Property and Equipment

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Property and equipment, including satellites, are stated at cost, less accumulated depreciation. Equipment under 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. During the year ended December 31, 2023, we retired property and equipment of $289, and recorded related impairment charges of $14 primarily related to terminated software projects. During the year ended December 31, 2022, we recorded impairment charges of $48 related to the write off of terminated software projects and fixed assets in connection with furniture and equipment located at impaired office spaces. Refer to the Note 5 for more information. During the year ended December 31, 2021, we recorded an impairment charge of $220 related to our SXM-7 satellite which was offset by insurance recoveries. Refer to the discussion below for more information.

Property and equipment, net, consists of the following:


	December 31, 2023		December 31, 2022
Satellite system	$	1,598	$	1,841
Terrestrial repeater network	117		118
Leasehold improvements	106		100
Broadcast studio equipment	146		133
Capitalized software and hardware	2,178		1,821
Satellite telemetry, tracking and control facilities	84		76
Furniture, fixtures, equipment and other	110		89
Land	32		32
Building	74		70
Construction in progress	538		313
Total property and equipment	4,983		4,593
Accumulated depreciation	(3,229)		(3,094)
Property and equipment, net	$	1,754	$	1,499

Construction in progress consists of the following:


	December 31, 2023		December 31, 2022
Satellite system	$	490	$	212
Terrestrial repeater network	7		10
Capitalized software and hardware	17		56
Other	24		35
Construction in progress	$	538	$	313

Depreciation and amortization expense on property and equipment was $410, $380 and $379 for the years ended December 31, 2023, 2022 and 2021, respectively. In addition to the property and equipment impaired above, we sold real estate during the year ended December 31, 2022 for net proceeds of $15 resulting in a gain of $8 which has been recorded to Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income.

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 $16, $5 and $7 for the years ended December 31, 2023, 2022, and 2021, respectively, which related to the construction of our SXM-9, SXM-10, SXM-11 and SXM-12 satellites. We also capitalize a portion of share-based compensation related to employee time for capitalized software projects. Capitalized share-based compensation costs were $18, $16 and $13 for the years ended December 31, 2023, 2022 and 2021, respectively.

Satellites

As of December 31, 2023, we operated a fleet of five satellites. 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 license. The renewal and extension of our licenses is reasonably certain at minimal cost, which is expensed as incurred. The chart below provides certain information on our satellites as of December 31, 2023:


Satellite Description	Year Delivered	Estimated End of Depreciable Life	FCC License Expiration Year

SIRIUS FM-5	2009	2024	2025
SIRIUS FM-6	2013	2028	2030
XM-3	2005	2020	2026

XM-5	2010	2025	2026
SXM-8	2021	2036	2029

During the year ended December 30, 2021, we recorded an impairment charge of $220 to Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income related to the total loss of our SXM-7 satellite. We procured insurance for SXM-7 to cover the risks associated with the satellite's launch and first year of in-orbit operation. The aggregate coverage under the insurance policies with respect to SXM-7 was $225. During the year ended December 30, 2021, we collected $225 of insurance recoveries. Of this amount, $220 was recorded as a reduction to Impairment, restructuring and acquisition costs during year ended December 30, 2021. The remaining $5 was recorded in Other income during the year ended December 30, 2021. SXM-7 remains in-orbit at its assigned orbital location, but is not being used to provide satellite radio service.

During 2023, we removed our XM-4 satellite from service and in October 2023 we completed the de-orbiting and decommissioning of the satellite. Our XM-3 satellite remains available as an in-orbit spare.