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 (excluding leased devices) totaled $704 million, $962 million, and $468 million as of March 31, 2018, 2017, and 2016, respectively.

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



	March 31,
	2018			2017
	(in millions)
Land	$	254		$	260
Network equipment, site costs and related software	22,930			21,693
Buildings and improvements	813			818
Non-network internal use software, office equipment, leased devices and other	11,149			8,625
Construction in progress	2,202			2,316
Less: accumulated depreciation	(17,423		)	(14,503		)
Property, plant and equipment, net	$	19,925		$	19,209

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.

Sprint offers a leasing program to its customers 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, 2018, substantially all of our device leases were classified as operating leases. Purchases of leased devices are reported 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:



	March 31,
	2018			2017
	(in millions)
Leased devices	$	9,592		$	7,276
Less: accumulated depreciation	(3,580		)	(3,114		)
Leased devices, net	$	6,012		$	4,162

During the years ended March 31, 2018 and 2017, we had non-cash transfers of returned leased devices from property, plant and equipment to device and accessory inventory at the lower of net book value or their estimated fair value of $661 million and $456 million, respectively. During the year ended March 31, 2017, we repurchased the remaining MLS Handset Sale-Leaseback Tranche 1 (Tranche 1) devices totaling $477 million, which were part of the total devices sold for $1.3 billion during the year ended March 31, 2016 (see Note 7. Long-Term Debt, Financing and Capital Lease Obligations).

As of March 31, 2018, the minimum estimated payments to be received for leased devices were as follows (in millions):



Fiscal year 2018	$	3,483
Fiscal year 2019	462
	$	3,945

During the year ended March 31, 2018, we recorded $868 million of loss on disposal of property, plant and equipment, net of recoveries. Net losses that resulted from the write-off of leased devices are primarily associated with lease cancellations prior to the scheduled customer lease terms where customers did not return the devices to us were $493 million and are included in "Cost of equipment rentals" in our consolidated statements of operations. In addition, we recorded $375 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, which are included in "Other, net" in our consolidated statements of operations.

During the year ended March 31, 2017, we recorded $509 million of loss on disposal of property, plant and equipment, net of recoveries. 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 and are included in "Cost of equipment rentals" in our consolidated statements of operations. 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, which are included in "Other, net" in our consolidated statements of operations.

During the year ended March 31, 2016, we recorded $487 million of loss on disposal of property, plant and equipment, net of recoveries. These losses were the result of $65 million in net losses recognized upon the sale of devices to MLS under the 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, which are both included in "Cost of equipment rentals" in our consolidated statements of operations. 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, which are included in "Other, net" in our consolidated statements of operations.