PROPERTY, PLANT AND EQUIPMENT

3 Months Ended

Mar. 27, 2022

Property, Plant and Equipment [Abstract]

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


	March 27, 2022		December 26, 2021
	(In thousands)
Land	$	262,409	$	260,079
Buildings	2,051,418		2,043,034
Machinery and equipment	3,608,105		3,594,482
Autos and trucks	76,700		76,710
Finance leases	5,710		5,710
Construction-in-progress	236,304		229,837
PP&E, gross	6,240,646		6,209,852
Accumulated depreciation	(3,350,630)		(3,292,046)
PP&E, net	$	2,890,016	$	2,917,806

The Company recognized depreciation expense of $93.4 million and $80.7 million during the three months ended March 27, 2022 and March 28, 2021, respectively.

During the three months ended March 27, 2022, Pilgrim’s spent $81.6 million on capital projects and transferred $73.8 million of completed projects from construction-in-progress to depreciable assets. Capital expenditures were primarily incurred during the three months ended March 27, 2022 to improve efficiencies and reduce costs. During the three months ended March 28, 2021, the Company spent $102.2 million on capital projects and transferred $68.3 million of completed projects from construction-in-progress to depreciable assets.

During the three months ended March 27, 2022, the Company sold certain PP&E for $0.8 million in cash and recognized a net loss of $1.9 million on these sales. PP&E sold during the three months ended March 27, 2022 consisted of miscellaneous equipment. During the three months ended March 28, 2021, the Company sold a broiler farm in Mexico, a processing plant within the U.K. and other miscellaneous equipment for cash of $13.1 million and recognized a net gain on these sales of $2.4 million.

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 March 27, 2022, the carrying amounts of these idled assets totaled $37.2 million based on depreciable value of $191.3 million and accumulated depreciation of $154.1 million. During the three months ended March 27, 2022, the Company recognized additional impairment loss of $0.2 million incurred as a result of a tornado in Mayfield, Kentucky in December 2021 that significantly damaged two hatcheries and a feed mill.

As of March 27, 2022, 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.