ~~July 2020~~the second quarter of fiscal year 2021 (after deducting offering expenses).

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. ~~However, as the~~As services ~~we provide~~ using the new satellite ~~continue to scale, we expect to continue to expand the~~scaled, however, our revenue base for ~~our~~ broadband services expanded and ~~gain~~we gained operating cost efficiencies, which together ~~we expect will yield~~yielded incremental segment earnings contributions, partially offset by investments associated with our global business and emerging markets growth. However, there can be no assurance that we will be successful in significantly increasing revenues or achieving operating profit in our satellite services segment.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.

~~Our first two~~We currently have three ViaSat-3 class satellites ~~which are expected to cover the Americas and the EMEA region, respectively, entered the phase of full construction during the second half of fiscal year 2018. In July 2019, we~~under construction. We have entered into ~~an agreement~~satellite construction agreements with ~~The~~ Boeing ~~Company~~ for ~~the~~their construction and purchase ~~of a third ViaSat-3 class satellite~~ and the integration of our payload and technologies into the satellite. This satellite is expected to cover the Asia and Pacific region. We expect our ViaSat-3 constellation, once in service, to provide a substantial amount of capacity and to enable us to deliver affordable connectivity across most of the world.satellites. We are ~~making good progress on our ViaSat-3 constellation, but the recent spikes in COVID-19 during the holidays and early part of calendar 2021 have led~~targeting to ~~intermittent supply chain and labor availability challenges as we work to complete the payload for~~launch the first ViaSat-3 ~~satellite. While~~class satellite in late summer 2022, although the actual launch date will be dependent on the completion of deliverables by our contract manufacturers, subcontractors, and other third-party service providers, available launch windows and other variables. In addition, we ~~were able~~have entered into various other satellite-related purchase commitments, including with respect to ~~offset some~~the provision of ~~these impacts with schedule gains~~launch services, satellite operation and satellite insurance. See Note 12 – Commitments to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2021 for information regarding our future minimum payments under our satellite construction contracts and other ~~areas, at this time~~satellite-related purchase commitments for the next five fiscal years and thereafter. In addition, we ~~believe that~~will continue to incur costs related to the ~~launch~~roll-out of related earth station infrastructure to support the ViaSat-3 ~~(Americas)~~constellation, the amount of which will ~~most likely move into~~depend, among other matters, on the ~~first quarter~~timing of ~~calendar 2022.~~roll-out and method used to procure fiber access. We believe we have adequate sources of funding for the ViaSat-3 ~~class satellites,~~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 the remainder of fiscal year ~~2021~~2022 and beyond relating to ~~ViaSat-3 ground infrastructure~~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 ~~2021~~2022 are expected to be higher than fiscal year ~~2020,~~2021, in light of the lead up to the launch of the first ViaSat-3 satellite and as we ~~have a~~continue to invest in the second and third ViaSat-3 ~~class satellite under construction,~~satellites, as well as increased ground network investments related to international ~~expansion.~~expansion and initial expenditures on our ViaSat-4 satellite program.

As of December 31, ~~2020,~~2021, the ~~Revolving Credit Facility provided a $700.0 million revolving line~~aggregate principal amount of credit (including up to $150.0 million of letters of credit), with a maturity date of January 18, 2024. As of December 31, 2020, we had no outstanding borrowings under the Revolving Credit Facility and $35.9 million outstanding under standby letters of credit, leaving borrowing availability under the Revolving Credit Facility as of December 31, 2020 of $664.1 million.

Borrowings under the Revolving Credit Facility bear interest, at our option, at either (1) the highest of the Federal Funds rate plus 0.50%, the Eurodollar rate plus 1.00%, or the administrative agent’s prime rate as announced from time to time, or (2) the Eurodollar rate, plus, in the case of each of (1) and (2), an applicable margin that is based on our total leverage ratio. The Revolving Credit Facility is required to be guaranteed by certain significant domestic subsidiaries of Viasat (as defined in the Revolving Credit Facility) and secured by substantially all of our assets. As of December 31, 2020, none of our subsidiaries guaranteed the Revolving Credit Facility.

The Revolving Credit Facility contains financial covenants regarding a maximum total leverage ratio and a minimum interest coverage ratio. In addition, the Revolving Credit Facility contains covenants that restrict, among other things, our ability to sell assets, make investments and acquisitions, make capital expenditures, grant liens, pay dividends and make certain other restricted payments.

~~The Ex-Im Credit Facility originally provided a $362.4 million senior secured direct loan facility,~~outstanding indebtedness was $2.2 billion, which was ~~fully drawn. Of the $362.4~~comprised of $700.0 million in principal amount of ~~borrowings made under the Ex-Im Credit Facility, $321.2~~2025 Notes, $600.0 million ~~was used to finance up to 85%~~in principal amount of ~~the costs~~2027 Notes, $400.0 million in principal amount of ~~construction, launch and insurance of the ViaSat-2 satellite and related goods and services (including costs incurred on or after September 18, 2012),~~2028 Notes (together with the ~~remaining $41.2 million used to finance~~2025 Notes and 2027 Notes, the ~~total exposure fees incurred under the Ex-Im Credit Facility (which included all previously accrued completion exposure fees). At December 31, 2020, we had $98.3~~Notes), $370.0 million in principal amount of outstanding borrowings under ~~the Ex-Im Credit Facility.~~

~~Borrowings under the Ex-Im~~our $700.0 million Revolving Credit Facility, ~~bear interest at a fixed rate~~$78.6 million in principal amount of ~~2.38%, payable semi-annually in arrears. The effective interest rate on our~~ outstanding borrowings under ~~the~~our Ex-Im Credit Facility which takes into account timing and amount of borrowings and payments, exposure fees, debt issuance costs and other fees, is 4.54%. Borrowings under the Ex-Im Credit Facility are required to be repaid in 16 semi-annual principal installments, which commenced on April 15, 2018, with a maturity date of October 15, ~~2025. Pursuant to~~2025 (together with the ~~terms of the Ex-Im~~Revolving Credit Facility, ~~certain insurance proceeds related to~~ the ~~ViaSat-2 satellite must be used to pay down outstanding borrowings under the Ex-Im~~ Credit ~~Facility upon receipt. During fiscal years 2019~~Facilities) and ~~2020, we received an aggregate of $188.0~~$48.2 million of ~~insurance proceeds related~~finance lease obligations. For information regarding our Credit Facilities and Notes, refer to ~~the ViaSat-2 satellite, all of which were used~~Note 6 – Senior Notes and Other Long-Term Debt to pay down outstanding borrowings under the Ex-Im Credit Facility upon receipt. The Ex-Im Credit Facility is guaranteed by Viasat and is secured by first-priority liens on the ViaSat-2 satellite and related assets as well as a pledge of the capital stock of the borrower under the facility.

The Ex-Im Credit Facility contains financial covenants regarding Viasat’s maximum total leverage ratio and minimum interest coverage ratio. In addition, the Ex-Im Credit Facility contains covenants that restrict, among other things, our ability to sell assets, make investments and acquisitions, make capital expenditures, grant liens, pay dividends and make certain other restricted payments.

~~The borrowings under the Ex-Im Credit Facility are recorded as current portion of long-term debt and as other long-term debt, net of unamortized discount and debt issuance costs, in~~ our condensed consolidated financial statements. The discount of $42.3 million (consisting of the initial $6.0 million pre-exposure fee, $35.3 million of completion exposure fees and other customary fees) and deferred financing cost associated with the issuance of the borrowings under the Ex-Im Credit Facility are amortized to interest expense on an effective interest rate basis over the weighted average term of the Ex-Im Credit Facility and in accordance with the related payment obligations.

In June 2020, we issued $400.0 million in principal amount of 2028 Notes in a private placement to institutional buyers. The 2028 Notes were issued at face value and are recorded as long-term debt, net of debt issuance costs, in our condensed consolidated financial statements. The 2028 Notes bear interest at the rate of 6.500% per year, payable semi-annually in cash in arrears, which interest payments commenced in January 2021. Debt issuance costs associated with the issuance of the 2028 Notes are amortized to interest expense on a straight-line basis over the term of the 2028 Notes, the results of which are not materially different from the effective interest rate basis.

The 2028 Notes are required to be guaranteed on an unsecured senior basis by each of our existing and future subsidiaries that guarantees the Revolving Credit Facility. As of December 31, 2020, none of our subsidiaries guaranteed the 2028 Notes. The 2028 Notes are our general senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured unsubordinated debt. The 2028 Notes are effectively junior in right of payment to our existing and future secured debt, including under the Revolving Credit Facility and the Ex-Im Credit Facility (collectively, our Credit Facilities) and the 2027 Notes (to the extent of the value of the assets securing such debt), are structurally subordinated to all existing and future liabilities (including trade payables) of our subsidiaries that do not guarantee the 2028 Notes, and are senior in right of payment to all of our existing and future subordinated indebtedness.

The indenture governing the 2028 Notes limits, among other things, our and our restricted subsidiaries’ ability to: incur, assume or guarantee additional debt; issue redeemable stock and preferred stock; pay dividends, make distributions or redeem or repurchase capital stock; prepay, redeem or repurchase subordinated debt; make loans and investments; grant or incur liens; restrict dividends, loans or asset transfers from restricted subsidiaries; sell or otherwise dispose of assets; enter into transactions with affiliates; reduce our satellite insurance; and consolidate or merge with, or sell substantially all of our assets to, another person.

Prior to July 15, 2023, we may redeem up to 40% of the 2028 Notes at a redemption price of 106.500% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the redemption date, from the net cash

proceeds of specified equity offerings. We may also redeem the 2028 Notes prior to July 15, 2023, in whole or in part, at a redemption price equal to 100% of the principal amount thereof plus the applicable premium and any accrued and unpaid interest, if any, thereon to the redemption date. The applicable premium is calculated as the greater of: (i) 1.0% of the principal amount of such 2028 Notes and (ii) the excess, if any, of (a) the present value at such date of redemption of (1) the redemption price of such 2028 Notes on July 15, 2023 plus (2) all required interest payments due on such 2028 Notes through July 15, 2023 (excluding accrued but unpaid interest to the date of redemption), computed using a discount rate equal to the treasury rate (as defined under the indenture governing the 2028 Notes) plus 50 basis points, over (b) the then-outstanding principal amount of such 2028 Notes. The 2028 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on July 15, 2023 at a redemption price of 103.250%, during the 12 months beginning on July 15, 2024 at a redemption price of 101.625%, and at any time on or after July 15, 2025 at a redemption price of 100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date.

In the event a change of control triggering event occurs (as defined in the indenture governing the 2028 Notes), each holder will have the right to require us to repurchase all or any part of such holder’s 2028 Notes at a purchase price in cash equal to 101% of the aggregate principal amount of the 2028 Notes repurchased, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

In March 2019, we issued $600.0 million in principal amount of 2027 Notes in a private placement to institutional buyers. The 2027 Notes were issued at face value and are recorded as long-term debt, net of debt issuance costs, in our condensed consolidated financial statements. The 2027 Notes bear interest at the rate of 5.625% per year, payable semi-annually in cash in arrears, which interest payments commenced in October 2019. Debt issuance costs associated with the issuance of the 2027 Notes are amortized to interest expense on a straight-line basis over the term of the 2027 Notes, the results of which are not materially different from the effective interest rate basis.

The 2027 Notes are required to be guaranteed on a senior secured basis by each of our existing and future subsidiaries that guarantees the Revolving Credit Facility. As of December 31, 2020, none of our subsidiaries guaranteed the 2027 Notes. The 2027 Notes are secured, equally and ratably with the Revolving Credit Facility and any future parity lien debt, by liens on substantially all of our assets.

The 2027 Notes are our general senior secured obligations and rank equally in right of payment with all of our existing and future unsubordinated debt. The 2027 Notes are effectively senior to all of our existing and future unsecured debt (including our 5.625% Senior Notes due 2025 (the 2025 Notes) and the 2028 Notes) as well as to all of any permitted junior lien debt that may be incurred in the future, in each case to the extent of the value of the assets securing the 2027 Notes. The 2027 Notes are effectively subordinated to any obligations that are secured by liens on assets that do not constitute a part of the collateral securing the 2027 Notes, are structurally subordinated to all existing and future liabilities (including trade payables) of our subsidiaries that do not guarantee the 2027 Notes (including obligations of the borrower under the Ex-Im Credit Facility), and are senior in right of payment to all of our existing and future subordinated indebtedness.

The indenture governing the 2027 Notes limits, among other things, our and our restricted subsidiaries’ ability to: incur, assume or guarantee additional debt; issue redeemable stock and preferred stock; pay dividends, make distributions or redeem or repurchase capital stock; prepay, redeem or repurchase subordinated debt; make loans and investments; grant or incur liens; restrict dividends, loans or asset transfers from restricted subsidiaries; sell or otherwise dispose of assets; enter into transactions with affiliates; reduce our satellite insurance; and consolidate or merge with, or sell substantially all of our assets to, another person.

Prior to April 15, 2022, we may redeem up to 40% of the 2027 Notes at a redemption price of 105.625% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the redemption date, from the net cash proceeds of specified equity offerings. We may also redeem the 2027 Notes prior to April 15, 2022, in whole or in part, at a redemption price equal to 100% of the principal amount thereof plus the applicable premium and any accrued and unpaid interest, if any, thereon to the redemption date. The applicable premium is calculated as the greater of: (i) 1.0% of the principal amount of such 2027 Notes and (ii) the excess, if any, of (a) the present value at such date of redemption of (1) the redemption price of such 2027 Notes on April 15, 2022 plus (2) all required interest payments due on such 2027 Notes through April 15, 2022 (excluding accrued but unpaid interest to the date of redemption), computed using a discount rate equal to the treasury rate (as defined under the indenture governing the 2027 Notes) plus 50 basis points, over (b) the then-outstanding principal amount of such 2027 Notes. The 2027 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on April 15, 2022 at a redemption price of 102.813%, during the 12 months beginning on April 15, 2023 at a redemption price of 101.406%, and at any time on or after April 15, 2024 at a redemption price of 100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date.

In the event a change of control triggering event occurs (as defined in the indenture governing the 2027 Notes), each holder will have the right to require us to repurchase all or any part of such holder’s 2027 Notes at a purchase price in cash equal to 101% of the aggregate principal amount of the 2027 Notes repurchased, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

In September 2017, we issued $700.0 million in principal amount of 2025 Notes in a private placement to institutional buyers. The 2025 Notes were issued at face value and are recorded as long-term debt, net of debt issuance costs, in our condensed consolidated financial statements. The 2025 Notes bear interest at the rate of 5.625% per year, payable semi-annually in cash in arrears, which interest payments commenced in March 2018. Debt issuance costs associated with the issuance of the 2025 Notes are amortized to interest expense on a straight-line basis over the term of the 2025 Notes, the results of which are not materially different from the effective interest rate basis.

The 2025 Notes are required to be guaranteed on an unsecured senior basis by each of our existing and future subsidiaries that guarantees the Revolving Credit Facility. As of December 31, 2020, none of our subsidiaries guaranteed the 2025 Notes. The 2025 Notes are our general senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured unsubordinated debt. The 2025 Notes are effectively junior in right of payment to our existing and future secured debt, including under our Credit Facilities and the 2027 Notes (to the extent of the value of the assets securing such debt), are structurally subordinated to all existing and future liabilities (including trade payables) of our subsidiaries that do not guarantee the 2025 Notes, and are senior in right of payment to all of our existing and future subordinated indebtedness.

The indenture governing the 2025 Notes limits, among other things, our and our restricted subsidiaries’ ability to: incur, assume or guarantee additional debt; issue redeemable stock and preferred stock; pay dividends, make distributions or redeem or repurchase capital stock; prepay, redeem or repurchase subordinated debt; make loans and investments; grant or incur liens; restrict dividends, loans or asset transfers from restricted subsidiaries; sell or otherwise dispose of assets; enter into transactions with affiliates; reduce our satellite insurance; and consolidate or merge with, or sell substantially all of our assets to, another person.

The 2025 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on September 15, 2020 at a redemption price of 102.813%, during the 12 months beginning on September 15, 2021 at a redemption price of 101.406%, and at any time on or after September 15, 2022 at a redemption price of 100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date.

In the event a change of control triggering event occurs (as defined in the indenture governing the 2025 Notes), each holder will have the right to require us to repurchase all or any part of such holder’s 2025 Notes at a purchase price in cash equal to 101% of the aggregate principal amount of the 2025 Notes repurchased, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

The following table sets forth a summary of our obligations at December 31, ~~2020:~~2021:

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 condensed consolidated balance sheets included ~~$152.0~~$157.1 million and ~~$120.9~~$137.4 million of “other liabilities” as of December 31, ~~2020~~2021 and March 31, ~~2020,~~2021, 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, deferred income taxes 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 included in our Annual Report on Form 10-K for the year ended March 31, ~~2020~~2021 for additional information regarding satellite performance incentive obligations relating to the ViaSat-1 and ViaSat-2 satellites. See Note 7 — Product Warranty to our condensed consolidated financial statements for a discussion of our product warranties.

We had no material off-balance sheet arrangements at December 31, ~~2020~~2021 as defined in Regulation S-K Item 303(a)(4) other than as discussed under “Contractual Obligations” above or disclosed in the notes to our condensed consolidated financial statements included in this report or in our Annual Report on Form 10-K for the year ended March 31, ~~2020.~~2021.

For information regarding recently adopted and issued accounting pronouncements, see Note 1 — Basis of Presentation to our condensed consolidated financial statements.

Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and short-term and long-term obligations, including the Credit Facilities ~~the 2025 Notes, the 2027 Notes~~ and the ~~2028 Notes, and foreign currency forward contracts.~~Notes. We consider investments in highly liquid instruments purchased with a remaining maturity of three months or less at the date of purchase to be cash equivalents. As of December 31, ~~2020,~~2021, we had no$370.0 million in principal amount of outstanding borrowings under our Revolving Credit Facility, ~~$98.3~~$78.6 million in principal amount of outstanding borrowings under our Ex-Im Credit Facility, $700.0 million in aggregate principal amount outstanding of the 2025 Notes, $600.0 million in aggregate principal amount outstanding of the 2027 Notes and $400.0 million in aggregate principal amount outstanding of the 2028 Notes, and we held no short-term investments. ~~Our 2025 Notes, 2027 Notes, 2028~~The Notes and borrowings under our Ex-Im Credit Facility bear interest at a fixed rate and therefore our exposure to market risk for changes in interest rates relates primarily to borrowings under our Revolving Credit Facility, cash equivalents, short-term investments and short-term obligations.

The primary objective of our investment activities is to preserve principal while at the same time maximizing the income we receive from our investments without significantly increasing risk. To minimize this risk, we maintain a significant amount of our cash balance in money market accounts. In general, money market accounts are not subject to interest rate risk because the interest paid on such funds fluctuates with the prevailing interest rate. Our cash and cash equivalents earn interest at variable rates. Our interest income has been and may continue to be negatively impacted by low market interest rates. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. If the underlying weighted average interest rate on our cash and cash equivalents, assuming balances remain constant over a year, changed by 50 basis points, interest income would have increased or decreased by an insignificant amount for the three and nine months ended December 31, ~~2020~~2021 and ~~2019.~~2020. Because our investment policy restricts us to invest in conservative, interest-bearing investments and because our business strategy does not rely on generating material returns from our investment portfolio, we do not expect our market risk exposure on our investment portfolio to be material.

As of December 31, 2021, we had $370.0 million in principal amount of outstanding borrowings under our Revolving Credit Facility. Our primary interest rate under the Revolving Credit Facility is the Eurodollar rate plus an applicable margin that is based on our total leverage ratio. ~~Under~~As of December 31, 2021, the ~~Revolving Credit Facility, the~~weighted average effective interest rate ~~as of December 31, 2020 that would have been applied to any new Eurodollar-based~~on our outstanding borrowings under the Revolving Credit Facility was ~~approximately 1.84%~~1.86%. ~~As of December 31, 2020, we had no outstanding borrowings under our Revolving Credit Facility. Accordingly, assuming~~Assuming the outstanding balance remained constant over a year, ~~changes~~a 50 basis point increase in the interest rates ~~applicable to our Revolving Credit Facility~~ would ~~have no effect on our~~increase interest incurred, ~~or cash flow.~~prior to effects of capitalized interest, by approximately $1.9 million over a 12-month period.

We generally conduct our business in U.S. dollars. However, as our international business is conducted in a variety of foreign currencies, we are exposed to fluctuations in foreign currency exchange rates. ~~Our investment in Euro Broadband Infrastructure Sàrl during the fourth quarter of fiscal year 2017, which is denominated in Euros, increases our exposure to foreign currency risk.~~ A five percent variance in foreign currencies in which our international business is conducted would change our (loss) income ~~(loss)~~ before income taxes by an insignificant amount for both the three and nine months ended December 31, 2021, and by an insignificant amount and $1.0 million for the three and nine months ended December 31, 2020, ~~respectively, and by an insignificant amount for the three and nine months ended December 31, 2019.~~respectively. Our objective in managing our exposure to foreign currency risk is to reduce earnings and cash flow volatility associated with foreign exchange rate fluctuations. Accordingly, from time to time, we may enter into foreign currency forward contracts to mitigate risks associated with foreign currency denominated assets, liabilities, commitments and anticipated foreign currency transactions.

As of December 31, ~~2020~~2021 and March 31, ~~2020,~~2021, we had no foreign currency forward contracts outstanding.

We maintain disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the requirements of the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of December 31, ~~2020,~~2021, the end of the period covered by this report. Based upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, ~~2020.~~2021.

During the period covered by this report, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we are involved in a variety of claims, suits, investigations and proceedings arising in the ordinary course of business, including government investigations and claims, and other claims and proceedings with respect to intellectual property, breach of contract, labor and employment, tax and other matters. Such matters could result in fines; penalties, compensatory, treble or other damages; or non-monetary relief. A violation of government contract laws and regulations could also result in the termination of our government contracts or debarment from bidding on future government contracts. Although claims, suits, investigations and proceedings are inherently uncertain and their results cannot be predicted with certainty, we believe that the resolution of our current pending matters will not have a material adverse effect on our business, financial condition, results of operations or liquidity. Regardless of the outcome, litigation can have an adverse impact on us because of defense costs, diversion of management resources and other factors. In addition, it is possible that an unfavorable resolution of one or more such proceedings could in the future materially and adversely affect our business, financial condition, results of operations or liquidity in a particular period. For further information on the risks we face from existing and future claims, suits, investigations and proceedings, see “Risk Factors” in Part I, Item 1A in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2020.~~2021.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2020,~~2021, as updated by our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, which factors could materially affect our business, financial condition, liquidity or future results. The risks described in our reports on Forms 10-K and 10-Q are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, liquidity or future results.

* Certain schedules to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2) or 601(a)(5) (as applicable). The registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request; provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


(Title of Each Class)	(Trading Symbol)	(Name of Each Exchange on which Registered)
Common Stock, par value $0.0001 per share	VSAT	The Nasdaq Stock Market LLC


	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)		3
Condensed Consolidated Balance Sheets		3
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)		4
Condensed Consolidated Statements of Cash Flows		5
Condensed Consolidated Statements of Equity		6
Notes to the Condensed Consolidated Financial Statements		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		3436
Item 3. Quantitative and Qualitative Disclosures About Market Risk		5859
Item 4. Controls and Procedures		5960
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		5960
Item 1A. Risk Factors		5960
Item 6. Exhibits		6061
Signatures		6162


	Amortization
	(In thousands)
For the nine months ended December 31, 2021	$	20,859

Expected for the remainder of fiscal year 2022	$	7,532
Expected for fiscal year 2023		30,128
Expected for fiscal year 2024		28,678
Expected for fiscal year 2025		26,540
Expected for fiscal year 2026		26,388
Thereafter		118,584
	$	237,850

	Nine Months Ended
	December 31, 2020			December 31, 2019
	(In thousands)
Balance, beginning of period	$	11,643		$	7,584
Change in liability for warranties issued in period		4,120			6,216
Settlements made (in cash or in kind) during the period		(3,882	)		(3,729	)
Balance, end of period	$	11,881		$	10,071


	Nine Months Ended
	December 31, 2021			December 31, 2020
	(In thousands)
Balance, beginning of period	$	11,886		$	11,643
Change in liability for warranties issued in period		4,064			4,120
Settlements made (in cash or in kind) during the period		(5,242	)		(3,882	)
Balance, end of period	$	10,708		$	11,881


☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐


	Three Months Ended				Dollar			Percentage			Three Months Ended				Dollar		Percentage
(In millions, except percentages)	December 31, 2020		December 31, 2019		Increase (Decrease)			Increase (Decrease)			December 31, 2021		December 31, 2020		Increase (Decrease)		Increase (Decrease)
Product revenues	$	266.5	$	303.1	$	(36.6	)		(12	)%	$	316.1	$	266.5	$	49.6		19	%
Service revenues		309.0		285.1		23.9			8	%		403.6		309.0		94.5		31	%
Total revenues	$	575.6	$	588.2	$	(12.7	)		(2	)%	$	719.7	$	575.6	$	144.2		25	%


			For the Remainder of Fiscal Year		For the Fiscal Years Ending
(In thousands, including interest where applicable)	Total		2022		2023-2024		2025-2026		Thereafter
Operating leases	$	446,623	$	16,925	$	137,641	$	125,142	$	166,915
Finance leases		54,362		3,111		24,251		24,000		3,000
2028 Notes		582,000		13,000		52,000		52,000		465,000
2027 Notes		785,625		—		67,500		67,500		650,625
2025 Notes		857,500		19,687		78,750		759,063		—
Revolving Credit Facility (1)		384,300		1,721		382,579		—		—
Ex-Im Credit Facility		82,819		—		42,344		40,475		—
Satellite performance incentives		29,053		1,867		10,269		11,269		5,648
Purchase commitments including satellite-related agreements		2,034,998		681,240		1,115,965		141,397		96,396
Total	$	5,257,280	$	737,551	$	1,911,299	$	1,220,846	$	1,387,584


		VIASAT, INC.

February ~~8, 2021~~4, 2022		/s/ R~~ICK~~ICHARD BALDRIDGE
		~~Rick~~Richard Baldridge
		President and Chief Executive Officer
		(Principal Executive Officer)

		/s/ SHAWN DUFFY
		Shawn Duffy
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)