Business Segments

6 Months Ended

Jun. 28, 2014

Segment Reporting [Abstract]

Business Segments

Business Segments

Effective December 29, 2013, the Company's business operations were reorganized into three industry segments: Feed Ingredients, Food Ingredients and Fuel Ingredients, in order to better align its business with the underlying markets and customers that the Company serves. All historical periods have been recast for the changes to the segment reporting structure. The Company sells its products domestically and internationally. The measure of segment profit (loss) includes all revenues, operating expenses (excluding certain amortization of intangibles), and selling, general and administrative expenses incurred at all operating locations and excludes general corporate expenses.

Included in corporate activities are general corporate expenses and the amortization of certain intangibles. Assets of corporate activities include cash, unallocated prepaid expenses, deferred tax assets, prepaid pension, and miscellaneous other assets.

Feed Ingredients

Feed Ingredients consists principally of (i) the Company's U.S. ingredients business, including the Company's used cooking oil, trap grease and food residuals collection businesses, the Rothsay ingredients business, and the ingredients and specialty products businesses conducted by Darling Ingredients International under the Sonac name (proteins, fats, and plasma products) and (ii) the Company's bakery residuals business. Feed Ingredients operations process animal by-products and used cooking oil into fats, protein and hides.

Food Ingredients

Food Ingredients consists principally of (i) the gelatin and collagen hydrolysates business conducted by Darling Ingredients International under the Rousselot name, (ii) the natural casings and meat-by-products business conducted by Darling Ingredients International under the CTH name and (iii) certain specialty products businesses conducted by Darling Ingredients International under the Sonac name.

Fuel Ingredients

The Company's Fuel Ingredients segment consists of (i) the Company's biofuel business conducted under the Dar Pro® and Rothsay names (ii) the bioenergy business conducted by Darling Ingredients International under the Ecoson and Rendac names and (iii) the Company's investment in the DGD Joint Venture.

Year-to-date business segment presentation reflects certain immaterial reclassifications to the first quarter of fiscal 2014 to conform to the second quarter fiscal 2014 presentation.

Business Segments (in thousands):

	Feed Ingredients		Food Ingredients		Fuel Ingredients		Corporate			Total
Three Months Ended June 28, 2014
Net Sales	$	599,884	$	329,541	$	77,534	$	—		$	1,006,959
Cost of sales and operating expenses	431,549		256,153		60,278		(14		)	747,966
Gross Margin	168,335		73,388		17,256		14			258,993
Selling, general and administrative expense	53,963		42,447		5,998		9,437			111,845
Acquisition costs	—		—		—		4,165			4,165
Depreciation and amortization	39,866		19,628		5,819		2,185			67,498
Segment operating income/ (loss)	74,506		11,313		5,439		(15,773		)	75,485
Equity in net income of unconsolidated subsidiaries	561		—		1,479		—			2,040
Segment income	75,067		11,313		6,918		(15,773		)	77,525
Total other expense										(27,447		)
Income before income taxes										$	50,078

	Feed Ingredients		Food Ingredients		Fuel Ingredients			Corporate			Total
Three Months Ended June 29, 2013
Net Sales	$	421,366	$	—	$	2,227		$	—		$	423,593
Cost of sales and operating expenses	308,326		—		1,679			(83		)	309,922
Gross Margin	113,040		—		548			83			113,671
Selling, general and administrative expense	33,108		—		95			7,590			40,793
Acquisition costs	—		—		—			—			—
Depreciation and amortization	21,535		—		31			510			22,076
Segment operating income/ (loss)	58,397		—		422			(8,017		)	50,802
Equity in net income of unconsolidated subsidiaries	—		—		(1,962		)	—			(1,962		)
Segment income	58,397		—		(1,540		)	(8,017		)	48,840
Total other expense											(6,087		)
Income before income taxes											$	42,753

	Feed Ingredients		Food Ingredients			Fuel Ingredients		Corporate			Total
Six Months Ended June 28, 2014
Net Sales	$	1,169,687	$	624,824		$	143,883	$	—		$	1,938,394
Cost of sales and operating expenses	869,197		512,148			111,630		(30		)	1,492,945
Gross Margin	300,490		112,676			32,253		30			445,449
Selling, general and administrative expense	110,167		76,437			11,133		19,511			217,248
Acquisition costs	—		—			—		20,113			20,113
Depreciation and amortization	78,425		37,069			13,196		4,477			133,167
Segment operating income/ (loss)	111,898		(830		)	7,924		(44,071		)	74,921
Equity in net income of unconsolidated subsidiaries	964		—			6,153		—			7,117
Segment income	112,862		(830		)	14,077		(44,071		)	82,038
Total other expense											(101,256		)
Income/ (loss) before income taxes											$	(19,218	)
Segment assets at June 28, 2014	$	2,786,197	$	1,881,335		$	743,597	$	143,666		$	5,554,795

	Feed Ingredients		Food Ingredients		Fuel Ingredients			Corporate			Total
Six Months Ended June 29, 2013
Net Sales	$	865,148	$	—	$	3,867		$	—		$	869,015
Cost of sales and operating expenses	629,659		—		3,040			(91		)	632,608
Gross Margin	235,489		—		827			91			236,407
Selling, general and administrative expense	67,194		—		191			15,701			83,086
Acquisition costs	—		—		—			—			—
Depreciation and amortization	42,173		—		62			1,708			43,943
Segment operating income/ (loss)	126,122		—		574			(17,318		)	109,378
Equity in net income of unconsolidated subsidiaries	—		—		(3,157		)	—			(3,157		)
Segment income	126,122		—		(2,583		)	(17,318		)	106,221
Total other expense											(10,645		)
Income before income taxes											$	95,576
Segment assets at December 28, 2013	$	1,986,564	$	—	$	179,722		$	1,077,847		$	3,244,133