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 investment in the DGD Joint Venture (ii) the Company's biofuel business conducted under the Dar Pro® and Rothsay names and (iii) 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 September 29, 2018
Net Sales	$	482,744		$	265,208	$	64,624		$	—		$	812,576
Cost of sales and operating expenses	383,846			210,697		53,558			—			648,101
Gross Margin	98,898			54,511		11,066			—			164,475

Selling, general and administrative expense	39,702			21,843		(2,822		)	8,724			67,447
Depreciation and amortization	47,321			19,697		9,370			2,454			78,842
Segment operating income/(loss)	11,875			12,971		4,518			(11,178		)	18,186

Equity in net loss of unconsolidated subsidiaries	(162		)	—		(2,630		)	—			(2,792		)
Segment income/(loss)	11,713			12,971		1,888			(11,178		)	15,394

Total other expense												(21,934		)
Loss before income taxes												$	(6,540	)



	Feed Ingredients		Food Ingredients		Fuel Ingredients			Corporate			Total
Three Months Ended September 30, 2017
Net Sales	$	575,543	$	298,863	$	61,856		$	—		$	936,262
Cost of sales and operating expenses	449,574		238,694		54,243			—			742,511
Gross Margin	125,969		60,169		7,613			—			193,751

Selling, general and administrative expense	44,841		25,556		(488		)	12,244			82,153
Depreciation and amortization	46,860		19,506		7,912			2,924			77,202
Segment operating income/(loss)	34,268		15,107		189			(15,168		)	34,396

Equity in net income of unconsolidated subsidiaries	523		—		7,180			—			7,703
Segment income/(loss)	34,791		15,107		7,369			(15,168		)	42,099

Total other expense											(27,119		)
Income before income taxes											$	14,980



	Feed Ingredients			Food Ingredients		Fuel Ingredients			Corporate			Total
Nine Months Ended September 29, 2018
Net Sales	$	1,467,365		$	847,457	$	219,774		$	—		$	2,534,596
Cost of sales and operating expenses	1,123,722			684,718		170,761			—			1,979,201
Gross Margin	343,643			162,739		49,013			—			555,395

Selling, general and administrative expense	131,914			67,894		(4,056		)	37,155			232,907
Restructuring and impairment charges	—			14,965		—			—			14,965
Depreciation and amortization	140,933			60,725		26,378			7,879			235,915
Segment operating income/(loss)	70,796			19,155		26,691			(45,034		)	71,608

Equity in net income/(loss) of unconsolidated subsidiaries	(57		)	—		109,655			—			109,598
Segment income/(loss)	70,739			19,155		136,346			(45,034		)	181,206

Total other expense												(113,414		)
Income before income taxes												$	67,792

Segment assets at September 29, 2018	$	2,517,315		$	1,378,880	$	762,652		$	146,364		$	4,805,211



	Feed Ingredients		Food Ingredients		Fuel Ingredients		Corporate			Total
Nine Months Ended September 30, 2017
Net Sales	$	1,677,286	$	843,498	$	188,918	$	—		$	2,709,702
Cost of sales and operating expenses	1,304,352		670,448		154,921		—			2,129,721
Gross Margin	372,934		173,050		33,997		—			579,981

Selling, general and administrative expense	132,553		77,236		5,648		38,171			253,608
Depreciation and amortization	134,933		55,291		22,472		8,610			221,306
Segment operating income/(loss)	105,448		40,523		5,877		(46,781		)	105,067

Equity in net income of unconsolidated subsidiaries	763		—		15,906		—			16,669
Segment income/(loss)	106,211		40,523		21,783		(46,781		)	121,736

Total other expense										(79,470		)
Income before income taxes										$	42,266

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