Property and Equipment

12 Months Ended

Dec. 31, 2014

Property and Equipment

Property and Equipment

4. Property and Equipment

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

	At December 31,
	2014			2013
Computers, software, machinery and equipment	$	65,694		$	64,188
Leasehold improvements	7,797			5,390
Furniture and fixtures	6,020			4,900
Building and improvements	18,674			10,401
Land	12,007			12,007
Software development and other equipment in progress	22,904			11,928
Subtotal	133,096			108,814
Less: Accumulated depreciation and amortization	(58,728		)	(53,021		)
Property and equipment, net	$	74,368		$	55,793

We capitalized interest costs of $0.6 million and $0.3 million in 2014 and 2013, respectively, primarily relating to internally developed software costs during development and the construction of our data center in New Albany, Ohio. Depreciation and amortization expense for property and equipment, including fixed assets under capital leases, for the years ended December 31, 2014, 2013 and 2012 totaled $10.3 million, $9.3 million and $9.0 million.

In May 2013, we completed the purchase of real property adjacent to the building we own in Santa Monica, California for $3.0 million and financed $1.7 million of the purchase price with a sub-line under our primary revolving credit facility. For more information on this financing arrangement, see Note 8 below.

In December 2012, we completed the purchase of 7.9 acres of land for approximately $1.1 million and have incurred additional costs of $12.2 million through December 31, 2014 towards the construction of a new cloud data center that we opened in June 2014. The Tier III facility is strategically located in a data center-centric development in New Albany, Ohio. The new facility complements our two existing data centers and a 24/7 Integrated Operations Center (IOC) located in Atlanta, Georgia, enhancing our managed service offerings, including cloud services, data center hosting and management, remote monitoring and disaster recovery. For more information on the financing arrangement relating to the construction costs of the data center, see Note 8 below.

Throughout 2014 and 2013, we entered into additional capital lease schedules with a bank totaling approximately $0.5 million and $1.3 million, respectively.  The capital leases are primarily related to the data center we are constructed in New Albany, Ohio and various furniture and equipment at our El Segundo, California corporate headquarters office. The capital lease schedules entered into 2014 and 2013 has a term ranging from three to five years. See Note 10 below for information related to capital lease obligations.