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 and food residuals collection businesses, the Rothsay ingredients business, the ingredients and specialty products businesses conducted by Darling Ingredients International under the Sonac name (proteins, fats, and plasma 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 gelatin and collagen hydrolysates 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 biofuel business conducted under the Dar Pro® and Rothsay names (ii) the bioenergy business conducted by Darling Ingredients International under the Ecoson and Rendac names and (iii) the Company's investment in the DGD Joint Venture.

Business Segments (in thousands):



	Feed Ingredients		Food Ingredients			Fuel Ingredients		Corporate			Total
Three Months Ended June 30, 2018
Net Sales	$	498,823	$	276,729		$	71,094	$	—		$	846,646
Cost of sales and operating expenses	370,788		224,836			57,377		—			653,001
Gross Margin	128,035		51,893			13,717		—			193,645

Selling, general and administrative expense	43,947		22,190			164		12,257			78,558
Restructuring and impairment charges	—		14,965			—		—			14,965
Depreciation and amortization	46,823		20,388			8,537		2,706			78,454
Segment operating income/(loss)	37,265		(5,650		)	5,016		(14,963		)	21,668

Equity in net income of unconsolidated subsidiaries	150		—			15,086		—			15,236
Segment income/(loss)	37,415		(5,650		)	20,102		(14,963		)	36,904

Total other expense											(64,359		)
Loss before income taxes											$	(27,455	)



	Feed Ingredients		Food Ingredients		Fuel Ingredients		Corporate			Total
Three Months Ended July 1, 2017
Net Sales	$	549,119	$	278,409	$	67,402	$	—		$	894,930
Cost of sales and operating expenses	422,202		222,362		54,680		—			699,244
Gross Margin	126,917		56,047		12,722		—			195,686

Selling, general and administrative expense	42,875		26,703		2,873		12,081			84,532
Depreciation and amortization	44,354		18,184		7,715		2,737			72,990
Segment operating income/(loss)	39,688		11,160		2,134		(14,818		)	38,164

Equity in net income of unconsolidated subsidiaries	131		—		8,129		—			8,260
Segment income/(loss)	39,819		11,160		10,263		(14,818		)	46,424

Total other expense										(28,354		)
Income before income taxes										$	18,070



	Feed Ingredients		Food Ingredients		Fuel Ingredients			Corporate			Total
Six Months Ended June 30, 2018
Net Sales	$	984,621	$	582,249	$	155,150		$	—		$	1,722,020
Cost of sales and operating expenses	739,876		474,021		117,203			—			1,331,100
Gross Margin	244,745		108,228		37,947			—			390,920

Selling, general and administrative expense	92,212		46,051		(1,234		)	28,431			165,460
Restructuring and impairment charges	—		14,965		—			—			14,965
Depreciation and amortization	93,612		41,028		17,008			5,425			157,073
Segment operating income/(loss)	58,921		6,184		22,173			(33,856		)	53,422

Equity in net income of unconsolidated subsidiaries	105		—		112,285			—			112,390
Segment income/(loss)	59,026		6,184		134,458			(33,856		)	165,812

Total other expense											(91,480		)
Income before income taxes											$	74,332

Segment assets at June 30, 2018	$	2,498,165	$	1,441,030	$	767,659		$	150,062		$	4,856,916



	Feed Ingredients		Food Ingredients		Fuel Ingredients		Corporate			Total
Six Months Ended July 1, 2017
Net Sales	$	1,101,743	$	544,635	$	127,062	$	—		$	1,773,440
Cost of sales and operating expenses	854,778		431,754		100,678		—			1,387,210
Gross Margin	246,965		112,881		26,384		—			386,230

Selling, general and administrative expense	87,712		51,680		6,136		25,927			171,455
Depreciation and amortization	88,073		35,785		14,560		5,686			144,104
Segment operating income/(loss)	71,180		25,416		5,688		(31,613		)	70,671

Equity in net income of unconsolidated subsidiaries	240		—		8,726		—			8,966
Segment income/(loss)	71,420		25,416		14,414		(31,613		)	79,637

Total other expense										(52,351		)
Income before income taxes										$	27,286

Segment assets at December 30, 2017	$	2,614,545	$	1,499,027	$	688,890	$	155,763		$	4,958,225