PROPERTY, PLANT AND EQUIPMENT

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



	June 25, 2017			December 25, 2016
	(In thousands)
Land	$	164,157		$	112,132
Buildings	1,256,981			1,169,984
Machinery and equipment	1,888,854			1,789,550
Autos and trucks	47,840			50,964
Construction-in-progress	268,175			231,874
PP&E, gross	3,626,007			3,354,504
Accumulated depreciation	(1,904,059		)	(1,848,564		)
PP&E, net	$	1,721,948		$	1,505,940

The Company recognized depreciation expenses of $52.0 million and $43.5 million during the thirteen weeks ended June 25, 2017 and June 26, 2016, respectively. The Company recognized depreciation expense of $97.8 million and $81.9 million during the twenty-six weeks ended June 25, 2017 and June 26, 2016, respectively.

During the twenty-six weeks ended June 25, 2017, Pilgrim's spent $174.2 million on capital projects and transferred $139.6 million of completed projects from construction-in-progress to depreciable assets. During the twenty-six weeks ended June 26, 2016, the Company spent $94.0 million on capital projects and transferred $128.1 million of completed projects from construction-in-progress to depreciable assets. Capital expenditures were primarily incurred during the twenty-six weeks ended June 25, 2017 to improve efficiencies and reduce costs.

During the thirteen and twenty-six weeks ended June 25, 2017, the Company sold certain PP&E for cash of $2.0 million and $1.5 million, respectively, and recognized net gains on these sales of $0.9 million and $0.8 million, respectively. PP&E sold in the twenty-six weeks ended June 25, 2017 included poultry farms in Alabama and Texas, vacant land in Texas and miscellaneous equipment. During the thirteen and twenty-six weeks ended June 26, 2016, the Company sold certain PP&E for cash of $7.5 million and $8.1 million, respectively, and recognized net gains on these sales of $6.6 million and $6.8 million, respectively. PP&E sold in the twenty-six weeks ended June 26, 2016 included poultry farms in Mexico and Texas, an office building in Texas, vacant land in Alabama and Texas 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 complex in Alabama and miscellaneous machinery and equipment, 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 both June 25, 2017 and December 25, 2016, the Company reported properties and related assets totaling $5.5 million and $5.3 million, respectively, in the line item Assets held for sale on its Condensed Consolidated Balance Sheets. The fair values of the Texas processing complex and the Alabama processing complex were both based on quoted market prices. The fair values of the miscellaneous assets were based on prices for similar assets. The Company tested the recoverability of its assets held for sale and determined that the aggregate carrying amount of the Texas processing complex asset group was recoverable over the remaining life of the respective primary asset in that asset group. However, the aggregate carrying amount of the Alabama processing complex asset group was not recoverable over the remaining life of the respective primary asset in that asset group. The Company recognized impairment cost of $3.5 million, which it reported in the line item Administrative restructuring charges on its Condensed Consolidated Statements of Income.

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 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 25, 2017, the carrying amount of these idled assets was $52.7 million based on depreciable value of $174.0 million and accumulated depreciation of $121.3 million.

The Company last tested the recoverability of its long-lived assets held and used in December 2016. 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 25, 2017 that required the Company to test its long-lived assets held and used for recoverability.