Equity interests acquired

[Table of Contents](#iedfcb48a3788458f95ee4009debca3d0_7)FORTINET, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)  
5.     PROPERTY AND EQUIPMENT—Net  
Property and equipment—net consisted of the following (in millions): 

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|   | March 31,2022 |  | December 31,2021 |
| Land | $ | 250.4  |  |  | $ | 204.5  |  |
| Buildings and improvements | 459.2  |  |  | 416.2  |  |
| Computer equipment and software | 188.0  |  |  | 176.1  |  |
| Leasehold improvements | 41.8  |  |  | 40.1  |  |
| Evaluation units | 14.8  |  |  | 15.6  |  |
| Furniture and fixtures | 28.5  |  |  | 26.9  |  |
| Construction-in-progress | 31.3  |  |  | 19.9  |  |
| Total property and equipment | 1,014.0  |  |  | 899.3  |  |
| Less: accumulated depreciation | (227.5) |  |  | (211.7) |  |
| Property and equipment—net | $ | 786.5  |  |  | $ | 687.6  |  |

  
Depreciation expense was $19.1 million and $14.0 million during the three months ended March 31, 2022 and 2021, respectively.  
6.     INVESTMENTS IN PRIVATELY HELD COMPANIES  
Linksys Holdings, Inc.  
On March 19, 2021, we invested $75.0 million in cash for shares of the Series A Preferred Stock of Linksys Holdings, Inc. (“Linksys”) for a 32.6% ownership interest. On September 24, 2021, we invested an additional $85.0 million in cash for shares of Series A Preferred Stock of Linksys, and as of September 30, 2021, we held 50.8% of the outstanding common stock (on an as-converted basis) of Linksys. Linksys provides router connectivity solutions to the consumer and small business markets.  
We have concluded that our investment in Linksys is an in-substance common stock investment and that we do not hold an absolute controlling financial interest in Linksys, but that we have the ability to exercise significant influence over the operating and financial policies of Linksys. Determining that we have significant influence but not control over the operating and financial policies of Linksys required significant judgement of many factors, including but not limited to the ownership interest in Linksys, board representation, participation in policy-making processes and participation rights in certain significant financial and operating decisions of Linksys in the ordinary course of business. Therefore, we determined to account for this investment using the equity method of accounting. We record our share of Linksys’ financial results on a three-month lag basis. We determined that there was a basis difference between the cost of our investment in Linksys and the amount of underlying equity in net assets of Linksys. Our share of loss of Linksys’ financial results, as well as our share of the amortization of the basis differences, in total was $8.5 million for the three months ended March 31, 2022, and has been recorded in loss from equity method investment on the condensed consolidated statements of income.  
As of March 31, 2022 and December 31, 2021, the investment was included in other assets on our condensed consolidated balance sheets. Transaction costs related to this investment were not material.  
7.     BUSINESS COMBINATIONS  
2021 Acquisitions  
Alaxala Networks Corporation   
On August 31, 2021, we closed an acquisition of 75% of equity interests as controlling interests in Alaxala Networks Corporation (“Alaxala”), a privately held network hardware equipment company in Japan, for $64.2 million in cash. We acquired the equity interests in Alaxala to broaden our offering of secure switches integrated with our Core Platform and 13
