Business Segments

3 Months Ended

Apr. 01, 2023

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 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 and Gelnex names, (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 April 1, 2023
Net Sales	$	1,237,494	$	396,392	$	157,286	$	—	$	1,791,172
Cost of sales and operating expenses	950,072		290,115		126,786		—		1,366,973
Gross Margin	287,422		106,277		30,500		—		424,199
Loss/(gain) on sale of assets	(342)		(21)		36		—		(327)
Selling, general and administrative expenses	74,691		33,122		6,192		21,461		135,466
Restructuring and asset impairment charges	92		4,432		—		—		4,524
Acquisition and integration costs	—		—		—		7,022		7,022
Depreciation and amortization	90,320		14,473		8,393		2,820		116,006
Equity in net income of Diamond Green Diesel	—		—		94,337		—		94,337
Segment operating income/(loss)	122,661		54,271		110,216		(31,303)		255,845
Equity in net income of other unconsolidated subsidiaries	120		—		—		—		120
Segment income/(loss)	122,781		54,271		110,216		(31,303)		255,965
Total other expense									(39,136)
Income before income taxes									$	216,829
Segment assets at April 1, 2023	$	4,807,542	$	2,593,490	$	2,505,583	$	954,517	$	10,861,132

	Feed Ingredients		Food Ingredients		Fuel Ingredients		Corporate		Total
Three Months Ended April 2, 2022
Net Sales	$	879,438	$	354,814	$	132,082	$	—	$	1,366,334
Cost of sales and operating expenses	645,523		270,312		104,742		—		1,020,577
Gross Margin	233,915		84,502		27,340		—		345,757
Gain on sale of assets	(341)		(9)		(39)		—		(389)
Selling, general and administrative expenses	56,209		26,844		3,920		15,059		102,032
Acquisition and integration costs	—		—		—		3,773		3,773
Depreciation and amortization	54,350		15,450		6,674		2,772		79,246
Equity in net income of Diamond Green Diesel	—		—		71,804		—		71,804
Segment operating income/(loss)	123,697		42,217		88,589		(21,604)		232,899
Equity in net income of other unconsolidated subsidiaries	1,360		—		—		—		1,360
Segment income/(loss)	125,057		42,217		88,589		(21,604)		234,259
Total other expense									(17,445)
Income before income taxes									$	216,814
Segment assets at December 31, 2022	$	4,866,351	$	1,251,473	$	2,307,199	$	777,347	$	9,202,370