Sirius XM Holdings Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Property and Equipment

Property and Equipment

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

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:



Satellite system	2 - 15 years
Terrestrial repeater network	5 - 15 years
Broadcast studio equipment	3 - 15 years
Capitalized software and hardware	3 - 7 years
Satellite telemetry, tracking and control facilities	3 - 15 years
Furniture, fixtures, equipment and other	2 - 7 years
Building	20 or 30 years
Leasehold improvements	Lesser of useful life or remaining lease term

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 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 for the amount by which the carrying amount exceeds the fair value of the asset. We did not record any impairments in 2014, 2013 or 2012.

Property and equipment, net, consists of the following:



	December 31, 2014			December 31, 2013
Satellite system	$	2,397,611		$	2,407,423
Terrestrial repeater network	108,341			109,367
Leasehold improvements	48,677			46,173
Broadcast studio equipment	61,306			59,020
Capitalized software and hardware	340,738			298,267
Satellite telemetry, tracking and control facilities	71,268			63,944
Furniture, fixtures, equipment and other	78,237			67,275
Land	38,411			38,411
Building	59,373			58,662
Construction in progress	155,716			103,148
Total property and equipment	3,359,678			3,251,690
Accumulated depreciation and amortization	(1,849,566		)	(1,657,116		)
Property and equipment, net	$	1,510,112		$	1,594,574

Construction in progress consists of the following:



	December 31, 2014		December 31, 2013
Satellite system	$	12,912	$	11,879
Terrestrial repeater network	48,406		30,078
Capitalized software	77,755		39,924
Other	16,643		21,267
Construction in progress	$	155,716	$	103,148

Depreciation expense on property and equipment was $211,407, $203,303 and $212,675 for the years ended December 31, 2014, 2013 and 2012, respectively. During the years ended December 31, 2014, 2013 and 2012, we retired property and equipment of $19,398, $16,039 and $5,251, respectively, which included the retirement of our XM-2 satellite in 2014, and recognized a loss on disposal of assets of $220, $351 and $657, respectively.

Satellites

We currently own a fleet of nine operating satellites. The chart below provides certain information on these satellites:



Satellite Designation	Year Delivered	Estimated End of Depreciable Life
FM-1*	2000	2013
FM-2*	2000	2013
FM-3	2000	2015
FM-5	2009	2024
FM-6	2013	2028
XM-1*	2001	2013
XM-3	2005	2020
XM-4	2006	2021
XM-5	2010	2025

* Satellite was fully depreciated as of December 31, 2014 but is still in operation.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

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