Quarterly report pursuant to Section 13 or 15(d)

Property and Equipment

v3.7.0.1
Property and Equipment
 6 Months Ended
Jun. 30, 2017
Property, Plant and Equipment [Abstract]  
Property and Equipment
Property and Equipment
Property and equipment, net, consists of the following:
 
June 30, 2017
 
December 31, 2016
Satellite system
$
1,586,794

 
$
1,586,794

Terrestrial repeater network
129,127

 
127,854

Leasehold improvements
54,749

 
53,898

Broadcast studio equipment
88,634

 
84,697

Capitalized software and hardware
606,567

 
558,101

Satellite telemetry, tracking and control facilities
66,759

 
77,290

Furniture, fixtures, equipment and other
91,567

 
90,214

Land
38,411

 
38,411

Building
61,729

 
61,597

Construction in progress
223,543

 
144,954

Total property and equipment
2,947,880

 
2,823,810

Accumulated depreciation and amortization
(1,537,615
)
 
(1,425,117
)
Property and equipment, net
$
1,410,265

 
$
1,398,693


Construction in progress consists of the following:
 
June 30, 2017
 
December 31, 2016
Satellite system
$
96,759

 
$
43,977

Terrestrial repeater network
1,863

 
1,139

Capitalized software
104,660

 
82,204

Other
20,261

 
17,634

Construction in progress
$
223,543

 
$
144,954


Depreciation and amortization expense on property and equipment was $61,421 and $54,450 for the three months ended June 30, 2017 and 2016, respectively, and $126,597 and $109,637 for the six months ended June 30, 2017 and 2016, respectively.  We retired property and equipment of $14,760 and $36,512 during the six months ended June 30, 2017 and 2016, respectively. We recognized a loss on disposal of assets of $12,912, which was recorded in Satellite and transmission expense in our unaudited consolidated statements of comprehensive income during the three and six months ended June 30, 2016, which related to the disposal of certain obsolete spare parts for a future satellite.
We capitalize a portion of the interest on funds borrowed to finance the construction and launch of our satellites and launch vehicles. Capitalized interest is recorded as part of the asset’s cost and depreciated over the satellite’s useful life. Capitalized interest costs for the three and six months ended June 30, 2017 was $1,005 and $1,723, respectively, which related to the construction of our SXM-7 and SXM-8 satellites. We did not capitalize any interest costs for the three and six months ended June 30, 2016.
Satellites
As of June 30, 2017, we owned a fleet of five satellites.  The chart below provides certain information on our satellites as of June 30, 2017:
Satellite Description
 
Year Delivered
 
Estimated End of
Depreciable Life
SIRIUS FM-5
 
2009
 
2024
SIRIUS FM-6
 
2013
 
2028
XM-3
 
2005
 
2020
XM-4
 
2006
 
2021
XM-5
 
2010
 
2025