9  PROPERTY AND EQUIPMENT

The following table details the composition of our property and equipment balances at year-end 2009 and year-end 2008.

We record property and equipment at cost, including interest and real estate taxes incurred during development and construction. Interest capitalized as a cost of property and equipment totaled $32 million in 2009, $55 million in 2008, and $49 million in 2007. We capitalize the cost of improvements that extend the useful life of property and equipment when incurred. These capitalized costs may include structural costs, equipment, fixtures, floor, and wall coverings. We expense all repair and maintenance costs as incurred. We compute depreciation using the straight-line method over the estimated useful lives of the assets (three to 40 years), and we amortize leasehold improvements over the shorter of the asset life or lease term. Depreciation expense totaled $151 million in 2009, $155 million in 2008, and $162 million in 2007.

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