PROPERTY, PLANT AND EQUIPMENT

9 Months Ended

Sep. 23, 2012

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

7. PROPERTY, PLANT AND EQUIPMENT

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

	September 23, 2012			December 25, 2011
	(In thousands)
Land	$	63,848		$	65,413
Buildings		1,075,088			1,077,789
Machinery and equipment		1,479,917			1,492,251
Autos and trucks		58,213			58,518
Construction-in-progress		55,357			36,094
PP&E, gross		2,732,423			2,730,065
Accumulated depreciation		(1,535,459	)		(1,488,313	)
PP&E, net	$	1,196,964		$	1,241,752

     The Company recognized depreciation expense of $32.5 million and $49.4 million during the thirteen weeks ended September 23, 2012 and September 25, 2011, respectively. We also recognized depreciation expense of $96.7 million and $144.4 million during the thirty-nine weeks ended September 23, 2012 and September 25, 2011, respectively.

     During the thirteen and thirty-nine weeks ended September 23, 2012, the Company sold certain PP&E for cash of $16.2 million and $28.7 million, respectively, and recognized net losses on these sales of $1.9 million and $1.4 million, respectively. PP&E sold in 2012 included a commercial egg operation in Texas, a vacant office building in Texas, an idled processing plant in Georgia, an idled feed mill in Arkansas, idled hatcheries in Alabama, Arkansas and Georgia, an idled distribution center in Louisiana, various broiler and breeder farms in Texas, both developed and undeveloped land in Texas and miscellaneous processing equipment. During the thirteen and thirty-nine weeks ended September 25, 2011, the Company sold certain PP&E for cash of $2.6 million and $7.5 million, respectively, and recognized net losses on these sales of $0.5 million and $0.2 million, respectively. PP&E sold in 2011 included an empty office building in West Virginia, an idled egg production facility and surrounding undeveloped land in Texas, an idled feed mill in Georgia, various broiler and breeder farms in Texas, both developed and undeveloped land in Texas and miscellaneous processing equipment.

     During the thirteen and thirty-nine weeks ended September 23, 2012, the Company also scrapped certain unused or obsolete PP&E and recognized net losses of $2.6 million and $3.7 million, respectively.

     Management has committed to the sale of certain properties and related assets, including, but not limited to, processing plants, office buildings and farms, 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 September 23, 2012 and December 25, 2011, the Company reported properties and related assets totaling $28.8 million and $53.8 million, respectively, in Assets held for sale on its Condensed Consolidated Balance Sheets. For the thirty-nine weeks ended September 23, 2012, the Company recognized impairment expense of $1.3 million on certain of these assets. The Company did not recognize any impairment expense for the thirteen weeks ended September 23, 2012.

     As part of the exit or disposal activities discussed in “Note 2. Exit or Disposal Activities,” the Company closed or idled various processing complexes, processing plants, hatcheries and broiler farms throughout the U.S. Neither the Board of Directors nor JBS USA 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 September 23, 2012, the carrying amount of these idled assets was $58.8 million based on depreciable value of $149.7 million and accumulated depreciation of $90.9 million.

     The Company last tested the recoverability of its long-lived assets held and used in December 2011. 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 thirty-nine weeks ended September 23, 2012 that required the Company to test its long-lived assets held and used for recoverability.