Property and Equipment

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]


	Property and Equipment

Property and equipment consists of the following (in millions):



	December 31,
	2012			2011
Network equipment	$	1,912		$	1,016
Land	36			34
Buildings	594			355
Leasehold improvements	194			120
Computer software, office equipment and other	93			73
Construction in progress	444			327
Total	3,273			1,925
Less: accumulated depreciation	(882		)	(450		)
Property and equipment, net	$	2,391		$	1,475

Depreciation expense on property and equipment was $566 million, $303 million and $129 million during 2012, 2011 and 2010, respectively.

Property and equipment at December 31, 2012 and 2011 includes $1.28 billion and $881 million, respectively, acquired under capital lease agreements of which the majority is included in computer software, office equipment, and other. Accumulated depreciation of property and equipment acquired under these capital leases was $437 million and $210 million at December 31, 2012 and 2011, respectively.

Construction in progress includes costs primarily related to the construction of data centers and equipment located in our data centers in Oregon, North Carolina, and Sweden. Interest capitalized during the years presented was not material.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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