Property and Equipment, net

Property and equipment are stated at cost, and when placed into service, are depreciated using the straight-line method over the estimated useful lives of the assets as follows:



Item		Estimated Life in Years
Lottery and other machinery and equipment		3 - 15
Gaming equipment		1 - 5
Transportation equipment		3 - 8
Furniture and fixtures		5 - 10
Buildings and improvements		15 - 40

Costs incurred for equipment associated with specific gaming and lottery contracts and internal use software projects not yet placed into service are classified as construction in progress and are not depreciated until placed into service. Leasehold improvements are amortized over the lesser of the term of the corresponding lease or their useful life.

We periodically review the estimated useful lives of our fixed assets and assess the recoverability of long-lived assets (or asset groups) whenever events or changes in circumstances indicate that the carrying value of such an asset (or asset groups) may not be recoverable.

Property and equipment, net consisted of the following:



	As of December 31,
	2017			2016
Land	$	35.7		$	36.5
Buildings and leasehold improvements	183.6			182.2
Gaming and lottery machinery and equipment	962.2			993.3
Furniture and fixtures	33.2			28.6
Construction in progress	27.7			21.2
Other property and equipment	236.9			239.3
Less: accumulated depreciation	(911.1		)	(888.9		)
Total property and equipment, net	$	568.2		$	612.2

Depreciation expense is excluded from cost of services, cost of product sales, cost of instant games and other operating expenses and is separately presented within D&A.



	Year Ended December 31,
	2017		2016		2015
Depreciation expense	$	269.5	$	323.1	$	313.6

Capitalized installation costs

Certain Participation contracts require us to perform installation activities. Direct installation activities, which include costs for installing gaming machines, terminals, facilities wiring, computers, internal labor and travel, are performed at the inception of the contract to enable us to perform under the terms of the contract. Such activities do not represent a separate earnings process and, therefore, the installation costs are capitalized and amortized over the expected life of the contract, which we define as the original life of the contract plus all available extensions in the case of lottery-related contracts and typically over the life of the equipment when no long-term contract exists, as is often the case within our Participation gaming business. We had $22.7 million and $23.7 million of capitalized installation costs, net of accumulated depreciation, included within lottery machinery and equipment included within property and equipment, net as of December 31, 2017 and 2016, respectively. There were no capitalized installation costs recorded related to gaming activities as of December 31, 2017 and 2016.