BUSINESS SEGMENTS | BUSINESS SEGMENTS In 2024, the Company adopted Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, on a retrospective basis. The Company sells its products through a global network of over 260 locations across five continents within three industry segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. The Company's segments are determined as those operations whose results are reviewed regularly by the chief operating decision maker (“CODM”), who is the Company's Chief Executive Officer, in deciding how to allocate resources and assess performance. Each segment is organized and managed based upon the nature of the Company's markets and customers and consists of similar products and services. The following is a description of each segment's business operations: 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, the Company’s Canada ingredients business, 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 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. The performance of the operating segments is evaluated based on segment profit (loss) which includes all revenues, operating expenses (excluding certain amortization of intangibles), and selling, general and administrative expenses incurred at all operating locations and excludes general corporate expenses. The CODM uses segment profit (loss) as the measure to make resource (including financial or capital resources) allocation decisions for each segment, predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a quarterly basis when evaluating performance for each segment and making decisions about capital allocation. Accounting policies have been applied consistently by all segments within the Company for all reporting periods. Intercompany revenue and expense amounts have been eliminated within each segment to report on the basis that management uses internally for evaluating segment performance. Business Segments (in thousands): Feed Ingredients Food Ingredients Fuel Ingredients Corporate (a) Total Fiscal Year Ended December 28, 2024 Total net sales $ 3,675,609 $ 1,489,101 $ 550,465 $ — $ 5,715,175 Cost of sales and operating expenses 2,886,125 1,115,348 435,864 — 4,437,337 Gross Margin 789,484 373,753 114,601 — 1,277,838 Gain on sale of assets (669) (1,758) (1,730) — (4,157) Selling, general and administrative expenses 279,095 119,604 32,370 61,036 492,105 Restructuring and asset impairment charges 3,671 2,123 — — 5,794 Depreciation and amortization 350,141 109,102 35,876 8,706 503,825 Acquisition and integration costs — — — 7,842 7,842 Change in fair value of contingent consideration (46,706) — — — (46,706) Equity in net income of Diamond Green Diesel — — 149,082 — 149,082 Segment operating income/(loss) 203,952 144,682 197,167 (77,584) 468,217 Equity in net income of other unconsolidated subsidiaries 11,994 — — — 11,994 Segment income/(loss) 215,946 144,682 197,167 (77,584) 480,211 Total other expense (b) (232,703) Income before income taxes $ 247,508 Segment assets at December 28, 2024 $ 4,100,841 $ 1,997,827 $ 2,489,149 $ 1,482,656 $ 10,070,473 (a) Included in corporate activities are general corporate expenses and the amortization of intangibles. Assets of corporate activities include cash, unallocated prepaid expenses, deferred tax assets, prepaid pension, and miscellaneous other assets. (b) Total other expense includes interest expense, foreign currency gain (loss) and other income (expense). Interest expense and foreign currency gain (loss) are separately disclosed on our Statement of Operations. Other income/(expense) consists of interest income of approximately $16.0 million, casualty gain of approximately $20.7 million, other pension expense excluding service cost of approximately $(1.8) million and other income (expense) of approximately $(12.6) million. Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Fiscal Year Ended December 30, 2023 Total net sales $ 4,472,592 $ 1,752,065 $ 563,423 $ — $ 6,788,080 Cost of sales and operating expenses 3,385,859 1,310,581 446,620 — 5,143,060 Gross Margin 1,086,733 441,484 116,803 — 1,645,020 Loss/(gain) on sale of assets 814 (8,144) (91) — (7,421) Selling, general and administrative expenses 310,363 128,464 23,543 80,164 542,534 Restructuring and asset impairment charges 4,026 14,527 — — 18,553 Depreciation and amortization 360,249 94,991 34,466 12,309 502,015 Acquisition and integration costs — — — 13,884 13,884 Change in fair value of contingent consideration (7,891) — — — (7,891) Equity in net income of Diamond Green Diesel — — 366,380 — 366,380 Segment operating income/(loss) 419,172 211,646 425,265 (106,357) 949,726 Equity in net income of other unconsolidated subsidiaries 5,011 — — — 5,011 Segment income/(loss) 424,183 211,646 425,265 (106,357) 954,737 Total other expense (c) (234,780) Income before income taxes $ 719,957 Segment assets at December 30, 2023 $ 4,702,593 $ 2,646,702 $ 2,589,145 $ 1,122,644 $ 11,061,084 (c) Total other expense includes interest expense, foreign currency gain (loss) and other income (expense). Interest expense and foreign currency gain (loss) are separately disclosed on our Statement of Operations. Other income (expense) consists of interest income of approximately $16.4 million, casualty gain of approximately $7.8 million, other pension expense excluding service cost of approximately $(1.5) million and other expense of approximately $(6.4) million. Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Fiscal Year Ended December 31, 2022 Total net sales $ 4,539,000 $ 1,459,630 $ 533,574 $ — $ 6,532,204 Cost of sales and operating expenses 3,473,506 1,102,250 426,853 — 5,002,609 Gross Margin 1,065,494 357,380 106,721 — 1,529,595 Gain on sale of assets (3,426) (1,008) (60) — (4,494) Selling, general and administrative expenses 258,781 101,681 13,690 62,456 436,608 Restructuring and asset impairment charges 8,557 21,109 — — 29,666 Acquisition and integration costs — — — 16,372 16,372 Depreciation and amortization 295,249 59,029 29,500 10,943 394,721 Equity in net income of Diamond Green Diesel — — 372,346 — 372,346 Segment operating income/(loss) 506,333 176,569 435,937 (89,771) 1,029,068 Equity in net income of other unconsolidated subsidiaries 5,102 — — — 5,102 Segment income/(loss) 511,435 176,569 435,937 (89,771) 1,034,170 Total other expense (d) (140,452) Income before income taxes $ 893,718 (d) Total other expense includes interest expense, foreign currency gain (loss) and other income (expense). Interest expense and foreign currency gain (loss) are separately disclosed on our Statement of Operations. Other income (expense) consists of interest income of approximately $5.3 million, casualty loss of approximately $(4.6) million, other pension income excluding service cost of approximately $1.1 million and other expense of approximately $(5.4) million. Business Segment Property, Plant and Equipment (in thousands): December 28, December 30, December 31, Capital expenditures for the year ended: Feed Ingredients $ 219,541 $ 413,831 $ 270,157 Food Ingredients 81,808 92,704 72,301 Fuel Ingredients 27,230 39,053 37,568 Corporate 3,886 9,892 11,283 Total (a) $ 332,465 $ 555,480 $ 391,309 (a) Excludes capital assets acquired in acquisitions in fiscal 2024, 2023 and 2022 of approximately $37.4 million, $155.5 million and $588.8 million, respectively. Long-lived assets related to the Company’s operations by geography were as follows (in thousands): FY 2024 FY 2023 Long-Lived Assets Long-Lived Assets North America $ 5,518,153 $ 5,667,606 Europe 1,344,033 1,329,466 China 115,152 116,698 South America 1,636,246 2,072,840 Other 17,453 18,808 Total $ 8,631,037 $ 9,205,418 |