Property and Equipment

12 Months Ended

Dec. 31, 2012

Property and Equipment [Abstract]

Property and Equipment

Property and Equipment:

Property and equipment consisted of the following (dollars in thousands):

	December 31,						Estimated Useful Lives in Years
	2012			2011
Computer and networking equipment	$	655,043		$	561,952		3
Purchased software	35,176			31,388			3
Furniture and fixtures	16,917			14,166			5
Office equipment	7,109			5,676			3
Leasehold improvements	44,539			36,358			2-12
Internal-use software	272,441			222,914			2-3
	1,031,225			872,454
Accumulated depreciation and amortization	(686,134		)	(579,411		)
	$	345,091		$	293,043

Depreciation and amortization expense on property and equipment and capitalized internal-use software for the years ended December 31, 2012, 2011 and 2010 were $183.2 million, $150.8 million and $126.6 million, respectively.

During the years ended December 31, 2012 and 2011, the Company wrote off $77.4 million and $61.7 million, respectively, of long-lived asset costs, with accumulated depreciation and amortization costs of $76.1 million and $59.9 million, respectively. These write-offs were primarily related to computer and networking equipment no longer in use.

During the years ended December 31, 2012, 2011 and 2010, the Company capitalized $54.2 million, $42.6 million and $32.8 million, respectively, of external consulting fees and payroll and payroll-related costs for the development and enhancement of internal-use software applications. Additionally, during the years ended December 31, 2012, 2011 and 2010, the Company capitalized $9.3 million, $7.5 million and $7.8 million, respectively, of non-cash stock-based compensation related to employees who developed and enhanced internal-use software applications. During the years ended December 31, 2012 and 2011, the Company wrote off $14.1 million and $4.6 million, respectively, of internal-use software costs, with accumulated amortization costs of $14.0 million and $3.9 million, respectively. Such internal-use software is used by the Company primarily to operate, manage and monitor its deployed network and deliver its services to customers.

The following table summarizes capitalized internal-use software costs (in thousands):

	December 31,
	2012			2011
Gross costs capitalized	$	294,531		$	230,938
Less: cumulative impairments	(22,090		)	(8,024		)
	272,441			222,914
Less: accumulated amortization, net of impairments	(185,430		)	(152,140		)
Net book value of capitalized internal-use software	$	87,011		$	70,774