NOTE 5. Property and Equipment

Property and equipment consisted of the following:

(in millions)	Depreciable Life (in years)	September 30, 2013			December 31, 2012
Satellites	1 – 12	$	1,323.6		$	1,110.8
Construction in progress	—	1,222.8			486.8
Computer equipment and software	3	304.1			140.6
Machinery and equipment, including ground terminals	5	96.2			32.7
Furniture, fixtures and other	3 – 7	40.3			20.2
Land and buildings	34	6.4			0.3
Total property and equipment		2,993.4			1,791.4
Accumulated depreciation and amortization		(831.2		)	(676.2		)
Property and equipment, net		$	2,162.2		$	1,115.2

The Company operates a constellation of five in-orbit satellites, as follows:

(in millions)	Depreciable Life (in years)	September 30, 2013			December 31, 2012
Quickbird	12.2	$	174.4		$	174.4
Worldview-1	10.5	473.2			473.2
WorldView-2	11	463.2			463.2
IKONOS	0.5	1.0			—
GeoEye-1	5	211.8			—
Total satellites		1,323.6			1,110.8
Accumulated depreciation		(625.6		)	(530.0		)
Satellites, net		$	698.0		$	580.8

Construction in progress includes the WorldView-3 and GeoEye-2 satellites, ground station construction, infrastructure projects, certain internally developed software costs and capitalized interest. The IKONOS, GeoEye-1, and GeoEye-2 satellites were added from our acquisition of GeoEye. The depreciable lives of the IKONOS and GeoEye-1 satellites were their estimated remaining useful lives determined as of the date of the acquisition. The Company currently expects to complete construction and testing and launch WorldView-3 in the summer of 2014.

Depreciation expense for property and equipment was $57.1 million and $28.9 million for the three months ended September 30, 2013 and 2012, respectively, and $159.6 million and $86.5 million for the nine months ended September 30, 2013 and 2012, respectively.

The capitalized costs of the Company’s satellites and related ground systems include internal and external direct labor costs, internally developed software and direct material costs which support the construction and development of the satellites and related ground systems. The cost of DigitalGlobe’s satellites also includes capitalized interest incurred during the construction, development and initial in-orbit testing period. The portion of the launch insurance premium allocable to the period from launch through in-orbit calibration and commissioning has been capitalized as part of the cost of the satellites and is amortized over the useful life of the satellites.

The expected operational life of a satellite is determined once the satellite has been placed into orbit. A satellite’s expected operational life is determined by considering certain factors including: (i) the orbit in which the satellite is placed; (ii) the supply of fuel; (iii) environmental stress; (iv) the anticipated environmental degradation of solar panels and other components; (v) the anticipated levels of solar radiation; (vi) the probability of design failure of the satellite’s components from design or manufacturing defect; and (vii) the quality of the satellite’s construction. The Company depreciates the cost of a satellite, after the satellite has been successfully placed into service, over its expected useful life using the straight-line method of depreciation as the Company anticipates that the satellite will provide consistent levels of imagery over its useful life. The Quickbird and IKONOS satellites are nearing the end of their expected useful lives.

If a satellite were to fail to launch or fail while in orbit, the resulting loss would be charged to expense in the period in which such loss was to occur. The amount of any such loss would be reduced to the extent of insurance proceeds received as a result of the launch or in-orbit failure