Property, Plant and Equipment

Property, plant and equipment consists primarily of network equipment and other long-lived assets used to provide service to our subscribers. Non-cash accruals included in PP&E totaled $962 million, $468 million, and $1.5 billion for the years ended March 31, 2017, 2016, and 2015, respectively.

The following table presents the components of PP&E, and the related accumulated depreciation:



	March 31,
	2017			2016
	(in millions)
Land	$	260		$	260
Network equipment, site costs and related software	21,693			21,500
Buildings and improvements	818			798
Non-network internal use software, office equipment, leased devices and other	8,625			6,182
Construction in progress	2,316			1,249
Less: accumulated depreciation	(14,503		)	(9,692		)
Property, plant and equipment, net	$	19,209		$	20,297

Network equipment, site costs and related software includes switching equipment, cell site towers, site development costs, radio frequency equipment, network software, digital fiber optic cable, transport facilities and transmission-related equipment. Buildings and improvements principally consists of owned general office facilities, retail stores and leasehold improvements. Non-network internal use software, office equipment, leased devices and other primarily consists of furniture, information technology systems, equipment and vehicles, and leased devices. Construction in progress, which is not depreciated until placed in service, primarily includes materials, transmission and related equipment, labor, engineering, site development costs, interest and other costs relating to the construction and development of our network.

In September 2014, Sprint introduced a leasing program, whereby qualified subscribers can lease a device for a contractual period of time. At the end of the lease term, the subscriber has the option to turn in the device, continue leasing the device, or purchase the device. As of March 31, 2017 and 2016, substantially all of our device leases were classified as operating leases. At lease inception, the devices leased through Sprint's direct channels are reclassified from inventory to property, plant and equipment. For those devices leased through indirect channels, Sprint purchases the device to be leased from the retailer at lease inception. The devices are then depreciated using the straight-line method to their estimated residual value generally over the term of the lease.

The following table presents leased devices and the related accumulated depreciation:



	March 31,
	2017			2016
	(in millions)
Leased devices	$	7,276		$	4,913
Less: accumulated depreciation	(3,114		)	(1,267		)
Leased devices, net	$	4,162		$	3,646

During the years ended March 31, 2017 and 2016, there were non-cash transfers to leased devices of $2.9 billion and $3.2 billion, respectively, along with a corresponding decrease in "Device and accessory inventory." In addition, during the year ended March 31, 2017, we repurchased MLS Tranche 1 devices totaling $477 million, which we had sold for $1.3 billion during the year ended March 31, 2016 (see Note 3. Funding Sources). Non-cash accruals included in leased devices totaled approximately $158 million, $159 million, and $182 million as of March 31, 2017, 2016, and 2015, respectively, for devices purchased from indirect dealers that were leased to our subscribers. Depreciation expense incurred on all leased devices for the years ended March 31, 2017, 2016, and 2015 was $3.1 billion, $1.8 billion, and $206 million, respectively.

As of March 31, 2017, the minimum estimated payments to be received for leased devices were as follows (in millions):



Fiscal year 2017	$	2,338
Fiscal year 2018	290
Fiscal year 2019	2
	$	2,630

During the year ended March 31, 2017, we recorded $509 million of loss on disposal of property, plant and equipment, net of recoveries, which is included in "Other, net" in our consolidated statements of operations. Losses totaling $481 million resulted from the write-off of leased devices associated with lease cancellations prior to the scheduled customer lease terms where customers did not return the devices to us. If customers continue to not return devices, we may have material losses in future periods. In addition, we recorded $28 million of losses related to cell site construction costs that are no longer recoverable as a result of changes in the Company's network plans.

During the year ended March 31, 2016, we recorded $487 million of loss on disposal of property, plant and equipment, net of recoveries, which is included in "Other, net" in our consolidated statements of operations. These losses were the result of $65 million in net losses recognized upon the sale of devices to MLS under the Handset Sale-Leaseback Tranche 1 transaction, which represented the difference between the fair value and net book value of the devices sold and $256 million in losses from the write-off of leased devices associated with lease cancellations prior to the scheduled customer lease terms where customers did not return the devices to us. In addition, we recorded $166 million of losses due to cell site construction costs and other network costs that are no longer recoverable as a result of changes in the Company's network plans. During the year ended March 31, 2015, there were no losses on disposal of property, plant and equipment recorded in our consolidated statements of operations.

Impairments

During the year ended March 31, 2015, we recorded an impairment loss of $233 million, which is included in "Impairments" in our consolidated statements of operations, to reduce the carrying value of the Wireline asset group, which includes the Wireline long-lived assets, to its estimated fair value of $918 million.