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 property, plant and equipment (excluding leased devices) totaled $387 million and $309 million as of June 30, 2017 and 2016, respectively.

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



	June 30, 2017			March 31, 2017
	(in millions)
Land	$	259		$	260
Network equipment, site costs and related software	21,689			21,693
Buildings and improvements	819			818
Non-network internal use software, office equipment, leased devices and other	9,146			8,625
Construction in progress	2,286			2,316
Less: accumulated depreciation	(15,333		)	(14,503		)
Property, plant and equipment, net	$	18,866		$	19,209

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 June 30, 2017, 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 and reports these purchases as cash outflows for "Capital expenditures - leased devices" in the consolidated statements of cash flows. 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:



	June 30, 2017			March 31, 2017
	(in millions)
Leased devices	$	7,699		$	7,276
Less: accumulated depreciation	(3,363		)	(3,114		)
Leased devices, net	$	4,336		$	4,162

During the three-month periods ended June 30, 2017 and 2016, there were non-cash transfers to leased devices of approximately $849 million and $541 million, respectively, along with a corresponding decrease in "Device and accessory inventory" for devices leased through our direct channel. Non-cash accruals included in leased devices totaled $210 million and $142 million as of June 30, 2017 and 2016, respectively, for devices purchased from indirect dealers that were leased to our subscribers. Depreciation expense incurred on all leased devices for the three-month periods ended June 30, 2017 and 2016 was $854 million and $644 million, respectively.

During the three-month period ended June 30, 2017, we recorded $287 million of loss on disposal of property, plant and equipment, net of recoveries, which is included in "Other, net" in our consolidated statements of comprehensive income (loss). Net losses totaling $175 million were primarily related to $181 million of cell site construction costs that are no longer recoverable as a result of changes in our network plans during the quarter ended June 30, 2017, slightly offset by a $6 million gain. In addition, during the three-month periods ended June 30, 2017 and 2016, we recorded $112 million and $120 million, respectively, of losses that 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 will have such losses in future periods.