Guarantor Financial Information (Tables)

3 Months Ended

Mar. 28, 2020

Guarantor Financial Information [Abstract]

Guarantor Financial Information Condensed Consolidating Balance Sheet

Condensed Consolidated Balance Sheet

As of March 28, 2020

(in thousands)

	Parent		Guarantors			Non-guarantors		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	903	$	25		$	75,411	$	—		$	76,339
Restricted cash	103		—			3		—			106
Accounts receivable	47,852		663,967			545,669		(859,788		)	397,700
Inventories	24,028		97,781			259,623		—			381,432
Income taxes refundable	1,378		—			1,728		—			3,106
Prepaid expenses	17,927		2,281			24,899		—			45,107
Other current assets	4,950		(3,346		)	44,906		(20,240		)	26,270
Total current assets	97,141		760,708			952,239		(880,028		)	930,060
Investment in subsidiaries	5,509,606		1,283,699			844,042		(7,637,347		)	—
Property, plant and equipment, net	432,561		521,784			809,775		—			1,764,120
Intangible assets, net	42,993		163,064			291,722		—			497,779
Goodwill	49,902		490,748			661,942		—			1,202,592
Investment in unconsolidated subsidiaries	—		—			802,184		—			802,184
Operating lease right-of-use asset	72,161		30,475			21,223		—			123,859
Other assets	34,715		134			57,336		(49,532		)	42,653
Deferred taxes	—		—			14,532		—			14,532
	$	6,239,079	$	3,250,612		$	4,454,995	$	(8,566,907	)	$	5,377,779
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of long-term debt	$	50,004	$	11		$	56,622	$	(20,240	)	$	86,397
Accounts payable	887,354		23,026			160,990		(859,774		)	211,596
Income taxes payable	919		—			7,674		—			8,593
Current operating lease liability	19,774		10,592			7,106		—			37,472
Accrued expenses	97,602		26,190			183,910		(14		)	307,688
Total current liabilities	1,055,653		59,819			416,302		(880,028		)	651,746
Long-term debt, net of current portion	1,139,898		27			574,465		(49,532		)	1,664,858
Long-term operating lease liability	57,796		19,462			13,992		—			91,250
Other noncurrent liabilities	76,714		—			34,431		—			111,145
Deferred income taxes	131,000		—			119,338		—			250,338
Total liabilities	2,461,061		79,308			1,158,528		(929,560		)	2,769,337
Total stockholders’ equity	3,778,018		3,171,304			3,296,467		(7,637,347		)	2,608,442
	$	6,239,079	$	3,250,612		$	4,454,995	$	(8,566,907	)	$	5,377,779

Condensed Consolidated 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	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 subsidiary	—			—			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

Guarantor Financial Information Condensed Consolidating Statements Of Operations

Condensed Consolidated Statements of Operations

For the three months ended March 28, 2020

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Net sales	$	180,919		$	310,301		$	405,025		$	(43,403	)	$	852,842
Cost and expenses:
Cost of sales and operating expenses	144,142			246,320			299,849			(43,403		)	646,908
Loss/(gain) on sale of assets	(38		)	63			36			—			61
Selling, general and administrative expenses	48,074			12,517			35,602			—			96,193
Depreciation and amortization	17,272			26,593			40,806			—			84,671
Total costs and expenses	209,450			285,493			376,293			(43,403		)	827,833
Equity in net income of Diamond Green Diesel	—			—			97,820			—			97,820
Operating income/(loss)	(28,531		)	24,808			126,552			—			122,829
Interest expense	(13,775		)	(58		)	(5,257		)	—			(19,090		)
Foreign currency gains/(losses)	(326		)	(24		)	2,014			—			1,664
Other expense, net	(1,540		)	(339		)	(2		)	—			(1,881		)
Equity in net income of other unconsolidated subsidiaries	—			—			869			—			869
Earnings in investments in subsidiaries	121,939			—			—			(121,939		)	—
Income/(loss) before taxes	77,767			24,387			124,176			(121,939		)	104,391
Income tax expense/(benefit)	(7,743		)	4,275			21,768			—			18,300
Net income attributable to noncontrolling interests	—			—			(581		)	—			(581		)
Net income/(loss) attributable to Darling	$	85,510		$	20,112		$	101,827		$	(121,939	)	$	85,510

Condensed Consolidated Statements of Operations

For the three months ended March 30, 2019

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Net sales	$	160,230		$	329,991		$	403,911		$	(59,028	)	$	835,104
Cost and expenses:
Cost of sales and operating expenses	128,324			271,671			309,946			(59,028		)	650,913
Loss (gain) on sale of assets	68			(4,477		)	159			—			(4,250		)
Selling, general and administrative expenses	47,423			11,947			25,633			—			85,003
Depreciation and amortization	14,373			26,112			38,679			—			79,164
Total costs and expenses	190,188			305,253			374,417			(59,028		)	810,830
Equity in net income of Diamond Green Diesel	—			—			24,277			—			24,277
Operating income/(loss)	(29,958		)	24,738			53,771			—			48,551
Interest expense	(14,027		)	(32		)	(5,817		)	—			(19,876		)
Foreign currency losses	(4		)	—			(728		)	—			(732		)
Other income/(expense), net	(1,567		)	(1,212		)	254			—			(2,525		)
Equity in net income/(loss) of other unconsolidated subsidiaries	(891		)	—			387			—			(504		)
Earnings in investments in subsidiaries	54,627			—			—			(54,627		)	—
Income/(loss) before taxes	8,180			23,494			47,867			(54,627		)	24,914
Income tax expense/(benefit)	(9,832		)	4,973			10,133			—			5,274
Net income attributable to noncontrolling interests	—			—			(1,628		)	—			(1,628		)
Net income/(loss) attributable to Darling	$	18,012		$	18,521		$	36,106		$	(54,627	)	$	18,012

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

Condensed Consolidated Statements of Comprehensive Income/(Loss)

For the three months ended March 28, 2020

(in thousands)

	Parent		Guarantors			Non-guarantors			Eliminations			Consolidated
Net income/(loss)	$	86,091	$	20,112		$	101,827		$	(121,939	)	$	86,091
Other comprehensive income/(loss), net of tax:
Foreign currency translation	651		(128,994		)	63,107			—			(65,236		)
Pension adjustments	518		—			130			—			648
Corn option derivative adjustments	136		—			—			—			136
Heating oil derivative adjustments	—		—			10,870			—			10,870
Foreign exchange derivative adjustments	—		—			(9,151		)	—			(9,151		)
Total other comprehensive income/(loss), net of tax	1,305		(128,994		)	64,956			—			(62,733		)
Total comprehensive income/(loss)	87,396		(108,882		)	166,783			(121,939		)	23,358
Total comprehensive loss attributable to noncontrolling interest	—		—			492			—			492
Total comprehensive income/(loss) attributable to Darling	$	87,396	$	(108,882	)	$	166,291		$	(121,939	)	$	22,866

Condensed Consolidated Statements of Comprehensive Income/(Loss)

For the three months ended March 30, 2019

(in thousands)

	Parent		Guarantors		Non-guarantors			Eliminations			Consolidated
Net income/(loss)	$	19,640	$	18,521	$	36,106		$	(54,627	)	$	19,640
Other comprehensive income/(loss), net of tax:
Foreign currency translation	507		—		(5,393		)	—			(4,886		)
Pension adjustments	767		—		91			—			858
Foreign exchange derivative adjustment	—		—		(1,937		)	—			(1,937		)
Total other comprehensive income/(loss), net of tax	1,274		—		(7,239		)	—			(5,965		)
Total comprehensive income/(loss)	20,914		18,521		28,867			(54,627		)	13,675
Total comprehensive income attributable to noncontrolling interest	—		—		3,387			—			3,387
Total comprehensive income/(loss) attributable to Darling	$	20,914	$	18,521	$	25,480		$	(54,627	)	$	10,288

Guarantor Financial Information Condensed Consolidating Statements Of Cash Flows

Condensed Consolidated Statements of Cash Flows

For the three months ended March 28, 2020

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income/(loss)	$	86,091		$	20,112		$	101,827		$	(121,939	)	$	86,091
Earnings in investments in subsidiaries	(121,939		)	—			—			121,939			—
Other operating cash flows	19,102			(3,545		)	(67,102		)	—			(51,545		)
Net cash provided/(used) by operating activities	(16,746		)	16,567			34,725			—			34,546
Cash flows from investing activities:
Capital expenditures	(14,829		)	(16,695		)	(30,075		)	—			(61,599		)
Investment in subsidiaries and affiliates	(13,534		)	—			—			13,534			—
Gross proceeds from sale of property, plant and equipment and other assets	87			129			163			—			379
Payments related to routes and other intangibles	(3,416		)	—			—			—			(3,416		)
Net cash provided/(used) in investing activities	(31,692		)	(16,566		)	(29,912		)	13,534			(64,636		)
Cash flows from financing activities:
Proceeds for long-term debt	—			—			8,264			—			8,264
Payments on long-term debt	(1		)	(2		)	(8,635		)	—			(8,638		)
Borrowings from revolving facilities	176,000			—			43,933			—			219,933
Payments on revolving facilities	(71,000		)	—			(29,782		)	—			(100,782		)
Net cash overdraft financing	3,084			—			(12,678		)	—			(9,594		)
Issuances of common stock	67			—			—			—			67
Repurchase of treasury stock	(55,044		)	—			—			—			(55,044		)
Contributions from parent	—			—			13,534			(13,534		)	—
Minimum withholding taxes paid on stock awards	(4,316		)	—			(12		)	—			(4,328		)
Acquisition of noncontrolling interest	—			—			(8,784		)	—			(8,784		)
Distributions to noncontrolling interests	—			—			(688		)	—			(688		)
Net cash provided/(used) in financing activities	48,790			(2		)	5,152			(13,534		)	40,406
Effect of exchange rate changes on cash	—			—			(6,916		)	—			(6,916		)
Net increase/(decrease) in cash, cash equivalents and restricted cash	352			(1		)	3,049			—			3,400
Cash, cash equivalents and restricted cash at beginning of period	654			26			72,365			—			73,045
Cash, cash equivalents and restricted cash at end of period	$	1,006		$	25		$	75,414		$	—		$	76,445

Condensed Consolidated Statements of Cash Flows

For the three months ended March 30, 2019

(in thousands)

	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income/(loss)	$	19,640		$	18,521		$	36,106		$	(54,627	)	$	19,640
Earnings in investments in subsidiaries	(54,627		)	—			—			54,627			—
Other operating cash flows	52,135			(2,881		)	(20,293		)	—			28,961
Net cash provided by operating activities	17,148			15,640			15,813			—			48,601
Cash flows from investing activities:
Capital expenditures	(34,303		)	(23,498		)	(26,468		)	—			(84,269		)
Acquisitions	(1,157		)	—			(274		)	—			(1,431		)
Gross proceeds from sale of property, plant and equipment and other assets	132			7,016			720			—			7,868
Proceeds from insurance settlements	—			845			—			—			845
Payments related to routes and other intangibles	—			—			(2,778		)	—			(2,778		)
Net cash used in investing activities	(35,328		)	(15,637		)	(28,800		)	—			(79,765		)
Cash flows from financing activities:
Proceeds for long-term debt	—			—			2,138			—			2,138
Payments on long-term debt	—			(2		)	(10,972		)	—			(10,974		)
Borrowings from revolving credit facility	50,000			—			106,829			—			156,829
Payments on revolving credit facility	(37,000		)	—			(101,147		)	—			(138,147		)
Net cash overdraft financing	8,350			—			6,175			—			14,525
Issuances of common stock	12			—			—			—			12
Minimum withholding taxes paid on stock awards	(3,190		)	—			—			—			(3,190		)
Net cash provided/(used) by financing activities	18,172			(2		)	3,023			—			21,193
Effect of exchange rate changes on cash	—			—			(1,575		)	—			(1,575		)
Net increase/(decrease) in cash, cash equivalents and restricted cash	(8		)	1			(11,539		)	—			(11,546		)
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	$	1,090		$	33		$	94,700		$	—		$	95,823