Sirius XM Holdings Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Property and Equipment

Property and Equipment

9 Months Ended

Sep. 30, 2016

Property, Plant and Equipment [Abstract]

Property and equipment, net, consists of the following:



	September 30, 2016			December 31, 2015
Satellite system	$	1,845,173		$	2,388,000
Terrestrial repeater network	125,266			117,127
Leasehold improvements	53,269			49,407
Broadcast studio equipment	80,425			70,888
Capitalized software and hardware	503,015			466,464
Satellite telemetry, tracking and control facilities	76,376			75,440
Furniture, fixtures, equipment and other	81,878			81,871
Land	38,411			38,411
Building	60,727			60,487
Construction in progress	145,431			101,324
Total property and equipment	3,009,971			3,449,419
Accumulated depreciation and amortization	(1,628,857		)	(2,034,018		)
Property and equipment, net	$	1,381,114		$	1,415,401

Construction in progress consists of the following:



	September 30, 2016		December 31, 2015
Satellite system	$	19,313	$	12,912
Terrestrial repeater network	692		25,578
Capitalized software	101,554		37,064
Other	23,872		25,770
Construction in progress	$	145,431	$	101,324

Depreciation expense on property and equipment was $55,800 and $57,580 for the three months ended September 30, 2016 and 2015, respectively, and $165,437 and $163,459 for the nine months ended September 30, 2016 and 2015, respectively. We retired property and equipment of $583,562 and $12,774 during the nine months ended September 30, 2016 and 2015, respectively, which included approximately $542,827 related to satellites during 2016. We recognized a loss on disposal of assets of $12,912, which has been recorded in Satellite and transmission expense in our unaudited consolidated statements of comprehensive income during the nine months ended September 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 nine months ended September 30, 2016 was $107, which related to the construction of our SXM-7 and SXM-8 satellites.

Satellites

As of September 30, 2016, we owned a fleet of six satellites, of which five were operating. The chart below provides certain information on our satellites as of September 30, 2016:



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

* Satellite was fully depreciated as of September 30, 2016. As of April 7, 2016, this satellite was no longer being used to transmit satellite radio. We plan to complete the deorbiting of this satellite during the fourth quarter of 2016.