Property and Equipment, net

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

8. Property and Equipment, net

Property and equipment, net, consists of the following:


(in millions)	September 30, 2023		December 31, 2022
Machinery, equipment and tooling	$	161.2	$	149.4
Building and building improvements	150.4		151.0
Operating lease assets	77.6		50.2
Land	65.5		65.1
Construction-in-progress (CIP)	60.6		50.6
Computer equipment and software	45.4		42.1
Leasehold improvements	34.7		32.3

Transportation, vehicles and other	33.2		32.7
Furniture and office equipment	20.7		19.4
Demonstration units	10.9		11.2
Total property and equipment	660.2		604.0
Accumulated depreciation	(245.2)		(201.5)
Property and equipment, net	$	415.0	$	402.5

For the three months ended September 30, 2023 and October 1, 2022, depreciation expense of property and equipment was $10.7 million and $12.6 million, respectively. For the nine months ended September 30, 2023 and October 1, 2022, depreciation expense of property and equipment was $33.2 million and $31.1 million, respectively.

For the three months ended September 30, 2023 and October 1, 2022, depreciation expense of operating lease assets was $5.2 million and $0.9 million, respectively. For the nine months ended September 30, 2023 and October 1, 2022, depreciation expense of operating lease assets was $12.4 million and $1.0 million, respectively.

The balance in CIP at September 30, 2023 and December 31, 2022 related primarily to the capitalized implementation costs related to a new enterprise resource planning software system, costs related to facility improvements, the expansion of certain key manufacturing facilities globally, machinery and equipment at the Company’s corporate headquarters, as well as on-going development costs associated with a new research and development facility, the underlying assets for which have not been completed or placed into service.

On February 14, 2022, the Company’s wholly owned subsidiary, Masimo Canada ULC, entered into a Purchase and Sale Agreement (Purchase Agreement) with Keltic (Prior) Development Limited Partnership (Vendor) for the purchase of a property in Vancouver, British Columbia, Canada for a purchase price of CAD 123.0 million, plus GST (Purchase Price), subject to certain adjustments. The Company paid CAD 21.0 million as a deposit towards the purchase during the year ended December 31, 2022. The balance of the Purchase Price will be due and payable upon the closing of the transaction, which is currently expected to occur during the first half of 2025.