PROPERTY, PLANT AND EQUIPMENT

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



	June 28, 2015			December 28, 2014
	(In thousands)
Land	$	71,411		$	66,798
Buildings	1,076,699			1,086,690
Machinery and equipment	1,555,807			1,537,241
Autos and trucks	49,406			52,639
Construction-in-progress	143,093			129,701
PP&E, gross	2,896,416			2,873,069
Accumulated depreciation	(1,707,295		)	(1,690,274		)
PP&E, net	$	1,189,121		$	1,182,795

The Company recognized depreciation expense of $36.6 million and $33.9 million during the thirteen weeks ended June 28, 2015 and June 29, 2014, respectively. The Company recognized depreciation expense of $70.6 million and $67.2 million during the twenty-six weeks ended June 28, 2015 and June 29, 2014, respectively.

During the twenty-six weeks ended June 28, 2015, we spent $87.7 million on capital projects and transferred $74.2 million of completed projects from construction-in-progress to depreciable assets. Capital expenditures were primarily incurred during the twenty-six weeks ended June 28, 2015 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 28, 2015, the Company sold certain PP&E for cash of $1.2 million and $2.1 million, respectively, and recognized net gains on these sales of $0.4 million and $1.3 million, respectively. PP&E sold in 2015 was comprised of miscellaneous equipment. During the thirteen and twenty-six weeks ended June 29, 2014, the Company sold certain PP&E for cash of $2.8 million and $4.4 million 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.

Management has committed to the sale of certain properties and related assets, including, but not limited to, a processing complex in Texas, a processing plant in 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 28, 2015 and December 28, 2014, the Company reported properties and related assets totaling $6.6 million and $1.4 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 amounts of the Texas processing complex asset group and the Louisiana processing plant asset group were not recoverable over the remaining life of the respective primary asset in each asset group. The Company recognized aggregate impairment costs of $4.8 million during the thirteen weeks ended June 28, 2015, which are presented in the line item Administrative restructuring charges on its Condensed Consolidated Statements of Income because management believed these costs were not directly related to the Company’s ongoing operations.

The Company has closed or idled various processing complexes, processing plants, hatcheries, broiler farms, and feed mills 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 28, 2015, the carrying amount of these idled assets was $51.2 million based on depreciable value of $150.8 million and accumulated depreciation of $99.5 million.

The Company last tested the recoverability of its long-lived assets held and used in December 2014. 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 28, 2015 that required the Company to test its long-lived assets held and used for recoverability.