PROPERTY, PLANT AND EQUIPMENT

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

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



	June 30, 2019			December 30, 2018
	(In thousands)
Land	$	197,582		$	196,769
Buildings	1,711,629			1,697,703
Machinery and equipment	2,636,922			2,618,213
Autos and trucks	61,538			59,195
Construction-in-progress	323,020			269,166
PP&E, gross	4,930,691			4,841,046
Accumulated depreciation	(2,720,479		)	(2,679,344		)
PP&E, net	$	2,210,212		$	2,161,702

The Company recognized depreciation expense of $65.7 million and $61.9 million during the thirteen weeks ended June 30, 2019 and July 1, 2018, respectively. The Company recognized depreciation expense of $127.2 million and $122.6 million during the twenty-six weeks ended June 30, 2019 and July 1, 2018, respectively.

During the twenty-six weeks ended June 30, 2019, Pilgrim's spent $177.6 million on capital projects and transferred $116.5 million of completed projects from construction-in-progress to depreciable assets. Capital expenditures were primarily incurred during the twenty-six weeks ended June 30, 2019 to improve efficiencies and reduce costs. During the twenty-six weeks ended July 1, 2018, the Company spent $155.2 million on capital projects and transferred $109.6 million of completed projects from construction-in-progress to depreciable assets.

During the thirteen and twenty-six weeks ended June 30, 2019, the Company sold certain PP&E for $1.2 million and $1.7 million, respectively, in cash and recognized net losses on these sales of $0.3 million and $0.2 million, respectively. PP&E sold in the twenty-six weeks ended June 30, 2019 included a breeder farm in Texas, vacant land in Minnesota and miscellaneous equipment. During the thirteen and twenty-six weeks ended July 1, 2018, the Company sold certain PP&E for cash of $0.2 million and $1.2 million, respectively, and recognized net losses on these sales of $0.1 million and $0.2 million, respectively. PP&E sold in the twenty-six weeks ended July 1, 2018 included a processing plant in Alabama and miscellaneous equipment.

Management has committed to the sale of miscellaneous equipment that no longer fits into the operating plans of the Company. The Company is actively marketing these assets for immediate sale and believes a sale of each asset can be consummated within the next 12 months. At June 30, 2019 and December 30, 2018, the Company reported assets totaling $0.1 million and $0.2 million, respectively, in the line item Assets held for sale on its Condensed Consolidated Balance Sheets. The fair values of the miscellaneous equipment that were classified as assets held for sale as of June 30, 2019 were based on quoted market prices.

The Company has closed or idled various facilities in the U.S. and in the U.K. 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 30, 2019, the carrying amounts of these idled assets totaled $41.9 million based on depreciable value of $137.1 million and accumulated depreciation of $95.2 million.

At June 30, 2019, the Company assessed if events or changes in circumstances indicated that the aggregate carrying amount of its property, plant and equipment held for use might not be recoverable. There were no indicators present that required the Company to test the recoverability of the aggregate carrying amount of its property, plant and equipment held for use at that date.