Business Segments

6 Months Ended

Jul. 03, 2021

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, the Rothsay ingredients business, and the ingredients and specialty products businesses conducted by Darling Ingredients International under the Sonac name (proteins, fats, and blood 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.

Fuel Ingredients

The Company's Fuel Ingredients segment consists of (i) the Company's investment in the DGD Joint Venture and (ii) 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 July 3, 2021
Net Sales	$	771,932	$	317,031	$	109,706	$	—	$	1,198,669
Cost of sales and operating expenses	556,424		238,539		83,110		—		878,073
Gross Margin	215,508		78,492		26,596		—		320,596
Gain on sale of assets	(122)		(48)		(58)		—		(228)
Selling, general and administrative expenses	54,977		25,542		4,474		14,139		99,132
Depreciation and amortization	53,971		15,850		6,698		2,703		79,222
Equity in net income of Diamond Green Diesel	—		—		125,788		—		125,788
Segment operating income/(loss)	106,682		37,148		141,270		(16,842)		268,258
Equity in net income of other unconsolidated subsidiaries	1,940		—		—		—		1,940
Segment income/(loss)	108,622		37,148		141,270		(16,842)		270,198
Total other expense									(17,150)
Income before income taxes									$	253,048

	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
Six Months Ended July 3, 2021
Net Sales	$	1,423,376	$	615,096	$	206,913	$	—	$	2,245,385
Cost of sales and operating expenses	1,031,005		464,952		154,900		—		1,650,857
Gross Margin	392,371		150,144		52,013		—		594,528
Loss/(gain) on sale of assets	(261)		7		(38)		—		(292)
Selling, general and administrative expenses	107,597		50,733		9,341		28,859		196,530
Restructuring and asset impairment charges	—		—		778		—		778
Depreciation and amortization	108,580		30,733		12,853		5,590		157,756
Equity in net income of Diamond Green Diesel	—		—		228,013		—		228,013
Segment operating income/(loss)	176,455		68,671		257,092		(34,449)		467,769
Equity in net income of other unconsolidated subsidiaries	2,552		—		—		—		2,552
Segment income/(loss)	179,007		68,671		257,092		(34,449)		470,321
Total other expense									(35,147)
Income before income taxes									$	435,174
Segment assets at July 3, 2021	$	2,748,192	$	1,253,856	$	1,348,148	$	483,127	$	5,833,323

	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 expenses	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 January 2, 2021	$	2,708,922	$	1,335,769	$	1,160,132	$	408,508	$	5,613,331