Business Segments

9 Months Ended

Oct. 01, 2022

Segment Reporting [Abstract]

Business Segments

Business SegmentsThe 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 and FASA names (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 1, 2022
Net Sales	$	1,273,142	$	347,902	$	126,555	$	—	$	1,747,599
Cost of sales and operating expenses	1,012,899		256,557		101,781		—		1,371,237
Gross Margin	260,243		91,345		24,774		—		376,362
Gain on sale of assets	(2,290)		(809)		(17)		—		(3,116)
Selling, general and administrative expenses	63,973		23,909		1,724		15,474		105,080
Acquisition and integration costs	—		—		—		4,503		4,503
Depreciation and amortization	80,679		14,408		7,284		2,607		104,978
Equity in net income of Diamond Green Diesel	—		—		103,414		—		103,414
Segment operating income/(loss)	117,881		53,837		119,197		(22,584)		268,331
Equity in net income of other unconsolidated subsidiaries	2,301		—		—		—		2,301
Segment income/(loss)	120,182		53,837		119,197		(22,584)		270,632
Total other expense									(43,116)
Income before income taxes									$	227,516

	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
Nine Months Ended October 1, 2022
Net Sales	$	3,322,927	$	1,071,897	$	369,297	$	—	$	4,764,121
Cost of sales and operating expenses	2,522,728		807,833		292,760		—		3,623,321
Gross Margin	800,199		264,064		76,537		—		1,140,800
Gain on sale of assets	(3,595)		(891)		(74)		—		(4,560)
Selling, general and administrative expenses	185,045		73,608		9,921		46,314		314,888
Restructuring and asset impairment charges	8,557		—		—		—		8,557
Acquisition and integration costs	—		—		—		13,634		13,634
Depreciation and amortization	203,967		44,307		20,894		8,169		277,337
Equity in net income of Diamond Green Diesel	—		—		248,898		—		248,898
Segment operating income/(loss)	406,225		147,040		294,694		(68,117)		779,842
Equity in net income of other unconsolidated subsidiaries	5,933		—		—		—		5,933
Segment income/(loss)	412,158		147,040		294,694		(68,117)		785,775
Total other expense									(89,283)
Income before income taxes									$	696,492
Segment assets at October 1, 2022	$	4,324,489	$	1,192,518	$	2,140,922	$	1,150,825	$	8,808,754

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