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Supplemental Financial Information
 9 Months Ended
Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Supplemental Financial Information SUPPLEMENTAL FINANCIAL INFORMATION

Noncash Investing and Financing Activities

 
 
For The Nine Months Ended September 30,
 
 
2018
 
2017
Property and equipment financed under capital lease obligations
 
$
187

 
$
8,423

Increase (decrease) in capital expenditures included in accounts payable, net
 
$
24,408

 
$
(2,257
)
Transfer of launch service contracts from (to) EchoStar
 
$
—

 
$
(145,114
)
Contribution of noncash net assets pursuant to Share Exchange Agreement (Note 1)
 
$
—

 
$
219,662

Noncash net assets exchanged for HSS Tracking Stock (Note 1)
 
$
—

 
$
(190,221
)
Capitalized in-orbit incentive obligations
 
$
—

 
$
31,000

Contribution of EchoStar XIX satellite
 
$
—

 
$
514,448



Restricted Cash and Cash Equivalents

The beginning and ending balances of cash and cash equivalents presented in our Condensed Consolidated Statements of Cash Flows included restricted cash and cash equivalents of $0.8 million and $0.8 million, respectively, for the nine months ended September 30, 2018 and $0.7 million and $0.8 million, respectively, for the nine months ended September 30, 2017.  These amounts are included in Other noncurrent assets, net in our Condensed Consolidated Balance Sheets.

Fair Value of In-Orbit Incentives

As of September 30, 2018 and December 31, 2017, the fair values of our in-orbit incentive obligations, based on measurements categorized within Level 2 of the fair value hierarchy, approximated their carrying amounts of $95.3 million and $99.3 million, respectively.

Contract Acquisition and Fulfillment Costs

Unamortized contract acquisition costs totaled $104.5 million as of September 30, 2018 and related amortization expense totaled $21.0 million and $61.7 million for the three and nine months ended September 30, 2018, respectively.

Unamortized contract fulfillment costs totaled $2.6 million as of September 30, 2018 and related amortization expense was de minimis for the three and nine months ended September 30, 2018.

Research and Development

The table below summarizes the research and development costs incurred in connection with customers’ orders included in cost of sales and other expenses we incurred for research and development.


 
For the three months
ended September 30,
 
For the nine months
ended September 30,
 
2018
 
2017
 
2018
 
2017
 
(In thousands)
Cost of sales
$
5,555

 
$
7,038

 
$
18,443

 
$
20,724

Research and development
$
6,544

 
$
8,302

 
$
20,328

 
$
23,444



Capitalized Software Costs

As of September 30, 2018 and December 31, 2017, the net carrying amount of externally marketed software was $95.7 million and $88.1 million, respectively, of which $31.3 million and $19.6 million, respectively, is under development and not yet placed in service. We capitalized costs related to the development of externally marketed software of $9.6 million and $8.3 million for the three months ended September 30, 2018 and 2017, respectively, and $24.6 million and $25.4 million for the nine months ended September 30, 2018 and 2017, respectively.  We recorded amortization expense relating to the development of externally marketed software of $5.8 million and $5.5 million for the three months ended September 30, 2018 and 2017, respectively, and $16.9 million and $14.1 million for the nine months ended September 30, 2018 and 2017, respectively. The weighted average useful life of our externally marketed software was approximately three years as of September 30, 2018.