Business Segments

6 Months Ended

Jun. 27, 2020

Segment Reporting [Abstract]

Business Segments

Business Segments

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 June 27, 2020
Net Sales	$	503,690	$	278,934	$	66,049	$	—	$	848,673
Cost of sales and operating expenses	367,902		220,159		44,286		—		632,347
Gross Margin	135,788		58,775		21,763		—		216,326
Loss/(gain) on sale of assets	76		(48)		(1)		—		27
Selling, general and administrative expenses	50,484		22,564		3,953		13,192		90,193
Depreciation and amortization	52,683		19,972		7,980		2,675		83,310
Equity in net income of Diamond Green Diesel	—		—		63,492		—		63,492
Segment operating income/(loss)	32,545		16,287		73,323		(15,867)		106,288
Equity in net income of other unconsolidated subsidiaries	692		—		—		—		692
Segment income/(loss)	33,237		16,287		73,323		(15,867)		106,980
Total other expense									(20,539)
Income before income taxes									$	86,441

	Feed Ingredients		Food Ingredients		Fuel Ingredients		Corporate		Total
Three Months Ended June 29, 2019
Net Sales	$	487,447	$	274,835	$	65,042	$	—	$	827,324
Cost of sales and operating expenses	376,955		214,444		53,317		—		644,716
Gross Margin	110,492		60,391		11,725		—		182,608
Gain on sale of assets	(524)		(13,379)		(23)		—		(13,926)
Selling, general and administrative expenses	46,465		23,431		425		10,696		81,017
Depreciation and amortization	48,720		19,861		8,362		2,543		79,486
Equity in net income of Diamond Green Diesel	—		—		38,093		—		38,093
Segment operating income/(loss)	15,831		30,478		41,054		(13,239)		74,124
Equity in net Income of other unconsolidated subsidiaries	82		—		—		—		82
Segment income/(loss)	15,913		30,478		41,054		(13,239)		74,206
Total other expense									(35,386)
Income before income taxes									$	38,820

	Feed Ingredients		Food Ingredients		Fuel Ingredients		Corporate		Total
Six Months Ended June 27, 2020
Net Sales	$	1,016,315	$	549,228	$	135,972	$	—	$	1,701,515
Cost of sales and operating expenses	756,355		425,589		97,311		—		1,279,255
Gross Margin	259,960		123,639		38,661		—		422,260
Loss/(gain) on sale of assets	126		(46)		8		—		88
Selling, general and administrative expense	104,431		48,040		5,607		28,308		186,386
Depreciation and amortization	106,204		40,277		16,072		5,428		167,981
Equity in net income of Diamond Green Diesel	—		—		161,312		—		161,312
Segment operating income/(loss)	49,199		35,368		178,286		(33,736)		229,117
Equity in net income of other unconsolidated subsidiaries	1,561		—		—		—		1,561
Segment income/(loss)	50,760		35,368		178,286		(33,736)		230,678
Total other expense									(39,846)
Income before income taxes									$	190,832
Segment assets at June 27, 2020	$	2,600,884	$	1,325,739	$	1,090,623	$	309,908	$	5,327,154

	Feed Ingredients		Food Ingredients		Fuel Ingredients		Corporate		Total
Six Months Ended June 29, 2019
Net Sales	$	983,266	$	553,999	$	125,163	$	—	$	1,662,428
Cost of sales and operating expenses	763,814		428,448		103,367		—		1,295,629
Gross Margin	219,452		125,551		21,796		—		366,799
Loss/(gain) on sale of assets	(4,914)		(13,265)		3		—		(18,176)
Selling, general and administrative expense	95,296		45,318		(329)		25,735		166,020
Depreciation and amortization	98,089		39,372		16,160		5,029		158,650
Equity in net income of Diamond Green Diesel	—		—		62,370		—		62,370
Segment operating income/(loss)	30,981		54,126		68,332		(30,764)		122,675
Equity in net loss of other unconsolidated subsidiaries	(422)		—		—		—		(422)
Segment income/(loss)	30,559		54,126		68,332		(30,764)		122,253
Total other expense									(58,519)
Income before income taxes									$	63,734
Segment assets at December 28, 2019	$	2,653,363	$	1,345,526	$	1,087,701	$	258,668	$	5,345,258