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. As a result of the modernization of our network and shut-down of the Nextel platform, estimated useful lives of related equipment were shortened, causing incremental depreciation charges during this period of implementation. The incremental effect of accelerated depreciation expense totaled approximately $800 million and $360 million for the Predecessor 191-day period ended July 10, 2013 and unaudited three month-period March 31, 2013, respectively, and $2.1 billion for the Predecessor year ended December 31, 2012, of which the majority related to shortened useful lives of Nextel platform assets for all periods.

The following table presents the components of property, plant and equipment, and the related accumulated depreciation:



	March 31,
	2015			2014
	(in millions)
Land	$	266		$	265
Network equipment, site costs and related software	18,990			14,902
Buildings and improvements	754			745
Non-network internal use software, office equipment, leased devices and other	2,979			866
Construction in progress	2,090			1,970
Less: accumulated depreciation	(5,358		)	(2,449		)
Property, plant and equipment, net	$	19,721		$	16,299

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. Non-cash accruals included in property, plant and equipment totaled $1.5 billion, $2.0 billion and $2.4 billion for the Successor year ended March 31, 2015, three-months ended March 31, 2014 and year ended December 31, 2013.

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 their device, continue leasing their device, or purchase the device. As of March 31, 2015, 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 will purchase 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 at the end of the lease term.

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



	March 31,
	2015			2014
	(in millions)
Leased devices	$	1,974		$	—
Less: accumulated depreciation	(197		)	—
Leased devices, net	$	1,777		$	—

During the year ended March 31, 2015 there were non-cash additions to leased devices of approximately $1.4 billion along with a corresponding decrease in "Device and accessory inventory" of approximately $1.2 billion and a corresponding increase in "Accounts payable" of approximately $182 million for devices purchased from indirect dealers that were leased to our subscribers.

As of March 31, 2015, the minimum estimated payments to be received for leased devices were as follows (in millions):



Fiscal year 2015	$	740
Fiscal year 2016	505
Fiscal year 2017	1
Fiscal year 2018 and thereafter	—
	$	1,246

Assessment of Impairment

During the quarter ended December 31, 2014, we tested the recoverability of the Wireline long-lived assets due to continued declines in our Wireline segment earnings and our forecast that projected continued losses in future periods. As a result of the test, 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 as of our testing date. The fair value of the Wireline long-lived assets was estimated using a market approach, which included significant unobservable inputs including liquidation curves, useful life assumptions, and scrap values. As the assumptions are largely unobservable, the estimate of fair value is considered to be unobservable within the fair value hierarchy.

We recorded asset impairments of $75 million for the Successor three-month transition period ended March 31, 2014 and $102 million for the Predecessor year ended December 31, 2012, respectively. For the Successor three-month transition period ended March 31, 2014, asset impairments were recorded primarily due to network equipment assets that were no longer necessary as a result of changes in management's strategic plans. Asset impairments in the year ended December 31, 2012 consisted of $18 million of assets associated with a decision to utilize fiber backhaul, which we expect to be more cost effective, rather than microwave backhaul, $66 million of capitalized assets that we no longer intend to deploy as a result of the termination of the spectrum hosting arrangement with LightSquared, and $18 million related to network asset equipment ($13 million Wireless; $5 million Wireline) that is no longer necessary for management's strategic plans.