Business Segments

6 Months Ended

Jul. 02, 2022

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, Darling Canada, 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 2, 2022
Net Sales	$	1,170,347	$	369,181	$	110,660	$	—	$	1,650,188
Cost of sales and operating expenses	864,306		280,964		86,237		—		1,231,507
Gross Margin	306,041		88,217		24,423		—		418,681
Gain on sale of assets	(964)		(73)		(18)		—		(1,055)
Selling, general and administrative expenses	64,863		22,855		4,277		15,781		107,776
Restructuring and asset impairment charges	8,557		—		—		—		8,557
Acquisition and integration costs	—		—		—		5,358		5,358
Depreciation and amortization	68,938		14,449		6,936		2,790		93,113
Equity in net income of Diamond Green Diesel	—		—		73,680		—		73,680
Segment operating income/(loss)	164,647		50,986		86,908		(23,929)		278,612
Equity in net income of other unconsolidated subsidiaries	2,272		—		—		—		2,272
Segment income/(loss)	166,919		50,986		86,908		(23,929)		280,884
Total other expense									(28,722)
Income before income taxes									$	252,162

	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
Six Months Ended July 2, 2022
Net Sales	$	2,049,785	$	723,995	$	242,742	$	—	$	3,016,522
Cost of sales and operating expenses	1,509,829		551,276		190,979		—		2,252,084
Gross Margin	539,956		172,719		51,763		—		764,438
Gain on sale of assets	(1,305)		(82)		(57)		—		(1,444)
Selling, general and administrative expenses	121,072		49,699		8,197		30,840		209,808
Restructuring and asset impairment charges	8,557		—		—		—		8,557
Acquisition and integration costs	—		—		—		9,131		9,131
Depreciation and amortization	123,288		29,899		13,610		5,562		172,359
Equity in net income of Diamond Green Diesel	—		—		145,484		—		145,484
Segment operating income/(loss)	288,344		93,203		175,497		(45,533)		511,511
Equity in net income of other unconsolidated subsidiaries	3,632		—		—		—		3,632
Segment income/(loss)	291,976		93,203		175,497		(45,533)		515,143
Total other expense									(46,167)
Income before income taxes									$	468,976
Segment assets at July 2, 2022	$	4,036,660	$	1,189,677	$	2,144,238	$	656,111	$	8,026,686

	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 January 1, 2022	$	2,714,528	$	1,205,217	$	1,658,892	$	555,091	$	6,133,728