16. SATELLITES, PROPERTY AND OTHER EQUIPMENT
| Satellites | Property and other equipment | Assets
under construction | Total | |||||||||||||
| Cost as at January 1, 2016 | $ | 3,213,581 | $ | 233,675 | $ | 48,057 | $ | 3,495,313 | ||||||||
| Additions | — | 1,736 | 227,222 | 228,958 | ||||||||||||
| Disposals/retirements | — | (12,100 | ) | — | (12,100 | ) | ||||||||||
| Reclassifications and transfers from assets under construction | — | 6,130 | (6,130 | ) | — | |||||||||||
| Impact of foreign exchange | (10,478 | ) | (233 | ) | 1,619 | (9,092 | ) | |||||||||
| Cost as at December 31, 2016 and January 1, 2017 | 3,203,103 | 229,208 | 270,768 | 3,703,079 | ||||||||||||
| Additions | — | 3,270 | 139,212 | 142,482 | ||||||||||||
| Disposals/retirements | — | (2,982 | ) | — | (2,982 | ) | ||||||||||
| Reclassifications and transfers from assets under construction | — | 11,816 | (11,816 | ) | — | |||||||||||
| Impact of foreign exchange | (22,925 | ) | (2,092 | ) | (21,199 | ) | (46,216 | ) | ||||||||
| Cost as at December 31, 2017 | $ | 3,180,178 | 239,220 | 376,965 | 3,796,363 | |||||||||||
| Accumulated depreciation and impairment as at January 1, 2016 | $ | (1,438,995 | ) | $ | (131,053 | ) | $ | — | $ | (1,570,048 | ) | |||||
| Depreciation | (209,804 | ) | (14,969 | ) | — | (224,773 | ) | |||||||||
| Disposals/retirements | — | 9,535 | — | 9,535 | ||||||||||||
| Impact of foreign exchange | (2,522 | ) | 140 | — | (2,382 | ) | ||||||||||
| Accumulated depreciation and impairment as at December 31, 2016 and January 1, 2017 | (1,651,321 | ) | (136,347 | ) | — | (1,787,668 | ) | |||||||||
| Depreciation | (206,439 | ) | (14,619 | ) | — | (221,058 | ) | |||||||||
| Disposals/retirements | — | 2,564 | — | 2,564 | ||||||||||||
| Impact of foreign exchange | 568 | 1,078 | — | 1,646 | ||||||||||||
| Accumulated depreciation and impairment as at December 31, 2017 | $ | (1,857,192 | ) | $ | (147,324 | ) | $ | — | $ | (2,004,516 | ) | |||||
| Net carrying values | ||||||||||||||||
| As at December 31, 2016 | $ | 1,551,782 | $ | 92,861 | $ | 270,768 | $ | 1,915,411 | ||||||||
| As at December 31, 2017 | $ | 1,322,986 | $ | 91,896 | $ | 376,965 | $ | 1,791,847 | ||||||||
Substantially all of the Company’s satellites, property and other equipment have been pledged as security as a requirement of the Company’s Senior Secured Credit Facilities as at December 31, 2017 and 2016 (Note 24).
Borrowing costs
Borrowing costs of $18.3 million were capitalized for the year ended December 31, 2017 (December 31, 2016 — $6.3 million, December 31, 2015 — $9.3 million). The average capitalization rate was 5% (5% in 2016 and 2015), representing the Company’s weighted average cost of debt. Of the total capitalized borrowing costs, $1.2 million was capitalized to intangible assets for the year ended December 31, 2017 (December 31, 2016 — $0.3 million, December 31, 2015- $nil) with the remaining balance capitalized to satellites, property and other equipment.
Impairment
No impairment was recognized for the years ended December 31, 2017, 2016 and 2015.
Joint arrangements
Telesat International Limited (“TIL”) and APT entered into agreements relating to the Telstar 18 VANTAGE satellite currently under construction, which are accounted for as a joint operation, whereby TIL’s interest is 42.5%. Telesat (IOM) Limited (“TIOM”) and ViaSat Inc. entered into agreements relating to the ViaSat-1 satellite, which are accounted for as a joint operation, whereby TIOM owns the Canadian payload on the ViaSat-1 Satellite.