Quarterly report pursuant to Section 13 or 15(d)

Property and Equipment

v3.23.2
Property and Equipment
 6 Months Ended
Jun. 30, 2023
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment
Property and equipment, net, consists of the following:
  June 30, 2023 December 31, 2022
Satellite system $ 1,598  $ 1,841 
Terrestrial repeater network 119  118 
Leasehold improvements 105  100 
Broadcast studio equipment 140  133 
Capitalized software and hardware 1,842  1,821 
Satellite telemetry, tracking and control facilities 80  76 
Furniture, fixtures, equipment and other 108  89 
Land 32  32 
Building 72  70 
Construction in progress 560  313 
Total property and equipment 4,656  4,593 
Accumulated depreciation (3,040) (3,094)
Property and equipment, net $ 1,616  $ 1,499 
Construction in progress consists of the following:
  June 30, 2023 December 31, 2022
Satellite system $ 361  $ 212 
Terrestrial repeater network 13  10 
Capitalized software and hardware 171  56 
Other 15  35 
Construction in progress $ 560  $ 313 
Depreciation and amortization expense on property and equipment was $103 and $96 for the three months ended June 30, 2023 and 2022, respectively, and $202 and $192 for the six months ended June 30, 2023 and 2022, respectively. During the three and six months ended June 30, 2023, we retired property and equipment of $16 and $269, respectively, and recorded related impairment charges of $10 and $13, respectively, primarily related to terminated software projects. During the six months ended June 30, 2022, we retired property and equipment with a cost of $22 and a net book value of $1.
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 $4 and $1 for the three months ended June 30, 2023 and 2022, respectively, and $6 and $2 for the six months ended
June 30, 2023 and 2022, respectively, which related to the construction of our SXM-9, SXM-10, SXM-11 and SXM-12 satellites. We also capitalize a portion of share-based compensation related to employee time for capitalized software projects. Capitalized share-based compensation costs were $3 and $4 for the three months ended June 30, 2023 and 2022, respectively, and $7 and $9 for the six months ended June 30, 2023 and 2022, respectively.
Satellites
As of June 30, 2023, we operated a fleet of five 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 June 30, 2023:
Satellite Description Year Delivered Estimated End of
Depreciable Life		 FCC License Expiration Year
SIRIUS FM-5 2009 2024 2025
SIRIUS FM-6 2013 2028 2030
XM-3 2005 2020 2026
XM-5 2010 2025 2026
SXM-8 2021 2036 2029
During the three months ended March 31, 2023, we removed our XM-4 satellite from service and, we are in the process of de-orbiting the satellite which we expect to be completed by the end of 2023. Our XM-3 satellite remains available as an in-orbit spare.