PROPERTY, PLANT AND EQUIPMENT

6 Months Ended

Jun. 26, 2022

Property, Plant and Equipment [Abstract]

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


	June 26, 2022		December 26, 2021
	(In thousands)
Land	$	256,592	$	260,079
Buildings	2,033,477		2,043,034
Machinery and equipment	3,559,063		3,594,482
Autos and trucks	76,183		76,710
Finance leases	5,710		5,710
Construction-in-progress	284,078		229,837
PP&E, gross	6,215,103		6,209,852
Accumulated depreciation	(3,361,217)		(3,292,046)
PP&E, net	$	2,853,886	$	2,917,806

The Company recognized depreciation expense of $91.1 million and $89.9 million during the three months ended June 26, 2022 and June 27, 2021, respectively. The Company recognized depreciation expense of $184.5 million and $170.6 million during the six months ended June 26, 2022 and June 27, 2021, respectively.

During the six months ended June 26, 2022, Pilgrim’s spent $196.2 million on capital projects and transferred $135.5 million of completed projects from construction-in-progress to depreciable assets. Capital expenditures were primarily incurred during the six months ended June 26, 2022 to improve efficiencies and reduce costs. During the six months ended June 27, 2021, the Company spent $183.7 million on capital projects and transferred $129.4 million of completed projects from construction-in-progress to depreciable assets.

During the three and six months ended June 26, 2022, the Company sold certain PP&E for $1.6 million and $2.4 million, respectively, in cash and recognized a net loss of $0.8 million and $2.7 million, respectively, on these sales. PP&E sold during the six months ended June 26, 2022 consisted of miscellaneous equipment. During the three and six months ended June 27, 2021, the Company sold miscellaneous equipment for cash of $8.3 million and $21.4 million, respectively, and recognized a net gain on these sales of $2.7 million and $5.1 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 26, 2022, the carrying amounts of these idled assets totaled $35.6 million based on depreciable value of $191.0 million and accumulated depreciation of $155.4 million.

As of June 26, 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.