Guarantor Financial Information (Tables)

6 Months Ended

Jun. 29, 2019

Guarantor Financial Information [Abstract]

Guarantor Financial Information Condensed Consolidating Balance Sheet

Condensed Consolidated Balance Sheet

As of June 29, 2019

(in thousands)

	Parent			Guarantors			Non-guarantors		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	3,562		$	32		$	83,417	$	—		$	87,011
Restricted cash	103			—			—		—			103
Accounts receivable	41,248			663,987			465,807		(813,371		)	357,671
Inventories	19,391			89,246			239,672		—			348,309
Income taxes refundable	1,550			—			4,004		—			5,554
Prepaid expenses	16,597			2,161			25,605		—			44,363
Other current assets	3,156			(1,557		)	22,528		—			24,127
Total current assets	85,607			753,869			841,033		(813,371		)	867,138
Investment in subsidiaries	5,003,892			1,366,517			844,043		(7,214,452		)	—
Property, plant and equipment, net	409,543			507,120			805,633		—			1,722,296
Intangible assets, net	47,238			185,741			332,997		—			565,976
Goodwill	49,902			490,748			692,836		—			1,233,486
Investment in unconsolidated subsidiaries	13,051			—			444,981		—			458,032
Operating lease right-of-use asset	70,324			32,625			18,001		—			120,950
Other assets	39,312			139			14,902		—			54,353
Deferred taxes	—			—			14,365		—			14,365
	$	5,718,869		$	3,336,759		$	4,008,791	$	(8,027,823	)	$	5,036,596
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of long-term debt	$	18,068		$	5		$	17,804	$	—		$	35,877
Accounts payable	839,937			32,804			149,511		(813,351		)	208,901
Income taxes payable	(855		)	—			11,146		—			10,291
Current operating lease liability	20,201			10,351			6,151		—			36,703
Accrued expenses	92,882			28,356			153,315		(19		)	274,534
Total current liabilities	970,233			71,516			337,927		(813,370		)	566,306
Long-term debt, net of current portion	1,045,820			15			594,221		—			1,640,056
Long-term operating lease liability	50,800			21,776			10,864		—			83,440
Other noncurrent liabilities	77,323			—			35,763		—			113,086
Deferred income taxes	97,185			—			129,888		—			227,073
Total liabilities	2,241,361			93,307			1,108,663		(813,370		)	2,629,961
Total stockholders’ equity	3,477,508			3,243,452			2,900,128		(7,214,453		)	2,406,635
	$	5,718,869		$	3,336,759		$	4,008,791	$	(8,027,823	)	$	5,036,596

Condensed Consolidated Balance Sheet

As of December 29, 2018

(in thousands)

	Parent			Guarantors			Non-guarantors		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	995		$	32		$	106,235	$	—		$	107,262
Restricted cash	103			—			4		—			107
Accounts receivable	56,113			619,628			461,005		(751,009		)	385,737
Inventories	23,752			83,261			234,015		—			341,028
Income taxes refundable	2,851			—			3,611		—			6,462
Prepaid expenses	12,890			2,936			19,421		—			35,247
Other current assets	2,680			(1,418		)	20,837		—			22,099
Total current assets	99,384			704,439			845,128		(751,009		)	897,942
Investment in subsidiaries	4,880,193			1,366,126			844,044		(7,090,363		)	—
Property, plant and equipment, net	375,824			503,130			808,904		—			1,687,858
Intangible assets, net	50,132			200,936			344,794		—			595,862
Goodwill	49,506			490,748			688,905		—			1,229,159
Investment in unconsolidated subsidiary	13,969			—			396,208		—			410,177
Other assets	39,395			138			13,842		—			53,375
Deferred income taxes	—			—			14,981		—			14,981
	$	5,508,403		$	3,265,517		$	3,956,806	$	(7,841,372	)	$	4,889,354
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of long-term debt	$	3,558		$	5		$	3,929	$	—		$	7,492
Accounts payable	783,406			24,388			162,678		(750,993		)	219,479
Income taxes payable	(10		)	—			4,053		—			4,043
Accrued expenses	107,572			33,387			168,541		(16		)	309,484
Total current liabilities	894,526			57,780			339,201		(751,009		)	540,498
Long-term debt, net of current portion	1,019,130			18			647,792		—			1,666,940
Other noncurrent liabilities	78,589			—			36,443		—			115,032
Deferred income taxes	95,710			—			135,353		—			231,063
Total liabilities	2,087,955			57,798			1,158,789		(751,009		)	2,553,533
Total stockholders’ equity	3,420,448			3,207,719			2,798,017		(7,090,363		)	2,335,821
	$	5,508,403		$	3,265,517		$	3,956,806	$	(7,841,372	)	$	4,889,354

Guarantor Financial Information Condensed Consolidating Statements Of Operations

Condensed Consolidated Statements of Operations

For the three months ended June 29, 2019

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Net sales	$	156,927		$	325,744		$	399,339		$	(54,686	)	$	827,324
Cost and expenses:
Cost of sales and operating expenses	125,586			268,582			305,234			(54,686		)	644,716
Loss (gain) on sale of assets	(26		)	(511		)	(13,389		)	—			(13,926		)
Selling, general and administrative expenses	40,570			10,776			29,671			—			81,017
Depreciation and amortization	14,224			25,165			40,097			—			79,486
Total costs and expenses	180,354			304,012			361,613			(54,686		)	791,293
Operating income/(loss)	(23,427		)	21,732			37,726			—			36,031
Interest expense	(15,078		)	(24		)	(5,751		)	—			(20,853		)
Debt extinguishment costs	(12,126		)	—			—			—			(12,126		)
Foreign currency losses	3			1			(392		)	—			(388		)
Other expense, net	(1,285		)	(764		)	30			—			(2,019		)
Equity in net loss of unconsolidated subsidiaries	(1,027		)	—			39,202			—			38,175
Earnings in investments in subsidiaries	68,680			—			—			(68,680		)	—
Income/(loss) before taxes	15,740			20,945			70,815			(68,680		)	38,820
Income tax expense/(benefit)	(10,518		)	4,126			14,168			—			7,776
Net income attributable to noncontrolling interests	—			—			(4,786		)	—			(4,786		)
Net income/(loss) attributable to Darling	$	26,258		$	16,819		$	51,861		$	(68,680	)	$	26,258

Condensed Consolidated Statements of Operations

For the six months ended June 29, 2019

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Net sales	$	317,157		$	655,735		$	803,250		$	(113,714	)	$	1,662,428
Cost and expenses:
Cost of sales and operating expenses	253,910			540,253			615,180			(113,714		)	1,295,629
Loss (gain) on sale of assets	42			(4,988		)	(13,230		)	—			(18,176		)
Selling, general and administrative expenses	87,993			22,723			55,304			—			166,020
Depreciation and amortization	28,597			51,277			78,776			—			158,650
Total costs and expenses	370,542			609,265			736,030			(113,714		)	1,602,123
Operating income/(loss)	(53,385		)	46,470			67,220			—			60,305
Interest expense	(29,105		)	(56		)	(11,568		)	—			(40,729		)
Debt extinguishment costs	(12,126		)	—			—			—			(12,126		)
Foreign currency losses	(1		)	1			(1,120		)	—			(1,120		)
Other income/(expense), net	(2,852		)	(1,976		)	284			—			(4,544		)
Equity in net income/(loss) of unconsolidated subsidiaries	(1,918		)	—			63,866			—			61,948
Earnings in investments in subsidiaries	123,307			—			—			(123,307		)	—
Income/(loss) before taxes	23,920			44,439			118,682			(123,307		)	63,734
Income tax expense/(benefit)	(20,350		)	9,099			24,301			—			13,050
Net income attributable to noncontrolling interests	—			—			(6,414		)	—			(6,414		)
Net income/(loss) attributable to Darling	$	44,270		$	35,340		$	87,967		$	(123,307	)	$	44,270

Condensed Consolidated Statements of Operations

For the three months ended June 30, 2018

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Net sales	$	135,196		$	348,497		$	423,466		$	(60,513	)	$	846,646
Cost and expenses:
Cost of sales and operating expenses	102,171			275,696			334,885			(60,513		)	652,239
Loss (gain) on sale of assets	50			(87		)	799			—			762
Selling, general and administrative expenses	36,393			12,425			29,740			—			78,558
Restructuring and impairment charges	—			—			14,965			—			14,965
Depreciation and amortization	11,577			25,942			40,935			—			78,454
Total costs and expenses	150,191			313,976			421,324			(60,513		)	824,978
Operating income/(loss)	(14,995		)	34,521			2,142			—			21,668
Interest expense	(14,193		)	3,240			(12,063		)	—			(23,016		)
Debt extinguishment costs	(15,635		)	—			(7,874		)	—			(23,509		)
Foreign currency gains/(losses)	(414		)	(31		)	(3,050		)	—			(3,495		)
Loss on sale of subsidiary	(15,538		)	—			—			—			(15,538		)
Other income/(expense), net	(10,204		)	1,810			9,593			—			1,199
Equity in net income/(loss) of unconsolidated subsidiaries	(577		)	—			15,813			—			15,236
Earnings in investments in subsidiaries	34,159			—			—			(34,159		)	—
Income/(loss) before taxes	(37,397		)	39,540			4,561			(34,159		)	(27,455		)
Income tax expense/(benefit)	(6,977		)	4,192			4,468			—			1,683
Net income attributable to noncontrolling interests	—			—			(1,282		)	—			(1,282		)
Net income/(loss) attributable to Darling	$	(30,420	)	$	35,348		$	(1,189	)	$	(34,159	)	$	(30,420	)

Condensed Consolidated Statements of Operations

For the six months ended June 30, 2018

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Net sales	$	254,821		$	693,100		$	891,274		$	(117,175	)	$	1,722,020
Cost and expenses:
Cost of sales and operating expenses	198,290			547,061			702,624			(117,175		)	1,330,800
Loss (gain) on sale of assets	(201		)	(215		)	716			—			300
Selling, general and administrative expenses	80,171			25,262			60,027			—			165,460
Restructuring and impairment charges	—			—			14,965			—			14,965
Depreciation and amortization	22,636			52,233			82,204			—			157,073
Total costs and expenses	300,896			624,341			860,536			(117,175		)	1,668,598
Operating income/(loss)	(46,075		)	68,759			30,738			—			53,422
Interest expense	(28,557		)	7,003			(24,586		)	—			(46,140		)
Debt extinguishment costs	(15,635		)	—			(7,874		)	—			(23,509		)
Foreign currency gains/(losses)	(437		)	(94		)	(4,445		)	—			(4,976		)
Loss on sale of subsidiary	(15,538		)	—			—			—			(15,538		)
Other income/(expense), net	(13,614		)	484			11,813			—			(1,317		)
Equity in net income/(loss) of unconsolidated subsidiaries	(1,075		)	—			113,465			—			112,390
Earnings in investments in subsidiaries	179,039			—			—			(179,039		)	—
Income/(loss) before taxes	58,108			76,152			119,111			(179,039		)	74,332
Income tax expense/(benefit)	(8,777		)	5,527			8,645			—			5,395
Net income attributable to noncontrolling interests	—			—			(2,052		)	—			(2,052		)
Net income/(loss) attributable to Darling	$	66,885		$	70,625		$	108,414		$	(179,039	)	$	66,885

Guarantor Financial Information Condensed Consolidating Statements of Comprehensive Income/(Loss)

Condensed Consolidated Statements of Comprehensive Income/(Loss)

For the three months ended June 29, 2019

(in thousands)

	Parent			Guarantors		Non-guarantors		Eliminations			Consolidated
Net income/(loss)	$	31,044		$	16,819	$	51,861	$	(68,680	)	$	31,044
Other comprehensive income/(loss), net of tax:
Foreign currency translation	(326		)	—		16,652		—			16,326
Pension adjustments	766			—		93		—			859
Corn option derivative adjustments	22			—		—		—			22
Heating oil derivative adjustments	—			—		2,133		—			2,133
Foreign exchange derivative adjustments	—			—		1,451		—			1,451
Total other comprehensive income/(loss), net of tax	462			—		20,329		—			20,791
Total comprehensive income/(loss)	31,506			16,819		72,190		(68,680		)	51,835
Total comprehensive loss attributable to noncontrolling interest	—			—		3,315		—			3,315
Total comprehensive income/(loss) attributable to Darling	$	31,506		$	16,819	$	68,875	$	(68,680	)	$	48,520

Condensed Consolidated Statements of Comprehensive Income/(Loss)

For the six months ended June 29, 2019

(in thousands)

	Parent		Guarantors		Non-guarantors			Eliminations			Consolidated
Net income/(loss)	$	50,684	$	35,340	$	87,967		$	(123,307	)	$	50,684
Other comprehensive income/ (loss), net of tax:
Foreign currency translation	181		—		11,259			—			11,440
Pension adjustments	1,533		—		184			—			1,717
Corn option derivative adjustments	22		—		—			—			22
Heating oil derivative adjustments	—		—		2,133			—			2,133
Foreign exchange derivative adjustments	—		—		(486		)	—			(486		)
Total other comprehensive income/(loss), net of tax	1,736		—		13,090			—			14,826
Total comprehensive income/(loss)	52,420		35,340		101,057			(123,307		)	65,510
Total comprehensive income attributable to noncontrolling interest	—		—		6,702			—			6,702
Total comprehensive income/(loss) attributable to Darling	$	52,420	$	35,340	$	94,355		$	(123,307	)	$	58,808

Condensed Consolidated Statements of Comprehensive Income/(Loss)

For the three months ended June 30, 2018

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Net income/(loss)	$	(29,138	)	$	35,348		$	(1,189	)	$	(34,159	)	$	(29,138	)
Other comprehensive income/(loss), net of tax:
Foreign currency translation	1,116			(53,387		)	(24,566		)	—			(76,837		)
Pension adjustments	565			—			101			—			666
Corn option derivative adjustments	447			—			—			—			447
Total other comprehensive income/(loss), net of tax	2,128			(53,387		)	(24,465		)	—			(75,724		)
Total comprehensive income/(loss)	(27,010		)	(18,039		)	(25,654		)	(34,159		)	(104,862		)
Total comprehensive income attributable to noncontrolling interest	—			—			1,232			—			1,232
Total comprehensive income/(loss) attributable to Darling	$	(27,010	)	$	(18,039	)	$	(26,886	)	$	(34,159	)	$	(106,094	)

Condensed Consolidated Statements of Comprehensive Income/(Loss)

For the six months ended June 30, 2018

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Net income/(loss)	$	68,937		$	70,625		$	108,414		$	(179,039	)	$	68,937
Other comprehensive income/(loss), net of tax:
Foreign currency translation	1,116			(53,387		)	(7,271		)	—			(59,542		)
Pension adjustments	1,131			—			202			—			1,333
Natural gas swap derivative adjustments	22			—			—			—			22
Corn option derivative adjustments	(1,158		)	—			—			—			(1,158		)
Total other comprehensive income, net of tax	1,111			(53,387		)	(7,069		)	—			(59,345		)
Total comprehensive income/(loss)	70,048			17,238			101,345			(179,039		)	9,592
Total comprehensive loss attributable to noncontrolling interest	—			—			2,519			—			2,519
Total comprehensive income/(loss) attributable to Darling	$	70,048		$	17,238		$	98,826		$	(179,039	)	$	7,073

Guarantor Financial Information Condensed Consolidating Statements Of Cash Flows

Condensed Consolidated Statements of Cash Flows

For the six months ended June 29, 2019

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income/(loss)	$	50,684		$	35,340		$	87,967		$	(123,307	)	$	50,684
Earnings in investments in subsidiaries	(123,307		)	—			—			123,307			—
Other operating cash flows	116,433			884			(13,697		)	—			103,620
Net cash provided by operating activities	43,810			36,224			74,270			—			154,304
Cash flows from investing activities:
Capital expenditures	(63,517		)	(44,720		)	(59,634		)	—			(167,871		)
Acquisitions	(1,157		)	—			(274		)	—			(1,431		)
Investment in subsidiaries and affiliates	(1,393		)	(393		)	—			786			(1,000		)
Gross proceeds from sale of property, plant and equipment and other assets	250			7,654			1,910			—			9,814
Proceeds from insurance settlements	—			845			—			—			845
Payments related to routes and other intangibles	(131		)	—			(3,019		)	—			(3,150		)
Net cash used in investing activities	(65,948		)	(36,614		)	(61,017		)	786			(162,793		)
Cash flows from financing activities:
Proceeds for long-term debt	500,000			—			7,722			—			507,722
Payments on long-term debt	(507,622		)	(3		)	(18,605		)	—			(526,230		)
Borrowings from revolving facilities	134,000			—			139,485			—			273,485
Payments on revolving facilities	(96,000		)	—			(170,884		)	—			(266,884		)
Net cash overdraft financing	4,510			—			6,668			—			11,178
Deferred loan costs	(7,003		)	—			—			—			(7,003		)
Issuances of common stock	12			—			—			—			12
Contributions from parent	—			393			393			(786		)	—
Minimum withholding taxes paid on stock awards	(3,192		)	—			(1		)	—			(3,193		)
Net cash provided/(used) in financing activities	24,705			390			(35,222		)	(786		)	(10,913		)
Effect of exchange rate changes on cash	—			—			(853		)	—			(853		)
Net decrease in cash, cash equivalents and restricted cash	2,567			—			(22,822		)	—			(20,255		)
Cash, cash equivalents and restricted cash at beginning of period	1,098			32			106,239			—			107,369
Cash, cash equivalents and restricted cash at end of period	$	3,665		$	32		$	83,417		$	—		$	87,114

Condensed Consolidated Statements of Cash Flows

For the six months ended June 30, 2018

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income/(loss)	$	68,937		$	70,625		$	108,414		$	(179,039	)	$	68,937
Earnings in investments in subsidiaries	(179,039		)	—			—			179,039			—
Other operating cash flows	143,415			(30,510		)	(53,795		)	—			59,110
Net cash provided/(used) by operating activities	33,313			40,115			54,619			—			128,047
Cash flows from investing activities:
Capital expenditures	(45,028		)	(45,759		)	(48,343		)	—			(139,130		)
Acquisitions	(51,089		)	—			—			—			(51,089		)
Investment in subsidiaries and affiliates	(6,500		)	(198,880		)	—			198,880			(6,500		)
Proceeds from sale of investment in subsidiary	80,000			—			2,805			—			82,805
Note receivable from affiliates	—			201,880			(201,880		)	—			—
Gross proceeds from sale of property, plant and equipment and other assets	873			610			761			—			2,244
Proceeds from insurance settlements	750			503			—			—			1,253
Payments related to routes and other intangibles	(246		)	—			(48		)	—			(294		)
Net cash used in investing activities	(21,240		)	(41,646		)	(246,705		)	198,880			(110,711		)
Cash flows from financing activities:
Proceeds for long-term debt	—			—			623,695			—			623,695
Payments on long-term debt	(10,066		)	—			(640,910		)	—			(650,976		)
Borrowings from revolving credit facility	131,000			—			116,975			—			247,975
Payments on revolving credit facility	(131,000		)	—			(90,632		)	—			(221,632		)
Net cash overdraft financing	—			—			4,517			—			4,517
Deferred loan costs	(824		)	—			(8,500		)	—			(9,324		)
Issuances of common stock	182			—			—			—			182
Contributions from parent	—			—			198,880			(198,880		)	—
Minimum withholding taxes paid on stock awards	(2,118		)	—			(5		)	—			(2,123		)
Distributions to noncontrolling interests	—			—			(983		)	—			(983		)
Net cash provided by financing activities	(12,826		)	—			203,037			(198,880		)	(8,669		)
Effect of exchange rate changes on cash	—			—			(11,321		)	—			(11,321		)
Net decrease in cash, cash equivalents and restricted cash	(753		)	(1,531		)	(370		)	—			(2,654		)
Cash, cash equivalents and restricted cash at beginning of period	1,827			2,993			102,096			—			106,916
Cash, cash equivalents and restricted cash at end of period	$	1,074		$	1,462		$	101,726		$	—		$	104,262