Business Segments

3 Months Ended

Mar. 28, 2020

The Company sells its products domestically and internationally, operating within three industry segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. The measure of segment income (loss) includes all revenues, operating expenses (excluding certain amortization of intangibles), and selling, general and administrative expenses incurred at all operating locations and excludes corporate activities.

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, 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, which primarily consists of an edible fat business.

Fuel Ingredients

The Company's Fuel Ingredients segment consists of (i) the portion of the Company's biofuel business related to its 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
Three Months Ended March 28, 2020
Net Sales	$	512,625	$	270,294	$	69,923	$	—		$	852,842
Cost of sales and operating expenses	388,453		205,430		53,025		—			646,908
Gross Margin	124,172		64,864		16,898		—			205,934

Loss on sale of assets	50		2		9		—			61
Selling, general and administrative expense	53,947		25,476		1,654		15,116			96,193
Depreciation and amortization	53,521		20,305		8,092		2,753			84,671
Equity in net income of Diamond Green Diesel	—		—		97,820		—			97,820
Segment operating income/(loss)	16,654		19,081		104,963		(17,869		)	122,829

Equity in net income of other unconsolidated subsidiaries	869		—		—		—			869
Segment income/(loss)	17,523		19,081		104,963		(17,869		)	123,698

Total other expense										(19,307		)
Income before income taxes										$	104,391

Segment assets at March 28, 2020	$	2,613,292	$	1,314,436	$	1,181,241	$	268,810		$	5,377,779



	Feed Ingredients			Food Ingredients		Fuel Ingredients			Corporate			Total
Three Months Ended March 30, 2019
Net Sales	$	495,819		$	279,164	$	60,121		$	—		$	835,104
Cost of sales and operating expenses	386,859			214,004		50,050			—			650,913
Gross Margin	108,960			65,160		10,071			—			184,191

Loss/(gain) on sale of assets	(4,391		)	114		27			—			(4,250		)
Selling, general and administrative expense	48,831			21,887		(754		)	15,039			85,003
Depreciation and amortization	49,369			19,511		7,798			2,486			79,164
Equity in net income of Diamond Green Diesel	—			—		24,277			—			24,277
Segment operating income/(loss)	15,151			23,648		27,277			(17,525		)	48,551

Equity in net loss of other unconsolidated subsidiaries	(504		)	—		—			—			(504		)
Segment income/(loss)	14,647			23,648		27,277			(17,525		)	48,047

Total other expense												(23,133		)
Income before income taxes												$	24,914

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