Property and Equipment

9 Months Ended

Sep. 30, 2015

6.Property and Equipment

Depreciation and amortization expense consisted of the following:


	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2015		2014		2015		2014
	(In thousands)
Equipment leased to customers	$	199,734	$	208,208	$	597,800	$	607,584
Satellites		15,261		15,261		45,784		53,723
Buildings, furniture, fixtures, equipment and other		14,927		22,671		47,481		58,181
Total depreciation and amortization	$	229,922	$	246,140	$	691,065	$	719,488

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 14 satellites in geostationary orbit approximately 22,300 miles above the equator, one of which we own and depreciate over its useful life. We currently utilize certain capacity on 11 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 September 30, 2015, our pay-TV satellite fleet consisted of the following:


			Estimated
			Useful Life
			(Years)/
		Degree	Lease
	Launch	Orbital	Termination
Satellites	Date	Location	Date
Owned:
EchoStar XV (1)	July 2010	45	15

Under Construction:
EchoStar XVIII (2)	Second quarter 2016	110	15

Leased from EchoStar (1):
EchoStar I (3)(4)	December 1995	77	November 2015
EchoStar VII (3)(5)	February 2002	119	June 2016
EchoStar VIII (6)	August 2002	77	November 2015
EchoStar IX	August 2003	121	Month to month
EchoStar X (3)(5)	February 2006	110	February 2021
EchoStar XI (3)(5)	July 2008	110	September 2021
EchoStar XII (5)	July 2003	61.5	September 2017
EchoStar XIV (3)(5)	March 2010	119	February 2023
EchoStar XVI (7)	November 2012	61.5	January 2017
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 10 for further discussion of our Related Party Transactions with EchoStar.

(2)

EchoStar XVIII is expected to launch during the second quarter 2016.

(3)

On February 20, 2014, we entered into the Satellite and Tracking Stock Transaction with EchoStar pursuant to which, among other things, we transferred these satellites to EchoStar and lease back all available capacity on these satellites. See Note 4 and Note 10 for further discussion.

(4)

The satellite capacity agreement for EchoStar I will expire on November 30, 2015.

(5)

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.

(6)

The satellite capacity agreement for EchoStar VIII will terminate in November 2015.

(7)

We have the option to renew this lease for an additional six-year period. If we exercise our six-year renewal option, we have the option to renew this lease for an additional five years.