PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment (“PP&E”), net consisted of the following:



	June 29, 2014			December 29, 2013
	(In thousands)
Land	$	66,268		$	66,071
Buildings	1,081,577			1,077,859
Machinery and equipment	1,516,362			1,502,968
Autos and trucks	55,104			55,779
Construction-in-progress	108,453			66,926
PP&E, gross	2,827,764			2,769,603
Accumulated depreciation	(1,653,896		)	(1,617,792		)
PP&E, net	$	1,173,868		$	1,151,811

The Company recognized depreciation expense of $33.9 million and $34.2 million during the thirteen weeks ended June 29, 2014 and June 30, 2013, respectively. We also recognized depreciation expense of $67.2 million and $68.0 million during the twenty-six weeks ended June 29, 2014 and June 30, 2013, respectively.

During the twenty-six weeks ended June 29, 2014, we spent $90.8 million on capital projects and transferred $49.4 million of completed projects from construction-in-progress to depreciable assets. Capital expenditures were primarily incurred during the twenty-six weeks ended June 29, 2014 to improve efficiencies and reduce costs in the U.S. and to expand capacity in Mexico.

During the thirteen and twenty-six weeks ended June 29, 2014, the Company sold certain PP&E for cash of $2.8 million and $4.3 million, respectively, and recognized net gains on these sales of $1.9 million and $1.4 million, respectively. PP&E sold in 2014 included a warehouse, a commercial building and a vehicle maintenance center in Texas, an office building in Mexico City and miscellaneous equipment. During the thirteen and twenty-six weeks ended June 30, 2013, the Company sold certain PP&E for cash of $1.2 million and $2.9 million, respectively, and recognized net gains on these sales of $0.1 million and $2.1 million, respectively. PP&E sold in 2013 included vehicle maintenance centers in Arkansas and Texas and miscellaneous equipment.

During the thirteen and twenty-six weeks ended June 29, 2014, the Company scrapped certain unused or obsolete PP&E and recognized net losses of $0.2 million and $0.3 million, respectively. During the thirteen and twenty-six weeks ended June 30, 2013, the Company also scrapped certain unused or obsolete PP&E and recognized net losses of approximately $1.3 million and $1.3 million, respectively.

Management has committed to the sale of certain properties and related assets, including, but not limited to, processing plants in Pennsylvania and Louisiana and other miscellaneous assets, which no longer fit into the operating plans of the Company. The Company is actively marketing these properties and related assets for immediate sale and believes a sale of each property can be consummated within the next 12 months. At June 29, 2014 and December 29, 2013, the Company reported properties and related assets totaling $5.4 million and $7.0 million, respectively, in the line item Assets held for sale on its Condensed Consolidated Balance Sheets. The Company tested the recoverability of its assets held for sale and determined that the aggregate carrying amount of each asset group was recoverable over the remaining life of the primary asset in that asset group.

The Company has closed or idled various processing complexes, processing plants, hatcheries and broiler farms throughout the U.S. Neither the Board of Directors nor JBS USA has determined if it would be in the best interest of the Company to divest any of these idled assets. Management is therefore not certain that it can or will divest any of these assets within one year, is not actively marketing these assets and, accordingly, has not classified them as assets held for sale. The Company continues to depreciate these assets. At June 29, 2014, the carrying amount of these idled assets was $75.4 million based on depreciable value of $185.4 million and accumulated depreciation of $110.0 million.

The Company last tested the recoverability of its long-lived assets held and used in December 2013. At that time, the Company determined that the carrying amount of its long-lived assets held and used was recoverable over the remaining life of the primary asset in the group and that long-lived assets held and used passed the Step 1 recoverability test under ASC 360-10-35, Impairment or Disposal of Long-Lived Assets. There were no indicators present during the twenty-six weeks ended June 29, 2014 that required the Company to test its long-lived assets held and used for recoverability.