Summary of Significant Accounting Policies


(a)	Basis of Presentation

The consolidated financial statements include the accounts of Darling and its consolidated subsidiaries. Noncontrolling interests represents the outstanding ownership interest in the Company's consolidated subsidiaries that are not owned by the Company. In the accompanying Consolidated Statements of Operations, the noncontrolling interest in net income (loss) of the consolidated subsidiaries is shown as an allocation of the Company's net income and is presented separately as "Net income/(loss) attributable to noncontrolling interests". In the Company's Consolidated Balance Sheets, noncontrolling interests represents the ownership interests in the Company consolidated subsidairies' net assets held by parties other than the Company. These ownership interests are presented separately as "Noncontrolling interests" within "Stockholders' Equity." All significant intercompany balances and transactions have been eliminated in consolidation.


(b)	Fiscal Periods

The Company has a 52/53 week fiscal year ending on the Saturday nearest December 31. Fiscal periods for the consolidated financial statements included herein are as of June 28, 2014, and include the 13 and 26 weeks ended June 28, 2014, and the 13 and 26 weeks ended June 29, 2013.


(c)	Revenue Recognition

The Company recognizes revenue on sales when products are shipped and the customer takes ownership and assumes risk of loss. Certain customers may be required to prepay prior to shipment in order to maintain payment protection related to certain foreign and domestic sales. These amounts are recorded as unearned revenue and recognized when the products have shipped and the customer takes ownership and assumes risk of loss. The Company has formula arrangements with certain suppliers whereby the charge or credit for raw materials is tied to published finished product commodity prices after deducting a fixed processing fee incorporated into the formula and is recorded as a cost of sale by line of business. The Company recognizes service revenue in the fiscal month the service occurs.


(d)	Foreign Currency Translation and Remeasurement

Foreign currency translation is included as a component of accumulated other comprehensive income and reflects the adjustments resulting from translating the foreign currency denominated financial statements of foreign subsidiaries into U.S. dollars. The functional currency of the Company's foreign subsidiaries is the currency of the primary economic environment in which the entity operates, which is generally the local currency of the country. Accordingly, assets and liabilities of the foreign subsidiaries are translated to U.S. dollars at fiscal period end exchange rates, including intercompany foreign currency transactions that are of long-term investment nature. Income and expense items are translated at average exchange rates occurring during the period. Changes in exchange rates that affect cash flows and the related receivables or payables are recognized as transaction gains and losses in determining net income. The Company incurred net foreign currency translation gains of approximately $13.7 million in the six months ended June 28, 2014 and no currency translation gains and losses in the six months ended June 29, 2013. In addition, the Company incurred foreign currency losses in the statement of operations of approximately $13.8 million in the six months ended June 28, 2014, with $12.6 million representing a loss on a hedge transaction during the first quarter of fiscal 2014.


(e)	Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.


(f)	Earnings Per Share

Basic income/ (loss) per common share is computed by dividing net income attributable to Darling by the weighted average number of common shares including non-vested and restricted shares outstanding during the period. Diluted income/ (loss) per common share is computed by dividing net income attributable to Darling by the weighted average number of common shares outstanding during the period increased by dilutive common equivalent shares determined using the treasury stock method.



	Net Income per Common Share (in thousands, except per share data)
	Three Months Ended
			June 28, 2014						June 29, 2013
	Income		Shares		Per Share		Income		Shares		Per Share
Basic:
Net Income allocable to Darling	$	32,757	164,600		$	0.20	$	26,418	118,196		$	0.22
Diluted:
Effect of dilutive securities:
Add: Option shares in the money and dilutive effect of non-vested stock awards			1,071						690
Less: Pro forma treasury shares			(574	)					(298	)
Diluted:
Net income allocable to Darling	$	32,757	165,097		$	0.20	$	26,418	118,588		$	0.22



	Net Income/ (loss) per Common Share (in thousands, except per share data)
	Six Months Ended
				June 28, 2014						June 29, 2013
	Loss			Shares	Per Share			Income		Shares		Per Share
Basic:
Net Income/ (loss) allocable to Darling	$	(20,046	)	164,469	$	(0.12	)	$	58,823	118,056		$	0.50
Diluted:
Effect of dilutive securities:
Add: Option shares in the money and dilutive effect of non-vested stock				—						688
Less: Pro forma treasury shares				—						(304	)
Diluted:
Net income/ (loss) allocable to Darling	$	(20,046	)	164,469	$	(0.12	)	$	58,823	118,440		$	0.50

For the three months ended June 28, 2014 and June 29, 2013, respectively, 163,078 and 331,367 outstanding stock options were excluded from diluted income/ (loss) per common share as the effect was antidilutive. For the three months ended June 28, 2014 and June 29, 2013, respectively, 740,988 and 58,942 shares of non-vested stock and stock equivalents were excluded from diluted income/ (loss) per common share as the effect was antidilutive.

For the six months ended June 28, 2014 and June 29, 2013, respectively, 975,799 and 261,498 outstanding stock options were excluded from diluted income/ (loss) per common share as the effect was antidilutive. For the six months ended June 28, 2014 and June 29, 2013, respectively, 919,798 and 61,735 shares of non-vested stock and stock equivalents were excluded from diluted income/ (loss) per common share as the effect was antidilutive.