Property and Equipment and Intangible Assets

6 Months Ended

Jun. 30, 2017

Property and Equipment and Intangible Assets

Property and Equipment

8.Property and Equipment

Property and equipment consisted of the following:

	Depreciable			As of
	Life			June 30,		December 31,
	(In Years)			2017		2016
				(In thousands)
Equipment leased to customers	2	-	5	$	2,505,046	$	2,720,695
EchoStar XV			15		277,658		277,658
EchoStar XVIII			15		411,255		411,255
D1		N/A			55,000		55,000
T1			15		401,721		401,721
Satellites acquired under capital lease agreements	10	-	15		499,819		499,819
Furniture, fixtures, equipment and other	1	-	10		1,728,578		1,639,051
Buildings and improvements	1	-	40		291,476		288,992
Land			—		14,057		14,057
Construction in progress			—		60,747		88,235
Total property and equipment					6,245,357		6,396,483
Accumulated depreciation					(3,797,412)		(3,742,212)
Property and equipment, net				$	2,447,945	$	2,654,271

Depreciation and amortization expense consisted of the following:

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2017		2016		2017		2016
	(In thousands)
Equipment leased to customers	$	145,603	$	181,431	$	281,737	$	348,611
Satellites		29,414		21,957		58,426		43,913
Buildings, furniture, fixtures, equipment and other		36,654		36,197		76,138		74,627
Total depreciation and amortization	$	211,671	$	239,585	$	416,301	$	467,151

Cost of sales and operating expense categories included in our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) do not include depreciation expense related to satellites or equipment leased to customers.

Pay-TV Satellites.  We currently utilize 13 satellites in geostationary orbit approximately 22,300 miles above the equator, two of which we own and depreciate over their estimated useful life.  We currently utilize certain capacity on nine satellites that we lease from EchoStar, which are accounted for as operating leases.  We also lease two satellites from third parties, which are accounted for as capital leases and are depreciated over the shorter of the economic life or the term of the satellite agreement.

As of June 30, 2017, our pay-TV satellite fleet consisted of the following:

			Estimated
			Useful Life
		Degree	(Years)/Lease
	Launch	Orbital	Termination
Satellites	Date	Location	Date
Owned:
EchoStar XV	July 2010	61.5	15
EchoStar XVIII	June 2016	61.5	15
Leased from EchoStar (1):
EchoStar VII (2)	February 2002	119	June 2018
EchoStar IX	August 2003	121	Month to month
EchoStar X (2)	February 2006	110	February 2021
EchoStar XI (2)	July 2008	110	September 2021
EchoStar XII	July 2003	61.5	September 2017
EchoStar XIV (2)	March 2010	119	February 2023
EchoStar XVI (3)	November 2012	61.5	January 2023
Nimiq 5	September 2009	72.7	September 2019
QuetzSat-1	September 2011	77	November 2021
Leased from Other Third Party:
Anik F3	April 2007	118.7	April 2022
Ciel II	December 2008	129	January 2019

(1) See Note 12 for further information on our Related Party Transactions with EchoStar.

(2) We generally have the option to renew each lease on a year-to-year basis through the end of the useful life of the respective satellite. 

(3) We have the option to renew this lease for an additional five-year period.