Business Segments

9 Months Ended

Sep. 26, 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 September 26, 2020
Net Sales	$	483,025	$	291,842	$	75,702	$	—	$	850,569
Cost of sales and operating expenses	361,576		226,745		50,047		—		638,368
Gross Margin	121,449		65,097		25,655		—		212,201
Loss/(gain) on sale of assets	167		16		(61)		—		122
Selling, general and administrative expenses	49,028		23,366		5,038		12,561		89,993
Depreciation and amortization	53,764		20,648		8,633		2,685		85,730
Equity in net income of Diamond Green Diesel	—		—		91,099		—		91,099
Segment operating income/(loss)	18,490		21,067		103,144		(15,246)		127,455
Equity in net income of other unconsolidated subsidiaries	906		—		—		—		906
Segment income/(loss)	19,396		21,067		103,144		(15,246)		128,361
Total other expense									(21,944)
Income before income taxes									$	106,417

	Feed Ingredients		Food Ingredients		Fuel Ingredients		Corporate		Total
Three Months Ended September 28, 2019
Net Sales	$	496,978	$	276,467	$	68,604	$	—	$	842,049
Cost of sales and operating expenses	379,792		214,643		58,488		—		652,923
Gross Margin	117,186		61,824		10,116		—		189,126
Loss/(gain) on sale of assets	(2,429)		(253)		13		—		(2,669)
Selling, general and administrative expenses	47,319		22,811		912		12,507		83,549
Depreciation and amortization	50,182		19,743		7,895		2,587		80,407
Equity in net income of Diamond Green Diesel	—		—		32,020		—		32,020
Segment operating income/(loss)	22,114		19,523		33,316		(15,094)		59,859
Equity in net loss of other unconsolidated subsidiaries	(665)		—		—		—		(665)
Segment income/(loss)	21,449		19,523		33,316		(15,094)		59,194
Total other expense									(21,507)
Income before income taxes									$	37,687

	Feed Ingredients		Food Ingredients		Fuel Ingredients		Corporate		Total
Nine Months Ended September 26, 2020
Net Sales	$	1,499,340	$	841,070	$	211,674	$	—	$	2,552,084
Cost of sales and operating expenses	1,117,931		652,334		147,358		—		1,917,623
Gross Margin	381,409		188,736		64,316		—		634,461
Loss/(gain) on sale of assets	293		(30)		(53)		—		210
Selling, general and administrative expense	153,459		71,406		10,645		40,869		276,379
Depreciation and amortization	159,968		60,925		24,705		8,113		253,711
Equity in net income of Diamond Green Diesel	—		—		252,411		—		252,411
Segment operating income/(loss)	67,689		56,435		281,430		(48,982)		356,572
Equity in net income of other unconsolidated subsidiaries	2,467		—		—		—		2,467
Segment income/(loss)	70,156		56,435		281,430		(48,982)		359,039
Total other expense									(61,790)
Income before income taxes									$	297,249
Segment assets at September 26, 2020	$	2,604,359	$	1,300,097	$	1,117,186	$	359,344	$	5,380,986

	Feed Ingredients		Food Ingredients		Fuel Ingredients		Corporate		Total
Nine Months Ended September 28, 2019
Net Sales	$	1,480,244	$	830,466	$	193,767	$	—	$	2,504,477
Cost of sales and operating expenses	1,143,606		643,091		161,855		—		1,948,552
Gross Margin	336,638		187,375		31,912		—		555,925
Loss/(gain) on sale of assets	(7,343)		(13,518)		16		—		(20,845)
Selling, general and administrative expense	142,615		68,129		583		38,242		249,569
Depreciation and amortization	148,271		59,115		24,055		7,616		239,057
Equity in net income of Diamond Green Diesel	—		—		94,390		—		94,390
Segment operating income/(loss)	53,095		73,649		101,648		(45,858)		182,534
Equity in net loss of other unconsolidated subsidiaries	(1,087)		—		—		—		(1,087)
Segment income/(loss)	52,008		73,649		101,648		(45,858)		181,447
Total other expense									(80,026)
Income before income taxes									$	101,421
Segment assets at December 28, 2019	$	2,653,363	$	1,345,526	$	1,087,701	$	258,668	$	5,345,258