Business Segments

9 Months Ended

Oct. 01, 2016

Segment Reporting [Abstract]

Business Segments

Business Segments

The Company sells its products domestically and internationally and operates within three industry segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. 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.

Business Segments (in thousands):

	Feed Ingredients			Food Ingredients		Fuel Ingredients		Corporate			Total
Three Months Ended October 1, 2016
Net Sales	$	531,413		$	261,997	$	60,446	$	—		$	853,856
Cost of sales and operating expenses	413,602			211,318		46,247		—			671,167
Gross Margin	117,811			50,679		14,199		—			182,689
Selling, general and administrative expense	38,943			25,352		1,332		10,881			76,508
Acquisition and integration costs	—			—		—		—			—
Depreciation and amortization	43,614			17,383		6,896		2,760			70,653
Segment operating income/(loss)	35,254			7,944		5,971		(13,641		)	35,528
Equity in net income/(loss) of unconsolidated subsidiaries	(36		)	—		18,174		—			18,138
Segment income/(loss)	35,218			7,944		24,145		(13,641		)	53,666
Total other expense											(25,520		)
Income before income taxes											$	28,146

	Feed Ingredients		Food Ingredients		Fuel Ingredients			Corporate			Total
Three Months Ended October 3, 2015
Net Sales	$	525,213	$	269,230	$	59,319		$	—		$	853,762
Cost of sales and operating expenses	409,030		214,406		47,885			—			671,321
Gross Margin	116,183		54,824		11,434			—			182,441
Selling, general and administrative expense	39,718		26,118		4,459			4,731			75,026
Acquisition and integration costs	—		—		—			1,280			1,280
Depreciation and amortization	40,846		17,144		6,729			2,608			67,327
Segment operating income/(loss)	35,619		11,562		246			(8,619		)	38,808
Equity in net income/(loss) of unconsolidated subsidiaries	309		—		(12,330		)	—			(12,021		)
Segment income/(loss)	35,928		11,562		(12,084		)	(8,619		)	26,787
Total other expense											(26,285		)
Income before income taxes											$	502

	Feed Ingredients		Food Ingredients		Fuel Ingredients		Corporate			Total
Nine Months Ended October 1, 2016
Net Sales	$	1,550,539	$	782,014	$	178,285	$	—		$	2,510,838
Cost of sales and operating expenses	1,202,404		611,151		133,620		—			1,947,175
Gross Margin	348,135		170,863		44,665		—			563,663
Selling, general and administrative expense	127,513		69,566		4,986		32,070			234,135
Acquisition and integration costs	—		—		—		401			401
Depreciation and amortization	130,110		51,823		20,999		9,508			212,440
Segment operating income/(loss)	90,512		49,474		18,680		(41,979		)	116,687
Equity in net income of unconsolidated subsidiaries	290		—		37,343		—			37,633
Segment income/(loss)	90,802		49,474		56,023		(41,979		)	154,320
Total other expense										(79,674		)
Income before income taxes										$	74,646
Segment assets at October 1, 2016	$	2,493,164	$	1,472,079	$	641,823	$	209,818		$	4,816,884

	Feed Ingredients		Food Ingredients		Fuel Ingredients			Corporate			Total
Nine Months Ended October 3, 2015
Net Sales	$	1,602,141	$	822,741	$	162,889		$	—		$	2,587,771
Cost of sales and operating expenses	1,237,936		654,233		131,949			—			2,024,118
Gross Margin	364,205		168,508		30,940			—			563,653
Selling, general and administrative expense	136,397		79,461		6,204			23,889			245,951
Acquisition and integration costs	—		—		—			7,807			7,807
Depreciation and amortization	121,386		51,126		19,959			7,499			199,970
Segment operating income/(loss)	106,422		37,921		4,777			(39,195		)	109,925
Equity in net income/(loss) of unconsolidated subsidiaries	1,128		—		(10,785		)	—			(9,657		)
Segment income/(loss)	107,550		37,921		(6,008		)	(39,195		)	100,268
Total other expense											(86,225		)
Income before income taxes											$	14,043
Segment assets at January 2, 2016	$	2,438,869	$	1,448,014	$	631,968		$	241,768		$	4,760,619