Note 11 — Commitments

In May 2013, the Company entered into an agreement to purchase ViaSat-2, the Company’s second high-capacity Ka-band satellite, from The Boeing Company (Boeing) at a price of approximately $358.0 million, plus an additional amount for launch support services to be performed by Boeing.

During the fourth quarter of fiscal year 2016, construction also commenced on two ViaSat-3 class satellites, the Company’s third-generation high-capacity Ka-band satellite design, pursuant to a limited authorization to proceed entered into with the satellite manufacturer under which the Company’s payment obligations are limited to $56.5 million in the aggregate.

In addition to the satellite construction arrangements described above, the Company also enters into various other satellite-related purchase commitments, including with respect to the provision of launch services, operation of our satellites and satellite insurance. As of March 31, 2016, future minimum payments under the ViaSat-2 satellite construction contract, the ViaSat-3 limited authorization to proceed and other satellite-related purchase commitments for the next five fiscal years and thereafter were as follows:


Fiscal Years Ending	(In thousands)
2017	$	175,935
2018		36,056
2019		53,345
2020		49,345
2021		1,470
Thereafter		15,032

	$	331,183

In January 2008, the Company entered into several agreements with Space Systems/Loral, Inc. (SS/L), its former parent company Loral Space & Communications, Inc. (Loral) and Telesat Canada related to the Company’s ViaSat-1 satellite, which was placed into service in January 2012. The Company’s contract with SS/L requires monthly in-orbit satellite performance incentive payments, including interest, over a fifteen-year period from December 2011 until December 2026, subject to the continued satisfactory performance of the satellite. The Company recorded the net present value of these expected future payments as a liability and as a component of the cost of the satellite during the third quarter of fiscal year 2012. As of March 31, 2016, the Company’s estimated satellite performance incentives obligation and accrued interest was approximately $22.0 million, of which $2.5 million and $19.5 million have been classified current in accrued liabilities and non-current in other liabilities, respectively. Under the satellite construction contract with SS/L, the Company may incur up to $32.0 million in total costs for satellite performance incentives obligation and related interest earned over the fifteen-year period with potential future minimum payments of $2.1 million, $2.3 million, $2.4 million, $2.6 million and $2.8 million in fiscal years 2017, 2018, 2019, 2020 and 2021, respectively, with $19.8 million commitments thereafter.

The Company has various other purchase commitments under satellite capacity agreements which are used to provide satellite networking services to its customers for future minimum payments of approximately $44.8 million, $15.4 million, $11.7 million, $9.5 million, $3.7 million and none in fiscal years 2017, 2018, 2019, 2020, 2021 and thereafter, respectively.

The Company leases office and other facilities under non-cancelable operating leases with initial terms ranging from one to fifteen years which expire between fiscal year 2017 and fiscal year 2027 and provide for pre-negotiated fixed rental rates during the terms of the lease. Certain of the Company’s facilities leases contain option provisions which allow for extension of the lease terms.

For operating leases, minimum lease payments, including minimum scheduled rent increases, are recognized as rent expense on a straight-line basis over the lease term as that term is defined in the authoritative guidance for leases including any option periods considered in the lease term and any periods during which the Company has use of the property but is not charged rent by a landlord (“rent holiday”). Leasehold improvement incentives paid to the Company by a landlord are recorded as a liability and amortized as a reduction of rent expense over the lease term. Total rent expense was $27.7 million, $24.5 million and $22.3 million in fiscal years 2016, 2015 and 2014, respectively.

As of March 31, 2016, future minimum lease payments for the next five fiscal years and thereafter were as follows:


Fiscal Years Ending	(In thousands)
2017	$	29,816
2018		26,802
2019		23,842
2020		20,028
2021		19,787
Thereafter		85,416

	$	205,691