7.Property and Equipment

Property and equipment consisted of the following:


	Depreciable			As of
	Life			June 30,		December 31,
	(In Years)			2018		2017
				(In thousands)
Equipment leased to customers	2	-	5	$	2,195,942	$	2,323,100
EchoStar XV		15			277,658		277,658
EchoStar XVIII		15			411,255		411,255
D1		N/A			55,000		55,000
T1		14.25			100,000		100,000
Satellites acquired under capital lease agreements	10	-	15		499,819		499,819
Furniture, fixtures, equipment and other	2	-	10		1,818,854		1,779,109
Buildings and improvements	3	-	40		295,118		293,571
Land		—			14,057		14,057
Construction in progress		—			116,697		103,176
Total property and equipment					5,784,400		5,856,745
Accumulated depreciation					(3,736,472)		(3,673,084)
Property and equipment, net				$	2,047,928	$	2,183,661

Depreciation and amortization expense consisted of the following:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
	(In thousands)
Equipment leased to customers	$	111,877	$	145,603	$	222,398	$	281,737
Satellites		25,086		29,414		50,172		58,426
Buildings, furniture, fixtures, equipment and other		35,739		36,654		93,104		76,138
Total depreciation and amortization	$	172,702	$	211,671	$	365,674	$	416,301

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 11 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 seven 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, 2018, 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 (3)	February 2006	110	February 2021
EchoStar XI (3)	July 2008	110	September 2021
EchoStar XIV (3)	March 2010	119	February 2023
EchoStar XVI (4)	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 (5)	December 2008	129	January 2019

(1)

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

(2)

The satellite capacity agreement for EchoStar VII expired on June 30, 2018.

(3)

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.

(4)

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

(5)

On July 30, 2018, we did not provide notice to renew our lease for the capacity of Ciel II. Accordingly, our lease for the capacity of Ciel II will expire in January 2019 at the conclusion of the initial term. There can be no assurance that the expiration of our lease for capacity of Ciel II will not have a material adverse effect on our business, results of operations and financial condition or otherwise disrupt our business.