PROPERTY, PLANT AND EQUIPMENT

6 Months Ended

Jun. 27, 2021

Property, Plant and Equipment [Abstract]

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


	June 27, 2021		December 27, 2020
	(In thousands)
Land	$	251,602	$	255,171
Buildings	1,972,410		1,983,823
Machinery and equipment	3,305,901		3,230,199
Autos and trucks	73,227		73,647
Finance leases	2,182		2,182
Construction-in-progress	254,811		199,161
PP&E, gross	5,860,133		5,744,183
Accumulated depreciation	(3,182,746)		(3,086,692)
PP&E, net	$	2,677,387	$	2,657,491

The Company recognized depreciation expense of $89.9 million and $79.4 million during the three months ended June 27, 2021 and June 28, 2020, respectively. The Company recognized depreciation expense of $170.6 million and $153.9 million during the six months ended June 27, 2021 and June 28, 2020, respectively.

During the six months ended June 27, 2021, Pilgrim’s spent $183.7 million on capital projects and transferred $129.4 million of completed projects from construction-in-progress to depreciable assets. Capital expenditures were primarily incurred during the six months ended June 27, 2021 to improve efficiencies and reduce costs. During the six months ended June 28, 2020, the Company spent $148.2 million on capital projects and transferred $153.6 million of completed projects from construction-in-progress to depreciable assets.

During the three and six months ended June 27, 2021, the Company sold certain PP&E for $8.3 million and $21.4 million, respectively, in cash and recognized net gains on these sales of $2.7 million and $5.1 million, respectively. PP&E sold during the six months ended June 27, 2021 consisted of a broiler farm in Mexico, two processing plants within the U.K. and other miscellaneous equipment. During the three and six months ended June 28, 2020, the Company sold miscellaneous equipment for cash of $9.3 million and $9.9 million, respectively, and recognized net gains on these sales of $1.1 million and $1.6 million, respectively.

The Company has closed or idled various facilities in the U.S. and in the U.K. The Board of Directors has not 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. As of June 27, 2021, the carrying amounts of these idled assets totaled $43.3 million based on depreciable value of $206.2 million and accumulated depreciation of $162.9 million.

As of June 27, 2021, the Company assessed if events or changes in circumstances indicated that the asset group-level carrying amounts 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 asset group-level carrying amounts of its property, plant and equipment held for use at that date.