Business Segments

9 Months Ended

Oct. 02, 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 October 2, 2021
Net Sales	$	769,626	$	311,856	$	104,434	$	—	$	1,185,916
Cost of sales and operating expenses	553,662		241,308		64,634		—		859,604
Gross Margin	215,964		70,548		39,800		—		326,312
Gain on sale of assets	(229)		(8)		(264)		—		(501)
Selling, general and administrative expenses	54,997		24,417		4,481		13,380		97,275
Depreciation and amortization	53,824		14,933		6,361		2,708		77,826
Equity in net income of Diamond Green Diesel	—		—		53,951		—		53,951
Segment operating income/(loss)	107,372		31,206		83,173		(16,088)		205,663
Equity in net income of other unconsolidated subsidiaries	1,647		—		—		—		1,647
Segment income/(loss)	109,019		31,206		83,173		(16,088)		207,310
Total other expense									(16,467)
Income before income taxes									$	190,843

	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
Nine Months Ended October 2, 2021
Net Sales	$	2,193,002	$	926,952	$	311,347	$	—	$	3,431,301
Cost of sales and operating expenses	1,584,667		706,260		219,534		—		2,510,461
Gross Margin	608,335		220,692		91,813		—		920,840
Gain on sale of assets	(490)		(1)		(302)		—		(793)
Selling, general and administrative expenses	162,594		75,150		13,822		42,239		293,805
Restructuring and asset impairment charges	—		—		778		—		778
Depreciation and amortization	162,404		45,666		19,214		8,298		235,582
Equity in net income of Diamond Green Diesel	—		—		281,964		—		281,964
Segment operating income/(loss)	283,827		99,877		340,265		(50,537)		673,432
Equity in net income of other unconsolidated subsidiaries	4,199		—		—		—		4,199
Segment income/(loss)	288,026		99,877		340,265		(50,537)		677,631
Total other expense									(51,614)
Income before income taxes									$	626,017
Segment assets at October 2, 2021	$	2,787,376	$	1,213,831	$	1,413,049	$	511,464	$	5,925,720

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