Comprehensive Income

12 Months Ended

Jan. 02, 2021

COMPREHENSIVE INCOME/(LOSS)

The Company follows FASB authoritative guidance for reporting and presentation of comprehensive income or loss and its components. Other comprehensive income (loss) is derived from adjustments that reflect pension adjustments, natural gas swap adjustments, corn option adjustments, soybean meal forward adjustments, foreign exchange forward and option adjustments, heating oil swap adjustments and foreign currency translation adjustments. In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU amends Topic 220, Income Statement - Reporting Comprehensive Income, which allowed for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The ASU is effective for fiscal years beginning after December 15, 2018; however, the Company elected to early adopt ASU No. 2018-02 during the quarter ended March 31, 2018. The adoption resulted in a $4.8 million reclassification from accumulated other comprehensive loss to retained earnings resulting from the Tax Cuts and Jobs Act.

In fiscal 2020 and fiscal 2019, the Company's DGD Joint Venture entered into heating oil derivatives that were deemed to be cash flow hedges. As a result, the Company has accrued the other comprehensive income/(loss) portion belonging to Darling with an offset to the investment in DGD as required by FASB ASC Topic 323.

The components of other comprehensive income/(loss) and the related tax impacts for the years ended January 2, 2021, December 28, 2019 and December 29, 2018 are as follows (in thousands):


	Before-Tax		Tax (Expense)		Net-of-Tax
	Amount		or Benefit		Amount
Year Ended December 29, 2018
Defined Benefit Pension Plans
Actuarial (loss)/gain recognized	$	(7,901)	$	2,015	$	(5,886)
Amortization of actuarial loss	3,543		(910)		2,633
Actuarial prior service cost recognized	(11)		3		(8)
Amortization of prior service costs	35		(9)		26
Amortization of curtailment	498		—		498
Amortization of settlement	(3)		1		(2)
Other	9		—		9
Total defined benefit pension plans	(3,830)		1,100		(2,730)
Natural gas swap derivatives
Gain/(loss) reclassified to net income	14		(3)		11
Gain/(loss) recognized in other comprehensive income (loss)	16		(4)		12
Total natural gas derivatives	30		(7)		23
Soybean meal option derivatives
Gain/(loss) reclassified to net income	(8)		2		(6)


Gain/(loss) recognized in other comprehensive income (loss)	8		(2)		6
Total soybean meal derivatives	0		0		0
Corn option derivatives
Gain/(loss) reclassified to net income	(1,912)		493		(1,419)
Gain/(loss) recognized in other comprehensive income (loss)	(361)		93		(268)
Total corn options	(2,273)		586		(1,687)
Foreign exchange derivatives

Gain/(loss) recognized in other comprehensive income	1,637		(556)		1,081
Total foreign exchange derivatives	1,637		(556)		1,081

Foreign currency translation	(89,198)		1,724		(87,474)
Other comprehensive income/(loss)	$	(93,634)	$	2,847	$	(90,787)
Year Ended December 28, 2019
Defined Benefit Pension Plans
Actuarial (loss)/gain recognized	$	(2,202)	$	211	$	(1,991)
Amortization of actuarial loss	4,571		(1,143)		3,428
Actuarial prior service cost recognized	9		(2)		7
Amortization of prior service costs	34		(9)		25

Amortization of settlement	66		(16)		50
Other	16		—		16
Total defined benefit pension plans	2,494		(959)		1,535








Heating oil swap derivatives

Gain/(loss) recognized in other comprehensive income (loss)	(4,188)		1,047		(3,141)
Total heating oil derivatives	(4,188)		1,047		(3,141)
Corn option derivatives
Gain/(loss) reclassified to net income	422		(106)		316
Gain/(loss) recognized in other comprehensive income (loss)	(51)		13		(38)
Total corn options	371		(93)		278
Foreign exchange derivatives
Gain/(loss) reclassified to net income	1,345		(442)		903

Gain/(loss) recognized in other comprehensive income (loss)	(6,887)		2,261		(4,626)
Total foreign exchange derivatives	(5,542)		1,819		(3,723)
Foreign currency translation	(12,771)		837		(11,934)
Other comprehensive income/(loss)	$	(19,636)	$	2,651	$	(16,985)
Year Ended January 2, 2021
Defined Benefit Pension Plans
Actuarial (loss)/gain recognized	$	(9,470)	$	2,547	$	(6,923)
Amortization of actuarial loss	3,405		(862)		2,543

Amortization of prior service costs	33		(8)		25
Amortization of curtailment	69		(15)		54
Amortization of settlement	(30)		7		(23)
Other	11		—		11
Total defined benefit pension plans	(5,982)		1,669		(4,313)
Heating oil swap derivatives

Gain/(loss) recognized in other comprehensive income (loss)	1,457		(353)		1,104
Total heating oil derivatives	1,457		(353)		1,104
Soybean meal option derivatives
Gain/(loss) reclassified to net income	49		(12)		37
Gain/(loss) recognized in other comprehensive income (loss)	349		(89)		260
Total soybean meal derivatives	398		(101)		297
Corn option derivatives
Gain/(loss) reclassified to net income	123		(31)		92
Gain/(loss) recognized in other comprehensive income (loss)	(7,803)		1,980		(5,823)
Total corn options	(7,680)		1,949		(5,731)
Foreign exchange derivatives
Gain/(loss) reclassified to net income	(13,809)		5,114		(8,695)
Gain/(loss) recognized in other comprehensive income (loss)	24,325		(9,009)		15,316
Total foreign exchange derivatives	10,516		(3,895)		6,621
Foreign currency translation	73,845		(3,525)		70,320
Other comprehensive income/(loss)	$	72,554	$	(4,256)	$	68,298


	Fiscal Year Ended
	January 2, 2021		December 28, 2019		December 29, 2018		Statement of Operations Classification
Derivative instruments
Soybean meal option derivatives	$	(49)	$	—	$	8	Net sales
Foreign Exchange derivatives	13,809		(1,345)		—		Net sales
Natural gas swap derivatives	—		—		(14)		Cost of sales and operating expenses
Corn option derivatives	(123)		(422)		1,912		Cost of sales and operating expenses

	13,637		(1,767)		1,906		Total before tax
	(5,071)		548		(492)		Income taxes
	8,566		(1,219)		1,414		Net of tax
Defined benefit pension plans
Amortization of prior service cost	$	(33)	$	(34)	$	(35)	(a)
Amortization of actuarial loss	(3,405)		(4,571)		(3,543)		(a)
Amortization of curtailment	(69)		—		(498)		(a)
Amortization of settlement	30		(66)		3		(a)
	(3,477)		(4,671)		(4,073)		Total before tax
	878		1,168		918		Income taxes
	(2,599)		(3,503)		(3,155)		Net of tax
Total reclassifications	$	5,967	$	(4,722)	$	(1,741)	Net of tax

(a)These items are included in the computation of net periodic pension cost. See Note 15 Employee Benefit Plans for additional information.

The following table presents changes in each component of accumulated comprehensive loss as of January 2, 2021 as follows (in thousands):


	Fiscal Year Ended January 2, 2021
	Foreign Currency		Derivative		Defined Benefit
	Translation		Instruments		Pension Plans		Total
Accumulated Other Comprehensive loss December 28, 2019, attributable to Darling, net of tax	$	(282,338)	$	(5,505)	$	(34,004)	$	(321,847)
Other comprehensive loss before reclassifications	70,320		10,857		(6,912)		74,265
Amounts reclassified from accumulated other comprehensive income	—		(8,566)		2,599		(5,967)

Net current-period other comprehensive income/(loss)	70,320		2,291		(4,313)		68,298
Noncontrolling interest	(1,116)		—		—		(1,116)
Accumulated Other Comprehensive loss January 2, 2021, attributable to Darling, net of tax	$	(210,902)	$	(3,214)	$	(38,317)	$	(252,433)