6.Property and Equipment and Intangible Assets

Property and Equipment

Property and equipment consisted of the following:


	Depreciable
	Life	As of December 31,
	(In Years)	2016		2015
		(In thousands)
Equipment leased to customers	2-5	$	3,014,243	$	3,439,254
EchoStar XV	15		277,658		277,658
Satellites acquired under capital lease agreements	10-15		499,819		499,819
Furniture, fixtures, equipment and other	1-10		708,313		679,221
Buildings and improvements	1-40		92,225		85,547
Land	-		5,205		5,504
Construction in progress	-		67,838		34,793
Total property and equipment			4,665,301		5,021,796
Accumulated depreciation			(2,871,822)		(2,871,456)
Property and equipment, net		$	1,793,479	$	2,150,340

Construction in progress consisted of the following:


	As of December 31,
	2016		2015
	(In thousands)
Software projects	$	45,590	$	22,539
Other		22,248		12,254
Total construction in progress	$	67,838	$	34,793

Depreciation and amortization expense consisted of the following:


	For the Years Ended December 31,
	2016		2015		2014
	(In thousands)
Equipment leased to customers	$	736,952	$	783,310	$	810,945
Satellites		61,045		61,045		68,984
Buildings, furniture, fixtures, equipment and other		66,382		63,332		76,172
Total depreciation and amortization	$	864,379	$	907,687	$	956,101

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

We did not record any capitalized interest during the years ended December 31, 2016, 2015 or 2014.

Satellites

Pay-TV Satellites. We currently utilize 13 satellites in geostationary orbit approximately 22,300 miles above the equator, one of which we own and depreciate over its estimated useful life. We currently utilize certain capacity on nine satellites that we lease from EchoStar and one satellite that we lease from DISH Network, 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 December 31, 2016, 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	July 2010	61.5	15

Leased from DISH Network (1):
EchoStar XVIII	June 2016	61.5	Month to month

Leased from EchoStar (2):
EchoStar VII (3)	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 XII (3)	July 2003	61.5	September 2017
EchoStar XIV (3)	March 2010	119	February 2023
EchoStar XVI (4)	November 2012	61.5	January 2018
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 15 for further information on our Related Party Transactions with DISH Network.

(2)

See Note 15 for further information on our Related Party Transactions with EchoStar.

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

Satellite Anomalies

Operation of our DISH branded pay-TV service requires that we have adequate satellite transmission capacity for the programming that we offer. While we generally have had in-orbit satellite capacity sufficient to transmit our existing channels and some backup capacity to recover the transmission of certain critical programming, our backup capacity is limited.

In the event of a failure or loss of any of our owned or leased satellites, we may need to acquire or lease additional satellite capacity or relocate one of our other owned or leased satellites and use it as a replacement for the failed or lost satellite. Such a failure could result in a prolonged loss of critical programming or a significant delay in our plans to expand programming as necessary to remain competitive and thus may have a material adverse effect on our business, financial condition and results of operations.

In the past, certain of our owned and leased satellites have experienced anomalies, some of which have had a significant adverse impact on their remaining useful life and/or commercial operation. There can be no assurance that future anomalies will not impact the remaining useful life and/or commercial operation of any of the owned and leased satellites in our fleet. See Note 2 “Impairment of Long-Lived Assets” for further information on evaluation of impairment. There can be no assurance that we can recover critical transmission capacity in the event one or more of our owned or leased in-orbit satellites were to fail. We generally do not carry commercial launch or in-orbit insurance on any of the satellites that we use, other than certain satellites leased from third parties, and therefore, we will bear the risk associated with any uninsured launch or in-orbit satellite failures. In light of current favorable market conditions, in January 2016, DISH Network procured commercial launch and in-orbit insurance (for a period of one year following launch) for the EchoStar XVIII satellite, which was launched on June 18, 2016.

Intangible Assets

FCC Authorizations

As of December 31, 2016 and 2015, our FCC Authorizations consisted of the following:


	As of December 31,
	2016		2015
	(In thousands)
DBS Licenses	$	611,794	$	611,794
MVDDS Licenses		24,000		24,000
Total	$	635,794	$	635,794