REVENUE

On December 31, 2017, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), using the modified retrospective basis. Results for reporting periods beginning December 31, 2017 are presented under Topic 606, while prior periods are not adjusted and continue to be reported in accordance with the Company's historic accounting under Revenue Recognition (Topic 605). The adoption did not change the timing of revenue recognition as the Company's revenues have been determined to be recognized at a point in time and not over time. The Company elected not to capitalize contract fulfillment costs as the recovery of such costs are for a period of less than one year's time and are not material to the Company. At December 29, 2018, there were no contract assets recorded on the Consolidated Balance sheets. Also, the Company elected to treat shipping and handling as fulfillment costs under Topic 606, which will result in billed freight recorded in cost of sales and netted against freight costs. Sales, value-add, and other taxes collected concurrently with revenue-producing activities are excluded from revenue and booked on a net basis.

The Company extends payment terms to its customers based on commercially acceptable practices. The term between invoicing and payment due date is not significant. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring finished products or performing services, which is generally based on executed agreement or purchase order.

Most of the Company's products are shipped based on the customer specifications. Customer returns are infrequent and not material to the Company. Adjustments to net sales for sales deductions are generally recognized in the same period as the sale or when known. Customers in certain industries or countries may be required to prepay prior to shipment in order to maintain payment protection. These represent short-term prepayment from customers and are not material to the Company.

The following table summarizes the impact of adopting Topic 606 on the Company's consolidated financial statements for the year ended December 29, 2018 (in thousands):



	Impact of changes in accounting policies
	As reported		Adjustments	Balances without adoption of Topic 606
Year Ended December 29, 2018

Net sales	$	3,387,726	177,726	$	3,565,452
Cost of sales and operating expenses	$	2,647,083	177,726	$	2,824,809

The following tables presents the Company revenues disaggregated by geographic area and major product types by reportable segment for the years ended December 29, 2018, December 30, 2017 and December 31, 2016 (in thousands):



	Year Ended December 29, 2018
	Feed Ingredients		Food Ingredients		Fuel Ingredients		Total
Geographic Area
North America	$	1,586,930	$	181,213	$	48,858	$	1,817,001
Europe	329,341		648,933		247,187		1,225,461
China	28,288		182,369		—		210,657
South America	—		53,206		—		53,206
Other	7,996		73,405		—		81,401
Net sales	$	1,952,555	$	1,139,126	$	296,045	$	3,387,726

Major product types
Fats	$	564,790	$	163,815	$	—	$	728,605
Used cooking oil	166,634		—		—		166,634
Proteins	842,878		—		—		842,878
Bakery	180,227		—		—		180,227
Other rendering	129,273		—		—		129,273
Food ingredients	—		886,042		—		886,042
Bioenergy	—		—		247,187		247,187
Biofuels	—		—		48,858		48,858
Other	68,753		89,269		—		158,022
Net sales	$	1,952,555	$	1,139,126	$	296,045	$	3,387,726



	Year Ended December 30, 2017 (a)
	Feed Ingredients		Food Ingredients		Fuel Ingredients		Total
Geographic Area
North America	$	1,696,081	$	193,950	$	46,996	$	1,937,027
Europe	503,786		650,177		218,787		1,372,750
China	32,103		177,677		—		209,780
South America	—		60,111		—		60,111
Other	7,522		75,061		—		82,583
Net sales	$	2,239,492	$	1,156,976	$	265,783	$	3,662,251

Major product types
Fats	$	648,328	$	183,719	$	—	$	832,047
Used cooking oil	185,516		—		—		185,516
Proteins	816,060		—		—		816,060
Bakery	209,801		—		—		209,801
Other rendering	286,183		—		—		286,183
Food ingredients	—		880,128		—		880,128
Bioenergy	—		—		218,787		218,787
Biofuels	—		—		46,996		46,996
Other	93,604		93,129		—		186,733
Net sales	$	2,239,492	$	1,156,976	$	265,783	$	3,662,251



	Year Ended December 31, 2016 (a)
	Feed Ingredients		Food Ingredients		Fuel Ingredients		Total
Geographic Area Revenues
North America	$	1,580,252	$	188,506	$	48,901	$	1,817,659
Europe	467,124		560,116		198,157		1,225,397
China	36,193		182,287		—		218,480
South America	—		55,089		—		55,089
Other	5,576		69,727		—		75,303
Net sales	$	2,089,145	$	1,055,725	$	247,058	$	3,391,928

Major product types
Fats	$	574,553	$	166,167	$	—	$	740,720
Used cooking oil	165,061		—		—		165,061
Proteins	769,391		—		—		769,391
Bakery	220,438		—		—		220,438
Other rendering	269,196		—		—		269,196
Food ingredients	—		826,216		—		826,216
Bioenergy	—		—		198,157		198,157
Biofuels	—		—		48,901		48,901
Other	90,506		63,342		—		153,848
Net sales	$	2,089,145	$	1,055,725	$	247,058	$	3,391,928

(a) As noted above prior year amounts have not been adjusted under the modified retrospective method for billed freight of approximately $160.0 million and $149.0 million that is included in net sales for the years ended December 30, 2017 and December 31, 2016, respectively.

Revenue from Contracts with Customers

The Company has two primary revenue streams. Finished product revenues are recognized when control of the promised finished product is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the finished product. Service revenues are recognized when the service occurs.

Fats and Proteins. Fats and Proteins include the Company's global activities related to the collection and processing of beef, poultry and pork animal by-products into finished products of non-food grade oils, food grade fats and protein meal. Fats and proteins net sales are recognized when the Company ships the finished product to the customer and control has been transferred.

Used Cooking Oil. Used cooking oil includes collection and processing of used cooking oil into finished products of non-food grade fats. Used cooking oil net sales are recognized when the Company ships the finished product to the customer and control has been transferred.

Bakery. Bakery includes collection and processing of bakery residuals into finished product including Cookie Meal®, an animal feed ingredient primarily used in poultry and swine rations. Bakery net sales are recognized when the Company ships the finished product to the customer and control has been transferred.

Other Rendering. Other rendering include hides, pet food products, and service charges. Hides and pet food net sales are recognized when the Company ships the finished product to the customer and control has been transferred. Service revenues are recognized when the service has occurred.

Food Ingredients. Food ingredients includes collection and processing of pigskin, hide, bone and fish into finished product. Also includes harvesting, sorting and selling of hog and sheep casings as well as harvesting, purchasing and processing of hog, sheep and beef meat for pet food industry. Collagen and CTH meat and casings net sales are recognized when the Company ships the finished product to the customer and control has been transferred.

Bioenergy. Bioenergy includes Ecoson, which converts organic sludge and food waste into biogas and Rendac, which collects fallen stock and animal waste for a fee and processes these materials into fats and meals that can only be used as low grade energy or fuel for boilers and cement kilns. Net sales are recognized when the finished product is shipped to the customer and control has been transferred. Service revenues are recognized in net sales when the service has occurred.

Biofuels. Biofuels includes the North American processing of rendered animal fats, recycled cooking oils and third party additives to produce diesel fuel. Biofuel net sales are recognized when the finished product is shipped to the customer and control has been transferred.

Other. Other includes grease trap collection and environmental services to food processors in the Feed Ingredients segment and Sonac Bone and Sonac Heparin in the Food Ingredients segment. Net sales are recognized when the Company ships the finished product to the customer. Service revenues are recognized when the service has occurred.