Guarantor Financial Information | Guarantor Financial Information The Company's 5.375% Notes and 4.75% Notes (see Note 7) are guaranteed on a senior unsecured basis by the following Notes Guarantors, each of which is a 100% directly or indirectly owned subsidiary of Darling and which constitute all of Darling's existing restricted subsidiaries that are Credit Agreement Guarantors (other than Darling's foreign subsidiaries, Darling Global Finance B.V., which issued the 4.75% Notes and is discussed further below, or any receivables entity): Darling National, Griffin and its subsidiary Craig Protein, Darling AWS LLC, Terra Holding Company, Darling Global Holdings Inc., Darling Northstar LLC, TRS, EV Acquisition, Inc., Rousselot Inc., Rousselot Dubuque Inc., Sonac USA LLC and Rousselot Peabody Inc. In addition, the 4.75% Notes, which were issued by Darling Global Finance B.V., a wholly-owned indirect subsidiary of Darling, are guaranteed on a senior unsecured basis by Darling. The Notes Guarantors, and Darling in the case of the 4.75% Notes, fully and unconditionally guaranteed the 5.375% Notes and 4.75% Notes on a joint and several basis. The following financial statements present condensed consolidating financial data for (i) Darling, (ii) the combined Notes Guarantors, (iii) the combined other subsidiaries of the Company that did not guarantee the 5.375% Notes or the 4.75% Notes (the “Non-guarantors”), and (iv) eliminations necessary to arrive at the Company's consolidated financial statements, which include condensed consolidated balance sheets as of April 1, 2017 and December 31, 2016 , and the condensed consolidating statements of operations, the condensed consolidating statements of comprehensive income and the condensed consolidating statements of cash flows for the three months ended April 1, 2017 and April 2, 2016 . Separate financial information is not presented for Darling Global Finance B.V. since it was formed as a special purpose finance subsidiary for the purpose of issuing the 4.75% Notes and therefore does not have any substantial operations or assets. Condensed Consolidating Balance Sheet As of April 1, 2017 (in thousands) Parent Guarantors Non-guarantors Eliminations Consolidated ASSETS Cash and cash equivalents $ 1,492 $ 2,548 $ 134,840 $ — $ 138,880 Restricted cash 103 — 179 — 282 Accounts receivable 37,683 132,374 374,206 (154,399 ) 389,864 Inventories 15,485 86,262 240,367 — 342,114 Income taxes refundable 3,035 — 3,943 — 6,978 Prepaid expenses 12,066 2,210 18,576 — 32,852 Other current assets 4,861 2,568 10,060 (1,158 ) 16,331 Total current assets 74,725 225,962 782,171 (155,557 ) 927,301 Investment in subsidiaries 4,334,518 1,154,398 909,263 (6,398,179 ) — Property, plant and equipment, net 240,775 497,348 794,460 — 1,532,583 Intangible assets, net 12,935 283,060 401,825 — 697,820 Goodwill 21,860 549,956 661,455 — 1,233,271 Investment in unconsolidated subsidiaries 3,315 — 267,606 — 270,921 Other assets 34,987 396,174 161,982 (551,005 ) 42,138 Deferred taxes — — 15,627 — 15,627 $ 4,723,115 $ 3,106,898 $ 3,994,389 $ (7,104,741 ) $ 4,719,661 LIABILITIES AND STOCKHOLDERS’ EQUITY Current portion of long-term debt $ 5,712 $ — $ 20,411 $ (1,158 ) $ 24,965 Accounts payable 174,121 22,212 134,387 (149,281 ) 181,439 Income taxes payable 2,140 373 9,553 — 12,066 Accrued expenses 64,391 26,697 147,354 (5,118 ) 233,324 Total current liabilities 246,364 49,282 311,705 (155,557 ) 451,794 Long-term debt, net of current portion 1,107,240 — 1,171,260 (551,004 ) 1,727,496 Other noncurrent liabilities 62,795 — 32,925 — 95,720 Deferred income taxes 135,404 — 205,410 — 340,814 Total liabilities 1,551,803 49,282 1,721,300 (706,561 ) 2,615,824 Total stockholders’ equity 3,171,312 3,057,616 2,273,089 (6,398,180 ) 2,103,837 $ 4,723,115 $ 3,106,898 $ 3,994,389 $ (7,104,741 ) $ 4,719,661 Condensed Consolidating Balance Sheet As of December 31, 2016 (in thousands) Parent Guarantors Non-guarantors Eliminations Consolidated ASSETS Cash and cash equivalents $ 1,470 $ 5,754 $ 107,340 $ — $ 114,564 Restricted cash 103 — 190 — 293 Accounts receivable 39,209 97,220 339,251 (87,283 ) 388,397 Inventories 16,573 85,890 228,352 — 330,815 Income taxes refundable 3,566 — 3,913 — 7,479 Prepaid expenses 11,152 2,769 16,063 — 29,984 Other current assets 5,859 3,165 19,221 (6,475 ) 21,770 Total current assets 77,932 194,798 714,330 (93,758 ) 893,302 Investment in subsidiaries 4,296,200 1,154,398 909,263 (6,359,861 ) — Property, plant and equipment, net 233,456 497,312 784,807 — 1,515,575 Intangible assets, net 13,746 291,724 406,457 — 711,927 Goodwill 21,860 549,960 654,073 — 1,225,893 Investment in unconsolidated subsidiary 1,438 — 291,279 — 292,717 Other assets 36,063 396,222 160,505 (549,177 ) 43,613 Deferred income taxes — — 14,990 — 14,990 $ 4,680,695 $ 3,084,414 $ 3,935,704 $ (7,002,796 ) $ 4,698,017 LIABILITIES AND STOCKHOLDERS’ EQUITY Current portion of long-term debt $ 4,220 $ — $ 25,502 $ (6,475 ) $ 23,247 Accounts payable 116,075 18,142 130,718 (84,040 ) 180,895 Income taxes payable (383 ) 373 4,923 — 4,913 Accrued expenses 86,581 33,834 125,624 (3,243 ) 242,796 Total current liabilities 206,493 52,349 286,767 (93,758 ) 451,851 Long-term debt, net of current portion 1,109,523 — 1,167,349 (549,176 ) 1,727,696 Other noncurrent liabilities 63,072 — 33,042 — 96,114 Deferred income taxes 140,543 — 205,591 — 346,134 Total liabilities 1,519,631 52,349 1,692,749 (642,934 ) 2,621,795 Total stockholders’ equity 3,161,064 3,032,065 2,242,955 (6,359,862 ) 2,076,222 $ 4,680,695 $ 3,084,414 $ 3,935,704 $ (7,002,796 ) $ 4,698,017 Condensed Consolidating Statements of Operations For the three months ended April 1, 2017 (in thousands) Parent Guarantors Non-guarantors Eliminations Consolidated Net sales $ 136,157 $ 360,184 $ 441,350 $ (57,619 ) $ 880,072 Cost and expenses: Cost of sales and operating expenses 109,663 292,771 344,812 (57,619 ) 689,627 Selling, general and administrative expenses 39,816 14,177 33,924 — 87,917 Acquisition and integration costs — — — — — Depreciation and amortization 10,285 25,436 35,393 — 71,114 Total costs and expenses 159,764 332,384 414,129 (57,619 ) 848,658 Operating income/(loss) (23,607 ) 27,800 27,221 — 31,414 Interest expense (13,586 ) 4,023 (12,117 ) — (21,680 ) Foreign currency gains/(losses) (6 ) (25 ) (233 ) — (264 ) Other expense, net (2,901 ) 32 1,909 — (960 ) Equity in net income/(loss) of unconsolidated subsidiaries (373 ) — 1,079 — 706 Earnings in investments in subsidiaries 38,318 — — (38,318 ) — Income/(loss) before taxes (2,155 ) 31,830 17,859 (38,318 ) 9,216 Income taxes (benefit) (7,984 ) 6,279 3,523 — 1,818 Net income attributable to noncontrolling interests — — (1,569 ) — (1,569 ) Net income/(loss) attributable to Darling $ 5,829 $ 25,551 $ 12,767 $ (38,318 ) $ 5,829 Condensed Consolidating Statements of Operations For the three months ended April 2, 2016 (in thousands) Parent Guarantors Non-guarantors Eliminations Consolidated Net sales $ 108,371 $ 303,765 $ 411,037 $ (43,532 ) $ 779,641 Cost and expenses: Cost of sales and operating expenses 89,483 236,336 316,606 (43,532 ) 598,893 Selling, general and administrative expenses 35,893 13,136 32,440 — 81,469 Acquisition and integration costs — — 331 — 331 Depreciation and amortization 11,425 26,808 34,023 — 72,256 Total costs and expenses 136,801 276,280 383,400 (43,532 ) 752,949 Operating income/(loss) (28,430 ) 27,485 27,637 — 26,692 Interest expense (15,522 ) 4,377 (12,756 ) — (23,901 ) Foreign currency gains/(losses) (31 ) 165 (2,737 ) — (2,603 ) Other expense, net (3,325 ) (5 ) 2,025 — (1,305 ) Equity in net loss of unconsolidated subsidiaries (97 ) — 5,740 — 5,643 Earnings in investments in subsidiaries 28,971 — — (28,971 ) — Income/(loss) before taxes (18,434 ) 32,022 19,909 (28,971 ) 4,526 Income taxes (benefit) (19,513 ) 13,181 8,195 — 1,863 Net income attributable to noncontrolling interests — — (1,584 ) — (1,584 ) Net income/(loss) attributable to Darling $ 1,079 $ 18,841 $ 10,130 $ (28,971 ) $ 1,079 Condensed Consolidating Statements of Comprehensive Income/(Loss) For the three months ended April 1, 2017 (in thousands) Parent Guarantors Non-guarantors Eliminations Consolidated Net income/(loss) $ 7,398 $ 25,551 $ 12,767 $ (38,318 ) $ 7,398 Other comprehensive income/(loss), net of tax: Foreign currency translation — — 15,679 — 15,679 Pension adjustments 641 — 118 — 759 Corn option derivative adjustments (1,102 ) — — — (1,102 ) Total other comprehensive income/(loss), net of tax (461 ) — 15,797 — 15,336 Total comprehensive income/(loss) 6,937 25,551 28,564 (38,318 ) 22,734 Total comprehensive income attributable to noncontrolling interest — — 1,247 — 1,247 Total comprehensive income/(loss) attributable to Darling $ 6,937 $ 25,551 $ 27,317 $ (38,318 ) $ 21,487 Condensed Consolidating Statements of Comprehensive Income/(Loss) For the three months ended April 2, 2016 (in thousands) Parent Guarantors Non-guarantors Eliminations Consolidated Net income/(loss) $ 2,663 $ 18,841 $ 10,130 $ (28,971 ) $ 2,663 Other comprehensive income/(loss), net of tax: Foreign currency translation — — 57,531 — 57,531 Pension adjustments 658 — 68 — 726 Corn option derivative adjustments (706 ) — — — (706 ) Total other comprehensive income/(loss), net of tax (48 ) — 57,599 — 57,551 Total comprehensive income/(loss) 2,615 18,841 67,729 (28,971 ) 60,214 Total comprehensive income attributable to noncontrolling interest — — (420 ) — (420 ) Total comprehensive income/(loss) attributable to Darling $ 2,615 $ 18,841 $ 68,149 $ (28,971 ) $ 60,634 Condensed Consolidating Statements of Cash Flows For the three months ended April 1, 2017 (in thousands) Parent Guarantors Non-guarantors Eliminations Consolidated Cash flows from operating activities: Net income/(loss) $ 7,398 $ 25,551 $ 12,767 $ (38,318 ) $ 7,398 Earnings in investments in subsidiaries (38,318 ) — — 38,318 — Other operating cash flows 56,236 (9,676 ) 40,511 — 87,071 Net cash provided by operating activities 25,316 15,875 53,278 — 94,469 Cash flows from investing activities: Capital expenditures (18,732 ) (19,689 ) (23,871 ) — (62,292 ) Investment in subsidiaries and affiliates (2,250 ) — — — (2,250 ) Gross proceeds from sale of property, plant and equipment and other assets 304 608 428 — 1,340 Proceeds from insurance settlements — — 3,301 — 3,301 Net cash used in investing activities (20,678 ) (19,081 ) (20,142 ) — (59,901 ) Cash flows from financing activities: Proceeds for long-term debt — — 8,649 — 8,649 Payments on long-term debt (1,522 ) — (7,743 ) — (9,265 ) Borrowings from revolving facilities 47,000 — — — 47,000 Payments on revolving facilities (47,000 ) — (5,327 ) — (52,327 ) Net cash overdraft financing — — (1,077 ) — (1,077 ) Deferred loan costs (1,135 ) — — — (1,135 ) Issuances of common stock 22 — — — 22 Minimum withholding taxes paid on stock awards (1,981 ) — (14 ) — (1,995 ) Distributions to noncontrolling interests — — (433 ) — (433 ) Net cash used in financing activities (4,616 ) — (5,945 ) — (10,561 ) Effect of exchange rate changes on cash — — 309 — 309 Net increase/(decrease) in cash and cash equivalents 22 (3,206 ) 27,500 — 24,316 Cash and cash equivalents at beginning of year 1,470 5,754 107,340 — 114,564 Cash and cash equivalents at end of year $ 1,492 $ 2,548 $ 134,840 $ — $ 138,880 Condensed Consolidating Statements of Cash Flows For the three months ended April 2, 2016 (in thousands) Parent Guarantors Non-guarantors Eliminations Consolidated Cash flows from operating activities: Net income/(loss) $ 2,663 $ 18,841 $ 10,130 $ (28,971 ) $ 2,663 Earnings in investments in subsidiaries (28,971 ) — — 28,971 — Other operating cash flows 34,573 (4,953 ) 12,760 — 42,380 Net cash provided by operating activities 8,265 13,888 22,890 — 45,043 Cash flows from investing activities: Capital expenditures (11,065 ) (21,764 ) (20,546 ) — (53,375 ) Acquisitions — — (8,511 ) — (8,511 ) Note receivable from affiliates — — (5,963 ) 5,963 — Gross proceeds from sale of property, plant and equipment and other assets 945 — 479 — 1,424 Proceeds from insurance settlements — — 1,181 — 1,181 Net cash used in investing activities (10,120 ) (21,764 ) (33,360 ) 5,963 (59,281 ) Cash flows from financing activities: Proceeds for long-term debt — — 8,760 — 8,760 Payments on long-term debt (5,291 ) — (10,916 ) — (16,207 ) Borrowings from revolving credit facility 33,000 — — — 33,000 Payments on revolving credit facility (21,000 ) — — — (21,000 ) Borrowings from affiliates — 5,963 — (5,963 ) — Issuances of common stock 45 — — — 45 Repurchase of treasury stock (5,000 ) — — — (5,000 ) Minimum withholding taxes paid on stock awards (1,663 ) — (125 ) — (1,788 ) Excess tax benefits from stock-based compensation (446 ) — — — (446 ) Net cash used in financing activities (355 ) 5,963 (2,281 ) (5,963 ) (2,636 ) Effect of exchange rate changes on cash — — 7,316 — 7,316 Net increase/(decrease) in cash and cash equivalents (2,210 ) (1,913 ) (5,435 ) — (9,558 ) Cash and cash equivalents at beginning of year 3,443 3,993 149,448 — 156,884 Cash and cash equivalents at end of year $ 1,233 $ 2,080 $ 144,013 $ — $ 147,326 |