Property and Equipment

Property and equipment, including satellites, are stated at cost, less accumulated depreciation. Equipment under capital leases is stated at the present value of minimum lease payments. Depreciation is calculated using the straight-line method over the following estimated useful life of the asset:



Satellite system	15 years
Terrestrial repeater network	5 - 15 years
Broadcast studio equipment	3 - 15 years
Capitalized software and hardware	2 - 7 years
Satellite telemetry, tracking and control facilities	3 - 15 years
Furniture, fixtures, equipment and other	2 - 7 years
Building	20 or 30 years
Leasehold improvements	Lesser of useful life or remaining lease term

We review long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds the estimated future cash flows, an impairment charge is recognized in an amount by which the carrying amount exceeds the fair value of the asset. We did not record any impairments during the years ended December 31, 2018, 2017 and 2016.

Property and equipment, net, consists of the following:



	December 31, 2018			December 31, 2017
Satellite system	$	1,586,794		$	1,586,794
Terrestrial repeater network	98,093			123,254
Leasehold improvements	58,447			57,635
Broadcast studio equipment	111,031			96,582
Capitalized software and hardware	824,345			639,516
Satellite telemetry, tracking and control facilities	75,837			69,147
Furniture, fixtures, equipment and other	97,078			96,965
Land	38,411			38,411
Building	62,649			61,824
Construction in progress	411,503			301,153
Total property and equipment	3,364,188			3,071,281
Accumulated depreciation and amortization	(1,851,323		)	(1,608,515		)
Property and equipment, net	$	1,512,865		$	1,462,766

Construction in progress consists of the following:



	December 31, 2018		December 31, 2017
Satellite system	$	296,281	$	183,243
Terrestrial repeater network	4,388		2,515
Capitalized software and hardware	76,980		94,456
Other	33,854		20,939
Construction in progress	$	411,503	$	301,153

Depreciation and amortization expense on property and equipment was $277,535, $261,147, and $220,434 for the years ended December 31, 2018, 2017 and 2016, respectively. We retired property and equipment of $35,122, $78,559 and $843,129 during the years ended December 31, 2018, 2017 and 2016, respectively, which included approximately $801,206 related to satellites during 2016. We recognized a loss on disposal of assets of $12,912, which was recorded in Satellite and transmission expense in our consolidated statements of comprehensive income, during the year ended December 31, 2016, which related to the disposal of certain obsolete spare parts for a future satellite.

We capitalize a portion of the interest on funds borrowed to finance the construction and launch of our satellites. Capitalized interest is recorded as part of the asset’s cost and depreciated over the satellite’s useful life. Capitalized interest costs were $11,864, $4,948 and $419 for the years ended December 31, 2018, 2017 and 2016, respectively, which related to the construction of our SXM-7 and SXM-8 satellites.

Satellites

As of December 31, 2018, we owned a fleet of five satellites. The chart below provides certain information on our satellites as of December 31, 2018:



Satellite Description	Year Delivered	Estimated End of Depreciable Life
SIRIUS FM-5	2009	2024
SIRIUS FM-6	2013	2028
XM-3	2005	2020
XM-4	2006	2021
XM-5	2010	2025

Each satellite requires an FCC license and prior to the expiration of each license, we are required to apply for a renewal of the FCC satellite licenses. The renewal and extension of our licenses is reasonably certain at minimal cost, which is expensed as incurred.

The following table outlines the years in which each of our satellite licenses expires:



FCC satellite licenses		Expiration year
SIRIUS FM-5		2025
SIRIUS FM-6		2022
XM-3		2021
XM-4		2022
XM-5		2026