Property and Equipment

Property and equipment consists of the following (in thousands):



	As of December 31,
	2018			2017
Ships	$	27,209,553		$	23,714,745
Ship improvements	2,965,634			2,410,525
Ships under construction	817,800			642,235
Land, buildings and improvements, including leasehold improvements and port facilities	321,136			250,079
Computer hardware and software, transportation equipment and other	1,120,988			762,512
Total property and equipment	32,435,111			27,780,096
Less—accumulated depreciation and amortization⁽¹⁾	(8,968,948		)	(8,044,916		)
	$	23,466,163		$	19,735,180


(1)	Amount includes accumulated depreciation and amortization for assets in service.

Ships under construction include progress payments for the construction of new ships as well as planning, design, capitalized interest and other associated costs. We capitalized interest costs of $49.6 million, $24.2 million and $25.3 million for the years ended December 31, 2018, 2017 and 2016, respectively.

During 2018, we completed our purchase of Azamara Pursuit and took delivery of Symphony of the Seas and Celebrity Edge. Refer to Note 9. Debt for further information.

Upon our acquisition of Silversea Cruises, we added to our fleet nine ships, two of which are under capital lease agreements. Refer to Note 3. Business Combination for further information on the Silversea Cruises acquisition and Note 9. Debt for further information on the capital leases.

During 2018, Silversea Cruises entered into an agreement with Shipyard De Hoop to build a ship designed for the Galapagos Islands. Refer to Note 18. Commitments and Contingencies for further information on the aggregate costs of our ships on order.

During 2017, we sold our three aircraft and 6% of our ownership stake in Wamos Air, S.A. (formerly known as Pullmantur Air, S.A.) to Wamos Air, S.A. In connection with the sale transaction, we extended two loans to Wamos Air, S.A. totaling €17.3 million. The loans accrue interest at rates ranging from 4.78% to 5.35% per annum, amortize through maturity of October 2019 and July 2021, respectively, and are secured by first priority security interests over the aircraft engines and shares sold in connection with the transaction. The sale resulted in an immaterial gain that was recognized in earnings during the year ended December 31, 2017. Post-sale, we retained a 13% interest in Wamos Air, S.A. During the year ended December 31, 2018, we received principal and interest payments of $4.0 million. As of December 31, 2018, a receivable of €14.1 million, or approximately $16.1 million, based on the exchange rate at December 31, 2018, was outstanding related to the principal amount of these loans.

During 2017, we sold Legend of the Seas to an affiliate of TUI AG, our joint venture partner in TUI Cruises. The sale resulted in a gain of $30.9 million and was reported within Other operating within Cruise operating expenses in our consolidated statements of comprehensive income (loss) for the year ended December 31, 2017.

During 2016, we sold our 51% interest in Pullmantur Holdings. We retained full ownership of the four vessels currently operated by the Pullmantur brand under bareboat charter arrangements. We account for the bareboat charters of the vessels to Pullmantur Holdings as operating leases.

In April 2016, we sold Splendour of the Seas to TUI Cruises. Concurrent with the acquisition, TUI Cruises leased the ship to an affiliate of TUI AG, our joint venture partner in TUI Cruises, which now operates the ship. The gain recognized did not have a material effect to our consolidated financial statements.