Property, plant and equipment

12 Months Ended

Dec. 31, 2018

8. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the following:


	Year ended December 31,
	2018		2017
Satellites	$	397	$	541
Equipment		229		268
Leasehold improvements		97		80
Computer hardware		92		88
Land and Land improvements		88		108
Buildings		46		91
Furniture and fixtures		19		11
Construction in process		142		72
Property, plant and equipment, at cost		1,110		1,259
Accumulated depreciation		(363)		(251)
Property, plant and equipment, net	$	747	$	1,008

Depreciation expense for property, plant and equipment was $157 million and $61 million for the year ended December 31, 2018 and 2017, respectively.

Impairment

The Company recognized impairment loss of $271 million on its property, plant and equipment for the year ended December 31, 2018 (nil in 2017 and 2016). The impairment loss on property, plant and equipment was due to the loss of the WorldView-4 satellite in the Imagery segment, and obsolescence and reduced future use of equipment and buildings in the Space Systems segment. During December 2018, WorldView-4 experienced a failure in its control moment gyros, preventing the satellite from collecting imagery. As a result, the Company recorded impairment losses of $150 million for the remaining book value of the satellite, $5 million related to deferred contract cost assets, $3 million for future insurance premiums due, and $2 million related to prepaid insurance. Impairment loss in the Space Systems segment was based on fair value less cost of disposal for those assets in an orderly liquidation. Fair value was based on observable inputs where possible (Level 2), in which market data could be applied. However, due to the specialized nature of the majority of these assets, inputs for the valuation were unobservable (Level 3).

Sale of Building

During the fourth quarter of 2018, the Company completed the sale of one of its buildings in Palo Alto, California for net proceeds of $68 million. The building and surrounding parcel of land were a part of the SSL campus. The sale resulted in a gain of $33 million from the sale, which is included in Impairment losses, net in the Company’s Consolidated Statements of Operations.