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 fats and proteins, 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 September 30, 2017
Net Sales	$	575,543	$	300,282	$	61,856		$	—		$	937,681
Cost of sales and operating expenses	449,608		240,160		54,260			—			744,028
Gross Margin	125,935		60,122		7,596			—			193,653

Selling, general and administrative expense	45,471		25,633		(461		)	12,498			83,141
Depreciation and amortization	46,860		19,506		7,912			2,924			77,202
Segment operating income/(loss)	33,604		14,983		145			(15,422		)	33,310

Equity in net income of unconsolidated subsidiaries	523		—		7,180			—			7,703
Segment income/(loss)	34,127		14,983		7,325			(15,422		)	41,013

Total other expense											(26,033		)
Income before income taxes											$	14,980



	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
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 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
Nine Months Ended September 30, 2017
Net Sales	$	1,677,286	$	847,897	$	188,918	$	—		$	2,714,101
Cost of sales and operating expenses	1,304,454		674,991		154,974		—			2,134,419
Gross Margin	372,832		172,906		33,944		—			579,682

Selling, general and administrative expense	134,444		77,480		5,732		38,933			256,589
Depreciation and amortization	134,933		55,291		22,472		8,610			221,306
Segment operating income/(loss)	103,455		40,135		5,740		(47,543		)	101,787

Equity in net income of unconsolidated subsidiaries	763		—		15,906		—			16,669
Segment income/(loss)	104,218		40,135		21,646		(47,543		)	118,456

Total other expense										(76,190		)
Income before income taxes										$	42,266

Segment assets at September 30, 2017	$	2,599,196	$	1,497,310	$	682,868	$	155,148		$	4,934,522



	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 December 31, 2016	$	2,464,509	$	1,414,409	$	657,637	$	161,462		$	4,698,017