Guarantor Financial Information

12 Months Ended

Dec. 28, 2019

Guarantor Financial Information [Abstract]

GUARANTOR FINANCIAL INFORMATION

GUARANTOR FINANCIAL INFORMATION

The Company's 5.25% Notes and 3.625% Notes (see Note 10) are guaranteed on a senior unsecured basis by the following Notes Guarantors, each of which is a 100% directly or indirectly owned subsidiary of Darling and which constitute all of Darling's existing restricted subsidiaries that are Credit Agreement Guarantors (other than Darling's foreign subsidiaries, Darling Global Finance B.V., which issued the 3.625% Notes and is discussed further below, or any receivables entity): Darling National, Griffin and its subsidiary Craig Protein, Darling Global Holdings Inc., EV Acquisition LLC, Rousselot Inc., Rousselot Dubuque Inc., Sonac USA LLC and Rousselot Peabody Inc. In addition, the 3.625% Notes, which were issued by Darling Global Finance B.V., a wholly-owned indirect subsidiary of Darling, are guaranteed on a senior unsecured basis by Darling. The Notes Guarantors, and Darling in the case of the 3.625% Notes, fully and unconditionally guaranteed the 5.25% Notes and 3.625% Notes on a joint and several basis. The following financial statements present condensed consolidating financial data for (i) Darling, (ii) the combined Notes Guarantors, (iii) the combined other subsidiaries of the Company that did not guarantee the 5.25% Notes or the 3.625% Notes (the “Non-guarantors”), and (iv) eliminations necessary to arrive at the Company's consolidated financial statements, which include condensed consolidated balance sheets as of December 28, 2019 and December 29, 2018, and the condensed consolidating statements of operations, the condensed consolidating statements of comprehensive income/(loss) and the condensed consolidating statements of cash flows for the years ended December 28, 2019, December 29, 2018 and December 30, 2017. Separate financial information is not presented for Darling Global Finance B.V. since it was formed as a special purpose finance subsidiary for the purpose of issuing euro-denominated notes such as the 3.625% Notes and therefore does not have any substantial operations or assets.

Condensed Consolidating Balance Sheet

As of December 28, 2019

(in thousands)

	Parent			Guarantors			Non-guarantors		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	551		$	26		$	72,358	$	—		$	72,935
Restricted cash	103			—			7		—			110
Accounts receivable, net	51,097			702,945			518,614		(866,318		)	406,338
Inventories	26,893			86,609			249,455		—			362,957
Income taxes refundable	1,106			—			2,211		—			3,317
Prepaid expenses	20,888			2,241			23,470		—			46,599
Other current assets	5,399			(2,326		)	40,872		(18,913		)	25,032
Total current assets	106,037			789,495			906,987		(885,231		)	917,288
Investment in subsidiaries	5,365,956			1,366,635			844,043		(7,576,634		)	—
Property, plant and equipment, net	434,237			524,577			843,597		—			1,802,411
Intangible assets, net	44,404			170,581			311,409		—			526,394
Goodwill	49,902			490,748			682,641		—			1,223,291
Investment in unconsolidated subsidiaries	—			—			689,354		—			689,354
Operating lease right-of-use asset	74,005			31,243			19,478		—			124,726
Other assets	35,456			134			61,974		(50,164		)	47,400
Deferred income taxes	—			—			14,394		—			14,394
	$	6,109,997		$	3,373,413		$	4,373,877	$	(8,512,029	)	$	5,345,258
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of long-term debt	$	40,916		$	10		$	68,983	$	(18,913	)	$	90,996
Accounts payable	893,490			29,535			182,484		(866,257		)	239,252
Income taxes payable	(10		)	—			8,905		—			8,895
Current operating lease liability	20,454			10,510			6,841		—			37,805
Accrued expenses	116,758			32,861			161,833		(61		)	311,391
Total current liabilities	1,071,608			72,916			429,046		(885,231		)	688,339
Long-term debt, net of current portion	1,040,974			30			567,589		(50,164		)	1,558,429
Long-term operating lease liability	58,970			20,281			12,173		—			91,424
Other noncurrent liabilities	80,409			—			35,376		—			115,785
Deferred income taxes	122,109			—			125,822		—			247,931
Total liabilities	2,374,070			93,227			1,170,006		(935,395		)	2,701,908
Total stockholders' equity	3,735,927			3,280,186			3,203,871		(7,576,634		)	2,643,350
	$	6,109,997		$	3,373,413		$	4,373,877	$	(8,512,029	)	$	5,345,258

Condensed Consolidating 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, net	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 tax 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

Condensed Consolidating Statements of Operations

For the year ended December 28, 2019

(in thousands) 

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Net sales	$	652,708		$	1,305,464		$	1,637,861		$	(232,128	)	$	3,363,905
Cost and expenses:
Cost of sales and operating expenses	515,286			1,078,247			1,227,680			(232,128		)	2,589,085
Loss (gain) on sale of assets	(403		)	(7,356		)	(12,823		)	—			(20,582		)
Selling, general and administrative expenses	187,851			43,855			126,817			—			358,523
Depreciation and amortization	61,777			104,247			159,486			—			325,510
Total costs and expenses	764,511			1,218,993			1,501,160			(232,128		)	3,252,536
Equity in net income of Diamond Green Diesel	—			—			364,452			—			364,452
Operating income/(loss)	(111,803		)	86,471			501,153			—			475,821
Interest expense	(56,240		)	(167		)	(22,267		)	—			(78,674		)
Debt extinguishment costs	(12,126		)	—			—			—			(12,126		)
Foreign currency gains/(losses)	(306		)	4			(1,009		)	—			(1,311		)
Gain on disposal of subsidiaries	—			—			2,967			—			2,967
Other income/(expense), net	(5,828		)	(880		)	37			—			(6,671		)
Equity in net income/(loss) of other unconsolidated subsidiaries	(2,425		)	—			2,853			—			428
Earnings in investments in subsidiaries	471,827			—			—			(471,827		)	—
Income/(loss) from operations before taxes	283,099			85,428			483,734			(471,827		)	380,434
Income taxes (benefit)	(29,501		)	13,354			75,614			—			59,467
Net income attributable to noncontrolling interests	—			—			(8,367		)	—			(8,367		)
Net income/(loss) attributable to Darling	$	312,600		$	72,074		$	399,753		$	(471,827	)	$	312,600

Condensed Consolidating Statements of Operations

For the year ended December 29, 2018

(in thousands) 

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Net sales	$	541,499		$	1,338,376		$	1,738,427		$	(230,576	)	$	3,387,726
Cost and expenses:
Cost of sales and operating expenses	422,028			1,080,420			1,374,502			(230,576		)	2,646,374
Loss (gain) on sale of assets	(86		)	(184		)	979			—			709
Selling, general and administrative expenses	149,715			46,199			113,350			—			309,264
Restructuring and impairment charges	—			—			14,965			—			14,965
Depreciation and amortization	48,941			107,581			164,670			—			321,192
Total costs and expenses	620,598			1,234,016			1,668,466			(230,576		)	3,292,504
Equity in net income of Diamond Green Diesel	—			—			159,779			—			159,779
Operating income/(loss)	(79,099		)	104,360			229,740			—			255,001
Interest expense	(56,832		)	7,397			(36,994		)	—			(86,429		)
Debt extinguishment costs	(15,635		)	—			(7,874		)	—			(23,509		)
Foreign currency gains/(losses)	(431		)	(103		)	(5,897		)	—			(6,431		)
Gain/(loss) on sale of subsidiaries	(15,583		)	—			3,038			—			(12,545		)
Other income/(expense), net	(18,487		)	(1,019		)	11,944			—			(7,562		)
Equity in net income/(loss) of unconsolidated subsidiaries	(2,622		)	—			2,072			—			(550		)
Earnings in investments in subsidiaries	270,943			—			—			(270,943		)	—
Income/(loss) from operations before taxes	82,254			110,635			196,029			(270,943		)	117,975
Income taxes (benefit)	(19,242		)	11,282			19,991			—			12,031
Net income attributable to noncontrolling interests	—			—			(4,448		)	—			(4,448		)
Net income/(loss) attributable to Darling	$	101,496		$	99,353		$	171,590		$	(270,943	)	$	101,496

Condensed Consolidating Statements of Operations

For the year ended December 30, 2017

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Net sales	$	545,699		$	1,464,920		$	1,893,304		$	(241,672	)	$	3,662,251
Cost and expenses:
Cost of sales and operating expenses	429,983			1,198,528			1,488,841			(241,672		)	2,875,680
Loss (gain) on sale of assets	(302		)	(257		)	322			—			(237		)
Selling, general and administrative expenses	150,880			55,053			137,569			—			343,502
Depreciation and amortization	42,366			106,406			153,328			—			302,100
Total costs and expenses	622,927			1,359,730			1,780,060			(241,672		)	3,521,045
Equity in net income of Diamond Green Diesel	—			—			28,239			—			28,239
Operating income/(loss)	(77,228		)	105,190			141,483			—			169,445
Interest expense	(55,336		)	15,818			(49,408		)	—			(88,926		)
Foreign currency gains/(losses)	(234		)	114			(6,778		)	—			(6,898		)
Loss on sale of subsidiaries	—			—			(885		)	—			(885		)
Other income/(expense), net	(14,651		)	37			5,813			—			(8,801		)
Equity in net income/(loss) of unconsolidated subsidiary	(1,847		)	—			2,112			—			265
Earnings in investments in subsidiaries	438,580			—			—			(438,580		)	—
Income/(loss) from operations before taxes	289,284			121,159			92,337			(438,580		)	64,200
Income taxes (benefit)	160,816			(130,508		)	(99,462		)	—			(69,154		)
Net income attributable to noncontrolling interests	—			—			(4,886		)	—			(4,886		)
Net income/(loss) attributable to Darling	$	128,468		$	251,667		$	186,913		$	(438,580	)	$	128,468

Condensed Consolidating Statements of Comprehensive Income/(Loss)

For the year ended December 28, 2019

(in thousands)

	Parent		Guarantors		Non-guarantors			Eliminations			Consolidated
Net income	$	320,967	$	72,074	$	399,753		$	(471,827	)	$	320,967
Other comprehensive income/(loss), net of tax:
Foreign currency translation	837		—		(12,771		)	—			(11,934		)
Pension adjustments	4,287		—		(2,752		)	—			1,535
Corn option derivative adjustments	278		—		—			—			278
Heating oil derivative adjustments	—		—		(3,141		)	—			(3,141		)
Foreign exchange derivative adjustments	—		—		(3,723		)	—			(3,723		)
Total other comprehensive income/(loss), net of tax	5,402		—		(22,387		)	—			(16,985		)
Total comprehensive income/(loss)	326,369		72,074		377,366			(471,827		)	303,982
Comprehensive income attributable to noncontrolling interests	—		—		8,690			—			$	8,690
Comprehensive income/(loss) attributable to Darling	$	326,369	$	72,074	$	368,676		$	(471,827	)	$	295,292

Condensed Consolidating Statements of Comprehensive Income/(Loss)

For the year ended December 29, 2018

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Net income	$	105,944		$	99,353		$	171,590		$	(270,943	)	$	105,944
Other comprehensive income/(loss), net of tax:
Foreign currency translation	1,724			(53,387		)	(35,811		)	—			(87,474		)
Pension adjustments	(4,184		)	—			1,454			—			(2,730		)
Natural gas swap derivative adjustments	23			—			—			—			23
Corn option derivative adjustments	(1,687		)	—			—			—			(1,687		)
Foreign exchange derivative adjustments	—			—			1,081			—			1,081
Total other comprehensive income, net of tax	(4,124		)	(53,387		)	(33,276		)	—			(90,787		)
Total comprehensive income/(loss)	$	101,820		$	45,966		$	138,314		$	(270,943	)	$	15,157
Comprehensive income attributable to noncontrolling interests	—			—			3,894			—			3,894
Comprehensive income/(loss) attributable to Darling	$	101,820		$	45,966		$	134,420		$	(270,943	)	$	11,263

Condensed Consolidating Statements of Comprehensive Income/(Loss)

For the year ended December 30, 2017

(in thousands)

	Parent			Guarantors		Non-guarantors		Eliminations			Consolidated
Net income	$	133,354		$	251,667	$	186,913	$	(438,580	)	$	133,354
Other comprehensive income/(loss), net of tax:
Foreign currency translation	—			—		121,810		—			121,810
Pension adjustments	4,797			—		1,032		—			5,829
Natural gas swap derivative adjustments	(18		)	—		—		—			(18		)
Corn option derivative adjustments	(1,078		)	—		—		—			(1,078		)
Total other comprehensive income/(loss), net of tax	3,701			—		122,842		—			126,543
Total comprehensive income/(loss)	$	137,055		$	251,667	$	309,755	$	(438,580	)	$	259,897
Comprehensive income attributable to noncontrolling interests	—			—		947		—			947
Comprehensive income/(loss) attributable to Darling	$	137,055		$	251,667	$	308,808	$	(438,580	)	$	258,950

Condensed Consolidating Statements of Cash Flows

For the year ended December 28, 2019

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	320,967		$	72,074		$	399,753		$	(471,827	)	$	320,967
Earnings in investments in subsidiaries	(471,827		)	—			—			471,827			—
Other operating cash flows	244,255			5,020			(207,621		)	—			41,654
Net cash provided by operating activities	93,395			77,094			192,132			—			362,621
Cash flows from investing activities:
Capital expenditures	(113,632		)	(94,659		)	(151,207		)	—			(359,498		)
Acquisitions, net of cash acquired	(1,157		)	—			(274		)	—			(1,431		)
Investment in subsidiaries and affiliates	(2,393		)	(393		)	—			786			(2,000		)
Proceeds from sale of investment in subsidiary	—			—			3,671			—			3,671
Note receivable from affiliates	50,164			—			(50,164		)	—			—
Gross proceeds from sale of property, plant and equipment and other assets	1,034			12,459			4,742			—			18,235
Proceeds from insurance settlements	1,493			5,107			—			—			6,600
Payments related to routes and other intangibles	(131		)	—			(3,520		)	—			(3,651		)
Net cash provide/(used) in investing activities	(64,622		)	(77,486		)	(196,752		)	786			(338,074		)
Cash flows from financing activities:
Proceeds from long-term debt	500,000			—			17,606			—			517,606
Payments on long-term debt	(545,872		)	(7		)	(35,284		)	—			(581,163		)
Borrowings from revolving credit facility	281,000			—			188,227			—			469,227
Payments on revolving credit facility	(242,000		)	—			(219,669		)	—			(461,669		)
Net overdraft financing	8,358			—			30,009			—			38,367
Deferred loan costs	(7,027		)	—			—			—			(7,027		)
Issuance of common stock	39			—			—			—			39
Repurchase of common stock	(19,260		)	—			—			—			(19,260		)
Contributions from parent	—			393			393			(786		)	—
Minimum withholding taxes paid on stock awards	(4,455		)	—			(17		)	—			(4,472		)
Distributions to noncontrolling interests	—			—			(6,533		)	—			(6,533		)
Net cash provided/(used) in financing activities	(29,217		)	386			(25,268		)	(786		)	(54,885		)
Effect of exchange rate changes on cash and cash equivalent	—			—			(3,986		)	—			(3,986		)
Net increase/(decrease) in cash, cash equivalents and restricted cash	(444		)	(6		)	(33,874		)	—			(34,324		)
Cash, cash equivalents and restricted cash at beginning of year	1,098			32			106,239			—			107,369
Cash, cash equivalents and restricted cash at end of year	$	654		$	26		$	72,365		$	—		$	73,045

Condensed Consolidating Statements of Cash Flows

For the year ended December 29, 2018

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income/(loss)	$	105,944		$	99,353		$	171,590		$	(270,943	)	$	105,944
Earnings in investments in subsidiaries	(270,943		)	—			—			270,943			—
Other operating cash flows	323,903			(81,561		)	50,329			—			292,671
Net cash provided by operating activities	158,904			17,792			221,919			—			398,615
Cash flows from investing activities:
Capital expenditures	(115,004		)	(90,402		)	(116,490		)	—			(321,896		)
Acquisitions, net of cash acquired	(100,500		)	—			(7,227		)	—			(107,727		)
Investment in subsidiaries and affiliates	(12,250		)	(198,880		)	—			198,880			(12,250		)
Proceeds from sale of investment in subsidiary	79,955			—			2,805			—			82,760
Note receivable from affiliates	—			266,880			(266,880		)	—			—
Gross proceeds from sale of property, plant and equipment and other assets	2,125			1,146			16,057			—			19,328
Proceeds from insurance settlements	750			503			—			—			1,253
Payments related to routes and other intangibles	(299		)	—			(3,584		)	—			(3,883		)
Net cash provided/(used) in investing activities	(145,223		)	(20,753		)	(375,319		)	198,880			(342,415		)
Cash flows from financing activities:
Proceeds from long-term debt	—			—			624,620			—			624,620
Payments on long-term debt	(15,116		)	—			(671,512		)	—			(686,628		)
Borrowings from revolving credit facility	351,000			—			192,898			—			543,898
Payments on revolving credit facility	(351,000		)	—			(159,974		)	—			(510,974		)
Net overdraft financing	3,558			—			(98		)	—			3,460
Deferred loan costs	(824		)	—			(8,844		)	—			(9,668		)
Issuances of common stock	182			—			—			—			182
Contributions from parent	—			—			198,880			(198,880		)	—
Minimum withholding taxes paid on stock awards	(2,210		)	—			(5		)	—			(2,215		)
Distributions to noncontrolling interest	—			—			(10,257		)	—			(10,257		)
Net cash provided/(used) in financing activities	(14,410		)	—			165,708			(198,880		)	(47,582		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(8,165		)	—			(8,165		)
Net increase/(decrease) in cash, cash equivalents and restricted cash	(729		)	(2,961		)	4,143			—			453
Cash, cash equivalents and restricted cash at beginning of year	1,827			2,993			102,096			—			106,916
Cash, cash equivalents and restricted cash at end of year	$	1,098		$	32		$	106,239		$	—		$	107,369

Condensed Consolidating Statements of Cash Flows

For the year ended December 30, 2017

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income/(loss)	$	133,354		$	251,667		$	186,913		$	(438,580	)	$	133,354
Earnings in investments in subsidiaries	(438,580		)	—			—			438,580			—
Other operating cash flows	489,302			(240,494		)	28,274			—			277,082
Net cash provided/(used) by operating activities	184,076			11,173			215,187			—			410,436
Cash flows from investing activities:
Capital expenditures	(83,520		)	(74,384		)	(116,264		)	—			(274,168		)
Acquisitions, net of cash acquired	—			(12,144		)	—			—			(12,144		)
Investment in subsidiaries and affiliates	(6,309		)	(13,386		)	—			14,945			(4,750		)
Note receivable from affiliates	—			82,000			(82,000		)	—			—
Gross proceeds from sale of property, plant and equipment and other assets	2,577			3,980			1,533			—			8,090
Proceeds from insurance settlements	—			—			6,054			—			6,054
Payments related to routes and other intangibles	(7,135		)	—			—			—			(7,135		)
Net cash provided/(used) in investing activities	(94,387		)	(13,934		)	(190,677		)	14,945			(284,053		)
Cash flows from financing activities:
Proceeds from long-term debt	—			—			33,401			—			33,401
Payments on long-term debt	(79,706		)	—			(69,917		)	—			(149,623		)
Borrowing from revolving credit facility	170,000			—			29,495			—			199,495
Payments on revolving credit facility	(170,000		)	—			(34,935		)	—			(204,935		)
Net overdraft financing	—			—			(714		)	—			(714		)
Deferred loan costs	(6,717		)	—			—			—			(6,717		)
Issuances of common stock	22			—			—			—			22
Contributions from parent	—			—			14,945			(14,945		)	—
Minimum withholding taxes paid on stock awards	(3,034		)	—			(15		)	—			(3,049		)
Deductions to noncontrolling interest	—			—			(17,451		)	—			(17,451		)
Distributions to noncontrolling interests	—			—			(5,281		)	—			(5,281		)
Net cash provided/(used) in financing activities	(89,435		)	—			(50,472		)	(14,945		)	(154,852		)
Effect of exchange rate changes on cash and cash equivalents	—			—			20,528			—			20,528
Net increase/(decrease) in cash, cash equivalents and restricted cash	254			(2,761		)	(5,434		)	—			(7,941		)
Cash, cash equivalents and restricted cash at beginning of year	1,573			5,754			107,530			—			114,857
Cash, cash equivalents and restricted cash at end of year	$	1,827		$	2,993		$	102,096		$	—		$	106,916