Property and Equipment
|12 Months Ended|
Dec. 31, 2022
|Property, Plant and Equipment [Abstract]|
|Property and Equipment||Property and Equipment
Property and equipment, including satellites, are stated at cost, less accumulated depreciation. Equipment under capital leases is stated at the present value of minimum lease payments. Depreciation is calculated using the straight-line method over the following estimated useful life of the asset:
We review long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds the estimated future cash flows, an impairment charge is recognized in an amount by which the carrying amount exceeds the fair value of the asset. During the year ended December 31, 2022, we recorded impairment charges of $48 related to the write off of terminated software projects and fixed assets in connection with furniture and equipment located at impaired office spaces. Refer to the Note 5 for more information.
During the year ended December 31, 2021, we recorded an impairment charge of $220 related to our SXM-7 satellite which was offset by insurance recoveries. Refer to the discussion below for more information. We did not record any impairment charges during the year ended 2020.
Property and equipment, net, consists of the following:
Construction in progress consists of the following:
Depreciation and amortization expense on property and equipment was $380, $379 and $354 for the years ended December 31, 2022, 2021 and 2020, respectively. During the year ended December 31, 2022, we wrote off furniture and equipment in connection with impaired office space leases and we disposed of assets associated with software development initiatives that we are no longer pursuing. In addition to the property and equipment impaired above, we sold real estate during the year ended December 31, 2022 for net proceeds of $15 resulting in a gain of $8 which has been recorded to Impairment, restructuring and acquisition costs line item in our consolidated statements of comprehensive income. We retired property and equipment of $65 during the year ended December 31, 2021 and $94 during the year ended December 31, 2020, which included a loss of $13 related to the termination of the Automatic service.
We capitalize a portion of the interest on funds borrowed to finance the construction and launch of our satellites. Capitalized interest is recorded as part of the asset’s cost and depreciated over the satellite’s useful life. Capitalized interest costs were $5, $7 and $19 for the years ended December 31, 2022, 2021 and 2020, respectively, which related to the construction of our SXM-7, SXM-8, SXM-9 and SXM-10 satellites. We also capitalize a portion of share-based compensation related to employee time for capitalized software projects. Capitalized share-based compensation costs were $16, $13 and $17 for the years ended December 31, 2022, 2021 and 2020, respectively.
As of December 31, 2022, we operated a fleet of six satellites. Each satellite requires an FCC license, and prior to the expiration of each license, we are required to apply for a renewal of the FCC satellite license. The renewal and extension of our licenses is reasonably certain at minimal cost, which is expensed as incurred. The chart below provides certain information on our satellites as of December 31, 2022:
During the year ended December 30, 2021, we recorded an impairment charge of $220 to Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income related to the total loss of the SXM-7 satellite. We procured insurance for SXM-7 to cover the risks associated with the satellite's launch and first year of in-orbit operation. The aggregate coverage under the insurance policies with respect to SXM-7 was $225. During the year ended December 30, 2021, we collected $225 of insurance recoveries. Of this amount, $220 was recorded as a reduction to Impairment, restructuring and acquisition costs during year ended December 30, 2021. The remaining $5 was recorded in Other income during the year ended December 30, 2021. SXM-7 remains in-orbit at its assigned orbital location, but is not being used to provide satellite radio service.
Our SXM-8 satellite was successfully launched into a geostationary orbit on June 6, 2021 and was placed into service on September 8, 2021 following the completion of in-orbit testing. Our SXM-8 satellite replaced our XM-3 satellite. During the year ended December 31, 2022, we replaced our XM-4 satellite with our XM-5 satellite. As of December 31, 2022, our XM-3 and XM-4 satellites remain available as in-orbit spares.
No definition available.
The entire disclosure for long-lived, physical asset used in normal conduct of business and not intended for resale. Includes, but is not limited to, work of art, historical treasure, and similar asset classified as collections.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef