Business Segments

12 Months Ended

Dec. 28, 2019

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 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, 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, proteins and hides.

Food Ingredients

Food Ingredients consists principally of (i) the collagen 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 investment in the DGD Joint Venture (ii) the Company's biofuel business conducted under the Dar Pro® and Rothsay names and (iii) the bioenergy business conducted by Darling Ingredients International under the Ecoson and Rendac names.

Business Segments (in thousands):



	Feed Ingredients			Food Ingredients			Fuel Ingredients		Corporate			Total
Fiscal Year Ended December 28, 2019
Net Sales	$	1,970,561		$	1,119,085		$	274,259	$	—		$	3,363,905
Cost of sales and operating expenses	1,519,596			864,618			204,871		—			2,589,085
Gross Margin	450,965			254,467			69,388		—			774,820

Loss (gain) on sale of assets	(7,720		)	(13,175		)	313		—			(20,582		)
Selling, general and administrative expense	200,487			97,363			2,762		57,911			358,523
Depreciation and amortization	203,456			79,671			31,946		10,437			325,510
Equity in net income of Diamond Green Diesel	—			—			364,452		—			364,452
Segment operating income/(loss)	54,742			90,608			398,819		(68,348		)	475,821

Equity in net income of other unconsolidated subsidiaries	428			—			—		—			428
Segment income/(loss)	55,170			90,608			398,819		(68,348		)	476,249

Total other expense												(95,815		)
Income before income taxes												$	380,434

Segment assets at December 28, 2019	$	2,653,363		$	1,345,526		$	1,087,701	$	258,668		$	5,345,258



	Feed Ingredients			Food Ingredients			Fuel Ingredients			Corporate			Total
Fiscal Year Ended December 29, 2018
Net Sales	$	1,952,555		$	1,139,126		$	296,045		$	—		$	3,387,726
Cost of sales and operating expenses	1,497,973			918,141			230,260			—			2,646,374
Gross Margin	454,582			220,985			65,785			—			741,352

Loss/(gain) on sale of assets	725			(282		)	266			—			709
Selling, general and administrative expense	176,722			91,546			(4,770		)	45,766			309,264
Restructuring and impairment charges	—			14,965			—			—			14,965
Depreciation and amortization	194,292			80,988			34,981			10,931			321,192
Equity in net income of Diamond Green Diesel	—			—			159,779			—			159,779
Segment operating income/(loss)	82,843			33,768			195,087			(56,697		)	255,001

Equity in net loss of unconsolidated subsidiaries	(550		)	—			—			—			(550		)
Segment income/(loss)	82,293			33,768			195,087			(56,697		)	254,451

Total other expense													(136,476		)
Income before income taxes													$	117,975

Segment assets at December 29, 2018	$	2,566,106		$	1,401,291		$	761,817		$	160,140		$	4,889,354



	Feed Ingredients			Food Ingredients		Fuel Ingredients			Corporate			Total
Fiscal Year Ended December 30, 2017
Net Sales	$	2,239,492		$	1,156,976	$	265,783		$	—		$	3,662,251
Cost of sales and operating expenses	1,744,990			920,165		210,525			—			2,875,680
Gross Margin	494,502			236,811		55,258			—			786,571

Loss/(gain) on sale of assets	(358		)	218		(97		)	—			(237		)
Selling, general and administrative expense	178,347			104,644		10,355			50,156			343,502
Depreciation and amortization	184,172			75,010		31,019			11,899			302,100
Equity in net income of Diamond Green Diesel	—			—		28,239			—			28,239
Segment operating income/(loss)	132,341			56,939		42,220			(62,055		)	169,445

Equity in net income of unconsolidated subsidiaries	265			—		—			—			265
Segment income/(loss)	132,606			56,939		42,220			(62,055		)	169,710

Total other expense												(105,510		)
Income before income taxes												$	64,200

Business Segment Property, Plant and Equipment (in thousands):



	December 28, 2019		December 29, 2018		December 30, 2017
Depreciation and amortization:
Feed Ingredients	$	203,456	$	194,292	$	184,172
Food Ingredients	79,671		80,988		75,010
Fuel Ingredients	31,946		34,981		31,019
Corporate Activities	10,437		10,931		11,899
Total	$	325,510	$	321,192	$	302,100
Capital expenditures:
Feed Ingredients	$	229,415	$	237,215	$	191,953
Food Ingredients	85,501		51,659		50,099
Fuel Ingredients	23,964		27,121		24,707
Corporate Activities	20,618		5,901		7,409
Total (a)	$	359,498	$	321,896	$	274,168


(a)	Excludes capital assets acquired by acquisition in fiscal 2018 of approximately $31.6 million and excludes immaterial capital assets acquired by acquisition in fiscal 2017.

Long-lived assets related to the Company's operations in North America, Europe, China, South American and other were as follows (in thousands):



	FY 2019		FY 2018
	Long-Lived Assets		Long-Lived Assets
North America	$	2,991,537	$	2,562,389
Europe	1,228,807		1,219,084
China	124,874		136,711
South America	73,477		64,916
Other	9,275		8,312
Total	$	4,427,970	$	3,991,412