(Mark One)
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/X/ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2016
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OR
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/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934
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For the transition period from _______ to _______
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Delaware
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36-2495346
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(State or other jurisdiction
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(I.R.S. Employer
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of incorporation or organization)
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Identification Number)
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251 O'Connor Ridge Blvd., Suite 300
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Irving, Texas
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75038
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Exchange on Which Registered
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Common Stock $0.01 par value per share
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New York Stock Exchange (“NYSE”)
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Large accelerated filer
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X
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Page No.
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Fiscal
2016
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Fiscal
2015
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Fiscal
2014
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Net sales:
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Feed Ingredients
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$
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2,089,145
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61.5
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%
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$
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2,074,333
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61.1
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%
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$
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2,421,462
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61.2
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%
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Food Ingredients
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1,061,912
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31.2
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1,094,918
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32.2
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1,248,352
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31.6
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Fuel Ingredients
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247,058
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7.3
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228,195
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6.7
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286,629
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7.2
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Total
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$
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3,398,115
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100.0
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%
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$
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3,397,446
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100.0
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%
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$
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3,956,443
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100.0
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%
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•
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Sonac C3 processes animal by-products collected primarily from slaughterhouses, into proteins and fats for applications used in the pet food, feed, technical, biofuels and oleo-chemical markets. Oleo-chemical producers use fats to produce specialty ingredients used in paint, rubber, paper, concrete, plastics and a variety of other consumer and industrial products.
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Sonac Bone processes porcine bones into fat, bone protein, glue, bone ash and bone chips for the feed, pet food, food and gelatin industries.
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Sonac Blood processes bovine, porcine and ovine blood by separating blood into plasma and hemoglobin and produces specialized end products for application in the feed and pet food markets. Sonac Blood’s end products include plasma, fibrimex, globin and hemin.
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Our hides operations process hides and skins from beef and hog processors, respectively, into outputs used in commercial applications, such as the leather industry. We sell treated hides and skins to external customers, the majority of which are tanneries. BestHides sources, sorts and processes hides from slaughterhouses, renderers and traders in Western Europe, and has a leading position in the premium South German hides market. Fresh and salted hides and fresh skins are sold to tanneries, automotive companies, leather processors and to the shoe and furniture industries in Italy, Germany and China.
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Our fertilizer operations utilize finished products from our animal by-products division to manufacture organic fertilizers from ingredients approved by the U.S. Department of Agriculture (“USDA”) to be used in organic farming which contain no waste by-products (i.e., sludge or sewage waste). The Company's North American fertilizer products are predominantly sold to golf courses, sports facilities, organic farms and landscaping companies.
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CTH Casings harvests, sorts and sells hog and sheep casings for worldwide food markets, particularly sausage manufacturers, and harvests, processes and sells hog and beef bowel package items for global pharmaceutical, food and feed market segments. CTH holds a leading position in the highly fragmented global casings market.
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CTH Meat By-Products harvests, purchases and processes hog, sheep and beef meat by-products for customers in the global food and European pet food industries. In the meat by-products market, CTH is a major player with established sales networks in Europe and Asia.
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Sonac Heparin extracts crude heparin from hydrolyzed mucosa for application in the pharmaceutical industry.
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Sonac Fat primarily melts, refines and packages animal fat into food grade fat for the food markets.
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The Food and Drug Administration
(“FDA”), which regulates pharmaceutical products and food and feed safety. The FDA has promulgated rules prohibiting the use of mammalian proteins, with some exceptions, in feeds for cattle, sheep and other ruminant animals (21 C.F.R. 589.2000, referred to herein as the “BSE Feed Rule”) to prevent further spread of bovine spongiform encephalopathy, which is commonly referred to as "mad cow" disease (“BSE”). With respect to BSE in the United States, on October 26, 2009, the FDA began enforcing new regulations intended to further reduce the risk of spreading BSE (the “Enhanced BSE Rule”). These new regulations included amending the BSE Feed Rule to prohibit the use of tallow having more than 0.15% insoluble impurities in feed for cattle or other ruminant animals. In addition, the Enhanced BSE Rule prohibits the use of brain and spinal cord material from cattle aged 30 months and older or the carcasses of such cattle, if the brain and spinal cord are not removed, in the feed or food for all animals. Management believes we are in compliance with the provisions of these rules. In addition, the FDA is responsible for implementing and enforcing the Food Safety Modernization Act, which was signed into law on January 4, 2011, and gave FDA a series of powers intended to better protect human and animal health by adopting a modern, preventive and risk-based approach to food safety regulation. The FDA finalized major rules affecting the production, importation and transport of human and animal food. See Item 1A “Risk Factors - Our business may be affected by the impact of BSE and other food safety issues,” for more information regarding certain FDA rules that affect our business, including changes to the BSE Feed Rule and rules and regulations under the Food Safety Modernization Act.
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The
United States Department of Agriculture
(“USDA”), which has authority over meat, poultry, and egg products and inspects producers to ensure compliance with applicable laws and regulations. Within the USDA, two agencies exercise direct regulatory oversight of our activities:
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The
U.S. Environmental Protection Agency
(“EPA”), which regulates air and water discharges and hazardous and solid waste requirements among other environmental requirements, as well as local and state environmental agencies with jurisdiction over environmental matters affecting the Company's operations. The EPA also administers the National Renewable Fuel Standard Program (“RFS2”).
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The
Association of American Feed Control Officials
(“AAFCO”), which is a voluntary membership association of state, and federal agencies that regulate the sale and distribution of animal feeds and animal drug remedies. Although, AAFCO has no regulatory authority, it brings together stakeholders and works to develop and implement uniform and equitable laws, regulations, standards, definitions, and enforcement polices for regulating the manufacture, labeling, distribution and sale of animal feeds.
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State Departments of Agriculture
, which regulate animal by-product collection and transportation procedures and animal feed quality.
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The
United States Department of Transportation
(“USDOT”), as well as local and state transportation agencies, which regulate the operation of our commercial vehicles.
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The
U.S. Occupational Safety and Health Administration
(“OSHA”), which is the main federal agency charged with the enforcement of worker safety and health legislation.
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The
Securities and Exchange Commission
(“SEC”), which regulates securities and information required in annual, quarterly and other reports filed by publicly traded companies.
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The
European Commission, Directorate-General for Health and Food Safety
, which addresses regulations for food, feed, human and animal health, technical uses of animal by-products and packaging.
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The
European Medicines Agency
, which establishes guidance for pharmaceutical products, bovine products and metal residues.
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The
European Food Safety Authority
, which advises the European Commission, the European Parliament and the EU Member States on food safety.
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The
European Directorate for the Quality of Medicine and Healthcare
, which protects public health by enabling the development, supporting the implementation, and monitoring the application of quality standards for safe medicines and their safe use.
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The
European Pharmacopeia
, which establishes requirements for the qualitative and quantitative composition of medicines, the tests to be carried out on medicines and on substances and materials used in their production.
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The
European Chemicals Agency
, which is responsible for the implementation of the Regulation (EC) No 1907/2006 on the Registration, Evaluation, Authorisation and Restriction of Chemicals.
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The
European Commission, Directorate-General for the Environment
, which establishes regulations on pollution and waste, such as Directive 2010/75/EU on Industrial Emissions (Integrated Pollution Prevention and Control) and the Best Available Techniques Reference Document on the Slaughterhouses and Animal By-products Industries.
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EU Member States
must ensure adequate enforcement, control and supervision of principles set forth in numerous EU Directives and Regulations
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such as minimum safety and health requirements for the workplace and use of work equipment by workers. EU Member States may be allowed to maintain or establish more stringent measures in their own legislation. In general, each EU Member State’s ministry of labor affairs is responsible for regulating health and safety at work and labor inspection services and is in charge of controlling compliance with applicable legislation and regulations.
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The
Dutch Food and Consumer Product Safety Authority (Nederlandse Voedsel- en Warenautoriteit)
, which issues permits, approvals and registrations to establishments or plants engaged in certain activities related to the handling of animal by-products and food and feed production.
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Belgian Federal Agency for the Safety of the Food Chain (FASFC) (Federal Agentschap voor de Veiligheid van de Voedselketen)
, which issues permits, approvals and registrations to establishments or plants engaged in certain activities related to the handling of animal by-products and food and feed production.
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Belgium's
Public Waste Agency of Flanders (Openbare Afvalstoffenmaatschappij voor het Vlaams Gewest)
, which issues permits, approvals and registrations to establishments or plants carrying out certain activities related to the handling of animal by-products.
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The
German Competent Authorities at state (Länder) level
, which issue permits, approvals and registrations to establishments or plants carrying out certain activities related to the handling of animal by-products and food and feed production.
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The United Kingdom’s
Health and Safety Executive
is the government body responsible for enforcing health and safety at work legislation, such as the
Health and Safety at Work Act 1974
, and enforcing health and safety law in industrial workplaces, together with local authorities.
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The United Kingdom’s
Food Standards Agency
issues permits, approvals and registrations to plants carrying out certain activities related to the handling of animal by-products.
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The
Canadian Food Inspection Agency
(“CFIA”), which regulates animal health and the disposal of animals and their products or by-products.
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Canadian provincial ministries of agriculture and the environment
, which regulate food safety and quality, air and water discharge requirements and the disposal of deadstock.
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The
Canadian Department of the Environment
(“Environment Canada”), which ensures compliance with Canadian federal air and water discharge and wildlife management requirements, and the various provincial and local environmental ministries and agencies.
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The
Canadian Technical Standards and Safety Authority
(“TSSA”), a non-profit organization that regulates the safety of fuels and pressure vessels and boilers.
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The
General Administration of Quality Supervision, Inspection and Quarantine
, which supervises the import and export of food and feed.
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The
Ministry of Health of the People’s Republic of China
, which establishes standards for food and pharmaceutical products.
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The
Chinese Pharmacopeia
, which establishes standards for pharmaceutical products.
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Ministry of Environmental Protection of the People's Republic of China
, which regulates the environmental protection standards.
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Ministry of Labor and Social Security of the People's Republic of China
, which establishes the regulations of labor, welfare and health insurance.
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State Administration of Work Safety
, which establishes the work safety standards and regulations.
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The
Ministry of Agriculture, Cattle and Supply (Ministério da Agricultura, Pecuária e Abastecimento)
, which regulates the production of gelatin.
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Ministry of Labor (Ministério do Trabalho)
, which regulates labor health and safety.
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National Water Agency (ANA)
, which regulates waste water discharge permits.
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State Government Agency CETESB
, responsible for the control, supervision, monitoring and licensing process for pollution generating activities.
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The
National Department for Food Safety and Quality (Servicio Nacional de Sanidad y Calidad Agroalimentaria)
, which regulates the production of gelatin.
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The
National Department of Animal Health (Servicio Nacional de Sanidad Animal)
, which at the local level is equivalent to the FDA in Argentina.
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Ministry of Labor (MMTT - Ministerio de Trabajo)
which proposes, designs develops, manages and monitors policies for all areas of labor, employment and labor relations, vocational training and social security.
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Department of Sustainable Development (OPDS - Organizmo Provincial para el Desarrollo Sostenible)
, which regulates all environmental affairs and issuing of the Environmental Aptitude Certificate.
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National Water Authority (ADA - Autoridad Del Agua)
, which regulates water consumption and waste water discharge.
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The
Australian Quarantine and Inspection Service
, which regulates the import and export of agricultural products, including animal by-products.
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The
Department of Agriculture, Fisheries and Forestry
, which administers meat and animal by-product legislation.
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PrimeSafe
, which is the principal regulator of meat and animal by-product businesses in the State of Victoria.
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The
Australian Competition and Consumer Commission
, which regulates Australia’s competition and consumer protection law.
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The
Australian Securities and Investments Commission
, which regulates Australia’s company and financial services laws.
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Worksafe Victoria
, which is the regulator responsible for administering and enforcing occupational health and safety laws and regulations in the State of Victoria.
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Environment Protection Authority Victoria
, which administers environmental protection laws in Victoria.
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Goulburn-Murray Rural Water Corporation
, which manages allocation and use of water under local water laws in Victoria.
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In North America, consolidation within the meat processing industry has resulted in bigger and more efficient slaughtering operations, the majority of which utilize “captive” renderers (rendering operations integrated with the meat or poultry packing operation).
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Concurrently, the number of small U.S. meat processors, which have historically been a dependable source of supply for non-captive or independent U.S. renderers, such as us, has been decreasing.
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The slaughter rates in the U.S. and international meat processing industry are subject to decline during poor economic conditions when consumers generally reduce their consumption of protein, and as a result, during such periods of decline, the availability, quantity and quality of raw materials available to independent renderers, such as us, decreases.
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In addition, the Company has seen an increase in the use of used cooking oil in the production of biodiesel, which has increased competition for the collection of used cooking oil from restaurants and other food service establishments and contributed to an increase in the frequency and magnitude of theft of used cooking oil in the United States.
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Furthermore, a decline in the general performance of the global economy (including a decline in consumer confidence) and an inability of consumers and companies to obtain credit in the financial markets could have a negative impact on our raw material volume, such as through the forced closure of any of our raw material suppliers. A significant decrease in available raw materials or a closure of a significant number of raw material suppliers could materially and adversely affect our business, results of operations and financial condition, including the carrying value of certain of our assets.
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imposition of tariffs, quotas, trade barriers and other trade protection measures imposed by foreign countries regarding the importation of poultry, beef and pork products, in addition to operating, import or export licensing requirements imposed by various foreign countries;
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imposition of border restrictions by foreign countries with respect to the import of poultry, beef and pork products due to animal disease or other perceived health or safety issues;
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impact of currency exchange rate fluctuations between the U.S. dollar and foreign currencies, particularly the euro, the Canadian dollar, the Chinese renminbi, the Brazilian real, the British pound, the Japanese yen, the Argentine peso, the Australian dollar and the Polish zloty, which may reduce the U.S. dollar value of the revenues, profits and cash flows we receive from non-U.S. markets or of our assets in non-U.S. countries or increase our supply costs, as measured in U.S. dollars in those markets;
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exchange controls and other limits on our ability to import raw materials, import or export finished products or to repatriate earnings from overseas, such as exchange controls in effect in China, that may limit our ability to repatriate earnings from those countries;
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different regulatory structures (including creditor rights that may be different than in the United States) and unexpected changes in regulatory environments (including, without limitation, in China), including changes resulting in potentially adverse tax consequences or imposition of onerous trade restrictions, price controls, industry controls, animal and human food safety controls, employee welfare schemes or other government controls;
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political or economic instability, social or labor unrest or changing macroeconomic conditions or other changes in political, economic or social conditions in the respective jurisdictions;
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changes in our effective tax rate, including tax rates that may exceed those in the United States, earnings that may be subject to withholding requirements and incremental taxes upon repatriation, changes in the mix of our business from year to year and from country to country, changes in rules related to accounting for income taxes, changes in tax laws in any of the jurisdictions in which we operate and adverse outcomes from tax audits;
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compliance with and enforcement of a wide variety of complex U.S. and non-U.S. laws, treaties and regulations, including, without limitation, anti-bribery laws such as the U.S. Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act 2010, the Brazilian corporate anti-corruption law and similar anti-corruption legislation in many jurisdictions in which we operate, as well as economic and trade sanctions enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the EU and other governmental entities; and
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distribution costs, disruptions in shipping or reduced availability or increased costs of freight transportation.
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problems integrating or developing operations, personnel, technologies or products;
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the unanticipated breakdown or failure of equipment or processes, including any unforeseen issues that may arise in connection with the operation of the DGD Facility or completion and startup of the expansion project;
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the inaccuracy of our assumptions about prices for the renewable diesel that the DGD Joint Venture produces;
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unforeseen engineering or environmental issues, including new or more stringent environmental regulations affecting operations;
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the inaccuracy of our assumptions about the timing and amount of anticipated revenues and operating costs including feedstock prices;
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the diversion of management time and resources;
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difficulty in obtaining and maintaining permits and other regulatory issues, potential license revocation and changes in legal requirements;
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difficulties in establishing and maintaining relationships with suppliers and end user customers;
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limitations in the DGD Joint Venture’s loan agreement with Valero prohibit the payment of distributions to the DGD Joint Venture partners until certain conditions required by the loan agreement with Valero are satisfied; however, those conditions were met in fiscal 2016 and the DGD Joint Venture distributed $
50.0 million
to the DGD Joint Venture partners;
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the risk that one or more competitive new renewable diesel plants are constructed that use different technologies from the DGD Joint Venture facility and result in the marketing of products that are more effective as a substitute for carbon-based fuels or less expensive than the products marketed by the DGD Joint Venture;
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performance below expected levels of output or efficiency;
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reliance on Valero and its adjacent refinery facility for many services and processes;
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if any of the risks described in connection with the DGD Joint Venture occur, possible impairment of the acquired assets, including intangible assets;
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possible third party claims of intellectual property infringement; and
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being forced to sell our equity interests in the DGD Joint Venture pursuant to buy/sell provisions in the DGD Joint Venture’s operating agreement and failing to realize the benefits of the DGD Joint Venture.
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making it more difficult for us to satisfy our obligations to our financial lenders and our contractual and commercial commitments;
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limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements on commercially reasonable terms or at all;
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requiring us to use a substantial portion of our cash flows from operations to pay principal and interest on our indebtedness instead of other purposes, thereby reducing the amount of our cash flows from operations available for working capital, capital expenditures, acquisitions and other general corporate purposes;
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increasing our vulnerability to adverse economic, industry and business conditions;
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exposing us to the risk of increased interest rates as certain of our borrowings are at variable rates of interest;
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increasing our exposure to the impact on our debt level of changes in foreign exchange rate conversion to functional currency;
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limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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placing us at a competitive disadvantage compared to other, less leveraged competitors; and
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increasing our cost of borrowing.
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On May 5, 2011, the FDA issued an interim final rule amending its administrative detention authority and lowering both the level of proof and the degree of risk required for detaining an article of food. This interim
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The FSMA also requires the FDA to develop new regulations that, among other provisions, place additional registration requirements on food and feed producing firms. Section 102 of the FSMA amends facility registration requirements in the FD&C Act for domestic and foreign manufacturers, processors, packers or holders of food for human or animal consumption, now requiring that facility registrations be renewed during the fourth quarter of each even-numbered year, beginning October 1, 2012. Provisions for renewing facility registrations and for submitting such registrations electronically were finalized in a rule published July 14, 2016, which codifies requirements that facility registrations be renewed between October 1 and December 31 of even numbered years; requires additional contact information be provided for the owner, operator or agent-in-charge of the facility; requires information about a facility's activity type(s); requires assurances that FDA will be permitted to inspect registered facilities at the times and manner permitted under the FD&C Act; requires all registrations be made electronically by 2020; and requires facilities to provide a Unique Facility Identifier when registering or renewing registrations beginning in 2020. On December 27, 2016, the FDA released an updated draft guidance, for which comments may be submitted through March 27, 2017, to address questions regarding food facility registration. In September 2016, FDA also issued updated guidance on food product categories in food facility registrations.
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Pursuant to FSMA, the FDA issued final rules for preventive controls (“PCs”) for human food and animal feed on September 17, 2015 (“Human Food PC Rule” and “Animal Food PC Rule,” respectively), which apply to facilities that manufacture, process, pack and hold human or animal food and require these facilities to establish and implement written food safety plans, which include hazard analyses, written PCs to ensure that significant hazards that are identified as needing to be controlled will be significantly reduced or prevented, monitoring of PCs, corrective actions, verification and recordkeeping. Both rules require a modern approach to food safety known as Hazard Analysis and Risk Based Preventive Controls (“HARPC”). The Human Food PC Rule updates existing Current Good Manufacturing Practices (“CGMPs”), and the Animal Food PC Rule establishes baseline CGMPs, which set forth minimum current good manufacturing requirements for each of the following areas: personnel, the facility and grounds, sanitation, water supply, equipment and utensils, facility operations and the holding and distribution of the human or animal food. Under these rules, human and animal food facilities will need “preventive control qualified individuals,” (“PCQI”) i.e., those with appropriate training or job experience in the development and application of risk-based PCs, to prepare, evaluate and maintain the food safety plan and PCs. Human and animal food facilities must include a recall plan in their food safety plan and a program for implementing supply-chain applied controls, if appropriate to control a significant hazard. Large firms, including Darling, were required to comply with most sections of the Human Food PC Rule and the CGMP requirements of the Animal Food PC Rule by September 19, 2016, and with the PC and related portions of the Animal Food PC Rule by September 18, 2017. Compliance dates with respect to supply-chain controls are dependent on when suppliers must comply with applicable rules. In August 2016 the FDA published draft guidance documents that are intended to help industry comply with the HARPC regulations for human and animal food. The comment period for the HARPC draft guidance for human food is open until February 21, 2017. Two draft guidance documents affecting animal food were published: (1) Current Good Manufacturing Practice Requirements and (2) Human Food By-Products for Use as Animal Feed. The comment period for these two animal food guidance documents closed on November 23, 2016. On October 31, 2016, the FDA published a draft guidance document to explain how a facility is expected to disclose the presence of certain hazards that would require control under the FSMA regulations but were not controlled by that facility (“Hazard Disclosure”). The disclosure that such a hazard was not controlled would be made in documents accompanying the human food or animal food or imported foods. The sale of such foods for which a hazard was not controlled would be permitted if the customer provides written assurance to the manufacturer that the customer will control the hazard. The FDA also extended the compliance date for the provisions regarding written assurance from customers to September 2018 (or later) but did not change the hazard disclosure requirements or extend the compliance date for such requirements. The comment period for the Hazard Disclosure draft guidance closes on May 1, 2017.
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November 27, 2015, FDA issued a final rule, entitled “Foreign Supplier Verification Program for Importers of Food for Humans and Animals” (“FSVP Rule”). The FSVP Rule establishes requirements for importers of both human and animal food by providing a flexible, risk-based approach to foreign supplier verification consistent with the HARPC requirements for food facilities established in the Human Food PC Rule and Animal Food PC Rule. Under the FSVP Rule, importers of human food and animal food must verify that their foreign suppliers produce food in a manner that provides the same level of public health protection as the Human Food PC Rule and Animal Food PC Rule, or FDA’s regulations established under FSMA regarding produce safety, as
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On June 16, 2016, the FDA published the third edition of a guidance document regarding the requirement for prior notice before importation of articles of food, including food for animals. The guidance addresses notification procedures and the scope of food articles covered by the regulation, and clarifies jurisdictional issues with other federal agencies, among other topics.
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Pursuant to the Sanitary Food Transportation Act of 2005 and FSMA, the FDA published a final rule on April 6, 2016 (“Sanitary Transportation Rule”), which requires that sanitary transportation practices be used to transport human and animal foods to prevent such food from being adulterated during transport and applies to shippers, loaders, carriers by motor vehicle or rail vehicle, and receivers engaged in the transportation of food. The Sanitary Transportation Rule became effective on June 6, 2016, and the compliance date for businesses other than small businesses, such as the Company, is April 6, 2017.
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On May 27, 2016, FDA published a final rule entitled “Mitigation Strategies to Protect Food Against Intentional Adulteration,” which requires registered human food facilities to conduct a vulnerability assessment and implement mitigation strategies to address hazards that may be intentionally introduced in order to harm the public health. The earliest compliance date for the rule is July 2019.
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actual or anticipated fluctuations in ingredient prices;
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actual or anticipated variations in our operating results;
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our earnings releases and financial performance;
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changes in financial estimates or buy/sell recommendations by securities analysts;
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our ability to repay our debt;
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our access to financial and capital markets to refinance our debt;
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performance of our joint venture investments, including the DGD Joint Venture;
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our dividend policy;
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market conditions in the industry and the general state of the securities markets;
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investor perceptions of us and the industry and markets in which we operate;
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governmental legislation or regulation;
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currency and exchange rate fluctuations that impact our earnings and balance sheet; and
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general economic and market conditions, such as U.S. or global reactions to economic developments, including regional recessions, currency devaluations or political unrest.
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Fresno, California, United States
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Animal By-Products
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Henderson, Kentucky, United States
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Animal By-Products
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Henderson, Kentucky, United States
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Bakery By-Products
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Hickson, Ontario, Canada
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Animal By-Products
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Honey Brook, Pennsylvania, United States
|
Bakery By-Products
|
Houston, Texas, United States
|
Animal By-Products
|
Jackson, Mississippi, United States
|
Animal By-Products
|
Kansas City, Kansas, United States
|
Animal By-Products
|
Kansas City, Missouri, United States
|
Hides
|
Lexington, Nebraska, United States
|
Animal By-Products
|
Lingen, Germany
|
Blood
|
Loenen, Netherlands
|
Animal By-Products
|
Los Angeles, California, United States
|
Animal By-Products
|
Luohe, China
|
Blood
|
Maquoketa, Iowa, United States
|
Blood
|
Marshville, North Carolina, United States
|
Bakery By-Products
|
Maryborough, Australia
|
Blood
|
Mason City, Illinois, United States
|
Animal By-Products
|
Memmingen, Germany
|
Hides
|
Mering, Germany
|
Animal By-Products
|
Moorefield, Ontario, Canada
|
Animal By-Products
|
Muscatine, Iowa, United States
|
Bakery By-Products
|
Newark, New Jersey, United States
|
Animal By-Products
|
Newberry, Indiana, United States
|
Animal By-Products
|
North Baltimore, Ohio, United States
|
Bakery By-Products
|
Omaha, Nebraska, United States
|
Animal By-Products
|
Osetnica, Poland
|
Animal By-Products
|
Paducah, Kentucky, United States
|
Wet Pet Food
|
Pocahontas, Arkansas, United States
|
Animal By-Products
|
Ravenna, Nebraska, United States
|
Wet Pet Food
|
Russellville, Kentucky, United State
|
Animal By-Products
|
San Francisco, California, United States
|
Animal By-Products
|
Sioux City, Iowa, United States
|
Animal By-Products
|
Smyrna, Georgia, United States
|
Animal By-Products
|
Son, Netherlands
|
Animal By-Products
|
Starke, Florida, United States
|
Animal By-Products
|
Suzhou, China
|
Blood
|
Tacoma, Washington, United States
|
Animal By-Products
|
Tampa, Florida, United States
|
Animal By-Products
|
Truro, Novia Scotia, Canada
|
Animal By-Products
|
Turlock, California, United States
|
Animal By-Products
|
Union City, Tennessee, United States
|
Animal By-Products
|
Usnice, Poland
|
Animal By-Products
|
Wahoo, Nebraska, United States
|
Animal By-Products
|
Watts, Oklahoma, United States
|
Bakery By-Products
|
Wichita, Kansas, United States
|
Animal By-Products
|
Winesburg, Ohio, United States
|
Animal By-Products
|
Winnipeg, Manitoba, Canada
|
Animal By-Products
|
|
|
Food Ingredients Segment
|
|
Almere, Netherlands
|
CTH
|
Amparo, Brazil
|
Gelatin
|
Angouleme, France
|
Gelatin
|
Da'an, China
|
Gelatin
|
Dubuque, Iowa, United States
|
Gelatin
|
Eindhoven, Netherlands
|
Fat
|
Elsholz, Germany
|
Fat
|
Erolzheim, Germany
|
Fat
|
Gent, Belgium
|
Gelatin
|
Girona, Spain
|
Gelatin
|
Harlingen, Netherlands
|
Fat
|
Hurlingham, Argentina
|
Gelatin
|
Ilse-Sur-La-Sorgue, France
|
Gelatin
|
Kaiping, China
|
Gelatin
|
Peabody, Massachusetts, United States
|
Gelatin
|
Presidente Epitacio, Brazil
|
Gelatin
|
Stoke-on Trent, United Kingdom
|
Bone
|
Versmold, Germany
|
Fat
|
Vuren, Netherlands
|
Bone
|
Wenzhou, China
|
Gelatin
|
Zhejiang, China
|
Gelatin
|
|
|
Fuel Ingredients Segment
|
|
Belm-Icker, Germany
|
Bioenergy
|
Butler, Kentucky, United States
|
Biodiesel
|
Denderleeuw, Belgium
|
Bioenergy
|
Jagel, Germany
|
Bioenergy
|
Rotenburg, Germany
|
Bioenergy
|
Saint-Catherine, Quebec Canada
|
Biodiesel
|
Son, Netherlands
|
Bioenergy
|
|
Fiscal 2016
|
Fiscal 2015
|
Fiscal 2014
|
Fiscal 2013
|
Fiscal 2012
|
||||||||||
|
Fifty-two
|
Fifty-two
|
Fifty-three
|
Fifty-two
|
Fifty-two
|
||||||||||
|
Weeks Ended
|
Weeks Ended
|
Weeks Ended
|
Weeks Ended
|
Weeks Ended
|
||||||||||
|
December 31,
|
January 2,
|
January 3,
|
December 28,
|
December 29,
|
||||||||||
|
2016
|
2016
|
2015 (j)
|
2013 (i)
|
2012 (h)
|
||||||||||
|
(dollars in thousands, except per share data)
|
||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
||||||||||
Net sales (k)
|
$
|
3,398,115
|
|
$
|
3,397,446
|
|
$
|
3,956,443
|
|
$
|
1,802,268
|
|
$
|
1,772,552
|
|
Cost of sales and operating expenses (a), (k)
|
2,641,734
|
|
2,654,025
|
|
3,123,171
|
|
1,339,819
|
|
1,303,727
|
|
|||||
Selling, general and administrative expenses (c)
|
314,005
|
|
322,574
|
|
374,580
|
|
170,825
|
|
151,713
|
|
|||||
Depreciation and amortization
|
289,908
|
|
269,904
|
|
269,517
|
|
98,787
|
|
85,371
|
|
|||||
Acquisition and integration costs
|
401
|
|
8,299
|
|
24,667
|
|
23,271
|
|
—
|
|
|||||
Operating income
|
152,067
|
|
142,644
|
|
164,508
|
|
169,566
|
|
231,741
|
|
|||||
Interest expense (b)
|
94,187
|
|
105,530
|
|
135,416
|
|
38,108
|
|
24,054
|
|
|||||
Foreign currency (gain)/loss (e)
|
1,854
|
|
4,911
|
|
13,548
|
|
(28,107
|
)
|
—
|
|
|||||
Other (income)/expense, net, (c), (d)
|
3,866
|
|
6,839
|
|
(299
|
)
|
3,547
|
|
(1,760
|
)
|
|||||
Equity in net (income)/loss of unconsolidated subsidiary
|
(70,379
|
)
|
(73,416
|
)
|
(65,609
|
)
|
(7,660
|
)
|
2,662
|
|
|||||
Income from continuing operations before income taxes
|
122,539
|
|
98,780
|
|
81,452
|
|
163,678
|
|
206,785
|
|
|||||
Income tax expense
|
15,315
|
|
13,501
|
|
13,141
|
|
54,711
|
|
76,015
|
|
|||||
Net Income
|
$
|
107,224
|
|
$
|
85,279
|
|
$
|
68,311
|
|
$
|
108,967
|
|
$
|
130,770
|
|
Net Income attributable to minority interests
|
(4,911
|
)
|
(6,748
|
)
|
(4,096
|
)
|
—
|
|
—
|
|
|||||
Net Income attributable to Darling
|
$
|
102,313
|
|
$
|
78,531
|
|
$
|
64,215
|
|
$
|
108,967
|
|
$
|
130,770
|
|
Basic earnings per common share
|
$
|
0.62
|
|
$
|
0.48
|
|
$
|
0.39
|
|
$
|
0.91
|
|
$
|
1.11
|
|
Diluted earnings per common share
|
$
|
0.62
|
|
$
|
0.48
|
|
$
|
0.39
|
|
$
|
0.91
|
|
$
|
1.11
|
|
Weighted average shares outstanding
|
164,600
|
|
165,031
|
|
164,627
|
|
119,526
|
|
117,592
|
|
|||||
Diluted weighted average shares outstanding
|
165,212
|
|
165,119
|
|
165,059
|
|
119,924
|
|
118,089
|
|
|||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA (a), (f)
|
$
|
441,975
|
|
$
|
412,548
|
|
$
|
434,025
|
|
$
|
268,353
|
|
$
|
317,112
|
|
Depreciation
|
212,217
|
|
186,595
|
|
185,955
|
|
66,691
|
|
57,305
|
|
|||||
Amortization
|
77,691
|
|
83,309
|
|
83,562
|
|
32,096
|
|
28,066
|
|
|||||
Capital expenditures (g)
|
243,523
|
|
229,848
|
|
228,918
|
|
118,307
|
|
115,413
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|||||
Working capital (l)
|
$
|
441,451
|
|
$
|
490,120
|
|
$
|
525,211
|
|
$
|
950,698
|
|
$
|
158,578
|
|
Total assets (l)
|
4,698,017
|
|
4,760,619
|
|
5,126,547
|
|
3,244,133
|
|
1,552,416
|
|
|||||
Current portion of long-term debt (l)
|
23,247
|
|
45,166
|
|
54,401
|
|
19,888
|
|
82
|
|
|||||
Total long-term debt less current portion (l)
|
1,727,696
|
|
1,885,851
|
|
2,098,039
|
|
866,947
|
|
250,142
|
|
|||||
Stockholders’ equity attributable to Darling
|
1,972,994
|
|
1,870,709
|
|
1,952,990
|
|
2,020,952
|
|
1,062,436
|
|
(a)
|
Included in fiscal 2014 are non-cash charges for the step-up of inventory acquired in the VION Acquisition of approximately $49.8 million.
|
(b)
|
Included in interest expense for fiscal 2015 is the write-off of deferred loan costs of approximately $
10.6 million
related to the payoff of the euro term loan B. Included in interest expense for fiscal 2014 is a redemption premium and a write-off of deferred loan costs of approximately $
27.3 million
and $
4.3 million
, respectively. Included in interest expense for fiscal 2013 is approximately $
13.0 million
for bank financing fees from an unutilized bridge facility. Fiscal 2012 includes the write-off of approximately $
0.7 million
in deferred loan costs as a result of the final payoff on the term loan portion of the Company's previous secured credit facilities.
|
(c)
|
Included in selling, general and administrative expenses is a gain of approximately $
3.1 million
and included in other (income)/expense in fiscal 2016 is a gain of approximately $
2.5 million
for a recorded insurance settlement. Included in other (income)/expense in fiscal
|
(d)
|
Included in other (income)/expense in fiscal 2012 are gain contingencies from insurance proceeds from fiscal 2012 and fiscal 2010 fire and casualty losses of approximately $
4.7 million
.
|
(e)
|
Included in fiscal 2014 and fiscal 2013, the Company recorded a loss of approximately $
12.6 million
and a gain of approximately $
27.5 million
, respectively on foreign currency
exchange forward hedge contracts for the VION Acquisition
.
|
(f)
|
Adjusted EBITDA is presented here not as an alternative to net income, but rather as a measure of the Company’s operating performance and is not intended to be a presentation in accordance with U.S. generally accepted accounting principles (“GAAP
”
). Adjusted EBITDA is calculated below and represents, for any relevant period, net income/(loss) plus depreciation and amortization, goodwill and long-lived asset impairment, interest expense, (income)/loss from discontinued operations, net of tax, income tax provision, other income/(expense) and equity in net loss of unconsolidated subsidiaries. The Company believes adjusted EBITDA is a useful measure for investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company's industry. In addition, management believes that adjusted EBITDA is useful in evaluating the Company's operating performance compared to that of other companies in the food ingredients and agriculture industries because the calculation of adjusted EBITDA generally eliminates the effects of financing, income taxes and certain non-cash and other items that may vary for different companies for reasons unrelated to overall operating performance. As a result, the Company’s management uses adjusted EBITDA as a measure to evaluate performance and for other discretionary purposes. However, adjusted EBITDA is not a recognized measurement under GAAP, should not be considered as an alternative to net income as a measure of operating results or to cash flow as a measure of liquidity, and is not intended to be a presentation in accordance with GAAP. Also, since adjusted EBITDA is not calculated identically by all companies, the presentation in this report may not be comparable to those disclosed by other companies. In addition to the foregoing, management also uses or will use adjusted EBITDA to measure compliance with certain financial covenants under the Company’s senior secured credit facilities and senior unsecured notes that were outstanding at December 31, 2016. The amounts shown below for adjusted EBITDA differ from the amounts calculated under similarly titled definitions in the Company’s Senior Secured Credit Facilities and Senior Unsecured Notes, as those definitions permit further adjustments to reflect certain other non-cash charges.
|
(dollars in thousands)
|
December 31,
2016
|
January 2,
2016
|
January 3,
2015
|
December 28,
2013
|
December 29,
2012
|
||||||||||
Net income attributable to Darling
|
$
|
102,313
|
|
$
|
78,531
|
|
$
|
64,215
|
|
$
|
108,967
|
|
$
|
130,770
|
|
Depreciation and amortization
|
289,908
|
|
269,904
|
|
269,517
|
|
98,787
|
|
85,371
|
|
|||||
Interest expense
|
94,187
|
|
105,530
|
|
135,416
|
|
38,108
|
|
24,054
|
|
|||||
Income tax expense
|
15,315
|
|
13,501
|
|
13,141
|
|
54,711
|
|
76,015
|
|
|||||
Other, net
|
5,720
|
|
11,750
|
|
13,249
|
|
(24,560
|
)
|
(1,760
|
)
|
|||||
Equity in net (income)/loss of unconsolidated subsidiaries
|
(70,379
|
)
|
(73,416
|
)
|
(65,609
|
)
|
(7,660
|
)
|
2,662
|
|
|||||
Net income attributable to noncontrolling interests
|
4,911
|
|
6,748
|
|
4,096
|
|
—
|
|
—
|
|
|||||
Adjusted EBITDA
|
$
|
441,975
|
|
$
|
412,548
|
|
$
|
434,025
|
|
$
|
268,353
|
|
$
|
317,112
|
|
(g)
|
Fiscal 2016, fiscal 2015 and fiscal 2012 excludes the capital assets acquired in immaterial acquisitions. Fiscal 2014 excludes the capital assets acquired as part of the VION Acquisition and the Custom Blenders acquisition of approximately $
984.2 million
. Fiscal 2013 excludes the capital assets acquired from Terra Holding Company, a Delaware corporation, and its wholly owned subsidiaries, Terra Renewal Services, Inc., an Arkansas corporation (“TRS
”
), and EV Acquisition, Inc., an Arkansas corporation (the “Terra Transaction
”
) and Rothsay capital assets acquired in fiscal 2013 of approximately $
167.0 million
.
|
(h)
|
Subsequent to the date of acquisition, fiscal 2012 includes
29
weeks of contribution from the RVO BioPur, LLC assets.
|
(i)
|
Subsequent to the date of acquisition, fiscal 2013 includes
18
weeks of contribution from the TRS assets and
9
weeks of contribution from the assets of Rothsay.
|
(j)
|
Subsequent to the date of acquisition, fiscal 2014 includes
52
weeks of contribution from the VION Acquisition and
14
weeks of contribution from the Custom Blenders acquisition.
|
(k)
|
Includes certain reclassifications from net sales to cost of sales and operating expenses of approximately $
78.7 million
and $
71.1 million
in fiscal 2013 and fiscal 2012, respectively to conform to fiscal 2014 through fiscal 2016 presentation.
|
(l)
|
Fiscal 2015 includes certain reclassifications for deferred loan costs from long-term assets of approximately $
29.0 million
to current and non-current liabilities as reduction of outstanding debt to conform with fiscal 2016 presentation of debt. The presentation impact was to reduce total assets by approximately $
29.0 million
, increase working capital by approximately $
2.1 million
, reduce current portion of long-term debt by approximately $
2.1 million
and reduce long-term debt less current portion by approximately $
26.9 million
.
|
•
|
$5.6 million related to the casualty gains in the Netherlands from the recording of an insurance settlement.
|
•
|
$8.3 million associated with the integration of VION Ingredients and Rothsay, a staff reduction in Angoulême, France and the implementation of internal controls over financial reporting per the Sarbanes-Oxley Act of 2002 for VION Ingredients;
|
•
|
$10.6 million related to the write-off of deferred loan costs associated with the retirement of the Company’s European portion of its term loan B note on June 3, 2015; and
|
•
|
$4.8 million related to the non-operating casualty losses in Canada, the Netherlands and Brazil and a legal settlement.
|
|
Fiscal Year Ended
|
|||||
(dollars in thousands)
|
December 31,
2016 |
January 2,
2016 |
||||
Net income attributable to Darling
|
$
|
102,313
|
|
$
|
78,531
|
|
Depreciation and amortization
|
289,908
|
|
269,904
|
|
||
Interest expense
|
94,187
|
|
105,530
|
|
||
Income tax expense/(benefit)
|
15,315
|
|
13,501
|
|
||
Foreign currency loss/(gain)
|
1,854
|
|
4,911
|
|
||
Other expense/(income), net
|
3,866
|
|
6,839
|
|
||
Equity in net (income)/loss of unconsolidated subsidiaries
|
(70,379
|
)
|
(73,416
|
)
|
||
Net (loss)/income attributable to noncontrolling interests
|
4,911
|
|
6,748
|
|
||
Adjusted EBITDA (Non-GAAP)
|
$
|
441,975
|
|
$
|
412,548
|
|
|
|
|
||||
Acquisition and integration-related expenses
|
401
|
|
8,299
|
|
||
Pro forma Adjusted EBITDA (Non-GAAP)
|
$
|
442,376
|
|
$
|
420,847
|
|
|
|
|
||||
Foreign currency exchange impact (1)
|
1,980
|
|
—
|
|
||
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP)
|
$
|
444,356
|
|
$
|
420,847
|
|
|
|
|
||||
DGD Joint Venture Adjusted EBITDA (Darling's Share)
|
$
|
87,224
|
|
$
|
88,494
|
|
•
|
Finished product commodity prices
|
•
|
Segment operating income
|
•
|
Raw material processed
|
•
|
Gross margin percentage
|
•
|
Foreign currency
|
•
|
Corporate activities
|
|
Avg. Price
Fiscal 2016
|
Avg. Price
Fiscal 2015
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
Jacobsen:
|
|
|
|
|
|
MBM (Illinois)
|
$ 274.51/ton
|
$ 334.55/ton
|
$ (60.04)/ton
|
(17.9
|
)%
|
Feed Grade PM (Mid-South)
|
$ 300.12/ton
|
$ 404.54/ton
|
$ (104.42)/ton
|
(25.8
|
)%
|
Pet Food PM (Mid-South)
|
$ 557.17/ton
|
$ 544.64/ton
|
$ 12.53/ton
|
2.3
|
%
|
Feather meal (Mid-South)
|
$ 356.40/ton
|
$ 472.27/ton
|
$ (115.87)/ton
|
(24.5
|
)%
|
BFT (Chicago)
|
$ 29.75/cwt
|
$ 27.36/cwt
|
$ 2.39/cwt
|
8.7
|
%
|
YG (Illinois)
|
$ 23.77/cwt
|
$ 21.79/cwt
|
$ 1.98/cwt
|
9.1
|
%
|
Corn (Illinois)
|
$ 3.70/bushel
|
$ 3.89/bushel
|
$ (0.19)/bushel
|
(4.9
|
)%
|
Reuters:
|
|
|
|
|
|
Palm Oil (CIF Rotterdam)
|
$ 698.00/ton
|
$ 607.00/ton
|
$ 91.00/ton
|
15.0
|
%
|
Soy meal (CIF Rotterdam)
|
$ 375.00/ton
|
$ 391.00/ton
|
$ (16.00)/ton
|
(4.1
|
)%
|
|
Avg. Price
4th Quarter
2016
|
Avg. Price
3rd Quarter
2016
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
Jacobsen:
|
|
|
|
|
|
MBM (Illinois)
|
$ 223.24/ton
|
$ 325.56/ton
|
$ (102.32)/ton
|
(31.4
|
)%
|
Feed Grade PM (Mid-South)
|
$ 281.43/ton
|
$ 364.37/ton
|
$ (82.94)/ton
|
(22.8
|
)%
|
Pet Food PM (Mid-South)
|
$ 571.09/ton
|
$ 593.47/ton
|
$ (22.38)/ton
|
(3.8
|
)%
|
Feather meal (Mid-South)
|
$ 356.91/ton
|
$ 432.57/ton
|
$ (75.66)/ton
|
(17.5
|
)%
|
BFT (Chicago)
|
$ 30.77/cwt
|
$ 28.59/cwt
|
$ 2.18/cwt
|
7.6
|
%
|
YG (Illinois)
|
$ 23.05/cwt
|
$ 24.01/cwt
|
$ (0.96)/cwt
|
(4.0
|
)%
|
Corn (Illinois)
|
$ 3.58/bushel
|
$ 3.42/bushel
|
$ 0.16/bushel
|
4.7
|
%
|
Reuters:
|
|
|
|
|
|
Palm Oil (CIF Rotterdam)
|
$ 752.00/ton
|
$ 705.00/ton
|
$ 47.00/ton
|
6.7
|
%
|
Soy meal (CIF Rotterdam)
|
$ 360.00/ton
|
$ 403.00/ton
|
$ (43.00)/ton
|
(10.7
|
)%
|
|
Fats
|
Proteins
|
Other Rendering
|
Total Rendering
|
Used Cooking Oil
|
Bakery
|
Other
|
Total
|
||||||||||||||||
Net sales year ended January 2, 2016
|
$
|
539.8
|
|
$
|
828.5
|
|
$
|
244.0
|
|
$
|
1,612.3
|
|
$
|
154.0
|
|
$
|
217.9
|
|
$
|
90.1
|
|
$
|
2,074.3
|
|
Increase/(decrease) in sales volumes
|
41.8
|
|
83.3
|
|
—
|
|
125.1
|
|
0.7
|
|
10.4
|
|
—
|
|
136.2
|
|
||||||||
Increase/(decrease) in finished product prices
|
(5.2
|
)
|
(139.9
|
)
|
—
|
|
(145.1
|
)
|
10.6
|
|
(7.9
|
)
|
—
|
|
(142.4
|
)
|
||||||||
Increase/(decrease) due to currency exchange rates
|
(1.8
|
)
|
(2.5
|
)
|
(0.7
|
)
|
(5.0
|
)
|
(0.2
|
)
|
—
|
|
(0.1
|
)
|
(5.3
|
)
|
||||||||
Other change
|
—
|
|
—
|
|
25.8
|
|
25.8
|
|
—
|
|
—
|
|
0.5
|
|
26.3
|
|
||||||||
Total change
|
34.8
|
|
(59.1
|
)
|
25.1
|
|
0.8
|
|
11.1
|
|
2.5
|
|
0.4
|
|
14.8
|
|
||||||||
Net sales year ended December 31, 2016
|
$
|
574.6
|
|
$
|
769.4
|
|
$
|
269.1
|
|
$
|
1,613.1
|
|
$
|
165.1
|
|
$
|
220.4
|
|
$
|
90.5
|
|
$
|
2,089.1
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Fiscal Year Ended December 31, 2016
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
2,089,145
|
|
$
|
1,061,912
|
|
$
|
247,058
|
|
$
|
—
|
|
$
|
3,398,115
|
|
Cost of sales and operating expenses
|
1,624,858
|
|
834,410
|
|
182,466
|
|
—
|
|
2,641,734
|
|
|||||
Gross Margin
|
464,287
|
|
227,502
|
|
64,592
|
|
—
|
|
756,381
|
|
|||||
|
|
|
|
|
|
||||||||||
Gross Margin %
|
22.2
|
%
|
21.4
|
%
|
26.1
|
%
|
—
|
%
|
22.3
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
169,648
|
|
96,170
|
|
6,895
|
|
41,292
|
|
314,005
|
|
|||||
Acquisition costs
|
—
|
|
—
|
|
—
|
|
401
|
|
401
|
|
|||||
Depreciation and amortization
|
178,845
|
|
70,120
|
|
28,531
|
|
12,412
|
|
289,908
|
|
|||||
Segment operating income/ (loss)
|
115,794
|
|
61,212
|
|
29,166
|
|
(54,105
|
)
|
152,067
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
467
|
|
—
|
|
69,912
|
|
—
|
|
70,379
|
|
|||||
Segment income
|
116,261
|
|
61,212
|
|
99,078
|
|
(54,105
|
)
|
222,446
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(99,907
|
)
|
|||||||||
Income/ (loss) before income taxes
|
|
|
|
|
$
|
122,539
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Fiscal Year Ended January 2, 2016
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
2,074,333
|
|
$
|
1,094,918
|
|
$
|
228,195
|
|
$
|
—
|
|
$
|
3,397,446
|
|
Cost of sales and operating expenses
|
1,613,402
|
|
863,562
|
|
177,061
|
|
—
|
|
2,654,025
|
|
|||||
Gross Margin
|
460,931
|
|
231,356
|
|
51,134
|
|
—
|
|
743,421
|
|
|||||
|
|
|
|
|
|
||||||||||
Gross Margin %
|
22.2
|
%
|
21.1
|
%
|
22.4
|
%
|
—
|
%
|
21.9
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
178,624
|
|
103,301
|
|
7,264
|
|
33,385
|
|
322,574
|
|
|||||
Acquisition costs
|
—
|
|
—
|
|
—
|
|
8,299
|
|
8,299
|
|
|||||
Depreciation and amortization
|
165,854
|
|
66,817
|
|
26,711
|
|
10,522
|
|
269,904
|
|
|||||
Segment operating income/(loss)
|
116,453
|
|
61,238
|
|
17,159
|
|
(52,206
|
)
|
142,644
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
1,521
|
|
—
|
|
71,895
|
|
—
|
|
73,416
|
|
|||||
Segment income
|
117,974
|
|
61,238
|
|
89,054
|
|
(52,206
|
)
|
216,060
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(117,280
|
)
|
|||||||||
Income before income taxes
|
|
|
|
|
$
|
98,780
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
|||||
Fiscal Year Ended December 31, 2016
|
|
|
|
|
|
|||||
Gross Margin %
|
22.2
|
%
|
21.4
|
%
|
26.1
|
%
|
—
|
|
22.3
|
%
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
|||||
Fiscal Year Ended January 2, 2016
|
|
|
|
|
|
|||||
Gross Margin %
|
22.2
|
%
|
21.1
|
%
|
22.4
|
%
|
—
|
|
21.9
|
%
|
•
|
$8.3 million associated with the integration of VION Ingredients and Rothsay, a staff reduction in Angoulême, France and the implementation of internal controls over financial reporting per the Sarbanes-Oxley Act of 2002 for VION Ingredients;
|
•
|
$10.6 million related to the write-off of deferred loan costs associated with the retirement of the Company’s European portion of its term loan B term note on June 3, 2015; and
|
•
|
$4.8 million related to the non-operating casualty losses in Canada, the Netherlands and Brazil and a legal settlement.
|
•
|
$49.8 million related to a non-cash inventory step-up associated with the required purchase accounting for the VION Acquisition related to the portion of acquired inventory sold during the period;
|
•
|
$31.7 million related to the redemption premium and write-off of deferred loan costs associated with the retirement of the Company’s 8.5% Senior Notes on February 7, 2014;
|
•
|
$24.7 million associated with the acquisition and integration of Rothsay and VION Ingredients during the period; and
|
•
|
$12.6 million related to certain euro forward contracts entered into to hedge against foreign exchange risks related to the closing of the VION Acquisition
|
|
Fiscal Year Ended
|
|||||
(dollars in thousands)
|
January 2,
2016 |
January 3,
2015 |
||||
Net income attributable to Darling
|
$
|
78,531
|
|
$
|
64,215
|
|
Depreciation and amortization
|
269,904
|
|
269,517
|
|
||
Interest expense
|
105,530
|
|
135,416
|
|
||
Income tax expense/(benefit)
|
13,501
|
|
13,141
|
|
||
Foreign currency loss/(gain)
|
4,911
|
|
13,548
|
|
||
Other expense/(income), net
|
6,839
|
|
(299
|
)
|
||
Equity in net (income)/loss of unconsolidated subsidiaries
|
(73,416
|
)
|
(65,609
|
)
|
||
Net (loss)/income attributable to noncontrolling interests
|
6,748
|
|
4,096
|
|
||
Adjusted EBITDA (Non-GAAP)
|
$
|
412,548
|
|
$
|
434,025
|
|
|
|
|
||||
Non-cash inventory step-up associated with VION Acquisition
|
—
|
|
49,803
|
|
||
Acquisition and integration-related expenses
|
8,299
|
|
24,667
|
|
||
Darling Ingredients International - 13th week (1)
|
—
|
|
4,100
|
|
||
Pro forma Adjusted EBITDA (Non-GAAP)
|
$
|
420,847
|
|
$
|
512,595
|
|
|
|
|
||||
Foreign currency exchange impact (3)
|
48,961
|
|
—
|
|
||
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP)
|
$
|
469,808
|
|
$
|
512,595
|
|
|
|
|
||||
DGD Joint Venture Adjusted EBITDA (Darling's Share) (2)
|
$
|
88,494
|
|
$
|
81,639
|
|
•
|
Finished product commodity prices
|
•
|
Segment operating income
|
•
|
Raw material processed
|
•
|
Gross margin percentage
|
•
|
Foreign currency
|
•
|
Corporate activities
|
|
Avg. Price
Fiscal 2015
|
Avg. Price
Fiscal 2014
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
Jacobsen:
|
|
|
|
|
|
MBM (Illinois)
|
$ 334.55/ton
|
$ 467.81/ton
|
$ (133.26)/ton
|
(28.5
|
)%
|
Feed Grade PM (Mid-South)
|
$ 404.54/ton
|
$ 555.42/ton
|
$ (150.88)/ton
|
(27.2
|
)%
|
Pet Food PM (Mid-South)
|
$ 544.64/ton
|
$ 790.75/ton
|
$ (246.11)/ton
|
(31.1
|
)%
|
Feather meal (Mid-South)
|
$ 472.27/ton
|
$ 700.69/ton
|
$ (228.42)/ton
|
(32.6
|
)%
|
BFT (Chicago)
|
$ 27.36/cwt
|
$ 36.77/cwt
|
$ (9.41)/cwt
|
(25.6
|
)%
|
YG (Illinois)
|
$ 21.79/cwt
|
$ 28.95/cwt
|
$ (7.16)/cwt
|
(24.7
|
)%
|
Corn (Illinois)
|
$ 3.89/bushel
|
$ 4.23/bushel
|
$ (0.34)/bushel
|
(8.0
|
)%
|
Reuters:
|
|
|
|
|
|
Palm Oil (CIF Rotterdam)
|
$ 607.00/ton
|
$ 809.00/ton
|
$ (202.00)/ton
|
(25.0
|
)%
|
Soy meal (CIF Rotterdam)
|
$ 391.00/ton
|
$ 526.00/ton
|
$ (135.00)/ton
|
(25.7
|
)%
|
|
Avg. Price
4th Quarter
2015
|
Avg. Price
3rd Quarter
2015
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
Jacobsen:
|
|
|
|
|
|
MBM (Illinois)
|
$ 249.29/ton
|
$ 354.91/ton
|
$ (105.62)/ton
|
(29.8
|
)%
|
Feed Grade PM (Mid-South)
|
$ 334.67/ton
|
$ 391.55/ton
|
$ (56.88)/ton
|
(14.5
|
)%
|
Pet Food PM (Mid-South)
|
$ 469.49/ton
|
$ 532.45/ton
|
$ (62.96)/ton
|
(11.8
|
)%
|
Feather meal (Mid-South)
|
$ 367.06/ton
|
$ 499.12/ton
|
$ (132.06)/ton
|
(26.5
|
)%
|
BFT (Chicago)
|
$ 21.18/cwt
|
$ 29.42/cwt
|
$ (8.24)/cwt
|
(28.0
|
)%
|
YG (Illinois)
|
$ 17.86/cwt
|
$ 21.48/cwt
|
$ (3.62)/cwt
|
(16.9
|
)%
|
Corn (Illinois)
|
$ 3.95/bushel
|
$ 3.91/bushel
|
$ 0.04/bushel
|
1.0
|
%
|
Reuters:
|
|
|
|
|
|
Palm Oil (CIF Rotterdam)
|
$ 563.00/ton
|
$ 558.00/ton
|
$ 5.00/ton
|
0.9
|
%
|
Soy meal (CIF Rotterdam)
|
$ 352.00/ton
|
$ 380.00/ton
|
$ (28.00)/ton
|
(7.4
|
)%
|
|
Fats
|
Proteins
|
Other Rendering
|
Total Rendering
|
Used Cooking Oil
|
Bakery
|
Other
|
Total
|
||||||||||||||||
Net sales year ended January 3, 2015
|
$
|
659.0
|
|
$
|
979.8
|
|
$
|
274.8
|
|
$
|
1,913.6
|
|
$
|
190.3
|
|
$
|
221.7
|
|
$
|
95.9
|
|
$
|
2,421.5
|
|
Increase/(decrease) in sales volumes
|
28.4
|
|
34.1
|
|
—
|
|
62.5
|
|
3.1
|
|
28.3
|
|
—
|
|
93.9
|
|
||||||||
Increase/(decrease) in finished product prices
|
(124.1
|
)
|
(118.6
|
)
|
—
|
|
(242.7
|
)
|
(37.6
|
)
|
(32.1
|
)
|
—
|
|
(312.4
|
)
|
||||||||
Increase/(decrease) due to currency exchange rates
|
(23.5
|
)
|
(66.8
|
)
|
(34.1
|
)
|
(124.4
|
)
|
(1.8
|
)
|
—
|
|
(0.3
|
)
|
(126.5
|
)
|
||||||||
Other change
|
—
|
|
—
|
|
3.3
|
|
3.3
|
|
—
|
|
—
|
|
(5.5
|
)
|
(2.2
|
)
|
||||||||
Total change
|
(119.2
|
)
|
(151.3
|
)
|
(30.8
|
)
|
(301.3
|
)
|
(36.3
|
)
|
(3.8
|
)
|
(5.8
|
)
|
(347.2
|
)
|
||||||||
Net sales year ended January 2, 2016
|
$
|
539.8
|
|
$
|
828.5
|
|
$
|
244.0
|
|
$
|
1,612.3
|
|
$
|
154.0
|
|
$
|
217.9
|
|
$
|
90.1
|
|
$
|
2,074.3
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Fiscal Year Ended January 2, 2016
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
2,074,333
|
|
$
|
1,094,918
|
|
$
|
228,195
|
|
$
|
—
|
|
$
|
3,397,446
|
|
Cost of sales and operating expenses
|
1,613,402
|
|
863,562
|
|
177,061
|
|
—
|
|
2,654,025
|
|
|||||
Gross Margin
|
460,931
|
|
231,356
|
|
51,134
|
|
—
|
|
743,421
|
|
|||||
|
|
|
|
|
|
||||||||||
Gross Margin %
|
22.2
|
%
|
21.1
|
%
|
22.4
|
%
|
—
|
%
|
21.9
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
178,624
|
|
103,301
|
|
7,264
|
|
33,385
|
|
322,574
|
|
|||||
Acquisition costs
|
—
|
|
—
|
|
—
|
|
8,299
|
|
8,299
|
|
|||||
Depreciation and amortization
|
165,854
|
|
66,817
|
|
26,711
|
|
10,522
|
|
269,904
|
|
|||||
Segment operating income/ (loss)
|
116,453
|
|
61,238
|
|
17,159
|
|
(52,206
|
)
|
142,644
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
1,521
|
|
—
|
|
71,895
|
|
—
|
|
73,416
|
|
|||||
Segment income
|
117,974
|
|
61,238
|
|
89,054
|
|
(52,206
|
)
|
216,060
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(117,280
|
)
|
|||||||||
Income/ (loss) before income taxes
|
|
|
|
|
$
|
98,780
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Fiscal Year Ended January 3, 2015
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
2,421,462
|
|
$
|
1,248,352
|
|
$
|
286,629
|
|
$
|
—
|
|
$
|
3,956,443
|
|
Cost of sales and operating expenses
|
1,864,835
|
|
1,029,488
|
|
228,848
|
|
—
|
|
3,123,171
|
|
|||||
Gross Margin
|
556,627
|
|
218,864
|
|
57,781
|
|
—
|
|
833,272
|
|
|||||
|
|
|
|
|
|
||||||||||
Gross Margin %
|
23.0
|
%
|
17.5
|
%
|
20.2
|
%
|
—
|
%
|
21.1
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
205,484
|
|
118,716
|
|
8,596
|
|
41,784
|
|
374,580
|
|
|||||
Acquisition costs
|
—
|
|
—
|
|
—
|
|
24,667
|
|
24,667
|
|
|||||
Depreciation and amortization
|
158,871
|
|
73,274
|
|
27,898
|
|
9,474
|
|
269,517
|
|
|||||
Segment operating income/(loss)
|
192,272
|
|
26,874
|
|
21,287
|
|
(75,925
|
)
|
164,508
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
1,842
|
|
—
|
|
63,767
|
|
—
|
|
65,609
|
|
|||||
Segment income
|
194,114
|
|
26,874
|
|
85,054
|
|
(75,925
|
)
|
230,117
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(148,665
|
)
|
|||||||||
Income before income taxes
|
|
|
|
|
$
|
81,452
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
|||||
Fiscal Year Ended January 2, 2016
|
|
|
|
|
|
|||||
Gross Margin %
|
22.2
|
%
|
21.1
|
%
|
22.4
|
%
|
—
|
|
21.9
|
%
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
|||||
Fiscal Year Ended January 3, 2015
|
|
|
|
|
|
|||||
Gross Margin %
|
23.0
|
%
|
17.5
|
%
|
20.2
|
%
|
—
|
|
21.1
|
%
|
|
|
|
|
|
|
|||||
Gross Margin % before inventory step-up
|
23.6
|
%
|
20.4
|
%
|
20.3
|
%
|
—
|
|
22.3
|
%
|
Senior Notes:
|
|
||
5.375 % Notes due 2022
|
$
|
500,000
|
|
Less unamortized deferred loan costs
|
(7,667
|
)
|
|
Carrying value of 5.375% Notes due 2022
|
$
|
492,333
|
|
|
|
||
4.75 % Notes due 2022 - Denominated in euros
|
$
|
543,840
|
|
Less unamortized deferred loan costs
|
(8,956
|
)
|
|
Carrying value of 4.75% Notes due 2022
|
$
|
534,884
|
|
|
|
||
Amended Credit Agreement:
|
|
||
Term Loan A
|
$
|
120,103
|
|
Less unamortized deferred loan costs
|
(1,083
|
)
|
|
Carrying value of Term Loan A
|
$
|
119,020
|
|
|
|
||
Term Loan B
|
$
|
583,500
|
|
Less unamortized deferred loan costs
|
(6,298
|
)
|
|
Carrying value of Term Loan B
|
$
|
577,202
|
|
|
|
||
Revolving Credit Facility:
|
|
||
Maximum availability
|
$
|
1,000,000
|
|
Borrowings outstanding
|
5,280
|
|
|
Letters of credit issued
|
26,585
|
|
|
Availability
|
$
|
968,135
|
|
|
|
||
Other Debt
|
$
|
22,224
|
|
•
|
As of
December 31, 2016
, the Company had availability of $
968.1 million
under the revolving loan facility, taking into account an aggregate of $
5.3 million
outstanding borrowings and letters of credit issued of $
26.6 million
.
|
•
|
As of
December 31, 2016
, the Company has borrowed all $350.0 million under the term loan A facility and repaid approximately CAD$
46.4 million
and $
156.8 million
, which when repaid, cannot be reborrowed. The term loan A facility is repayable in quarterly installments to commence on March 31, 2017 as follows: for the first eight quarters following December 16, 2016, 1.25% of the original principal amount of the term loan A facility outstanding on the Fourth Amendment date, for the ninth through sixteenth quarters following December 16, 2016, 1.875% of the original principal amount of the term loan A facility outstanding on the Fourth Amendment date, and for each quarterly installment after such sixteenth installment until December 16, 2021, 3.75% of the original principal amount of the term loan A facility outstanding on the Fourth Amendment date. The term loan A facility will mature on December 16, 2021, subject to a 91 day “springing” adjustment if the Term B loans are outstanding 91 days prior to the maturity date (January 6, 2021) of the Term B loans.
|
•
|
As of
December 31, 2016
, the Company has borrowed all $1.3 billion under the terms of the term loan B facility and repaid approximately €
510.0 million
and $
16.5 million
, which when repaid, cannot be reborrowed. The term loan B facility is repayable in quarterly installments of 0.25% of the aggregate principal amount of the relevant term loan B facility on the last day of each March, June, September and December of each year commencing on the last day of each month falling on or after the last day of the first full quarter following January 6, 2014, and continuing until the last day of each quarter period ending immediately prior to January 6, 2021; and one final installment in the amount of the relevant term loan B facility then outstanding, due on January 6, 2021. The term loan B facility will mature on January 6, 2021.
|
•
|
The interest rate applicable to any borrowings under the term loan A facility and the revolving loan facility will equal either LIBOR/euro interbank offered rate/CDOR plus 2.00% per annum or base rate/Canadian prime rate plus 1.00% per annum, subject to certain step-downs or step-ups based on the Company's total leverage ratio. The interest rate applicable to any borrowings under the term loan B facility will equal (a) for U.S. dollar term loans, either the base rate plus 1.50% or LIBOR plus 2.50%, and (b) for euro revolving loans, the euro interbank offered rate plus 2.75%, in each case subject to a step-down based on our total leverage ratio. For term loan B loans, the LIBOR rate cannot be less than 0.75%.
|
|
Total
|
Less than
1 Year
|
1 – 3
Years
|
3 – 5
Years
|
More than
5 Years
|
||||||||||
Contractual obligations(a):
|
|
|
|
|
|
||||||||||
Long-term debt obligations (b)
|
$
|
1,752,723
|
|
$
|
4,500
|
|
$
|
15,242
|
|
$
|
689,141
|
|
$
|
1,043,840
|
|
Operating lease obligations (c)
|
146,867
|
|
39,481
|
|
66,688
|
|
26,679
|
|
14,019
|
|
|||||
Capital lease obligations (c)
|
2,847
|
|
1,527
|
|
1,176
|
|
144
|
|
—
|
|
|||||
Estimated interest payable (d)
|
379,401
|
|
79,723
|
|
158,003
|
|
129,878
|
|
11,797
|
|
|||||
Purchase commitments (e)
|
100,314
|
|
100,314
|
|
—
|
|
—
|
|
—
|
|
|||||
Pension funding obligation (f)
|
4,321
|
|
4,321
|
|
—
|
|
—
|
|
—
|
|
|||||
Other obligations
|
19,522
|
|
18,818
|
|
403
|
|
75
|
|
226
|
|
|||||
Total
|
$
|
2,405,995
|
|
$
|
248,684
|
|
$
|
241,512
|
|
$
|
845,917
|
|
$
|
1,069,882
|
|
(a)
|
The above table does not reflect uncertain tax positions at
December 31, 2016
. The Company's uncertain tax position is approximately $
4.7 million
.
|
(b)
|
Represents debt obligations outstanding as of December 31, 2016. See Note 10 to the consolidated financial statements.
|
(c)
|
See Note 9 to the consolidated financial statements.
|
(d)
|
Interest payable was calculated using the current rate for the debt that was outstanding as of December 31, 2016.
|
(e)
|
Purchase commitments were determined based on specified contracts for natural gas, diesel fuel and finished product purchases.
|
(f)
|
Pension funding requirements are determined annually based upon a third party actuarial estimate. The Company expects to make approximately $
4.3 million
in required contributions to domestic and foreign pension plans in
fiscal 2017
. The Company is not able to estimate pension funding requirements beyond the next twelve months. The accrued pension benefit liability was approximately $
54.4 million
at the end of
fiscal 2016
. The Company knows certain of the multiemployer pension plans that have not terminated to which it contributes and which are not administered by the Company were under-funded as of the latest available information, and while the Company has no ability to calculate a possible current liability for the under-funded multiemployer plan to which the Company contributes, the amounts could be material.
|
Other commercial commitments:
|
|
||
Standby letters of credit
|
$
|
26,585
|
|
Foreign bank guarantees
|
10,051
|
|
|
Total other commercial commitments:
|
$
|
36,636
|
|
Functional Currency
|
|
Contract Currency
|
|
Range of
|
U.S.
|
||||||
Type
|
Amount
|
|
Type
|
Amount
|
|
Hedge rates
|
Equivalent
|
||||
Brazilian real
|
28,304
|
|
|
Euro
|
7,270
|
|
|
3.46 - 4.41
|
$
|
8,695
|
|
Brazilian real
|
66,273
|
|
|
U.S. dollar
|
18,900
|
|
|
3.21 - 3.92
|
18,900
|
|
|
Euro
|
150,394
|
|
|
U.S. dollar
|
166,377
|
|
|
1.05 - 1.13
|
166,377
|
|
|
Euro
|
10,444
|
|
|
Polish zloty
|
47,000
|
|
|
4.42 - 4.51
|
11,029
|
|
|
Euro
|
4,295
|
|
|
Japanese yen
|
505,320
|
|
|
114.37 - 122.50
|
4,536
|
|
|
Euro
|
34,337
|
|
|
Chinese renminbi
|
254,639
|
|
|
7.42
|
36,260
|
|
|
Euro
|
11,563
|
|
|
Australian dollar
|
16,700
|
|
|
1.44
|
12,211
|
|
|
Euro
|
1,405
|
|
|
British pound
|
1,200
|
|
|
.085
|
1,484
|
|
|
Polish zloty
|
19,111
|
|
|
Euro
|
4,312
|
|
|
4.31 - 4.52
|
4,562
|
|
|
Japanese yen
|
14,423
|
|
|
U.S. dollar
|
135
|
|
|
106.54 - 107.13
|
135
|
|
|
|
|
|
|
|
|
|
$
|
264,189
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
December 31,
2016
|
|
January 2,
2016
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
114,564
|
|
|
$
|
156,884
|
|
Restricted cash
|
293
|
|
|
331
|
|
||
Accounts receivable, less allowance for bad debts of $8,090
at December 31, 2016 and $9,732 at January 2, 2016
|
388,397
|
|
|
371,392
|
|
||
Inventories
|
330,815
|
|
|
344,583
|
|
||
Prepaid expenses
|
29,984
|
|
|
36,175
|
|
||
Income taxes refundable
|
7,479
|
|
|
11,963
|
|
||
Other current assets
|
21,770
|
|
|
10,460
|
|
||
Total current assets
|
893,302
|
|
|
931,788
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
1,515,575
|
|
|
1,508,167
|
|
||
Intangible assets, less accumulated amortization of $301,187
at December 31, 2016 and $252,719 at January 2, 2016
|
711,927
|
|
|
782,349
|
|
||
Goodwill
|
1,225,893
|
|
|
1,233,102
|
|
||
Investment in unconsolidated subsidiaries
|
292,717
|
|
|
247,238
|
|
||
Other assets
|
43,613
|
|
|
41,623
|
|
||
Deferred income taxes
|
14,990
|
|
|
16,352
|
|
||
|
$
|
4,698,017
|
|
|
$
|
4,760,619
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Current portion of long-term debt
|
$
|
23,247
|
|
|
$
|
45,166
|
|
Accounts payable, principally trade
|
180,895
|
|
|
149,998
|
|
||
Income taxes payable
|
4,913
|
|
|
6,679
|
|
||
Accrued expenses
|
242,796
|
|
|
239,825
|
|
||
Total current liabilities
|
451,851
|
|
|
441,668
|
|
||
|
|
|
|
||||
Long-term debt, net of current portion
|
1,727,696
|
|
|
1,885,851
|
|
||
Other noncurrent liabilities
|
96,114
|
|
|
97,809
|
|
||
Deferred income taxes
|
346,134
|
|
|
360,681
|
|
||
Total liabilities
|
2,621,795
|
|
|
2,786,009
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
||
Common stock, $.01 par value; 250,000,000 shares authorized, 167,641,415 and 167,070,983 shares issued at December 31, 2016 and January 2, 2016, respectively
|
1,676
|
|
|
1,671
|
|
||
Additional paid-in capital
|
1,499,431
|
|
|
1,488,783
|
|
||
Treasury stock, at cost; 3,028,857 and 2,335,607 shares at
December 31, 2016 and January 2, 2016, respectively
|
(40,909
|
)
|
|
(34,316
|
)
|
||
Accumulated other comprehensive loss
|
(340,006
|
)
|
|
(335,918
|
)
|
||
Retained earnings
|
852,802
|
|
|
750,489
|
|
||
Total Darling's stockholders’ equity
|
1,972,994
|
|
|
1,870,709
|
|
||
Noncontrolling interests
|
103,228
|
|
|
103,901
|
|
||
Total stockholders’ equity
|
2,076,222
|
|
|
1,974,610
|
|
||
|
$
|
4,698,017
|
|
|
$
|
4,760,619
|
|
|
December 31,
2016
|
|
January 2,
2016
|
|
January 3,
2015
|
||||||
Net sales
|
$
|
3,398,115
|
|
|
$
|
3,397,446
|
|
|
$
|
3,956,443
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|||
Cost of sales and operating expenses
|
2,641,734
|
|
|
2,654,025
|
|
|
3,123,171
|
|
|||
Selling, general and administrative expenses
|
314,005
|
|
|
322,574
|
|
|
374,580
|
|
|||
Depreciation and amortization
|
289,908
|
|
|
269,904
|
|
|
269,517
|
|
|||
Acquisition and integration costs
|
401
|
|
|
8,299
|
|
|
24,667
|
|
|||
Total costs and expenses
|
3,246,048
|
|
|
3,254,802
|
|
|
3,791,935
|
|
|||
Operating income
|
152,067
|
|
|
142,644
|
|
|
164,508
|
|
|||
|
|
|
|
|
|
||||||
Other expense:
|
|
|
|
|
|
|
|
|
|||
Interest expense
|
(94,187
|
)
|
|
(105,530
|
)
|
|
(135,416
|
)
|
|||
Foreign currency losses
|
(1,854
|
)
|
|
(4,911
|
)
|
|
(13,548
|
)
|
|||
Other income/(expense), net
|
(3,866
|
)
|
|
(6,839
|
)
|
|
299
|
|
|||
Total other expense
|
(99,907
|
)
|
|
(117,280
|
)
|
|
(148,665
|
)
|
|||
|
|
|
|
|
|
||||||
Equity in net income of unconsolidated subsidiaries
|
70,379
|
|
|
73,416
|
|
|
65,609
|
|
|||
Income from operations before income taxes
|
122,539
|
|
|
98,780
|
|
|
81,452
|
|
|||
|
|
|
|
|
|
||||||
Income taxes
|
15,315
|
|
|
13,501
|
|
|
13,141
|
|
|||
|
|
|
|
|
|
||||||
Net income
|
107,224
|
|
|
85,279
|
|
|
68,311
|
|
|||
|
|
|
|
|
|
||||||
Net income attributable to noncontrolling interests
|
(4,911
|
)
|
|
(6,748
|
)
|
|
(4,096
|
)
|
|||
|
|
|
|
|
|
||||||
Net income attributable to Darling
|
$
|
102,313
|
|
|
$
|
78,531
|
|
|
$
|
64,215
|
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
0.62
|
|
|
$
|
0.48
|
|
|
$
|
0.39
|
|
Diluted
|
$
|
0.62
|
|
|
$
|
0.48
|
|
|
$
|
0.39
|
|
|
December 31, 2016
|
|
January 2, 2016
|
|
January 3, 2015
|
||||||
Net income
|
$
|
107,224
|
|
|
$
|
85,279
|
|
|
$
|
68,311
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation
|
(5,593
|
)
|
|
(162,436
|
)
|
|
(119,684
|
)
|
|||
Pension adjustments
|
(1,016
|
)
|
|
4,202
|
|
|
(20,381
|
)
|
|||
Natural gas swap derivative adjustments
|
—
|
|
|
—
|
|
|
(113
|
)
|
|||
Corn option derivative adjustments
|
625
|
|
|
1,767
|
|
|
(1,259
|
)
|
|||
Total other comprehensive loss, net of tax
|
(5,984
|
)
|
|
(156,467
|
)
|
|
(141,437
|
)
|
|||
Total comprehensive income/(loss)
|
101,240
|
|
|
(71,188
|
)
|
|
(73,126
|
)
|
|||
Comprehensive income attributable to noncontrolling interests
|
3,015
|
|
|
9,139
|
|
|
10,296
|
|
|||
Comprehensive income/(loss) attributable to Darling
|
$
|
98,225
|
|
|
$
|
(80,327
|
)
|
|
$
|
(83,422
|
)
|
|
Common Stock
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Number of Outstanding Shares
|
$.01 par Value
|
Additional Paid-In Capital
|
Treasury Stock
|
Accumulated Other Comprehensive Loss
|
Retained Earnings
|
Stockholders' equity attributable to Darling
|
Non-controlling Interest
|
Total Stockholders' Equity
|
|||||||||||||||||
Balances at December 28, 2013
|
164,267,425
|
|
$
|
1,653
|
|
$
|
1,454,250
|
|
$
|
(13,271
|
)
|
$
|
(29,423
|
)
|
$
|
607,743
|
|
$
|
2,020,952
|
|
$
|
—
|
|
$
|
2,020,952
|
|
Acquisition of noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
90,919
|
|
90,919
|
|
||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
64,215
|
|
64,215
|
|
4,096
|
|
68,311
|
|
||||||||
Distribution of noncontrolling interest earnings
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(4,272
|
)
|
(4,272
|
)
|
||||||||
Additions to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,201
|
|
1,201
|
|
||||||||
Pension liability adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
(20,381
|
)
|
—
|
|
(20,381
|
)
|
—
|
|
(20,381
|
)
|
||||||||
Natural gas swap derivative adjustment, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
(113
|
)
|
—
|
|
(113
|
)
|
—
|
|
(113
|
)
|
||||||||
Corn option derivative adjustment, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,259
|
)
|
—
|
|
(1,259
|
)
|
—
|
|
(1,259
|
)
|
||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
(125,884
|
)
|
—
|
|
(125,884
|
)
|
6,200
|
|
(119,684
|
)
|
||||||||
Issuance of non-vested stock
|
209,827
|
|
2
|
|
4,369
|
|
—
|
|
—
|
|
—
|
|
4,371
|
|
—
|
|
4,371
|
|
||||||||
Stock-based compensation
|
—
|
|
—
|
|
9,993
|
|
—
|
|
—
|
|
—
|
|
9,993
|
|
—
|
|
9,993
|
|
||||||||
Tax benefits associated with stock-based compensation
|
—
|
|
—
|
|
2,420
|
|
—
|
|
—
|
|
—
|
|
2,420
|
|
—
|
|
2,420
|
|
||||||||
Treasury stock
|
(507,552
|
)
|
—
|
|
—
|
|
(9,936
|
)
|
—
|
|
—
|
|
(9,936
|
)
|
—
|
|
(9,936
|
)
|
||||||||
Issuance of common stock
|
742,963
|
|
7
|
|
8,605
|
|
—
|
|
—
|
|
—
|
|
8,612
|
|
—
|
|
8,612
|
|
||||||||
Balances at January 3, 2015
|
164,712,663
|
|
$
|
1,662
|
|
$
|
1,479,637
|
|
$
|
(23,207
|
)
|
$
|
(177,060
|
)
|
$
|
671,958
|
|
$
|
1,952,990
|
|
$
|
98,144
|
|
$
|
2,051,134
|
|
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
78,531
|
|
78,531
|
|
6,748
|
|
85,279
|
|
||||||||
Distribution of noncontrolling interest earnings
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,295
|
)
|
(3,295
|
)
|
||||||||
Deductions to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(87
|
)
|
(87
|
)
|
||||||||
Pension liability adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
4,202
|
|
—
|
|
4,202
|
|
—
|
|
4,202
|
|
||||||||
Corn option derivative adjustment, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
1,767
|
|
—
|
|
1,767
|
|
—
|
|
1,767
|
|
||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
(164,827
|
)
|
—
|
|
(164,827
|
)
|
2,391
|
|
(162,436
|
)
|
||||||||
Issuance of non-vested stock
|
261,615
|
|
3
|
|
3,788
|
|
—
|
|
—
|
|
—
|
|
3,791
|
|
—
|
|
3,791
|
|
||||||||
Stock-based compensation
|
—
|
|
—
|
|
2,083
|
|
—
|
|
—
|
|
—
|
|
2,083
|
|
—
|
|
2,083
|
|
||||||||
Tax benefits associated with stock-based compensation
|
—
|
|
—
|
|
(389
|
)
|
—
|
|
—
|
|
—
|
|
(389
|
)
|
—
|
|
(389
|
)
|
||||||||
Treasury stock
|
(834,477
|
)
|
—
|
|
—
|
|
(11,109
|
)
|
—
|
|
—
|
|
(11,109
|
)
|
—
|
|
(11,109
|
)
|
||||||||
Issuance of common stock
|
595,575
|
|
6
|
|
3,664
|
|
—
|
|
—
|
|
—
|
|
3,670
|
|
—
|
|
3,670
|
|
||||||||
Balances at January 2, 2016
|
164,735,376
|
|
$
|
1,671
|
|
$
|
1,488,783
|
|
$
|
(34,316
|
)
|
$
|
(335,918
|
)
|
$
|
750,489
|
|
$
|
1,870,709
|
|
$
|
103,901
|
|
$
|
1,974,610
|
|
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
102,313
|
|
102,313
|
|
4,911
|
|
107,224
|
|
||||||||
Distribution of noncontrolling interest earnings
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,688
|
)
|
(3,688
|
)
|
||||||||
Pension liability adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,016
|
)
|
—
|
|
(1,016
|
)
|
—
|
|
(1,016
|
)
|
||||||||
Corn option derivative adjustment, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
625
|
|
—
|
|
625
|
|
—
|
|
625
|
|
||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,697
|
)
|
—
|
|
(3,697
|
)
|
(1,896
|
)
|
(5,593
|
)
|
||||||||
Issuance of non-vested stock
|
341,185
|
|
3
|
|
4,128
|
|
—
|
|
—
|
|
—
|
|
4,131
|
|
—
|
|
4,131
|
|
||||||||
Stock-based compensation
|
—
|
|
—
|
|
4,081
|
|
—
|
|
—
|
|
—
|
|
4,081
|
|
—
|
|
4,081
|
|
||||||||
Tax benefits associated with stock-based compensation
|
—
|
|
—
|
|
(364
|
)
|
—
|
|
—
|
|
—
|
|
(364
|
)
|
—
|
|
(364
|
)
|
||||||||
Treasury stock
|
(693,250
|
)
|
—
|
|
—
|
|
(6,593
|
)
|
—
|
|
—
|
|
(6,593
|
)
|
—
|
|
(6,593
|
)
|
||||||||
Issuance of common stock
|
229,247
|
|
2
|
|
2,803
|
|
—
|
|
—
|
|
—
|
|
2,805
|
|
—
|
|
2,805
|
|
||||||||
Balances at December 31, 2016
|
164,612,558
|
|
$
|
1,676
|
|
$
|
1,499,431
|
|
$
|
(40,909
|
)
|
$
|
(340,006
|
)
|
$
|
852,802
|
|
$
|
1,972,994
|
|
$
|
103,228
|
|
$
|
2,076,222
|
|
|
December 31,
2016
|
|
January 2,
2016
|
|
January 3,
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
107,224
|
|
|
$
|
85,279
|
|
|
$
|
68,311
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
289,908
|
|
|
269,904
|
|
|
269,517
|
|
|||
Deferred income taxes
|
(11,532
|
)
|
|
7,807
|
|
|
(21,216
|
)
|
|||
Loss/(gain) on sale of assets
|
1,744
|
|
|
1,311
|
|
|
(2,437
|
)
|
|||
Gain on insurance proceeds from insurance settlement
|
(356
|
)
|
|
(561
|
)
|
|
(1,550
|
)
|
|||
Increase/(decrease) in long-term pension liability
|
(430
|
)
|
|
(4,811
|
)
|
|
9,593
|
|
|||
Stock-based compensation expense
|
10,330
|
|
|
8,995
|
|
|
20,807
|
|
|||
Write-off deferred loan costs
|
528
|
|
|
10,633
|
|
|
4,330
|
|
|||
Deferred loan cost amortization
|
11,171
|
|
|
10,155
|
|
|
9,949
|
|
|||
Equity in net income of unconsolidated subsidiary
|
(70,379
|
)
|
|
(73,416
|
)
|
|
(65,609
|
)
|
|||
Distributions of earnings from unconsolidated subsidiaries
|
26,317
|
|
|
26,589
|
|
|
—
|
|
|||
Changes in operating assets and liabilities, net
of effects from acquisitions:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
(22,796
|
)
|
|
8,214
|
|
|
982
|
|
|||
Income taxes refundable/payable
|
2,839
|
|
|
12,377
|
|
|
(22,451
|
)
|
|||
Inventories and prepaid expenses
|
15,343
|
|
|
34,536
|
|
|
(11,194
|
)
|
|||
Accounts payable and accrued expenses
|
39,286
|
|
|
(11,449
|
)
|
|
(31,223
|
)
|
|||
Other
|
(8,161
|
)
|
|
35,396
|
|
|
47,363
|
|
|||
Net cash provided by operating activities
|
391,036
|
|
|
420,959
|
|
|
275,172
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(243,523
|
)
|
|
(229,848
|
)
|
|
(228,918
|
)
|
|||
Acquisitions, net of cash acquired
|
(8,511
|
)
|
|
(377
|
)
|
|
(2,094,400
|
)
|
|||
Gross proceeds from sale of property, plant and equipment and other assets
|
7,329
|
|
|
3,840
|
|
|
9,262
|
|
|||
Proceeds from insurance settlement
|
1,537
|
|
|
561
|
|
|
1,550
|
|
|||
Payments related to routes and other intangibles
|
(23
|
)
|
|
(3,845
|
)
|
|
(11,288
|
)
|
|||
Net cash used in investing activities
|
(243,191
|
)
|
|
(229,669
|
)
|
|
(2,323,794
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from long-term debt
|
36,327
|
|
|
590,745
|
|
|
1,842,184
|
|
|||
Payments on long-term debt
|
(204,428
|
)
|
|
(609,255
|
)
|
|
(333,762
|
)
|
|||
Borrowings from revolving credit facility
|
99,276
|
|
|
78,244
|
|
|
170,143
|
|
|||
Payments on revolving credit facility
|
(104,028
|
)
|
|
(166,755
|
)
|
|
(351,589
|
)
|
|||
Net cash overdraft financing
|
1,071
|
|
|
(1,261
|
)
|
|
4,077
|
|
|||
Deferred loan costs
|
(3,879
|
)
|
|
(17,310
|
)
|
|
(45,223
|
)
|
|||
Issuance of common stock
|
188
|
|
|
171
|
|
|
416
|
|
|||
Repurchase of common stock
|
(5,000
|
)
|
|
(5,912
|
)
|
|
—
|
|
|||
Minimum withholding taxes paid on stock awards
|
(1,843
|
)
|
|
(4,874
|
)
|
|
(10,026
|
)
|
|||
Excess tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
2,420
|
|
|||
Addition/(deductions) of noncontrolling interest
|
—
|
|
|
(87
|
)
|
|
1,201
|
|
|||
Distributions to noncontrolling interests
|
(1,552
|
)
|
|
(3,295
|
)
|
|
(4,272
|
)
|
|||
Net cash provided/(used) in financing activities
|
(183,868
|
)
|
|
(139,589
|
)
|
|
1,275,569
|
|
|||
Effect of exchange rate changes on cash flows
|
(6,297
|
)
|
|
(3,601
|
)
|
|
10,980
|
|
|||
Net increase/(decrease) in cash and cash equivalents
|
(42,320
|
)
|
|
48,100
|
|
|
(762,073
|
)
|
|||
Cash and cash equivalents at beginning of year
|
156,884
|
|
|
108,784
|
|
|
870,857
|
|
|||
Cash and cash equivalents at end of year
|
$
|
114,564
|
|
|
$
|
156,884
|
|
|
$
|
108,784
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Accrued capital expenditures
|
$
|
(937
|
)
|
|
$
|
5,325
|
|
|
$
|
1,340
|
|
Cash paid during the year for:
|
|
|
|
|
|
|
|
|
|||
Interest, net of capitalized interest
|
$
|
82,094
|
|
|
$
|
78,979
|
|
|
$
|
104,834
|
|
Income taxes, net of refunds
|
$
|
23,220
|
|
|
$
|
(3,035
|
)
|
|
$
|
28,315
|
|
Non-cash financing activities
|
|
|
|
|
|
||||||
Debt issued for service contract assets
|
$
|
10
|
|
|
$
|
2,591
|
|
|
$
|
—
|
|
Contribution of assets to unconsolidated subsidiary
|
$
|
2,674
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(b)
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
(1)
|
Basis of Presentation
|
(2)
|
Fiscal Year
|
(3)
|
Cash and Cash Equivalents
|
(4)
|
Accounts Receivable and Allowance for Doubtful Accounts
|
(5)
|
Inventories
|
(6)
|
Long Lived Assets
|
(7)
|
Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed of
|
(8)
|
Goodwill
|
(9)
|
Environmental Expenditures
|
(10)
|
Income Taxes
|
(11)
|
Earnings per Share
|
|
Net Income per Common Share (in thousands, except per share data)
|
||||||||||||||||||||||
|
|
December 31,
|
|
|
|
January 2,
|
|
|
|
January 3,
|
|
||||||||||||
|
|
2016
|
|
|
|
2016
|
|
|
|
2015
|
|
||||||||||||
|
Income
|
Shares
|
Per-Share
|
|
Income
|
Shares
|
Per-Share
|
|
Income
|
Shares
|
Per-Share
|
||||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income attributable to Darling
|
$
|
102,313
|
|
164,600
|
$
|
0.62
|
|
|
$
|
78,531
|
|
165,031
|
$
|
0.48
|
|
|
$
|
64,215
|
|
164,627
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Add: Option shares in the money and dilutive effect of nonvested stock
|
—
|
|
1,329
|
—
|
|
|
—
|
|
168
|
—
|
|
|
—
|
|
806
|
—
|
|
||||||
Less: Pro-forma treasury shares
|
—
|
|
(717)
|
—
|
|
|
—
|
|
(80)
|
—
|
|
|
—
|
(374)
|
—
|
|
|||||||
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income attributable to Darling
|
$
|
102,313
|
|
165,212
|
$
|
0.62
|
|
|
$
|
78,531
|
|
165,119
|
$
|
0.48
|
|
|
$
|
64,215
|
|
165,059
|
$
|
0.39
|
|
(12)
|
Stock Based Compensation
|
(13)
|
Use of Estimates
|
(14)
|
Financial Instruments
|
(15)
|
Derivative Instruments
|
(16)
|
Revenue Recognition
|
(17)
|
Related Party Transactions
|
(18)
|
Foreign Currency Translation and Remeasurement
|
(19)
|
Reclassification
|
(20)
|
Subsequent Events
|
Accounts receivable
|
$
|
337,278
|
|
Inventory
|
375,306
|
|
|
Prepaid expense
|
23,135
|
|
|
Other current assets
|
3,525
|
|
|
Deferred tax assets
|
48,639
|
|
|
Property plant and equipment
|
981,009
|
|
|
Identifiable intangibles
|
464,193
|
|
|
Goodwill
|
702,672
|
|
|
Investment in unconsolidated subsidiaries
|
27,069
|
|
|
Other long term assets
|
1,101
|
|
|
Accounts payable
|
(210,477
|
)
|
|
Current portion of long-term debt
|
(26,347
|
)
|
|
Accrued expenses
|
(149,345
|
)
|
|
Deferred tax liability
|
(350,003
|
)
|
|
Long Term debt obligations
|
(4,109
|
)
|
|
Other noncurrent liabilities
|
(57,721
|
)
|
|
Noncontrolling interests
|
(90,919
|
)
|
|
Purchase price, net of cash acquired of $91.2 million
|
$
|
2,075,006
|
|
|
December 31, 2016
|
|
January 2, 2016
|
||||
Finished product
|
$
|
156,542
|
|
|
$
|
164,428
|
|
Work in process
|
87,284
|
|
|
84,474
|
|
||
Raw material
|
39,859
|
|
|
48,401
|
|
||
Supplies and other
|
47,130
|
|
|
47,280
|
|
||
|
$
|
330,815
|
|
|
$
|
344,583
|
|
|
December 31, 2016
|
|
January 2, 2016
|
||||
Land
|
$
|
152,949
|
|
|
$
|
156,422
|
|
Buildings and improvements
|
464,957
|
|
|
448,620
|
|
||
Machinery and equipment
|
1,385,694
|
|
|
1,211,465
|
|
||
Vehicles
|
204,995
|
|
|
189,561
|
|
||
Aircraft
|
13,504
|
|
|
13,504
|
|
||
Construction in process
|
135,662
|
|
|
141,470
|
|
||
|
2,357,761
|
|
|
2,161,042
|
|
||
Accumulated depreciation
|
(842,186
|
)
|
|
(652,875
|
)
|
||
|
$
|
1,515,575
|
|
|
$
|
1,508,167
|
|
|
December 31, 2016
|
|
January 2, 2016
|
||||
Indefinite Lived Intangible Assets
|
|
|
|
||||
Trade names
|
$
|
51,687
|
|
|
$
|
52,466
|
|
|
51,687
|
|
|
52,466
|
|
||
Finite Lived Intangible Assets:
|
|
|
|
|
|
||
Routes
|
374,989
|
|
|
390,888
|
|
||
Permits
|
493,311
|
|
|
494,754
|
|
||
Non-compete agreements
|
3,638
|
|
|
6,996
|
|
||
Trade names
|
76,033
|
|
|
75,825
|
|
||
Royalty, consulting, land use rights and leasehold
|
13,456
|
|
|
14,139
|
|
||
|
961,427
|
|
|
982,602
|
|
||
Accumulated Amortization:
|
|
|
|
||||
Routes
|
(105,934
|
)
|
|
(99,819
|
)
|
||
Permits
|
(170,165
|
)
|
|
(134,752
|
)
|
||
Non-compete agreements
|
(1,788
|
)
|
|
(4,628
|
)
|
||
Trade names
|
(21,042
|
)
|
|
(11,959
|
)
|
||
Royalty, consulting, land use rights and leasehold
|
(2,258
|
)
|
|
(1,561
|
)
|
||
|
(301,187
|
)
|
|
(252,719
|
)
|
||
Total Intangible assets, less accumulated amortization
|
$
|
711,927
|
|
|
$
|
782,349
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Total
|
||||||||
Balance at January 3, 2015
|
|
|
|
|
||||||||
Goodwill
|
$
|
863,508
|
|
$
|
346,153
|
|
$
|
126,672
|
|
$
|
1,336,333
|
|
Accumulated impairment losses
|
(15,914
|
)
|
—
|
|
—
|
|
(15,914
|
)
|
||||
|
847,594
|
|
346,153
|
|
126,672
|
|
1,320,419
|
|
||||
Goodwill acquired during year
|
(259
|
)
|
—
|
|
521
|
|
262
|
|
||||
Foreign currency translation
|
(50,452
|
)
|
(22,768
|
)
|
(14,359
|
)
|
(87,579
|
)
|
||||
Balance at January 2, 2016
|
|
|
|
|
||||||||
Goodwill
|
812,797
|
|
323,385
|
|
112,834
|
|
1,249,016
|
|
||||
Accumulated impairment losses
|
(15,914
|
)
|
—
|
|
—
|
|
(15,914
|
)
|
||||
|
796,883
|
|
323,385
|
|
112,834
|
|
1,233,102
|
|
||||
Goodwill acquired during year
|
827
|
|
—
|
|
2
|
|
829
|
|
||||
Foreign currency translation
|
(3
|
)
|
(6,377
|
)
|
(1,658
|
)
|
(8,038
|
)
|
||||
Balance at December 31, 2016
|
|
|
|
|
|
|
|
|||||
Goodwill
|
813,621
|
|
317,008
|
|
111,178
|
|
1,241,807
|
|
||||
Accumulated impairment losses
|
(15,914
|
)
|
—
|
|
—
|
|
(15,914
|
)
|
||||
|
$
|
797,707
|
|
$
|
317,008
|
|
$
|
111,178
|
|
$
|
1,225,893
|
|
(in thousands)
|
|
December 31, 2016
|
December 31, 2015
|
||||
Assets:
|
|
|
|
||||
Total current assets
|
|
$
|
268,734
|
|
$
|
261,444
|
|
Property, plant and equipment, net
|
|
354,871
|
|
356,230
|
|
||
Other assets
|
|
12,164
|
|
3,034
|
|
||
Total assets
|
|
$
|
635,769
|
|
$
|
620,708
|
|
Liabilities and members' equity:
|
|
|
|
||||
Total current portion of long term debt
|
|
$
|
17,023
|
|
$
|
62,023
|
|
Total other current liabilities
|
|
23,200
|
|
19,935
|
|
||
Total long term debt
|
|
53,753
|
|
86,819
|
|
||
Total other long term liabilities
|
|
418
|
|
380
|
|
||
Total members' equity
|
|
541,375
|
|
451,551
|
|
||
Total liabilities and member's equity
|
|
$
|
635,769
|
|
$
|
620,708
|
|
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
|
2016
|
2015
|
2014
|
||||||
Revenues:
|
|
|
|
|
||||||
Operating revenues
|
|
$
|
527,670
|
|
$
|
475,934
|
|
$
|
487,834
|
|
Expenses:
|
|
|
|
|
||||||
Total costs and expenses less depreciation, amortization and accretion expense
|
|
353,222
|
|
298,946
|
|
324,557
|
|
|||
Depreciation, amortization and accretion expense
|
|
27,821
|
|
19,714
|
|
18,186
|
|
|||
Operating income
|
|
146,627
|
|
157,274
|
|
145,091
|
|
|||
Other income
|
|
551
|
|
120
|
|
82
|
|
|||
Interest and debt expense, net
|
|
(7,354
|
)
|
(13,604
|
)
|
(17,640
|
)
|
|||
Net income
|
|
$
|
139,824
|
|
$
|
143,790
|
|
$
|
127,533
|
|
|
December 31, 2016
|
|
January 2, 2016
|
||||
Compensation and benefits
|
$
|
83,355
|
|
|
$
|
79,087
|
|
Utilities and sewage
|
16,446
|
|
|
16,671
|
|
||
Accrued income, ad valorem, and franchise taxes
|
19,179
|
|
|
13,711
|
|
||
Reserve for self insurance, litigation, environmental and tax matters (Note 19)
|
12,479
|
|
|
13,643
|
|
||
Medical claims liability
|
5,070
|
|
|
3,807
|
|
||
Accrued operating expenses
|
55,128
|
|
|
50,953
|
|
||
Accrued interest payable
|
15,961
|
|
|
16,060
|
|
||
Other accrued expense
|
35,178
|
|
|
45,893
|
|
||
|
$
|
242,796
|
|
|
$
|
239,825
|
|
Period Ending Fiscal
|
Operating Leases
|
Capital Leases
|
||||
2017
|
$
|
39,481
|
|
$
|
1,527
|
|
2018
|
35,653
|
|
891
|
|
||
2019
|
31,035
|
|
285
|
|
||
2020
|
19,258
|
|
144
|
|
||
2021
|
7,421
|
|
—
|
|
||
Thereafter
|
14,019
|
|
—
|
|
||
|
$
|
146,867
|
|
$
|
2,847
|
|
Less amounts representing interest
|
|
(145
|
)
|
|||
Capital lease obligations included in current and long-term debt
|
|
$
|
2,702
|
|
|
December 31, 2016
|
|
January 2, 2016
|
||||
Amended Credit Agreement:
|
|
|
|
||||
Revolving Credit Facility ($5.3 million denominated in euro at December 31, 2016 and $9.4 million denominated in CAD at January 2, 2016)
|
$
|
5,280
|
|
|
$
|
9,358
|
|
Term Loan A ($76.9 million and $97.1 million denominated in CAD at December 31, 2016 and January 2, 2016, respectively)
|
120,103
|
|
|
277,181
|
|
||
Less unamortized deferred loan costs
|
(1,083
|
)
|
|
(1,552
|
)
|
||
Carrying value Term Loan A
|
119,020
|
|
|
275,629
|
|
||
|
|
|
|
||||
Term Loan B
|
583,500
|
|
|
589,500
|
|
||
Less unamortized deferred loan costs
|
(6,298
|
)
|
|
(7,774
|
)
|
||
Carrying value Term Loan B
|
577,202
|
|
|
581,726
|
|
||
|
|
|
|
||||
5.375% Senior Notes due 2022 with effective interest of 5.72%
|
500,000
|
|
|
500,000
|
|
||
Less unamortized deferred loan costs
|
(7,667
|
)
|
|
(8,952
|
)
|
||
Carrying value 5.375% Senior Notes due 2022
|
492,333
|
|
|
491,048
|
|
||
|
|
|
|
||||
4.75% Senior Notes due 2022 - Denominated in euro with effective interest of 5.10%
|
543,840
|
|
|
560,912
|
|
||
Less unamortized deferred loan costs - Denominated in euro
|
(8,956
|
)
|
|
(10,705
|
)
|
||
Carrying value 4.75% Senior Notes due 2022
|
534,884
|
|
|
550,207
|
|
||
|
|
|
|
||||
Other Notes and Obligations
|
22,224
|
|
|
23,049
|
|
||
|
1,750,943
|
|
|
1,931,017
|
|
||
Less Current Maturities
|
23,247
|
|
|
45,166
|
|
||
|
$
|
1,727,696
|
|
|
$
|
1,885,851
|
|
|
Contractual
Debt Payment
|
||
2017
|
$
|
24,758
|
|
2018
|
7,105
|
|
|
2019
|
9,661
|
|
|
2020
|
129,832
|
|
|
2021
|
559,525
|
|
|
thereafter
|
1,044,066
|
|
|
|
$
|
1,774,947
|
|
|
December 31, 2016
|
|
January 2, 2016
|
||||
Accrued pension liability (Note 15)
|
$
|
53,152
|
|
|
$
|
53,220
|
|
Reserve for self insurance, litigation, environmental and tax
matters (Note 19)
|
41,251
|
|
|
42,778
|
|
||
Other
|
1,711
|
|
|
1,811
|
|
||
|
$
|
96,114
|
|
|
$
|
97,809
|
|
|
December 31, 2016
|
|
January 2, 2016
|
|
January 3, 2015
|
||||||
United States
|
$
|
48,869
|
|
|
$
|
50,473
|
|
|
$
|
58,972
|
|
Foreign
|
73,670
|
|
|
48,307
|
|
|
22,480
|
|
|||
Income from operations before income taxes
|
$
|
122,539
|
|
|
$
|
98,780
|
|
|
$
|
81,452
|
|
|
December 31, 2016
|
|
January 2, 2016
|
|
January 3, 2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
65
|
|
|
$
|
(21,775
|
)
|
|
$
|
1,134
|
|
State
|
(332
|
)
|
|
411
|
|
|
(884
|
)
|
|||
Foreign
|
27,992
|
|
|
29,871
|
|
|
24,770
|
|
|||
Total current
|
27,725
|
|
|
8,507
|
|
|
25,020
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
||||
Federal
|
(8,056
|
)
|
|
13,057
|
|
|
886
|
|
|||
State
|
(649
|
)
|
|
(1,521
|
)
|
|
1,235
|
|
|||
Foreign
|
(3,705
|
)
|
|
(6,542
|
)
|
|
(14,000
|
)
|
|||
Total deferred
|
(12,410
|
)
|
|
4,994
|
|
|
(11,879
|
)
|
|||
|
$
|
15,315
|
|
|
$
|
13,501
|
|
|
$
|
13,141
|
|
|
December 31, 2016
|
|
January 2, 2016
|
|
January 3, 2015
|
||||||
Computed "expected" tax expense
|
$
|
42,888
|
|
|
$
|
34,573
|
|
|
$
|
28,508
|
|
Change in valuation allowance
|
1,039
|
|
|
4,421
|
|
|
5,420
|
|
|||
Deferred tax on unremitted foreign earnings
|
2,546
|
|
|
4,848
|
|
|
1,956
|
|
|||
Sub-Part F income
|
6,159
|
|
|
4,923
|
|
|
3,786
|
|
|||
Foreign rate differential
|
(9,982
|
)
|
|
(5,653
|
)
|
|
(9,754
|
)
|
|||
Biofuel tax incentives
|
(28,435
|
)
|
|
(28,143
|
)
|
|
(22,546
|
)
|
|||
Non-deductible transaction costs
|
—
|
|
|
—
|
|
|
4,107
|
|
|||
Other, net
|
1,100
|
|
|
(1,468
|
)
|
|
1,664
|
|
|||
|
$
|
15,315
|
|
|
$
|
13,501
|
|
|
$
|
13,141
|
|
|
December 31, 2016
|
|
January 2, 2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Loss contingency reserves
|
$
|
11,998
|
|
|
$
|
11,961
|
|
Employee benefits
|
9,586
|
|
|
9,383
|
|
||
Pension liability
|
18,200
|
|
|
17,714
|
|
||
Intangible assets amortization, including taxable goodwill
|
2,317
|
|
|
2,947
|
|
||
Net operating losses
|
119,602
|
|
|
99,534
|
|
||
Inventory
|
8,523
|
|
|
7,934
|
|
||
Other
|
13,583
|
|
|
16,621
|
|
||
Total gross deferred tax assets
|
183,809
|
|
|
166,094
|
|
||
Less valuation allowance
|
(20,150
|
)
|
|
(22,209
|
)
|
||
Net deferred tax assets
|
163,659
|
|
|
143,885
|
|
||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets amortization, including taxable goodwill
|
(189,233
|
)
|
|
(182,748
|
)
|
||
Property, plant and equipment depreciation
|
(207,729
|
)
|
|
(209,925
|
)
|
||
Investment in DGD Joint Venture
|
(47,607
|
)
|
|
(46,239
|
)
|
||
Tax on unremitted foreign earnings
|
(49,196
|
)
|
|
(48,106
|
)
|
||
Other
|
(1,038
|
)
|
|
(1,196
|
)
|
||
Total gross deferred tax liabilities
|
(494,803
|
)
|
|
(488,214
|
)
|
||
Net deferred tax liability
|
$
|
(331,144
|
)
|
|
$
|
(344,329
|
)
|
|
|
|
|
||||
Amounts reported on Consolidated Balance Sheets:
|
|
|
|
||||
Non-current deferred tax asset
|
$
|
14,990
|
|
|
$
|
16,352
|
|
Non-current deferred tax liability
|
(346,134
|
)
|
|
(360,681
|
)
|
||
Net deferred tax liability
|
$
|
(331,144
|
)
|
|
$
|
(344,329
|
)
|
|
December 31, 2016
|
|
January 2, 2016
|
||||
Balance at beginning of Year
|
$
|
5,604
|
|
|
$
|
8,130
|
|
Change in tax positions related to prior years
|
99
|
|
|
(1,953
|
)
|
||
Expiration of the Statute of Limitations
|
(1,036
|
)
|
|
(573
|
)
|
||
Balance at end of year
|
$
|
4,667
|
|
|
$
|
5,604
|
|
|
Number of
shares
|
|
Weighted-avg.
exercise price
per share
|
|
Weighted-avg.
remaining
contractual life
|
|||
Options outstanding at December 28, 2013
|
906,251
|
|
|
$
|
9.97
|
|
|
5.0 years
|
Granted
|
163,078
|
|
|
19.94
|
|
|
|
|
Exercised
|
(343,550
|
)
|
|
6.18
|
|
|
|
|
Forfeited
|
(29,603
|
)
|
|
16.89
|
|
|
|
|
Expired
|
—
|
|
|
—
|
|
|
|
|
Options outstanding at January 3, 2015
|
696,176
|
|
|
13.88
|
|
|
6.2 years
|
|
Granted
|
422,386
|
|
|
14.76
|
|
|
|
|
Exercised
|
(131,653
|
)
|
|
4.13
|
|
|
|
|
Forfeited
|
(136,177
|
)
|
|
16.68
|
|
|
|
|
Expired
|
—
|
|
|
—
|
|
|
|
|
Options outstanding at January 2, 2016
|
850,732
|
|
|
15.38
|
|
|
7.7 years
|
|
Granted
|
1,547,184
|
|
|
9.53
|
|
|
|
|
Exercised
|
(28,000
|
)
|
|
6.71
|
|
|
|
|
Forfeited
|
(4,000
|
)
|
|
16.20
|
|
|
|
|
Expired
|
—
|
|
|
—
|
|
|
|
|
Options outstanding at December 31, 2016
|
2,365,916
|
|
|
$
|
11.65
|
|
|
8.4 years
|
Options exercisable at December 31, 2016
|
715,833
|
|
|
$
|
15.18
|
|
|
6.8 years
|
Weighted Average
|
|
2016
|
2015
|
2014
|
Expected dividend yield
|
|
0.0%
|
0.0%
|
0.0%
|
Risk-free interest rate
|
|
1.35%
|
1.82%
|
1.77%
|
Expected term
|
|
5.76 years
|
5.75 years
|
5.75 years
|
Expected volatility
|
|
34.4%
|
38.0%
|
43.7%
|
Fair value of options granted
|
|
$3.34
|
$5.59
|
$8.93
|
|
Non-Vested, RSU and PSU
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Stock awards outstanding December 28, 2013
|
821,207
|
|
|
$
|
14.93
|
|
Shares granted
|
1,436,658
|
|
|
20.73
|
|
|
Shares vested
|
(861,772
|
)
|
|
16.43
|
|
|
Shares forfeited
|
(138,920
|
)
|
|
19.90
|
|
|
Stock awards outstanding January 3, 2015
|
1,257,173
|
|
|
19.98
|
|
|
Shares granted
|
524,225
|
|
|
14.47
|
|
|
Shares vested
|
(714,626
|
)
|
|
17.91
|
|
|
Shares forfeited
|
(32,581
|
)
|
|
19.65
|
|
|
Stock awards outstanding January 2, 2016
|
1,034,191
|
|
|
18.63
|
|
|
Shares granted
|
602,306
|
|
|
12.11
|
|
|
Shares vested
|
(413,654
|
)
|
|
15.11
|
|
|
Shares forfeited
|
(241,582
|
)
|
|
20.86
|
|
|
Stock awards outstanding December 31, 2016
|
981,261
|
|
|
$
|
15.56
|
|
Weighted Average
|
|
2016
|
Expected dividend yield
|
|
0.0%
|
Risk-free interest rate
|
|
0.80%
|
Expected term
|
|
2.62 years
|
Expected volatility
|
|
29.3%
|
Illiquidity discount
|
|
16.1%
|
|
LTIP PSU
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
LTIP PSU awards outstanding January 2, 2016
|
—
|
|
|
$
|
—
|
|
Granted
|
664,120
|
|
|
7.17
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
LTIP PSU awards outstanding December 31, 2016
|
664,120
|
|
|
$
|
7.17
|
|
|
Restricted stock and Restricted Stock Unit
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Stock awards outstanding December 28, 2013
|
130,238
|
|
|
$
|
10.75
|
|
Restricted shares granted
|
25,678
|
|
|
19.67
|
|
|
Restricted shares where the restriction lapsed
|
—
|
|
|
—
|
|
|
Restricted shares forfeited
|
—
|
|
|
—
|
|
|
Stock awards outstanding January 3, 2015
|
155,916
|
|
|
12.22
|
|
|
Restricted shares granted
|
46,910
|
|
|
13.80
|
|
|
Restricted shares where the restriction lapsed
|
(50,322
|
)
|
|
12.25
|
|
|
Restricted shares forfeited
|
—
|
|
|
—
|
|
|
Stock awards outstanding January 2, 2016
|
152,504
|
|
|
12.69
|
|
|
Restricted shares granted
|
43,421
|
|
|
14.51
|
|
|
Restricted shares where the restriction lapsed
|
(81,031
|
)
|
|
11.55
|
|
|
Restricted shares forfeited
|
(3,535
|
)
|
|
14.51
|
|
|
Stock awards outstanding December 31, 2016
|
111,359
|
|
|
$
|
14.18
|
|
|
Before-Tax
|
|
Tax (Expense)
|
|
Net-of-Tax
|
||||||
|
Amount
|
|
or Benefit
|
|
Amount
|
||||||
Year Ended January 3, 2015
|
|
|
|
|
|
||||||
Defined Benefit Pension Plans
|
|
|
|
|
|
||||||
Actuarial (loss)/gain recognized
|
$
|
(34,547
|
)
|
|
$
|
12,001
|
|
|
$
|
(22,546
|
)
|
Amortization of actuarial loss
|
2,078
|
|
|
(806
|
)
|
|
1,272
|
|
|||
Actuarial prior service cost recognized
|
1,140
|
|
|
(261
|
)
|
|
879
|
|
|||
Amortization of prior service costs
|
23
|
|
|
(9
|
)
|
|
14
|
|
|||
Total defined benefit pension plans
|
(31,306
|
)
|
|
10,925
|
|
|
(20,381
|
)
|
|||
Natural gas swap derivatives
|
|
|
|
|
|
||||||
Loss/(gain) reclassified to net income
|
(196
|
)
|
|
76
|
|
|
(120
|
)
|
|||
Gain/(loss) recognized in other comprehensive income (loss)
|
11
|
|
|
(4
|
)
|
|
7
|
|
|||
Total natural gas derivatives
|
(185
|
)
|
|
72
|
|
|
(113
|
)
|
|||
Corn option derivatives
|
|
|
|
|
|
||||||
Loss/(gain) reclassified to net income
|
(3,868
|
)
|
|
1,501
|
|
|
(2,367
|
)
|
|||
Gain/(loss) recognized in other comprehensive income (loss)
|
1,812
|
|
|
(704
|
)
|
|
1,108
|
|
|||
Total corn options
|
(2,056
|
)
|
|
797
|
|
|
(1,259
|
)
|
|||
Foreign currency translation
|
|
|
|
|
|
||||||
Other comprehensive income/(loss)
|
(119,684
|
)
|
|
—
|
|
|
(119,684
|
)
|
|||
Other comprehensive income/(loss)
|
$
|
(153,231
|
)
|
|
$
|
11,794
|
|
|
$
|
(141,437
|
)
|
Year Ended January 2, 2016
|
|
|
|
|
|
||||||
Defined Benefit Pension Plans
|
|
|
|
|
|
||||||
Actuarial (loss)/gain recognized
|
$
|
(3,822
|
)
|
|
$
|
1,499
|
|
|
$
|
(2,323
|
)
|
Amortization of actuarial loss
|
5,101
|
|
|
(1,986
|
)
|
|
3,115
|
|
|||
Amortization of prior service costs
|
(67
|
)
|
|
36
|
|
|
(31
|
)
|
|||
Amortization of curtailment
|
(1,181
|
)
|
|
328
|
|
|
(853
|
)
|
|||
Amortization of settlement
|
5,291
|
|
|
(1,468
|
)
|
|
3,823
|
|
|||
Other
|
471
|
|
|
—
|
|
|
471
|
|
|||
Total defined benefit pension plans
|
5,793
|
|
|
(1,591
|
)
|
|
4,202
|
|
|||
Corn option derivatives
|
|
|
|
|
|
||||||
Loss/(gain) reclassified to net income
|
(1,517
|
)
|
|
589
|
|
|
(928
|
)
|
|||
Gain/(Loss) recognized in other comprehensive income
|
4,405
|
|
|
(1,710
|
)
|
|
2,695
|
|
|||
Total corn options
|
2,888
|
|
|
(1,121
|
)
|
|
1,767
|
|
|||
Foreign currency translation
|
(162,436
|
)
|
|
—
|
|
|
(162,436
|
)
|
|||
Other comprehensive income/(loss)
|
$
|
(153,755
|
)
|
|
$
|
(2,712
|
)
|
|
$
|
(156,467
|
)
|
Year Ended December 31, 2016
|
|
|
|
|
|
||||||
Defined Benefit Pension Plans
|
|
|
|
|
|
||||||
Actuarial (loss)/gain recognized
|
$
|
(5,257
|
)
|
|
$
|
1,396
|
|
|
$
|
(3,861
|
)
|
Amortization of actuarial loss
|
4,632
|
|
|
(1,786
|
)
|
|
2,846
|
|
|||
Amortization of prior service costs
|
36
|
|
|
(12
|
)
|
|
24
|
|
|||
Amortization of curtailment
|
—
|
|
|
—
|
|
|
—
|
|
|||
Amortization of settlement
|
(114
|
)
|
|
45
|
|
|
(69
|
)
|
|||
Other
|
44
|
|
|
—
|
|
|
44
|
|
|||
Total defined benefit pension plans
|
(659
|
)
|
|
(357
|
)
|
|
(1,016
|
)
|
|||
Corn option derivatives
|
|
|
|
|
|
||||||
Loss/(gain) reclassified to net income
|
(3,868
|
)
|
|
1,501
|
|
|
(2,367
|
)
|
|||
Gain/(Loss) recognized in other comprehensive income
|
4,889
|
|
|
(1,897
|
)
|
|
2,992
|
|
|||
Total corn options
|
1,021
|
|
|
(396
|
)
|
|
625
|
|
|||
Foreign currency translation
|
(5,593
|
)
|
|
—
|
|
|
(5,593
|
)
|
|||
Other comprehensive income/(loss)
|
$
|
(5,231
|
)
|
|
$
|
(753
|
)
|
|
$
|
(5,984
|
)
|
(a)
|
These items are included in the computation of net periodic pension cost. See Note 15 Employee Benefit Plans for additional information.
|
|
|
Fiscal Year Ended December 31, 2016
|
|||||||||||
|
|
Foreign Currency
|
Derivative
|
Defined Benefit
|
|
||||||||
|
|
Translation
|
Instruments
|
Pension Plans
|
Total
|
||||||||
Accumulated Other Comprehensive Income/(loss) January 2, 2016, attributable to Darling, net of tax
|
|
$
|
(305,213
|
)
|
$
|
1,843
|
|
$
|
(32,548
|
)
|
$
|
(335,918
|
)
|
Other comprehensive gain before reclassifications
|
|
(5,593
|
)
|
2,992
|
|
(3,817
|
)
|
(6,418
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income/(loss)
|
|
—
|
|
(2,367
|
)
|
2,801
|
|
434
|
|
||||
Net current-period other comprehensive income
|
|
(5,593
|
)
|
625
|
|
(1,016
|
)
|
(5,984
|
)
|
||||
Noncontrolling interest
|
|
(1,896
|
)
|
—
|
|
—
|
|
(1,896
|
)
|
||||
Accumulated Other Comprehensive Income/(loss) December 31, 2016, attributable to Darling, net of tax
|
|
$
|
(308,910
|
)
|
$
|
2,468
|
|
$
|
(33,564
|
)
|
$
|
(340,006
|
)
|
|
December 31,
2016
|
|
January 2,
2016 |
||||
Change in projected benefit obligation:
|
|
|
|
||||
Projected benefit obligation at beginning of period
|
$
|
182,276
|
|
|
$
|
395,142
|
|
Acquisitions
|
—
|
|
|
—
|
|
||
Service cost
|
2,549
|
|
|
6,638
|
|
||
Interest cost
|
6,950
|
|
|
10,536
|
|
||
Employee contributions
|
439
|
|
|
1,862
|
|
||
Plan amendments
|
101
|
|
|
90
|
|
||
Actuarial loss/(gain)
|
7,905
|
|
|
(24,436
|
)
|
||
Benefits paid
|
(7,146
|
)
|
|
(11,197
|
)
|
||
Effect of curtailment
|
(1,286
|
)
|
|
(9,545
|
)
|
||
Effect of settlement
|
(953
|
)
|
|
(162,600
|
)
|
||
Other
|
(1,545
|
)
|
|
(24,214
|
)
|
||
Projected benefit obligation at end of period
|
189,290
|
|
|
182,276
|
|
||
|
|
|
|
||||
Change in plan assets:
|
|
|
|
|
|
||
Fair value of plan assets at beginning of period
|
127,970
|
|
|
328,220
|
|
||
Acquisitions
|
—
|
|
|
—
|
|
||
Actual return on plan assets
|
10,138
|
|
|
(17,888
|
)
|
||
Employer contributions
|
5,250
|
|
|
9,612
|
|
||
Employee contributions
|
439
|
|
|
1,862
|
|
||
Benefits paid
|
(7,146
|
)
|
|
(11,197
|
)
|
||
Effect of settlement
|
(953
|
)
|
|
(162,600
|
)
|
||
Other
|
(789
|
)
|
|
(20,039
|
)
|
||
Fair value of plan assets at end of period
|
134,909
|
|
|
127,970
|
|
||
|
|
|
|
||||
Funded status
|
(54,381
|
)
|
|
(54,306
|
)
|
||
Net amount recognized
|
$
|
(54,381
|
)
|
|
$
|
(54,306
|
)
|
|
|
|
|
||||
Amounts recognized in the consolidated balance
sheets consist of:
|
|
|
|
|
|
||
Noncurrent assets
|
$
|
—
|
|
|
$
|
—
|
|
Current liability
|
(1,229
|
)
|
|
(1,086
|
)
|
||
Noncurrent liability
|
(53,152
|
)
|
|
(53,220
|
)
|
||
Net amount recognized
|
$
|
(54,381
|
)
|
|
$
|
(54,306
|
)
|
|
|
|
|
||||
Amounts recognized in accumulated other
comprehensive loss consist of:
|
|
|
|
|
|
||
Net actuarial loss
|
$
|
52,525
|
|
|
$
|
51,921
|
|
Prior service cost/(credit)
|
417
|
|
|
359
|
|
||
Net amount recognized (a)
|
$
|
52,942
|
|
|
$
|
52,280
|
|
(a)
|
Amounts do not include deferred taxes of $
19.4 million
and $
19.7 million
at
December 31, 2016
and
January 2, 2016
, respectively.
|
|
December 31,
2016
|
|
January 2,
2016
|
||||
Projected benefit obligation
|
$
|
189,290
|
|
|
$
|
182,276
|
|
Accumulated benefit obligation
|
181,340
|
|
|
171,530
|
|
||
Fair value of plan assets
|
134,909
|
|
|
127,970
|
|
|
December 31,
2016
|
|
January 2,
2016
|
|
January 3,
2015
|
||||||
Service cost
|
$
|
2,549
|
|
|
$
|
6,638
|
|
|
$
|
5,208
|
|
Interest cost
|
6,950
|
|
|
10,536
|
|
|
13,214
|
|
|||
Expected return on plan assets
|
(7,552
|
)
|
|
(12,229
|
)
|
|
(14,439
|
)
|
|||
Net amortization and deferral
|
4,668
|
|
|
5,034
|
|
|
2,094
|
|
|||
Curtailment
|
(1,285
|
)
|
|
(1,181
|
)
|
|
7
|
|
|||
Settlement
|
(114
|
)
|
|
(2,353
|
)
|
|
—
|
|
|||
Net pension cost
|
$
|
5,216
|
|
|
$
|
6,445
|
|
|
$
|
6,084
|
|
|
2016
|
|
2015
|
||||
Actuarial (loss)/gain recognized:
|
|
|
|
||||
Reclassification adjustments
|
$
|
2,846
|
|
|
$
|
3,115
|
|
Actuarial (loss)/gain recognized during the period
|
(3,861
|
)
|
|
(2,323
|
)
|
||
Amortization of settlement
|
(69
|
)
|
|
3,823
|
|
||
Prior service (cost) credit recognized:
|
|
|
|
|
|
||
Reclassification adjustments
|
24
|
|
|
(31
|
)
|
||
Prior service cost arising during the period
|
—
|
|
|
—
|
|
||
Amortization of curtailment
|
—
|
|
|
(853
|
)
|
||
Other
|
44
|
|
|
471
|
|
||
|
$
|
(1,016
|
)
|
|
$
|
4,202
|
|
|
2017
|
||
Net actuarial loss
|
$
|
4,754
|
|
Prior service cost
|
33
|
|
|
|
$
|
4,787
|
|
|
December 31,
2016
|
|
January 2,
2016
|
|
January 3,
2015
|
|
|
|
|
|
|
Discount rate
|
3.81%
|
|
4.13%
|
|
2.79%
|
Rate of compensation increase
|
0.38%
|
|
0.31%
|
|
1.82%
|
|
December 31,
2016
|
|
January 2,
2016
|
|
January 3,
2015
|
Discount rate
|
3.55%
|
|
3.47%
|
|
4.15%
|
Rate of increase in future compensation levels
|
0.84%
|
|
0.38%
|
|
1.70%
|
Expected long-term rate of return on assets
|
6.52%
|
|
6.62%
|
|
5.06%
|
Fixed Income
|
35% - 80%
|
Equities
|
20% - 65%
|
|
Total
|
|
Quoted Prices in
Active Markets for
Identical Assets
|
|
Significant Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
(In thousands of dollars)
|
Fair Value
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Balances as January 2, 2016
|
|
|
|
|
|
|
|
||||||||
Fixed Income:
|
|
|
|
|
|
|
|
||||||||
Long Term
|
$
|
21,079
|
|
|
$
|
21,079
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short Term
|
1,341
|
|
|
1,341
|
|
|
—
|
|
|
—
|
|
||||
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Domestic equities
|
34,864
|
|
|
34,864
|
|
|
—
|
|
|
—
|
|
||||
International equities
|
21,190
|
|
|
21,190
|
|
|
—
|
|
|
—
|
|
||||
Insurance contracts
|
8,121
|
|
|
—
|
|
|
5,801
|
|
|
2,320
|
|
||||
Total categorized in fair value hierarchy
|
86,595
|
|
|
78,474
|
|
|
5,801
|
|
|
2,320
|
|
||||
Other investments measured at NAV
|
41,375
|
|
|
|
|
|
|
|
|||||||
Totals
|
$
|
127,970
|
|
|
$
|
78,474
|
|
|
$
|
5,801
|
|
|
$
|
2,320
|
|
|
|
|
|
|
|
|
|
||||||||
Balances as December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed Income:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long Term
|
$
|
17,408
|
|
|
$
|
17,408
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short Term
|
2,825
|
|
|
2,825
|
|
|
—
|
|
|
—
|
|
||||
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Domestic equities
|
41,300
|
|
|
41,300
|
|
|
—
|
|
|
—
|
|
||||
International equities
|
24,403
|
|
|
24,403
|
|
|
—
|
|
|
—
|
|
||||
Insurance contracts
|
10,670
|
|
|
—
|
|
|
7,887
|
|
|
2,783
|
|
||||
Total categorized in fair value hierarchy
|
96,606
|
|
|
85,936
|
|
|
7,887
|
|
|
2,783
|
|
||||
Other investments measured at NAV
|
38,303
|
|
|
|
|
|
|
|
|||||||
Totals
|
$
|
134,909
|
|
|
$
|
85,936
|
|
|
$
|
7,887
|
|
|
$
|
2,783
|
|
|
|
Insurance
|
||
(in thousands of dollars)
|
|
Contracts
|
||
Balance as of January 3, 2015
|
|
$
|
194,909
|
|
Unrealized gains/(losses) relating to instruments still held in the reporting period.
|
|
(12,601
|
)
|
|
Purchases, sales, and settlements
|
|
(161,402
|
)
|
|
Exchange rate changes
|
|
(18,586
|
)
|
|
Balance as of January 2, 2016
|
|
2,320
|
|
|
Unrealized gains/(losses) relating to instruments still held in the reporting period.
|
|
316
|
|
|
Purchases, sales, and settlements
|
|
244
|
|
|
Exchange rate changes
|
|
(97
|
)
|
|
Balance as of December 31, 2016
|
|
$
|
2,783
|
|
Year Ending
|
Pension Benefits
|
||
2017
|
$
|
9,854
|
|
2018
|
8,438
|
|
|
2019
|
9,307
|
|
|
2020
|
9,849
|
|
|
2021
|
10,931
|
|
|
Years 2022 – 2026
|
58,887
|
|
(a)
|
In July 2005 this plan received a 10 year extension from the IRS for amortizing unfunded liabilities. In April 2016 the IRS approved a modification of the amortization extension.
|
(b)
|
The Company has several plants that participate in the Western Conference of Teamsters Pension Plan under collective bargaining agreements that require minimum funding contributions. Certain of these agreements have expired and are being renegotiated with others having expiration dates through April 1, 2020.
|
(c)
|
The Company has several processing plants that participate in the Central States, Southeast and Southwest Areas Pension Plan under collective bargaining agreements that require minimum funding contributions. Certain of these agreements have expired and are being renegotiated with others having expiration dates through August 6, 2018.
|
Functional Currency
|
|
Contract Currency
|
||||
Type
|
Amount
|
|
Type
|
Amount
|
||
Brazilian real
|
28,304
|
|
|
Euro
|
7,270
|
|
Brazilian real
|
66,273
|
|
|
U.S. Dollar
|
18,900
|
|
Euro
|
150,394
|
|
|
U.S. Dollar
|
166,377
|
|
Euro
|
10,444
|
|
|
Polish zloty
|
47,000
|
|
Euro
|
4,295
|
|
|
Japanese yen
|
505,320
|
|
Euro
|
34,337
|
|
|
Chinese renminbi
|
254,639
|
|
Euro
|
11,563
|
|
|
Australian dollar
|
16,700
|
|
Euro
|
1,405
|
|
|
British pound
|
1,200
|
|
Polish zloty
|
19,111
|
|
|
Euro
|
4,312
|
|
Japanese yen
|
14,423
|
|
|
U.S. dollar
|
135
|
|
Derivatives Designated
|
|
Balance Sheet
|
|
Asset Derivatives Fair Value
|
||||||
as Hedges
|
|
Location
|
|
December 31, 2016
|
|
January 2, 2016
|
||||
Corn options
|
|
Other current assets
|
|
$
|
4,235
|
|
|
$
|
3,215
|
|
|
|
|
|
|
|
|
||||
Total derivatives designated as hedges
|
|
|
|
$
|
4,235
|
|
|
$
|
3,215
|
|
|
|
|
|
|
|
|
||||
Derivatives not
Designated as
Hedges
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
Other current assets
|
|
$
|
8,939
|
|
|
$
|
644
|
|
Corn options and futures
|
|
Other current assets
|
|
151
|
|
|
599
|
|
||
|
|
|
|
|
|
|
||||
Total derivatives not designated as hedges
|
|
|
|
$
|
9,090
|
|
|
$
|
1,243
|
|
|
|
|
|
|
|
|
||||
Total asset derivatives
|
|
|
|
$
|
13,325
|
|
|
$
|
4,458
|
|
|
|
Balance Sheet
|
|
Liability Derivatives Fair Value
|
||||||
|
|
Location
|
|
December 31, 2016
|
|
January 2, 2016
|
||||
|
|
|
|
|
|
|
||||
Derivatives not
Designated as
Hedges
|
|
|
|
|
|
|
|
|
||
Foreign currency contracts
|
|
Accrued Expenses
|
|
$
|
608
|
|
|
$
|
4,435
|
|
Corn options and futures
|
|
Accrued Expenses
|
|
122
|
|
|
2
|
|
||
|
|
|
|
|
|
|
||||
Total derivatives not designated as hedges
|
|
|
|
$
|
730
|
|
|
$
|
4,437
|
|
|
|
|
|
|
||||||
Total liability derivatives
|
|
|
|
$
|
730
|
|
|
$
|
4,437
|
|
Derivatives
Designated as
Cash Flow Hedges
|
Gain or (Loss)
Recognized in OCI
on Derivatives
(Effective Portion) (a)
|
|
Gain or (Loss)
Reclassified From
Accumulated OCI
into Income
(Effective Portion) (b)
|
|
Gain or (Loss)
Recognized in Income
On Derivatives
(Ineffective Portion and
Amount Excluded from
Effectiveness Testing) (c)
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corn options
|
$
|
4,889
|
|
|
$
|
4,405
|
|
|
$
|
3,868
|
|
|
$
|
1,517
|
|
|
$
|
331
|
|
|
$
|
68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
4,889
|
|
|
$
|
4,405
|
|
|
$
|
3,868
|
|
|
$
|
1,517
|
|
|
$
|
331
|
|
|
$
|
68
|
|
(a)
|
Amount recognized in accumulated OCI (effective portion) is reported as accumulated other comprehensive gain of approximately $
4.9 million
and approximately $
4.4 million
recorded net of taxes of approximately $
1.9 million
and approximately $
1.7 million
for the year ended
December 31, 2016
and
January 2, 2016
, respectively.
|
(b)
|
Gains and (losses) reclassified from accumulated OCI into income (effective portion) for interest rate swaps and natural gas swaps is included in interest expense and cost of sales, respectively, in the Company’s consolidated statements of operations.
|
(c)
|
Gains and (losses) recognized in income on derivatives (ineffective portion) for interest rate swaps and natural gas swaps is included in other income/(expense), net in the Company’s consolidated statements of operations.
|
|
|
|
|
Loss or (Gain) Recognized in Income on Derivatives Not Designated as Hedges
|
||||||||
|
|
|
|
For The Year Ended
|
||||||||
Derivatives not designated as hedging instruments
|
|
Location
|
|
December 31, 2016
|
January 2, 2016
|
January 3, 2015
|
||||||
Foreign exchange
|
|
Foreign currency loss/(gain)
|
|
$
|
(1,542
|
)
|
$
|
(27,321
|
)
|
$
|
(21,162
|
)
|
Foreign exchange
|
|
Selling, general and administrative expense
|
|
(8,543
|
)
|
7,508
|
|
4,652
|
|
|||
Corn options and futures
|
|
Net sales
|
|
472
|
|
(2
|
)
|
—
|
|
|||
Corn options and futures
|
|
Cost of sales and operating expenses
|
|
(1,411
|
)
|
(2,067
|
)
|
(71
|
)
|
|||
Natural gas and heating oil swaps and options
|
|
Cost of sales and operating expenses
|
|
—
|
|
132
|
|
982
|
|
|||
Heating oil swaps and options
|
|
Net sales
|
|
455
|
|
—
|
|
—
|
|
|||
Soybean meal
|
|
Net sales
|
|
7
|
|
—
|
|
—
|
|
|||
Total
|
|
|
|
$
|
(10,562
|
)
|
$
|
(21,750
|
)
|
$
|
(15,599
|
)
|
|
|
Fair Value Measurements at December 31, 2016 Using
|
||||||||||
|
|
Quoted Prices in
Active Markets for
Identical Assets
|
Significant Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
||||||||
(In thousands of dollars)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||
Assets
|
|
|
|
|
||||||||
Derivative assets
|
$
|
13,325
|
|
$
|
—
|
|
$
|
13,325
|
|
$
|
—
|
|
Total Assets
|
13,325
|
|
—
|
|
13,325
|
|
—
|
|
||||
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
||||||||
Derivative liabilities
|
730
|
|
—
|
|
730
|
|
—
|
|
||||
5.375% Senior Notes
|
520,300
|
|
—
|
|
520,300
|
|
—
|
|
||||
4.75% Senior Notes
|
575,111
|
|
—
|
|
575,111
|
|
—
|
|
||||
Term Loan A
|
120,403
|
|
—
|
|
120,403
|
|
—
|
|
||||
Term Loan B
|
593,347
|
|
—
|
|
593,347
|
|
—
|
|
||||
Revolver
|
5,201
|
|
—
|
|
5,201
|
|
—
|
|
||||
Total Liabilities
|
$
|
1,815,092
|
|
$
|
—
|
|
$
|
1,815,092
|
|
$
|
—
|
|
|
|
Fair Value Measurements at January 2, 2016 Using
|
||||||||||
|
|
Quoted Prices in
Active Markets for
Identical Assets
|
Significant Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
||||||||
(In thousands of dollars)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||
Assets
|
|
|
|
|
||||||||
Derivative assets
|
$
|
4,458
|
|
$
|
—
|
|
$
|
4,458
|
|
$
|
—
|
|
Total Assets
|
4,458
|
|
—
|
|
4,458
|
|
—
|
|
||||
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
||||||||
Derivative liabilities
|
4,437
|
|
—
|
|
4,437
|
|
—
|
|
||||
5.375% Senior Notes
|
495,000
|
|
—
|
|
495,000
|
|
—
|
|
||||
4.75% Senior Notes
|
541,280
|
|
—
|
|
541,280
|
|
—
|
|
||||
Term Loan A
|
277,874
|
|
—
|
|
277,874
|
|
—
|
|
||||
Term Loan B
|
577,710
|
|
—
|
|
577,710
|
|
—
|
|
||||
Revolver
|
9,218
|
|
—
|
|
9,218
|
|
—
|
|
||||
Total Liabilities
|
$
|
1,905,519
|
|
$
|
—
|
|
$
|
1,905,519
|
|
$
|
—
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Fiscal Year Ended December 31, 2016
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
2,089,145
|
|
$
|
1,061,912
|
|
$
|
247,058
|
|
$
|
—
|
|
$
|
3,398,115
|
|
Cost of sales and operating expenses
|
1,624,858
|
|
834,410
|
|
182,466
|
|
—
|
|
2,641,734
|
|
|||||
Gross Margin
|
464,287
|
|
227,502
|
|
64,592
|
|
—
|
|
756,381
|
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
169,648
|
|
96,170
|
|
6,895
|
|
41,292
|
|
314,005
|
|
|||||
Acquisition costs
|
—
|
|
—
|
|
—
|
|
401
|
|
401
|
|
|||||
Depreciation and amortization
|
178,845
|
|
70,120
|
|
28,531
|
|
12,412
|
|
289,908
|
|
|||||
Segment operating income/(loss)
|
115,794
|
|
61,212
|
|
29,166
|
|
(54,105
|
)
|
152,067
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
467
|
|
—
|
|
69,912
|
|
—
|
|
70,379
|
|
|||||
Segment income
|
116,261
|
|
61,212
|
|
99,078
|
|
(54,105
|
)
|
222,446
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(99,907
|
)
|
|||||||||
Income before income taxes
|
|
|
|
|
$
|
122,539
|
|
||||||||
|
|
|
|
|
|
||||||||||
Segment assets at December 31, 2016
|
$
|
2,464,509
|
|
$
|
1,414,409
|
|
$
|
657,637
|
|
$
|
161,462
|
|
$
|
4,698,017
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Fiscal Year Ended January 2, 2016
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
2,074,333
|
|
$
|
1,094,918
|
|
$
|
228,195
|
|
$
|
—
|
|
$
|
3,397,446
|
|
Cost of sales and operating expenses
|
1,613,402
|
|
863,562
|
|
177,061
|
|
—
|
|
2,654,025
|
|
|||||
Gross Margin
|
460,931
|
|
231,356
|
|
51,134
|
|
—
|
|
743,421
|
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
178,624
|
|
103,301
|
|
7,264
|
|
33,385
|
|
322,574
|
|
|||||
Acquisition costs
|
—
|
|
—
|
|
—
|
|
8,299
|
|
8,299
|
|
|||||
Depreciation and amortization
|
165,854
|
|
66,817
|
|
26,711
|
|
10,522
|
|
269,904
|
|
|||||
Segment operating income/(loss)
|
116,453
|
|
61,238
|
|
17,159
|
|
(52,206
|
)
|
142,644
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
1,521
|
|
—
|
|
71,895
|
|
—
|
|
73,416
|
|
|||||
Segment income
|
117,974
|
|
61,238
|
|
89,054
|
|
(52,206
|
)
|
216,060
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(117,280
|
)
|
|||||||||
Income before income taxes
|
|
|
|
|
$
|
98,780
|
|
||||||||
|
|
|
|
|
|
||||||||||
Segment assets at January 2, 2016
|
$
|
2,438,869
|
|
$
|
1,448,014
|
|
$
|
631,968
|
|
$
|
241,768
|
|
$
|
4,760,619
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Fiscal Year Ended January 3, 2015
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
2,421,462
|
|
$
|
1,248,352
|
|
$
|
286,629
|
|
$
|
—
|
|
$
|
3,956,443
|
|
Cost of sales and operating expenses
|
1,864,835
|
|
1,029,488
|
|
228,848
|
|
—
|
|
3,123,171
|
|
|||||
Gross Margin
|
556,627
|
|
218,864
|
|
57,781
|
|
—
|
|
833,272
|
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
205,484
|
|
118,716
|
|
8,596
|
|
41,784
|
|
374,580
|
|
|||||
Acquisition costs
|
—
|
|
—
|
|
—
|
|
24,667
|
|
24,667
|
|
|||||
Depreciation and amortization
|
158,871
|
|
73,274
|
|
27,898
|
|
9,474
|
|
269,517
|
|
|||||
Segment operating income/(loss)
|
192,272
|
|
26,874
|
|
21,287
|
|
(75,925
|
)
|
164,508
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
1,842
|
|
—
|
|
63,767
|
|
—
|
|
65,609
|
|
|||||
Segment income
|
194,114
|
|
26,874
|
|
85,054
|
|
(75,925
|
)
|
230,117
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(148,665
|
)
|
|||||||||
Income before income taxes
|
|
|
|
|
$
|
81,452
|
|
||||||||
|
|
|
|
|
|
|
December 31,
2016
|
|
January 2,
2016
|
|
January 3,
2015
|
||||||
Depreciation and amortization:
|
|
|
|
|
|
||||||
Feed Ingredients
|
$
|
178,845
|
|
|
$
|
165,854
|
|
|
$
|
158,871
|
|
Food Ingredients
|
70,120
|
|
|
66,817
|
|
|
73,274
|
|
|||
Fuel Ingredients
|
28,531
|
|
|
26,711
|
|
|
27,898
|
|
|||
Corporate Activities
|
12,412
|
|
|
10,522
|
|
|
9,474
|
|
|||
Total
|
$
|
289,908
|
|
|
$
|
269,904
|
|
|
$
|
269,517
|
|
Capital expenditures:
|
|
|
|
|
|
||||||
Feed Ingredients
|
$
|
167,313
|
|
|
$
|
153,894
|
|
|
$
|
135,923
|
|
Food Ingredients
|
50,020
|
|
|
49,066
|
|
|
61,657
|
|
|||
Fuel Ingredients
|
22,323
|
|
|
19,478
|
|
|
21,392
|
|
|||
Corporate Activities
|
3,867
|
|
|
7,410
|
|
|
9,946
|
|
|||
Total (a)
|
$
|
243,523
|
|
|
$
|
229,848
|
|
|
$
|
228,918
|
|
(a)
|
Excludes the immaterial capital assets acquired in fiscal 2016 and fiscal 2015 and the VION Acquisition and Custom Blenders acquisition in fiscal 2014 of approximately $
984.2 million
.
|
|
December 31,
2016
|
|
January 2,
2016
|
|
January 3,
2015
|
||||||
North America
|
$
|
1,817,659
|
|
|
$
|
1,951,421
|
|
|
$
|
2,131,978
|
|
Europe
|
1,225,397
|
|
|
1,066,779
|
|
|
1,438,320
|
|
|||
China
|
218,480
|
|
|
234,978
|
|
|
229,876
|
|
|||
South America
|
61,276
|
|
|
68,226
|
|
|
73,241
|
|
|||
Other
|
75,303
|
|
|
76,042
|
|
|
83,028
|
|
|||
Total
|
$
|
3,398,115
|
|
|
$
|
3,397,446
|
|
|
$
|
3,956,443
|
|
|
FY 2016
|
FY 2015
|
||||
|
Long-Lived Assets
|
Long-Lived Assets
|
||||
North America
|
$
|
2,411,489
|
|
$
|
2,375,919
|
|
Europe
|
1,158,087
|
|
1,215,341
|
|
||
China
|
152,150
|
|
169,832
|
|
||
South America
|
74,837
|
|
60,396
|
|
||
Other
|
8,152
|
|
7,343
|
|
||
Total
|
$
|
3,804,715
|
|
$
|
3,828,831
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
First
Quarter (a)
|
|
Second
Quarter (a)
|
|
Third
Quarter
|
|
Fourth
Quarter (b)
|
||||||||
Net sales
|
$
|
779,641
|
|
|
$
|
877,341
|
|
|
$
|
853,856
|
|
|
$
|
887,277
|
|
Operating income
|
26,692
|
|
|
54,467
|
|
|
35,528
|
|
|
35,380
|
|
||||
Income from operations before income taxes
|
4,526
|
|
|
41,974
|
|
|
28,146
|
|
|
47,893
|
|
||||
Net income
|
2,663
|
|
|
33,991
|
|
|
28,890
|
|
|
41,680
|
|
||||
Net (income)/loss attributable to minority interests
|
(1,584
|
)
|
|
(1,992
|
)
|
|
(196
|
)
|
|
(1,139
|
)
|
||||
Net income/(loss) attributable to Darling
|
1,079
|
|
|
31,999
|
|
|
28,694
|
|
|
40,541
|
|
||||
Basic earnings per share
|
0.01
|
|
|
0.19
|
|
|
0.17
|
|
|
0.25
|
|
||||
Diluted earnings per share
|
0.01
|
|
|
0.19
|
|
|
0.17
|
|
|
0.25
|
|
(a)
|
Included in net income are $
0.3 million
in integration costs in the first quarter of fiscal 2016, $
0.1 million
in integration costs in the second quarter of fiscal 2016 primarily relating to the integration of the Company's Canadian subsidiary Rothsay (“Rothsay”).
|
(b)
|
Included in net income is approximately $
5.6 million
related to a recorded insurance settlement gain in the Netherlands relating to a December 2015 casualty fire.
|
|
Year Ended January 2, 2016
|
||||||||||||||
|
First
Quarter (c)
|
|
Second
Quarter (c), (d)
|
|
Third
Quarter (c)
|
|
Fourth
Quarter (c), (d)
|
||||||||
Net sales
|
$
|
874,694
|
|
|
$
|
859,315
|
|
|
$
|
853,762
|
|
|
$
|
809,675
|
|
Operating income
|
31,825
|
|
|
39,292
|
|
|
38,808
|
|
|
32,719
|
|
||||
Income from operations before income taxes
|
3,939
|
|
|
9,602
|
|
|
502
|
|
|
84,737
|
|
||||
Net income
|
1,824
|
|
|
4,937
|
|
|
(7,357
|
)
|
|
85,875
|
|
||||
Net (income)/loss attributable to minority interests
|
(1,715
|
)
|
|
(1,857
|
)
|
|
(1,730
|
)
|
|
(1,446
|
)
|
||||
Net income/(loss) attributable to Darling
|
109
|
|
|
3,080
|
|
|
(9,087
|
)
|
|
84,429
|
|
||||
Basic earnings per share
|
—
|
|
|
0.02
|
|
|
(0.06
|
)
|
|
0.51
|
|
||||
Diluted earnings per share
|
—
|
|
|
0.02
|
|
|
(0.06
|
)
|
|
0.51
|
|
(c)
|
Included in net income are $
5.3 million
in integration costs in the first quarter of fiscal 2015, $
1.2 million
in integration costs in the second quarter of fiscal 2015, $
1.3 million
in integration costs in the third quarter of fiscal 2015 and $
0.5 million
in the fourth quarter of fiscal 2015 primarily relating to the integration of Darling Ingredients International and Rothsay.
|
(d)
|
Included in net income in the second quarter of fiscal 2015 is approximately $
10.6 million
for the write-off of deferred loan costs resulting from the payoff of the Euro Term Loan B. Additionally, included in net income for the fourth quarter of fiscal 2015 were the Company's portion of all blenders tax credit recorded by the DGD Joint Venture and the Company's other processing facilities, which amounted to approximately$
85.4 million
.
|
|
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 subsidiaries
|
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
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
3,443
|
|
$
|
3,993
|
|
$
|
149,448
|
|
$
|
—
|
|
$
|
156,884
|
|
Restricted cash
|
102
|
|
—
|
|
229
|
|
—
|
|
331
|
|
|||||
Accounts receivable
|
184,472
|
|
81,644
|
|
310,932
|
|
(205,656
|
)
|
371,392
|
|
|||||
Inventories
|
13,564
|
|
89,078
|
|
241,941
|
|
—
|
|
344,583
|
|
|||||
Income taxes refundable
|
7,695
|
|
—
|
|
4,268
|
|
—
|
|
11,963
|
|
|||||
Prepaid expenses
|
13,322
|
|
2,262
|
|
20,591
|
|
—
|
|
36,175
|
|
|||||
Other current assets
|
5,273
|
|
24
|
|
22,852
|
|
(17,689
|
)
|
10,460
|
|
|||||
Total current assets
|
227,871
|
|
177,001
|
|
750,261
|
|
(223,345
|
)
|
931,788
|
|
|||||
Investment in subsidiaries
|
4,072,855
|
|
1,141,644
|
|
837,604
|
|
(6,052,103
|
)
|
—
|
|
|||||
Property, plant and equipment, net
|
224,208
|
|
477,446
|
|
806,513
|
|
—
|
|
1,508,167
|
|
|||||
Intangible assets, net
|
17,794
|
|
326,231
|
|
438,324
|
|
—
|
|
782,349
|
|
|||||
Goodwill
|
21,860
|
|
549,690
|
|
661,552
|
|
—
|
|
1,233,102
|
|
|||||
Investment in unconsolidated subsidiary
|
—
|
|
—
|
|
247,238
|
|
—
|
|
247,238
|
|
|||||
Other assets
|
36,488
|
|
499,764
|
|
314,893
|
|
(809,522
|
)
|
41,623
|
|
|||||
Deferred income taxes
|
—
|
|
—
|
|
16,352
|
|
—
|
|
16,352
|
|
|||||
|
$
|
4,601,076
|
|
$
|
3,171,776
|
|
$
|
4,072,737
|
|
$
|
(7,084,970
|
)
|
$
|
4,760,619
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||||||
Current portion of long-term debt
|
$
|
20,328
|
|
$
|
—
|
|
$
|
42,527
|
|
$
|
(17,689
|
)
|
$
|
45,166
|
|
Accounts payable
|
6,981
|
|
210,926
|
|
122,136
|
|
(190,045
|
)
|
149,998
|
|
|||||
Income tax payable
|
(383
|
)
|
373
|
|
6,689
|
|
—
|
|
6,679
|
|
|||||
Accrued expenses
|
82,854
|
|
29,037
|
|
143,547
|
|
(15,613
|
)
|
239,825
|
|
|||||
Total current liabilities
|
109,780
|
|
240,336
|
|
314,899
|
|
(223,347
|
)
|
441,668
|
|
|||||
Long-term debt, net of current portion
|
1,234,002
|
|
—
|
|
1,461,371
|
|
(809,522
|
)
|
1,885,851
|
|
|||||
Other noncurrent liabilities
|
57,578
|
|
1,999
|
|
38,232
|
|
—
|
|
97,809
|
|
|||||
Deferred income taxes
|
147,416
|
|
—
|
|
213,265
|
|
—
|
|
360,681
|
|
|||||
Total liabilities
|
1,548,776
|
|
242,335
|
|
2,027,767
|
|
(1,032,869
|
)
|
2,786,009
|
|
|||||
Total stockholders' equity
|
3,052,300
|
|
2,929,441
|
|
2,044,970
|
|
(6,052,101
|
)
|
1,974,610
|
|
|||||
|
$
|
4,601,076
|
|
$
|
3,171,776
|
|
$
|
4,072,737
|
|
$
|
(7,084,970
|
)
|
$
|
4,760,619
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net sales
|
$
|
501,856
|
|
$
|
1,341,925
|
|
$
|
1,752,844
|
|
$
|
(198,510
|
)
|
$
|
3,398,115
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
Cost of sales and operating expenses
|
392,876
|
|
1,085,582
|
|
1,361,786
|
|
(198,510
|
)
|
2,641,734
|
|
|||||
Selling, general and administrative expenses
|
130,573
|
|
51,029
|
|
132,403
|
|
—
|
|
314,005
|
|
|||||
Depreciation and amortization
|
41,106
|
|
105,261
|
|
143,541
|
|
—
|
|
289,908
|
|
|||||
Acquisition and integration costs
|
—
|
|
—
|
|
401
|
|
—
|
|
401
|
|
|||||
Total costs and expenses
|
564,555
|
|
1,241,872
|
|
1,638,131
|
|
(198,510
|
)
|
3,246,048
|
|
|||||
Operating income
|
(62,699
|
)
|
100,053
|
|
114,713
|
|
—
|
|
152,067
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(60,971
|
)
|
17,492
|
|
(50,708
|
)
|
—
|
|
(94,187
|
)
|
|||||
Foreign currency gains/(losses)
|
122
|
|
(283
|
)
|
(1,693
|
)
|
—
|
|
(1,854
|
)
|
|||||
Other income/(expense), net
|
(13,538
|
)
|
106
|
|
9,566
|
|
—
|
|
(3,866
|
)
|
|||||
Equity in net income of unconsolidated subsidiaries
|
(1,236
|
)
|
—
|
|
71,615
|
|
—
|
|
70,379
|
|
|||||
Earnings in investments in subsidiaries
|
223,347
|
|
—
|
|
—
|
|
(223,347
|
)
|
—
|
|
|||||
Income/(loss) from operations before taxes
|
85,025
|
|
117,368
|
|
143,493
|
|
(223,347
|
)
|
122,539
|
|
|||||
Income taxes (benefit)
|
(17,288
|
)
|
14,669
|
|
17,934
|
|
—
|
|
15,315
|
|
|||||
Net (income)/loss attributable to noncontrolling interests
|
—
|
|
—
|
|
(4,911
|
)
|
—
|
|
(4,911
|
)
|
|||||
Net income/(loss) attributable to Darling
|
$
|
102,313
|
|
$
|
102,699
|
|
$
|
120,648
|
|
$
|
(223,347
|
)
|
$
|
102,313
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net sales
|
$
|
475,213
|
|
$
|
1,363,279
|
|
$
|
1,759,800
|
|
$
|
(200,846
|
)
|
$
|
3,397,446
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
Cost of sales and operating expenses
|
369,928
|
|
1,108,864
|
|
1,376,079
|
|
(200,846
|
)
|
2,654,025
|
|
|||||
Selling, general and administrative expenses
|
122,509
|
|
55,691
|
|
144,374
|
|
—
|
|
322,574
|
|
|||||
Depreciation and amortization
|
34,889
|
|
98,400
|
|
136,615
|
|
—
|
|
269,904
|
|
|||||
Acquisition and integration costs
|
3,177
|
|
—
|
|
5,122
|
|
—
|
|
8,299
|
|
|||||
Total costs and expenses
|
530,503
|
|
1,262,955
|
|
1,662,190
|
|
(200,846
|
)
|
3,254,802
|
|
|||||
Operating income
|
(55,290
|
)
|
100,324
|
|
97,610
|
|
—
|
|
142,644
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(60,945
|
)
|
18,839
|
|
(63,424
|
)
|
—
|
|
(105,530
|
)
|
|||||
Foreign currency gains/(losses)
|
(123
|
)
|
(1,649
|
)
|
(3,139
|
)
|
—
|
|
(4,911
|
)
|
|||||
Other income/(expense), net
|
(22,455
|
)
|
435
|
|
15,181
|
|
—
|
|
(6,839
|
)
|
|||||
Equity in net income of unconsolidated subsidiaries
|
—
|
|
—
|
|
73,416
|
|
—
|
|
73,416
|
|
|||||
Earnings in investments in subsidiaries
|
198,371
|
|
—
|
|
—
|
|
(198,371
|
)
|
—
|
|
|||||
Income/(loss) from operations before taxes
|
59,558
|
|
117,949
|
|
119,644
|
|
(198,371
|
)
|
98,780
|
|
|||||
Income taxes (benefit)
|
(18,973
|
)
|
16,121
|
|
16,353
|
|
—
|
|
13,501
|
|
|||||
Net (income)/loss attributable to noncontrolling interests
|
—
|
|
—
|
|
(6,748
|
)
|
—
|
|
(6,748
|
)
|
|||||
Net income/(loss) attributable to Darling
|
$
|
78,531
|
|
$
|
101,828
|
|
$
|
96,543
|
|
$
|
(198,371
|
)
|
$
|
78,531
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net sales
|
$
|
557,316
|
|
$
|
1,620,054
|
|
$
|
2,063,310
|
|
$
|
(284,237
|
)
|
$
|
3,956,443
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
Cost of sales and operating expenses
|
421,883
|
|
1,330,038
|
|
1,655,487
|
|
(284,237
|
)
|
3,123,171
|
|
|||||
Selling, general and administrative expenses
|
145,258
|
|
54,070
|
|
175,252
|
|
—
|
|
374,580
|
|
|||||
Depreciation and amortization
|
31,183
|
|
83,957
|
|
154,377
|
|
—
|
|
269,517
|
|
|||||
Acquisition costs
|
20,410
|
|
—
|
|
4,257
|
|
—
|
|
24,667
|
|
|||||
Total costs and expenses
|
618,734
|
|
1,468,065
|
|
1,989,373
|
|
(284,237
|
)
|
3,791,935
|
|
|||||
Operating income
|
(61,418
|
)
|
151,989
|
|
73,937
|
|
—
|
|
164,508
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(97,912
|
)
|
21,231
|
|
(58,554
|
)
|
(181
|
)
|
(135,416
|
)
|
|||||
Foreign currency gains/(losses)
|
(12,244
|
)
|
(417
|
)
|
(887
|
)
|
—
|
|
(13,548
|
)
|
|||||
Other income/(expense), net
|
(3,717
|
)
|
(19
|
)
|
3,854
|
|
181
|
|
299
|
|
|||||
Equity in net income of unconsolidated subsidiary
|
—
|
|
—
|
|
65,609
|
|
—
|
|
65,609
|
|
|||||
Earnings in investments in subsidiaries
|
223,790
|
|
—
|
|
—
|
|
(223,790
|
)
|
—
|
|
|||||
Income/(loss) from operations before taxes
|
48,499
|
|
172,784
|
|
83,959
|
|
(223,790
|
)
|
81,452
|
|
|||||
Income taxes (benefit)
|
(15,716
|
)
|
17,534
|
|
11,323
|
|
—
|
|
13,141
|
|
|||||
Net (income)/loss attributable to noncontrolling interests
|
—
|
|
—
|
|
(4,096
|
)
|
—
|
|
(4,096
|
)
|
|||||
Net income/(loss) attributable to Darling
|
$
|
64,215
|
|
$
|
155,250
|
|
$
|
68,540
|
|
$
|
(223,790
|
)
|
$
|
64,215
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net income
|
$
|
107,224
|
|
$
|
102,699
|
|
$
|
120,648
|
|
$
|
(223,347
|
)
|
$
|
107,224
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
—
|
|
—
|
|
(5,593
|
)
|
—
|
|
(5,593
|
)
|
|||||
Pension adjustments
|
1,766
|
|
—
|
|
(2,782
|
)
|
—
|
|
(1,016
|
)
|
|||||
Corn option derivative adjustments
|
625
|
|
—
|
|
—
|
|
—
|
|
625
|
|
|||||
Total other comprehensive income, net of tax
|
2,391
|
|
—
|
|
(8,375
|
)
|
—
|
|
(5,984
|
)
|
|||||
Total comprehensive income/(loss)
|
109,615
|
|
102,699
|
|
112,273
|
|
(223,347
|
)
|
101,240
|
|
|||||
Comprehensive income attributable to noncontrolling interests
|
—
|
|
—
|
|
3,015
|
|
—
|
|
$
|
3,015
|
|
||||
Comprehensive income/(loss) attributable to Darling
|
$
|
109,615
|
|
$
|
102,699
|
|
$
|
109,258
|
|
$
|
(223,347
|
)
|
$
|
98,225
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net income
|
$
|
85,279
|
|
$
|
101,828
|
|
$
|
96,543
|
|
$
|
(198,371
|
)
|
$
|
85,279
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
—
|
|
—
|
|
(162,436
|
)
|
—
|
|
(162,436
|
)
|
|||||
Pension adjustments
|
83
|
|
109
|
|
4,010
|
|
—
|
|
4,202
|
|
|||||
Corn option derivative adjustments
|
1,767
|
|
—
|
|
—
|
|
—
|
|
1,767
|
|
|||||
Total other comprehensive income, net of tax
|
1,850
|
|
109
|
|
(158,426
|
)
|
—
|
|
(156,467
|
)
|
|||||
Total comprehensive income (loss)
|
$
|
87,129
|
|
$
|
101,937
|
|
$
|
(61,883
|
)
|
$
|
(198,371
|
)
|
$
|
(71,188
|
)
|
Comprehensive income attributable to noncontrolling interests
|
—
|
|
—
|
|
9,139
|
|
—
|
|
9,139
|
|
|||||
Comprehensive income/(loss) attributable to Darling
|
$
|
87,129
|
|
$
|
101,937
|
|
$
|
(71,022
|
)
|
$
|
(198,371
|
)
|
$
|
(80,327
|
)
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net income
|
$
|
68,311
|
|
$
|
155,250
|
|
$
|
68,540
|
|
$
|
(223,790
|
)
|
$
|
68,311
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
—
|
|
—
|
|
(119,684
|
)
|
—
|
|
(119,684
|
)
|
|||||
Pension adjustments
|
(11,844
|
)
|
(34
|
)
|
(8,503
|
)
|
—
|
|
(20,381
|
)
|
|||||
Natural gas swap derivative adjustments
|
(113
|
)
|
—
|
|
—
|
|
—
|
|
(113
|
)
|
|||||
Corn option derivative adjustments
|
(1,259
|
)
|
—
|
|
—
|
|
—
|
|
(1,259
|
)
|
|||||
Total other comprehensive income, net of tax
|
(13,216
|
)
|
(34
|
)
|
(128,187
|
)
|
—
|
|
(141,437
|
)
|
|||||
Total comprehensive income (loss)
|
$
|
55,095
|
|
$
|
155,216
|
|
$
|
(59,647
|
)
|
$
|
(223,790
|
)
|
$
|
(73,126
|
)
|
Comprehensive income attributable to noncontrolling interests
|
—
|
|
—
|
|
10,296
|
|
—
|
|
10,296
|
|
|||||
Comprehensive income/(loss) attributable to Darling
|
$
|
55,095
|
|
$
|
155,216
|
|
$
|
(69,943
|
)
|
$
|
(223,790
|
)
|
$
|
(83,422
|
)
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||||||
Net income
|
$
|
107,224
|
|
$
|
102,699
|
|
$
|
120,648
|
|
$
|
(223,347
|
)
|
$
|
107,224
|
|
Earnings in investments in subsidiaries
|
(223,347
|
)
|
—
|
|
—
|
|
223,347
|
|
—
|
|
|||||
Other operating cash flows
|
317,040
|
|
(100,970
|
)
|
67,742
|
|
—
|
|
283,812
|
|
|||||
Net cash provided/(used) by operating activities
|
200,917
|
|
1,729
|
|
188,390
|
|
—
|
|
391,036
|
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(51,330
|
)
|
(91,340
|
)
|
(100,853
|
)
|
—
|
|
(243,523
|
)
|
|||||
Acquisitions, net of cash acquired
|
—
|
|
—
|
|
(8,511
|
)
|
—
|
|
(8,511
|
)
|
|||||
Investment in subsidiaries and affiliates
|
—
|
|
(12,754
|
)
|
—
|
|
12,754
|
|
—
|
|
|||||
Note receivable from affiliates
|
—
|
|
103,056
|
|
(103,056
|
)
|
—
|
|
—
|
|
|||||
Gross proceeds from sale of property, plant and equipment and other assets
|
2,784
|
|
1,070
|
|
3,475
|
|
—
|
|
7,329
|
|
|||||
Proceeds from insurance settlements
|
—
|
|
—
|
|
1,537
|
|
—
|
|
1,537
|
|
|||||
Payments related to routes and other intangibles
|
—
|
|
—
|
|
(23
|
)
|
—
|
|
(23
|
)
|
|||||
Net cash provide/(used) in investing activities
|
(48,546
|
)
|
32
|
|
(207,431
|
)
|
12,754
|
|
(243,191
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
Proceeds from long-term debt
|
—
|
|
—
|
|
36,327
|
|
—
|
|
36,327
|
|
|||||
Payments on long-term debt
|
(143,935
|
)
|
—
|
|
(60,493
|
)
|
—
|
|
(204,428
|
)
|
|||||
Borrowings from revolving credit facility
|
94,000
|
|
—
|
|
5,276
|
|
—
|
|
99,276
|
|
|||||
Payments on revolving credit facility
|
(94,000
|
)
|
—
|
|
(10,028
|
)
|
—
|
|
(104,028
|
)
|
|||||
Net overdraft financing
|
—
|
|
—
|
|
1,071
|
|
—
|
|
1,071
|
|
|||||
Deferred loan costs
|
(3,879
|
)
|
—
|
|
—
|
|
—
|
|
(3,879
|
)
|
|||||
Issuance of common stock
|
188
|
|
—
|
|
—
|
|
—
|
|
188
|
|
|||||
Repurchase of treasury stock
|
(5,000
|
)
|
—
|
|
—
|
|
—
|
|
(5,000
|
)
|
|||||
Contributions from parent
|
—
|
|
—
|
|
12,754
|
|
(12,754
|
)
|
—
|
|
|||||
Minimum withholding taxes paid on stock awards
|
(1,718
|
)
|
—
|
|
(125
|
)
|
—
|
|
(1,843
|
)
|
|||||
Distributions to noncontrolling interests
|
—
|
|
—
|
|
(1,552
|
)
|
—
|
|
(1,552
|
)
|
|||||
Net cash provided/(used) in financing activities
|
(154,344
|
)
|
—
|
|
(16,770
|
)
|
(12,754
|
)
|
(183,868
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash and cash equivalent
|
—
|
|
—
|
|
(6,297
|
)
|
—
|
|
(6,297
|
)
|
|||||
Net increase/(decrease) in cash and cash equivalents
|
(1,973
|
)
|
1,761
|
|
(42,108
|
)
|
—
|
|
(42,320
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
3,443
|
|
3,993
|
|
149,448
|
|
—
|
|
156,884
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
1,470
|
|
$
|
5,754
|
|
$
|
107,340
|
|
$
|
—
|
|
$
|
114,564
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||||||
Net income/(loss)
|
$
|
85,279
|
|
$
|
101,828
|
|
$
|
96,543
|
|
$
|
(198,371
|
)
|
$
|
85,279
|
|
Earnings in investments in subsidiaries
|
(198,371
|
)
|
—
|
|
—
|
|
198,371
|
|
—
|
|
|||||
Other operating cash flows
|
250,597
|
|
(53,098
|
)
|
138,181
|
|
—
|
|
335,680
|
|
|||||
Net cash provided by operating activities
|
137,505
|
|
48,730
|
|
234,724
|
|
—
|
|
420,959
|
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(46,574
|
)
|
(91,702
|
)
|
(91,572
|
)
|
—
|
|
(229,848
|
)
|
|||||
Acquisitions, net of cash acquired
|
—
|
|
—
|
|
(377
|
)
|
—
|
|
(377
|
)
|
|||||
Investment in subsidiaries and affiliates
|
(20
|
)
|
(45,103
|
)
|
29,541
|
|
15,582
|
|
—
|
|
|||||
Note receivable from affiliates
|
—
|
|
76,019
|
|
(76,019
|
)
|
—
|
|
—
|
|
|||||
Gross proceeds from sale of property, plant and equipment and other assets
|
1,035
|
|
1,154
|
|
1,651
|
|
—
|
|
3,840
|
|
|||||
Proceeds from insurance settlements
|
71
|
|
490
|
|
—
|
|
—
|
|
561
|
|
|||||
Payments related to routes and other intangibles
|
—
|
|
—
|
|
(3,845
|
)
|
—
|
|
(3,845
|
)
|
|||||
Net cash provided/(used) in investing activities
|
(45,488
|
)
|
(59,142
|
)
|
(140,621
|
)
|
15,582
|
|
(229,669
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
Proceeds from long-term debt
|
—
|
|
—
|
|
590,745
|
|
—
|
|
590,745
|
|
|||||
Payments on long-term debt
|
(16,111
|
)
|
(55
|
)
|
(593,089
|
)
|
—
|
|
(609,255
|
)
|
|||||
Borrowings from revolving credit facility
|
25,000
|
|
—
|
|
53,244
|
|
—
|
|
78,244
|
|
|||||
Payments on revolving credit facility
|
(90,000
|
)
|
—
|
|
(76,755
|
)
|
—
|
|
(166,755
|
)
|
|||||
Net overdraft financing
|
—
|
|
—
|
|
(1,261
|
)
|
—
|
|
(1,261
|
)
|
|||||
Deferred loan costs
|
(7,295
|
)
|
—
|
|
(10,015
|
)
|
—
|
|
(17,310
|
)
|
|||||
Issuances of common stock
|
171
|
|
—
|
|
—
|
|
—
|
|
171
|
|
|||||
Repurchase of treasury stock
|
(5,912
|
)
|
—
|
|
—
|
|
—
|
|
(5,912
|
)
|
|||||
Contributions from parent
|
—
|
|
—
|
|
15,582
|
|
(15,582
|
)
|
—
|
|
|||||
Minimum withholding taxes paid on stock awards
|
(4,874
|
)
|
—
|
|
—
|
|
—
|
|
(4,874
|
)
|
|||||
Deductions to noncontrolling interest
|
—
|
|
—
|
|
(87
|
)
|
—
|
|
(87
|
)
|
|||||
Distributions to noncontrolling interests
|
—
|
|
—
|
|
(3,295
|
)
|
—
|
|
(3,295
|
)
|
|||||
Net cash provided/(used) in financing activities
|
(99,021
|
)
|
(55
|
)
|
(24,931
|
)
|
(15,582
|
)
|
(139,589
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
—
|
|
(3,601
|
)
|
—
|
|
(3,601
|
)
|
|||||
Net increase/(decrease) in cash and cash equivalents
|
(7,004
|
)
|
(10,467
|
)
|
65,571
|
|
—
|
|
48,100
|
|
|||||
Cash and cash equivalents at beginning of year
|
10,447
|
|
14,460
|
|
83,877
|
|
—
|
|
108,784
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
3,443
|
|
$
|
3,993
|
|
$
|
149,448
|
|
$
|
—
|
|
$
|
156,884
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||||||
Net income/(loss)
|
$
|
68,311
|
|
$
|
155,250
|
|
$
|
68,540
|
|
$
|
(223,790
|
)
|
$
|
68,311
|
|
Earnings in investments in subsidiaries
|
(223,790
|
)
|
—
|
|
—
|
|
223,790
|
|
—
|
|
|||||
Other operating cash flows
|
226,120
|
|
(34,238
|
)
|
14,979
|
|
—
|
|
206,861
|
|
|||||
Net cash provided/(used) by operating activities
|
70,641
|
|
121,012
|
|
83,519
|
|
—
|
|
275,172
|
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(39,248
|
)
|
(84,299
|
)
|
(105,371
|
)
|
—
|
|
(228,918
|
)
|
|||||
Acquisitions, net of cash acquired
|
—
|
|
(19,394
|
)
|
(2,075,006
|
)
|
—
|
|
(2,094,400
|
)
|
|||||
Investment in subsidiaries and affiliates
|
(1,483,007
|
)
|
(1,442,788
|
)
|
(440,619
|
)
|
3,366,414
|
|
—
|
|
|||||
Note receivable from affiliates
|
—
|
|
(204,074
|
)
|
204,074
|
|
—
|
|
—
|
|
|||||
Gross proceeds from sale of property, plant and equipment and other assets
|
1,522
|
|
5,155
|
|
2,585
|
|
—
|
|
9,262
|
|
|||||
Proceeds from insurance settlements
|
1,350
|
|
200
|
|
—
|
|
—
|
|
1,550
|
|
|||||
Payments related to routes and other intangibles
|
(9,640
|
)
|
—
|
|
(1,648
|
)
|
—
|
|
(11,288
|
)
|
|||||
Net cash provided/(used) in investing activities
|
(1,529,023
|
)
|
(1,745,200
|
)
|
(2,415,985
|
)
|
3,366,414
|
|
(2,323,794
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
Proceeds from long-term debt
|
1,100,000
|
|
—
|
|
742,184
|
|
—
|
|
1,842,184
|
|
|||||
Payments on long-term debt
|
(264,500
|
)
|
(87
|
)
|
(69,175
|
)
|
—
|
|
(333,762
|
)
|
|||||
Borrowing from revolving credit facility
|
122,445
|
|
—
|
|
47,698
|
|
—
|
|
170,143
|
|
|||||
Payments on revolving credit facility
|
(297,445
|
)
|
—
|
|
(54,144
|
)
|
—
|
|
(351,589
|
)
|
|||||
Net overdraft financing
|
—
|
|
—
|
|
4,077
|
|
—
|
|
4,077
|
|
|||||
Deferred loan costs
|
(41,748
|
)
|
—
|
|
(3,475
|
)
|
—
|
|
(45,223
|
)
|
|||||
Issuances of common stock
|
416
|
|
—
|
|
—
|
|
—
|
|
416
|
|
|||||
Contributions from parent
|
—
|
|
1,632,618
|
|
1,733,796
|
|
(3,366,414
|
)
|
—
|
|
|||||
Minimum withholding taxes paid on stock awards
|
(10,026
|
)
|
—
|
|
—
|
|
—
|
|
(10,026
|
)
|
|||||
Excess tax benefits from stock-based compensation
|
2,420
|
|
—
|
|
—
|
|
—
|
|
2,420
|
|
|||||
Addition of noncontrolling interest
|
—
|
|
—
|
|
1,201
|
|
—
|
|
1,201
|
|
|||||
Distributions to noncontrolling interests
|
—
|
|
—
|
|
(4,272
|
)
|
—
|
|
(4,272
|
)
|
|||||
Net cash provided/(used) in financing activities
|
611,562
|
|
1,632,531
|
|
2,397,890
|
|
(3,366,414
|
)
|
1,275,569
|
|
|||||
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
—
|
|
10,980
|
|
—
|
|
10,980
|
|
|||||
Net increase/(decrease) in cash and cash equivalents
|
(846,820
|
)
|
8,343
|
|
76,404
|
|
—
|
|
(762,073
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
857,267
|
|
6,117
|
|
7,473
|
|
—
|
|
870,857
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
10,447
|
|
$
|
14,460
|
|
$
|
83,877
|
|
$
|
—
|
|
$
|
108,784
|
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
•
|
the number of securities to be issued upon the exercise of outstanding options and granted non-vested stock;
|
•
|
the weighted-average exercise price of the outstanding options and granted non-vested stock; and
|
•
|
the number of securities that remain available for future issuance under the plans.
|
Plan Category
|
(a)
Number of securities
to be issued upon
exercise of
outstanding
options, warrants
and rights
|
(b)
Weighted-average
exercise price of
outstanding
options, warrants
and rights
|
(c)
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a))
|
|
Equity compensation plans approved by security holders
|
3,500,409
|
(1)
|
$11.56
|
4,566,505
|
Equity compensation plans not approved by security holders
|
– |
|
– |
– |
Total
|
3,500,409
|
|
$11.56
|
4,566,505
|
(1)
|
Includes shares underlying options that have been issued and granted non-vested stock pursuant to the Company’s 2004 Omnibus Plan (the “2004 Plan”) and the 2012 Omnibus Incentive Plan (the “2012 Plan”) as approved by the Company’s stockholders. See Note 13 of Notes to Consolidated Financial Statements for information regarding the material features of the 2012 Plan, which are substantially similar to the 2004 Plan.
|
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Page
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|
|
Exhibit No.
|
||
|
|
|
|
2.1
|
Agreement and Plan of Merger, dated as of November 9, 2010, by and among Darling International Inc., DG Acquisition Corp., Griffin Industries, Inc. and Robert A. Griffin, in his capacity as the Shareholders’ Representative (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed November 9, 2010 (Securities and Exchange Commission File No. 001-13323) and incorporated herein by reference).
|
|
|
|
|
2.2
|
Acquisition Agreement, dated as of August 23, 2013, by and between Darling International Inc. and Maple Leaf Foods Inc. (the schedules and certain exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be furnished to the SEC upon request) (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed August 26, 2013 and incorporated herein by reference).
|
|
|
|
|
2.3
|
Sale and Purchase Agreement, dated as of October 5, 2013, by and between Darling International Inc. and VION Holding N.V. (certain immaterial schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be furnished to the Securities and Exchange Commission upon request) (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed October 10, 2013 and incorporated herein by reference).
|
|
|
|
|
3.1
|
Restated Certificate of Incorporation of the Company, as amended (filed as Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed May 23, 2002 and incorporated herein by reference).
|
|
|
|
|
3.2
|
Certificate of Amendment of Restated Certificate of Incorporation of the Company (filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K filed March 2, 2011 and incorporated herein by reference).
|
|
|
|
|
3.3
|
Certificate of Amendment of Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed November 27, 2013 and incorporated herein by reference).
|
|
|
|
|
3.4
|
Certificate of Amendment of Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed May 7, 2014 and incorporated herein by reference).
|
|
|
|
|
3.5
|
Amended and Restated Bylaws of the Company (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed May 7, 2014 and incorporated herein by reference).
|
|
|
|
|
4.1
|
Specimen Common Stock Certificate (filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed May 27, 1994 and incorporated herein by reference).
|
|
|
|
|
4.2
|
Certificate of Designation, Preferences and Rights of Series A Preferred Stock (filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-1 filed May 23, 2002 and incorporated herein by reference).
|
|
|
|
|
4.3
|
Senior Notes Indenture, dated as of January 2, 2014, by and among Darling Escrow Corporation, the subsidiary guarantors party thereto from time to time and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 10, 2014 and incorporated herein by reference).
|
|
|
|
|
4.4
|
Supplemental Indenture, dated as of January 8, 2014, by and among Darling Escrow Corporation, Darling International Inc., Craig Protein Division, Inc., Darling AWS LLC, Darling National LLC, Darling Northstar LLC, Darling Global Holdings Inc., EV Acquisition, Inc., Griffin Industries LLC, Terra Holding Company and Terra Renewal Services Inc. and U.S. Bank National Association, as trustee (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed January 10, 2014 and incorporated herein by reference).
|
|
|
|
|
4.5
|
Supplemental Indenture, dated as of April 4, 2014, by and among Darling International Inc., Craig Protein Division, Inc., Darling AWS LLC, Darling National LLC, Darling Northstar LLC, Darling Global Holdings Inc., EV Acquisition, Inc., Griffin Industries LLC, Terra Holding Company, Terra Renewal Services Inc., Rousselot Dubuque Inc., Rousselot Inc., Rousselot Peabody Inc., Sonac USA LLC and U.S. Bank National Association, as trustee (filed as Exhibit 4.5 to the Company’s Registration Statement on Form S-4 filed July 15, 2014 and incorporated herein by reference).
|
|
|
|
|
4.6
|
Senior Notes Indenture, dated as of June 3, 2015, by and among Darling Global Finance B.V., Darling Ingredients Inc., the subsidiary guarantors party thereto from time to time, Citibank, N.A., London Branch, as trustee and principal paying agent, and Citigroup Global Markets Deutschland AG, as principal registrar (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed June 3, 2015 and incorporated herein by reference).
|
|
|
|
|
10.1
|
Second Amended and Restated Credit Agreement, dated as of January 6, 2014, by and among Darling International Inc., the other borrowers party thereto from time to time, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents from time to time party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 10, 2014 and incorporated herein by reference).
|
|
|
|
|
10.2
|
First Amendment to the Second Amended and Restated Credit Agreement, dated as of May 13, 2015, among the Company, as the parent borrower, the other subsidiary borrowers party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed May 15, 2015 and incorporated herein by reference).
|
|
|
|
|
10.3
|
Second Amendment to the Second Amended and Restated Credit Agreement, dated as of September 23, 2015, among the Company, as the parent borrower, the other subsidiary borrowers party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 25, 2015 and incorporated herein by reference).
|
|
|
|
|
10.4
|
Third Amendment to the Second Amended and Restated Credit Agreement, dated as of October 14, 2015, among the Company, as the parent borrower, the other subsidiary borrowers party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 14, 2015 and incorporated herein by reference).
|
|
|
|
|
10.5
|
Fourth Amendment, dated as of December 16, 2016, to Second Amended and Restated Credit Agreement by and among Darling Ingredients Inc., as the parent borrower, the other subsidiary borrowers party thereto, the subsidiary guarantors, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 20, 2016 and incorporated herein by reference).
|
|
|
|
|
10.6
|
Second Amended and Restated Security Agreement, dated as of January 6, 2014, by and among Darling International Inc., its subsidiaries signatory thereto and any other subsidiary who may become a party thereto and JPMorgan Chase Bank, N.A, as administrative agent (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed January 10, 2014 and incorporated herein by reference).
|
|
|
|
|
10.7
|
Second Amended and Restated Guaranty Agreement, dated as of January 6, 2014, by and among Darling International Inc., its subsidiaries signatory thereto and any other subsidiary who may become a party thereto and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed January 10, 2014 and incorporated herein by reference).
|
|
|
|
|
10.8
|
Limited Liability Company Agreement, dated as of January 21, 2011, by and among Diamond Green Diesel Holdings LLC, Darling Green Energy LLC and Diamond Alternative Energy, LLC. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 21, 2011 and incorporated herein by reference).
|
|
|
|
|
10.9
|
Sponsor Support Agreement, dated as of May 31, 2011, by and between Darling International Inc., Diamond Green Diesel LLC and Diamond Alternative Energy, LLC (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed June 1, 2011 and incorporated herein by reference).
|
|
|
|
|
10.10
|
Raw Material Supply Agreement, dated as of May 31, 2011, by and between Diamond Green Diesel LLC and Darling International Inc. (filed as Exhibit 10 to the Company's Quarterly Report on Form 10-Q filed August 11, 2011 and incorporated herein by reference).
|
|
|
|
|
10.11
|
Ground Lease, dated as of December 17, 2010, by and between Martom Properties, LLC and Griffin Industries, Inc. (Butler, Kentucky) (filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K filed December 20, 2010 (Securities and Exchange Commission File No. 001-13323) and incorporated herein by reference).
|
|
|
|
|
10.12
|
Ground Lease, dated as of December 17, 2010, by and between Martom Properties, LLC and Griffin Industries, Inc. (Henderson, Kentucky) (filed as Exhibit 10.7 to the Company’s Current Report on Form 8-K filed December 20, 2010 (Securities and Exchange Commission File No. 001-13323) and incorporated herein by reference).
|
|
|
|
|
10.13 *
|
Darling International Inc. 2004 Omnibus Incentive Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed May 11, 2005 (Securities and Exchange Commission File No. 000-24620), and incorporated herein by reference).
|
|
|
|
|
10.14 *
|
Amendment to Darling International Inc. 2004 Omnibus Incentive Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 22, 2007 (Securities and Exchange Commission File No. 000-24620) and incorporated herein by reference).
|
|
|
|
|
10.15 *
|
Amendment to Darling International Inc. 2004 Omnibus Incentive Plan (filed herewith).
|
|
|
|
|
10.16 *
|
Darling International Inc. 2012 Omnibus Incentive Plan (filed as Exhibit 99 to the Company’s Registration Statement on Form S-8 filed May 31, 2012 and incorporated herein by reference).
|
|
|
|
|
10.17 *
|
Amendment to Darling International Inc. 2012 Omnibus Incentive Plan (filed herewith).
|
|
|
|
|
10.18 *
|
Form of Performance Award Agreement for use in connection with awards under the 2012 Omnibus Incentive Plan (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed May 12, 2016 and incorporated herein by reference).
|
|
|
|
|
10.19 *
|
Form of Stock Option Notice and Agreement for use in connection with awards under the 2012 Omnibus Incentive Plan (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed May 12, 2016 and incorporated herein by reference).
|
|
|
|
|
10.20 *
|
Form of Performance Unit Award Agreement under the Darling International Inc. 2012 Omnibus Incentive Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 6, 2014 and incorporated herein by reference).
|
|
|
|
|
10.21 *
|
Non-Employee Director Restricted Stock Award Plan (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 15, 2006 (Securities and Exchange Commission File No. 000-24620) and incorporated herein by reference).
|
|
|
|
|
10.22 *
|
Amendment No. 1 to Non-Employee Director Restricted Stock Award Plan, effective as of January 15, 2009 (filed as Exhibit 10.04 to the Company’s Current Report on Form 8-K filed January 21, 2009 (Securities and Exchange Commission File No. 000-24620) and incorporated herein by reference).
|
|
|
|
|
10.23 *
|
Amended and Restated Non-Employee Director Restricted Stock Award Plan, (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 28, 2011 and incorporated herein by reference).
|
|
|
|
|
10.24 *
|
Form of Notice of Grant of Restricted Stock Unit Award (Non-Employee Directors) under the Darling International Inc. 2012 Omnibus Incentive Plan (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed August 7, 2014 and incorporated herein by reference).
|
|
|
|
|
10.25 *
|
Notice of Amendment to Grants and Awards, dated as of October 10, 2006 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 10, 2006 (Securities and Exchange Commission File No. 000-24620) and incorporated herein by reference).
|
|
|
|
|
10.26 *
|
Amended and Restated Employment Agreement, dated as of January 1, 2009, between Darling International Inc. and Randall C. Stuewe (filed as Exhibit 10.01 to the Company’s Current Report on Form 8-K filed January 21, 2009 (Securities and Exchange Commission File No. 000-24620), and incorporated herein by reference).
|
|
|
|
|
10.27 *
|
Amendment No. 1, dated as of March 23, 2015, to Amended and Restated Employment Agreement between Darling Ingredients Inc. and Randall C. Stuewe (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 25, 2015 and incorporated herein by reference).
|
|
|
|
|
10.28 *
|
Employment Agreement, dated as of February 12, 2014, between Darling International Netherlands BV and Dirk Kloosterboer (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed May 8, 2014 and incorporated herein by reference).
|
|
|
|
|
10.29 *
|
Form of Senior Executive Termination Benefits Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 29, 2007 (Securities and Exchange Commission File No. 000-24620) and incorporated herein by reference).
|
|
|
|
|
|
|
DARLING INGREDIENTS INC.
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Randall C. Stuewe
|
|
|
|
Randall C. Stuewe
|
|
|
|
Chairman of the Board and
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
Date:
|
February 28, 2017
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Randall C. Stuewe
|
|
Chairman of the Board and
|
|
February 28, 2017
|
Randall C. Stuewe
|
|
Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ John O. Muse
|
|
Executive Vice President –
|
|
February 28, 2017
|
John O. Muse
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ D. Eugene Ewing
|
|
Director
|
|
February 28, 2017
|
D. Eugene Ewing
|
|
|
|
|
|
|
|
|
|
/s/ Dirk Kloosterboer
|
|
Director
|
|
February 28, 2017
|
Dirk Kloosterboer
|
|
|
|
|
|
|
|
|
|
/s/ Mary R. Korby
|
|
Director
|
|
February 28, 2017
|
Mary R. Korby
|
|
|
|
|
|
|
|
|
|
/s/ Cynthia Pharr Lee
|
|
Director
|
|
February 28, 2017
|
Cynthia Pharr Lee
|
|
|
|
|
|
|
|
|
|
/s/ Charles Macaluso
|
|
Director
|
|
February 28, 2017
|
Charles Macaluso
|
|
|
|
|
|
|
|
|
|
/s/ Gary W. Mize
|
|
Director
|
|
February 28, 2017
|
Gary W. Mize
|
|
|
|
|
|
2.1
|
Agreement and Plan of Merger, dated as of November 9, 2010, by and among Darling International Inc., DG Acquisition Corp., Griffin Industries, Inc. and Robert A. Griffin, in his capacity as the Shareholders’ Representative (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed November 9, 2010 (Securities and Exchange Commission File No. 001-13323) and incorporated herein by reference).
|
|
|
|
|
2.2
|
Acquisition Agreement, dated as of August 23, 2013, by and between Darling International Inc. and Maple Leaf Foods Inc. (the schedules and certain exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be furnished to the SEC upon request) (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed August 26, 2013 and incorporated herein by reference).
|
|
|
|
|
2.3
|
Sale and Purchase Agreement, dated as of October 5, 2013, by and between Darling International Inc. and VION Holding N.V. (certain immaterial schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be furnished to the Securities and Exchange Commission upon request) (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed October 10, 2013 and incorporated herein by reference).
|
|
|
|
|
3.1
|
Restated Certificate of Incorporation of the Company, as amended (filed as Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed May 23, 2002 and incorporated herein by reference).
|
|
|
|
|
3.2
|
Certificate of Amendment of Restated Certificate of Incorporation of the Company (filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K filed March 2, 2011 and incorporated herein by reference).
|
|
|
|
|
3.3
|
Certificate of Amendment of Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed November 27, 2013 and incorporated herein by reference).
|
|
|
|
|
3.4
|
Certificate of Amendment of Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed May 7, 2014 and incorporated herein by reference).
|
|
|
|
|
3.5
|
Amended and Restated Bylaws of the Company (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed May 7, 2014 and incorporated herein by reference).
|
|
|
|
|
4.1
|
Specimen Common Stock Certificate (filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed May 27, 1994 and incorporated herein by reference).
|
|
|
|
|
4.2
|
Certificate of Designation, Preferences and Rights of Series A Preferred Stock (filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-1 filed May 23, 2002 and incorporated herein by reference).
|
|
|
|
|
4.3
|
Senior Notes Indenture, dated as of January 2, 2014, by and among Darling Escrow Corporation, the subsidiary guarantors party thereto from time to time and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 10, 2014 and incorporated herein by reference).
|
|
|
|
|
4.4
|
Supplemental Indenture, dated as of January 8, 2014, by and among Darling Escrow Corporation, Darling International Inc., Craig Protein Division, Inc., Darling AWS LLC, Darling National LLC, Darling Northstar LLC, Darling Global Holdings Inc., EV Acquisition, Inc., Griffin Industries LLC, Terra Holding Company and Terra Renewal Services Inc. and U.S. Bank National Association, as trustee (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed January 10, 2014 and incorporated herein by reference).
|
|
|
|
|
4.5
|
Supplemental Indenture, dated as of April 4, 2014, by and among Darling International Inc., Craig Protein Division, Inc., Darling AWS LLC, Darling National LLC, Darling Northstar LLC, Darling Global Holdings Inc., EV Acquisition, Inc., Griffin Industries LLC, Terra Holding Company, Terra Renewal Services Inc., Rousselot Dubuque Inc., Rousselot Inc., Rousselot Peabody Inc., Sonac USA LLC and U.S. Bank National Association, as trustee (filed as Exhibit 4.5 to the Company’s Registration Statement on Form S-4 filed July 15, 2014 and incorporated herein by reference).
|
|
|
|
|
4.6
|
Senior Notes Indenture, dated as of June 3, 2015, by and among Darling Global Finance B.V., Darling Ingredients Inc., the subsidiary guarantors party thereto from time to time, Citibank, N.A., London Branch, as trustee and principal paying agent, and Citigroup Global Markets Deutschland AG, as principal registrar (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed June 3, 2015 and incorporated herein by reference).
|
|
|
|
|
10.1
|
Second Amended and Restated Credit Agreement, dated as of January 6, 2014, by and among Darling International Inc., the other borrowers party thereto from time to time, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents from time to time party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 10, 2014 and incorporated herein by reference).
|
|
|
|
|
10.2
|
First Amendment to the Second Amended and Restated Credit Agreement, dated as of May 13, 2015, among the Company, as the parent borrower, the other subsidiary borrowers party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed May 15, 2015 and incorporated herein by reference).
|
|
|
|
|
10.3
|
Second Amendment to the Second Amended and Restated Credit Agreement, dated as of September 23, 2015, among the Company, as the parent borrower, the other subsidiary borrowers party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 25, 2015 and incorporated herein by reference).
|
|
|
|
|
10.4
|
Third Amendment to the Second Amended and Restated Credit Agreement, dated as of October 14, 2015, among the Company, as the parent borrower, the other subsidiary borrowers party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 14, 2015 and incorporated herein by reference).
|
|
|
|
|
10.5
|
Fourth Amendment, dated as of December 16, 2016, to Second Amended and Restated Credit Agreement by and among Darling Ingredients Inc., as the parent borrower, the other subsidiary borrowers party thereto, the subsidiary guarantors, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 20, 2016 and incorporated herein by reference).
|
|
|
|
|
10.6
|
Second Amended and Restated Security Agreement, dated as of January 6, 2014, by and among Darling International Inc., its subsidiaries signatory thereto and any other subsidiary who may become a party thereto and JPMorgan Chase Bank, N.A, as administrative agent (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed January 10, 2014 and incorporated herein by reference).
|
|
|
|
|
10.7
|
Second Amended and Restated Guaranty Agreement, dated as of January 6, 2014, by and among Darling International Inc., its subsidiaries signatory thereto and any other subsidiary who may become a party thereto and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed January 10, 2014 and incorporated herein by reference).
|
|
|
|
|
10.8
|
Limited Liability Company Agreement, dated as of January 21, 2011, by and among Diamond Green Diesel Holdings LLC, Darling Green Energy LLC and Diamond Alternative Energy, LLC. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 21, 2011 and incorporated herein by reference).
|
|
|
|
|
10.9
|
Sponsor Support Agreement, dated as of May 31, 2011, by and between Darling International Inc., Diamond Green Diesel LLC and Diamond Alternative Energy, LLC (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed June 1, 2011 and incorporated herein by reference).
|
|
|
|
|
10.10
|
Raw Material Supply Agreement, dated as of May 31, 2011, by and between Diamond Green Diesel LLC and Darling International Inc. (filed as Exhibit 10 to the Company's Quarterly Report on Form 10-Q filed August 11, 2011 and incorporated herein by reference).
|
|
|
|
|
10.11
|
Ground Lease, dated as of December 17, 2010, by and between Martom Properties, LLC and Griffin Industries, Inc. (Butler, Kentucky) (filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K filed December 20, 2010 (Securities and Exchange Commission File No. 001-13323) and incorporated herein by reference).
|
|
|
|
|
10.12
|
Ground Lease, dated as of December 17, 2010, by and between Martom Properties, LLC and Griffin Industries, Inc. (Henderson, Kentucky) (filed as Exhibit 10.7 to the Company’s Current Report on Form 8-K filed December 20, 2010 (Securities and Exchange Commission File No. 001-13323) and incorporated herein by reference).
|
|
|
|
|
10.13 *
|
Darling International Inc. 2004 Omnibus Incentive Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed May 11, 2005 (Securities and Exchange Commission File No. 000-24620), and incorporated herein by reference).
|
|
|
|
|
10.14 *
|
Amendment to Darling International Inc. 2004 Omnibus Incentive Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 22, 2007 (Securities and Exchange Commission File No. 000-24620) and incorporated herein by reference).
|
|
|
|
|
10.15 *
|
Amendment to Darling International Inc. 2004 Omnibus Incentive Plan (filed herewith).
|
|
|
|
|
10.16 *
|
Darling International Inc. 2012 Omnibus Incentive Plan (filed as Exhibit 99 to the Company’s Registration Statement on Form S-8 filed May 31, 2012 and incorporated herein by reference).
|
|
|
|
|
10.17 *
|
Amendment to Darling International Inc. 2012 Omnibus Incentive Plan (filed herewith).
|
|
|
|
|
10.18 *
|
Form of Performance Award Agreement for use in connection with awards under the 2012 Omnibus Incentive Plan (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed May 12, 2016 and incorporated herein by reference).
|
|
|
|
|
10.19 *
|
Form of Stock Option Notice and Agreement for use in connection with awards under the 2012 Omnibus Incentive Plan (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed May 12, 2016 and incorporated herein by reference).
|
|
|
|
|
10.20 *
|
Form of Performance Unit Award Agreement under the Darling International Inc. 2012 Omnibus Incentive Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 6, 2014 and incorporated herein by reference).
|
|
|
|
|
10.21 *
|
Non-Employee Director Restricted Stock Award Plan (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 15, 2006 (Securities and Exchange Commission File No. 000-24620) and incorporated herein by reference).
|
|
|
|
|
10.22 *
|
Amendment No. 1 to Non-Employee Director Restricted Stock Award Plan, effective as of January 15, 2009 (filed as Exhibit 10.04 to the Company’s Current Report on Form 8-K filed January 21, 2009 (Securities and Exchange Commission File No. 000-24620) and incorporated herein by reference).
|
|
|
|
|
10.23 *
|
Amended and Restated Non-Employee Director Restricted Stock Award Plan, (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 28, 2011 and incorporated herein by reference).
|
|
|
|
|
10.24 *
|
Form of Notice of Grant of Restricted Stock Unit Award (Non-Employee Directors) under the Darling International Inc. 2012 Omnibus Incentive Plan (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed August 7, 2014 and incorporated herein by reference).
|
|
|
|
|
10.25 *
|
Notice of Amendment to Grants and Awards, dated as of October 10, 2006 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 10, 2006 (Securities and Exchange Commission File No. 000-24620) and incorporated herein by reference).
|
|
|
|
|
10.26 *
|
Amended and Restated Employment Agreement, dated as of January 1, 2009, between Darling International Inc. and Randall C. Stuewe (filed as Exhibit 10.01 to the Company’s Current Report on Form 8-K filed January 21, 2009 (Securities and Exchange Commission File No. 000-24620), and incorporated herein by reference).
|
|
|
|
|
10.27 *
|
Amendment No. 1, dated as of March 23, 2015, to Amended and Restated Employment Agreement between Darling Ingredients Inc. and Randall C. Stuewe (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 25, 2015 and incorporated herein by reference).
|
|
|
|
|
10.28 *
|
Employment Agreement, dated as of February 12, 2014, between Darling International Netherlands BV and Dirk Kloosterboer (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed May 8, 2014 and incorporated herein by reference).
|
|
|
|
|
10.29 *
|
Form of Senior Executive Termination Benefits Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 29, 2007 (Securities and Exchange Commission File No. 000-24620) and incorporated herein by reference).
|
|
|
|
(a)
|
Termination by reason of the Executive’s “voluntary termination” other than a Change in Control Termination (as hereinafter defined)
. For the purposes of this Agreement, “
voluntary termination
” shall mean the voluntary resignation by the Executive of his employment with the Company;
|
(b)
|
“
Termination with Cause
.” For the purposes hereof, “
Cause
” shall mean termination of employment of the Executive by the Company following (1) material failure of the Executive to comply with the reasonable directions of the Company’s Chief Executive Officer or Board of Directors, which failure is not corrected after thirty (30) days written notice from the Company, (2) the commission by the Executive of an act of fraud or dishonesty or of an act which he knew to be in material violation of his duties to the Company (including the unauthorized disclosure of confidential information) or (3) following a felony conviction of the Executive; or
|
(c)
|
Termination upon the Executive’s normal retirement
. For the purposes of this Agreement, “normal retirement” shall mean the termination of employment of the Executive by the Company or the Executive in accordance with the Company’s retirement policy (including early retirement, if included in such policy and elected by the Executive in writing) generally applicable to its senior executive employees, or in accordance with any other retirement agreement entered into by and between the Executive and the Company.
|
(b)
|
Vacation Pay
. Any accrued vacation pay due but not yet taken at the Termination Date shall be paid to the Executive on the date his employment with the Company is terminated (the “Termination Date”).
|
(c)
|
Welfare Benefits, etc.
The Executive’s participation (including dependent coverage) in any life and disability plans, and other similar benefits of the Company (except business travel accident insurance and continued contributions to qualified retirement plans) in effect immediately prior to the Termination Date shall be continued, or equivalent benefits provided by the Company, for a period of eighteen (18) months from the Termination Date, or thirty-six (36) months in the case of a Change in Control Termination, to the extent allowed under the policies or agreements pursuant to which the Company obtains and provides such benefits. In addition, the Company shall pay an amount equal to the applicable COBRA premium rate, if any, for a period of eighteen (18) months from the Termination Date, or thirty-six (36) months in the case of a Change in Control Termination, for health, dental and other similar COBRA coverage for the Executive and Executive’s eligible dependents, and such payments shall be includible in the Executive’s gross income.
|
(d)
|
Bonus and Retirement Benefits
. The Executive shall remain eligible to receive a prorated amount (based on the number of days worked in the fiscal year) of his annual incentive cash bonus to the extent it is earned under the terms of the Company’s then applicable annual incentive plan. Executive’s annual incentive cash bonus (if any) shall be paid in cash in accordance with the terms of the annual incentive plan and at the same time that other executive participants in the plan are paid. The Agreement shall not affect the Executive’s entitlement to benefits under the Company’s retirement plan accrued as of his termination.
|
(e)
|
Executive Outplacement Counseling
. The Company shall engage an outplacement counseling service of national reputation, at its own expense provided that such expense shall not exceed Ten Thousand Dollars ($10,000), to assist the Executive in obtaining employment, until the earliest of (i) two years from the Termination Date, (ii) such date as the
|
(b)
|
Return of Property
. The Executive agrees that, upon termination of the Executive’s employment with the Company for any reason, the Executive will return to the Company, in good condition, all property of the Company and any of its affiliates, including without limitation, keys; building access cards; computers; cellular telephones; automobiles; the originals and all copies (in whatever format) of all management, training, marketing, pricing, strategic, routing and selling materials; promotional materials; other training and instructional materials; financial information; vendor, owner, manager and product information; customer lists; other customer information; and all other selling, service and trade information and equipment, provided that nothing in this Section 5(b) limits any provision of Section 5(g) below. If such items are not returned in accordance with this Section 5(b), the Company will have the right to charge the Executive for all reasonable damages, costs, attorneys’ fees and other expenses incurred in searching for, taking, removing and/or recovering such property.
|
(c)
|
Nonsolicitation
. During the period of employment with the Company and for a period of 12 months thereafter, the Executive will not, on the Executive’s own behalf or on behalf of any other person, partnership, association, corporation or other entity, or otherwise act indirectly to hire or solicit or in any manner attempt to influence or induce any employee of the Company or its affiliates to leave the employment of the Company or its affiliates, nor will the Executive use or disclose to any person, partnership, association, corporation or other entity any information obtained while an employee of the Company concerning the names and addresses of the employees of the Company or its affiliates.
|
(d)
|
Nondisparagement
. The Executive shall not, either during the term of this Agreement or at any time thereafter, make statements, whether orally or in writing, concerning the Company, any of its directors, officers, employees or affiliates or any of its business strategies, policies or practices, that shall be in any way disparaging, derogatory or critical, or in any way harmful to the reputation of the Company, any such persons or entities or business strategies, policies or practices, provided that nothing in this Section 5(d) limits any provision of Section 5(g) below.
|
(e)
|
Cooperation
. The Executive agrees to cooperate, at the request and expense of the Company, in the prosecution and/or defense of any claim or litigation in which the Company or any affiliate is involved on the Termination Date or thereafter that includes subject matter as to which the Executive has knowledge and/or expertise, provided that nothing in this Section 5(e) limits any provision of Section 5(g) below.
|
(f)
|
Damages.
Notwithstanding anything in this Agreement to the contrary, if the Executive breaches the covenants contained in this Section 5, the Company will have no further obligations to the Executive pursuant to this Agreement or otherwise and may recover from the Executive all such damages to which it may be entitled at law or in equity. In addition, the Executive acknowledges that any such breach may result in immediate and irreparable harm to the Company for which money damages are likely to be inadequate. Accordingly, the Company may seek whatever relief it determines to be appropriate to protect the Company’s rights under this Agreement, including, without limitation, an injunction to prevent the Executive from disclosing any trade secrets or confidential or proprietary information concerning the Company to any person or entity, to prevent any person or entity from receiving from the Executive or using any such trade secrets or confidential or proprietary information and/or to prevent any person or entity from retaining or seeking to retain any other employees of the Company. The Executive acknowledges good and sufficient consideration for the covenants of this Section 5.
|
(g)
|
Protected Rights
. Executive understands that nothing contained in this Agreement limits Executive’s ability to report possible violations of law or regulation to, or file a charge or complaint with, the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Department of Justice, the Congress, any Inspector General, or any other federal, state or local governmental agency or commission (“
Government Agencies
”). Executive further understands that this Agreement does not limit Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company.
Nothing in this Agreement shall limit the Executive’s ability under applicable United States federal law to (i) disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law or (ii) disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.
|
Name
|
|
Where Organized
|
|
|
|
Griffin Industries LLC
|
|
Kentucky
|
Craig Protein Division, Inc.
|
|
Georgia
|
Darling National LLC
|
|
Delaware
|
Darling Green Energy LLC
|
|
Delaware
|
Darling AWS LLC
|
|
Delaware
|
Terra Holding Company
|
|
Delaware
|
Terra Renewal Services, Inc.
|
|
Arkansas
|
EV Acquisition Inc.
|
|
Arkansas
|
Darling Northstar LLC
|
|
Delaware
|
Darling Global Holdings Inc.
|
|
Delaware
|
DII Holdings (Gibraltar) Limited
|
|
Gibraltar
|
Darling (GI) Limited
|
|
Gibraltar
|
Darling International NL CV
|
|
The Netherlands
|
Darling International Netherlands B.V.
|
|
The Netherlands
|
Darling International Canada Inc.
|
|
Canada
|
Darling International NL Holding B.V.
|
|
The Netherlands
|
Darling Global Finance B.V.
|
|
The Netherlands
|
Best Commodity Trade B.V.
|
|
The Netherlands
|
BestHides GmbH (60%)
|
|
Germany
|
B.V. CTH Groep
|
|
The Netherlands
|
Changchun Sonac Biology Co. Ltd (65%)
|
|
China
|
China Millers Ltd
|
|
United Kingdom
|
CTH B.V.
|
|
The Netherlands
|
CTH België BVBA
|
|
Belgium
|
CTH do Brasil Indústria e Comércio de subproduto animal Ltda
|
|
Brazil
|
Triperia CTH Espana SL
|
|
Spain
|
CTH GmbH
|
|
Germany
|
CTH Porto - Industria Alimentar Unipessoal Lda
|
|
Portugal
|
CTH US Inc.
|
|
Delaware
|
Darling 5Q B.V.
|
|
The Netherlands
|
Darling 5Q UK Ltd
|
|
United Kingdom
|
Darling Ingredients Belgium Holding BVBA
|
|
Belgium
|
Darling Ingredients Germany Holding GmbH
|
|
Germany
|
Darling Ingredients International Financial Services B.V.
|
|
The Netherlands
|
Darling Ingredients International Holding B.V.
|
|
The Netherlands
|
Darling Ingredients Nederland B.V.
|
|
The Netherlands
|
Darling Ingredients Nederland Holding B.V.
|
|
The Netherlands
|
Darling (Shanghai) Management Co. Ltd
|
|
China
|
Dentrans BVBA
|
|
Belgium
|
Ecoson B.V.
|
|
The Netherlands
|
ERS Holding B.V.
|
|
The Netherlands
|
ecoson GmbH
|
|
Germany
|
Global Ceramic Materials Ltd
|
|
United Kingdom
|
Harimex B.V.
|
|
The Netherlands
|
Harimex do Brazil Ltda
|
|
Brazil
|
Haripro SpA (50%)
|
|
Italy
|
Hepac B.V.
|
|
The Netherlands
|
Hide Service GmbH (50%)
|
|
Germany
|
HR-Service Nederland B.V.
|
|
The Netherlands
|
Hunan Teijsen Casings & Food Co. Ltd
|
|
China
|
IT Services B.V.
|
|
The Netherlands
|
Kanzler GmbH
|
|
Germany
|
LARU GmbH
|
|
Germany
|
MD Entsorgungsges. für Schlachtnebenprodukte mbH
|
|
Germany
|
Nederlandse Darmenhandel Nevada BV
|
|
The Netherlands
|
Nevada Darmen- und Schlachtnebenprodukte Handels GmbH
|
|
Germany
|
Qionglai Sonac Biology Co. Ltd (65%)
|
|
China
|
Rendac B.V.
|
|
The Netherlands
|
Rendac BVBA
|
|
Belgium
|
Rendac CES SA
|
|
Luxemburg
|
Rendac Icker GmbH & Co. KG
|
|
Germany
|
Rendac Jagel GmbH
|
|
Germany
|
Rendac Lingen GmbH
|
|
Germany
|
Rendac Rotenburg GmbH
|
|
Germany
|
Rendac Son B.V.
|
|
The Netherlands
|
Sonac Functional Products B.V.
|
|
The Netherlands
|
Rendac Transport BVBA
|
|
Belgium
|
Rendac UDES SPRL
|
|
Belgium
|
Rendac Udes Transport SPRL
|
|
Belgium
|
Rousselot (Da'an) Gelatin Co. Ltd (75%)
|
|
China
|
Rousselot (Guangdong) Gelatin Co. Ltd (75%)
|
|
China
|
Rousselot (M) SDN.BHD
|
|
Malaysia
|
Rousselot (Whenzou) Gelatin Co. Ltd (70%)
|
|
China
|
Rousselot (Zhejiang) Gelatin Co. Ltd (70%)
|
|
China
|
Rousselot Angouleme SAS
|
|
France
|
Rousselot Argentina SA
|
|
Argentina
|
Rousselot B.V.
|
|
The Netherlands
|
Rousselot BVBA
|
|
Belgium
|
Rousselot Dubuque Inc.
|
|
Delaware
|
Rousselot Gelatin SL
|
|
Spain
|
Rousselot Gelatinas do Brasil Ltda
|
|
Brazil
|
Rousselot GmbH
|
|
Germany
|
Rousselot Inc.
|
|
Delaware
|
Rousselot Isle sur La Sorgue SAS
|
|
France
|
Rousselot Japan KK
|
|
Japan
|
Rousselot Jellice KK (51%)
|
|
Japan
|
Rousselot Peabody Inc.
|
|
Massachusetts
|
Rousselot SAS
|
|
France
|
Sanrec GmbH
|
|
Germany
|
Siping Sonac Biology Co. Ltd (65%)
|
|
China
|
SNP Handels- und Beteiligungs GmbH
|
|
Germany
|
SNP Verwaltungs- GmbH
|
|
Germany
|
Sobel GmbH
|
|
Germany
|
Sobel Luxembourg Sarl
|
|
Luxemburg
|
Sonac Almere BV
|
|
The Netherlands
|
Sonac (China) Biology Co. Ltd (65%)
|
|
China
|
Sonac (Luohe) Biology Co. Ltd (65%)
|
|
China
|
Sonac Australia PTY, Ltd
|
|
Australia
|
Sonac Bad Bramstedt GmbH
|
|
Germany
|
Sonac België BVBA
|
|
Belgium
|
Sonac Bergheim GmbH
|
|
Austria
|
Sonac Bramstedt-Nord GmbH
|
|
Germany
|
Sonac Brünen GmbH
|
|
Germany
|
Sonac Burgum B.V.
|
|
The Netherlands
|
Sonac Eindhoven B.V.
|
|
The Netherlands
|
Sonac Elsholz GmbH
|
|
Germany
|
Sonac Erolzheim GmbH
|
|
Germany
|
Sonac Gelsenkirchen GmbH
|
|
Germany
|
Sonac Gent BVBA
|
|
Belgium
|
Sonac Harlingen B.V.
|
|
The Netherlands
|
Sonac Hides & Skins (UK) Ltd
|
|
United Kingdom
|
Sonac Kiel GmbH
|
|
Germany
|
Sonac Lingen GmbH
|
|
Germany
|
Sonac Loenen B.V.
|
|
The Netherlands
|
Sonac Mering GmbH
|
|
Germany
|
Sonac Osetnica Sp.z o.o.
|
|
Poland
|
Sonac Son B.V.
|
|
The Netherlands
|
Sonac Transport BVBA
|
|
Belgium
|
Sonac USA LLC
|
|
Delaware
|
Sonac Usnice Sp.z o.o.
|
|
Poland
|
Sonac Versmold GmbH
|
|
Germany
|
Sonac Vuren B.V.
|
|
The Netherlands
|
Suzhou Sonac Protein Co. Ltd (52%)
|
|
China
|
Vada BVBA
|
|
Belgium
|
Zhejiang Sonac Biology Co. Ltd (65%)
|
|
China
|
Treuhand SNP Icker GmbH
|
|
Germany
|
Sonac Brazil Processamento De Sangue E De Subprodutos Do Abate Ltda
|
|
Brazil
|
Schmalzbaron Handels GmbH
|
|
Germany
|
1.
|
I have reviewed this annual report on Form 10-K of Darling Ingredients Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstance under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 28, 2017
|
1.
|
I have reviewed this annual report on Form 10-K of Darling Ingredients Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstance under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 28, 2017
|
|
/s/ Randall C. Stuewe
|
|
/s/ John O. Muse
|
|
Randall C. Stuewe
|
|
John O. Muse
|
|
Chief Executive Officer
|
|
Chief Financial Officer
|
|
Date: February 28, 2017
|
|
Date: February 28, 2017
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash
|
|
$
|
166,917,712
|
|
|
$
|
44,246,929
|
|
Receivables
|
|
54,123,377
|
|
|
172,208,558
|
|
||
Receivables—due from related party
|
|
13,952,095
|
|
|
5,765,858
|
|
||
Inventory
|
|
31,243,313
|
|
|
38,282,816
|
|
||
Prepaid expenses and other
|
|
2,497,117
|
|
|
940,027
|
|
||
Total current assets
|
|
268,733,614
|
|
|
261,444,188
|
|
||
Property, plant and equipment, at cost
|
|
412,005,794
|
|
|
397,447,389
|
|
||
Accumulated depreciation
|
|
(57,134,362
|
)
|
|
(41,217,164
|
)
|
||
Property, plant and equipment, net
|
|
354,871,432
|
|
|
356,230,225
|
|
||
Deferred charges and other assets, net
|
|
12,164,086
|
|
|
3,033,932
|
|
||
Total assets
|
|
$
|
635,769,132
|
|
|
$
|
620,708,345
|
|
LIABILITIES AND MEMBERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Current portion of related party debt
|
|
$
|
17,022,938
|
|
|
$
|
62,022,938
|
|
Accounts payable
|
|
9,835,764
|
|
|
6,343,591
|
|
||
Accounts payable—due to related party
|
|
11,466,319
|
|
|
10,242,394
|
|
||
Accrued interest—due to related party
|
|
1,446,976
|
|
|
3,042,983
|
|
||
Taxes other than income taxes
|
|
138,243
|
|
|
106,749
|
|
||
Other accrued expenses
|
|
313,020
|
|
|
199,224
|
|
||
Total current liabilities
|
|
40,223,260
|
|
|
81,957,879
|
|
||
Related party debt, less current portion
|
|
53,753,031
|
|
|
86,818,635
|
|
||
Other long-term liabilities
|
|
417,645
|
|
|
380,583
|
|
||
Commitments
|
|
|
|
|
||||
Members’ equity:
|
|
|
|
|
||||
Paid-in capital
|
|
223,377,260
|
|
|
223,377,260
|
|
||
Retained earnings
|
|
317,997,936
|
|
|
228,173,988
|
|
||
Total members’ equity
|
|
541,375,196
|
|
|
451,551,248
|
|
||
Total liabilities and members’ equity
|
|
$
|
635,769,132
|
|
|
$
|
620,708,345
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Operating revenues
|
|
$
|
527,670,493
|
|
|
$
|
475,934,054
|
|
Costs and expenses:
|
|
|
|
|
||||
Cost of sales
|
|
308,396,359
|
|
|
256,447,306
|
|
||
Operating expenses
|
|
43,269,764
|
|
|
40,980,039
|
|
||
General and administrative expenses
|
|
1,556,616
|
|
|
1,518,588
|
|
||
Depreciation, amortization and accretion expense
|
|
27,821,073
|
|
|
19,714,439
|
|
||
Total costs and expenses
|
|
381,043,812
|
|
|
318,660,372
|
|
||
Operating income
|
|
146,626,681
|
|
|
157,273,682
|
|
||
Other income, net
|
|
551,078
|
|
|
120,015
|
|
||
Interest and debt expense:
|
|
|
|
|
||||
Incurred
|
|
(7,970,753
|
)
|
|
(13,717,803
|
)
|
||
Capitalized
|
|
616,942
|
|
|
113,844
|
|
||
Interest and debt expense, net
|
|
(7,353,811
|
)
|
|
(13,603,959
|
)
|
||
Net income
|
|
$
|
139,823,948
|
|
|
$
|
143,789,738
|
|
|
|
Diamond
|
|
Darling
|
|
Total
|
||||||
|
|
Alternative
|
|
Green
|
|
Members’
|
||||||
|
|
Energy, LLC
|
|
Energy LLC
|
|
Equity
|
||||||
Balances as of December 31, 2014
|
|
$
|
178,880,755
|
|
|
$
|
178,880,755
|
|
|
$
|
357,761,510
|
|
Cash distributions to members
|
|
(25,000,000
|
)
|
|
(25,000,000
|
)
|
|
(50,000,000
|
)
|
|||
Net income
|
|
71,894,869
|
|
|
71,894,869
|
|
|
143,789,738
|
|
|||
Balances as of December 31, 2015
|
|
225,775,624
|
|
|
225,775,624
|
|
|
451,551,248
|
|
|||
Cash distributions to members
|
|
(25,000,000
|
)
|
|
(25,000,000
|
)
|
|
(50,000,000
|
)
|
|||
Net income
|
|
69,911,974
|
|
|
69,911,974
|
|
|
139,823,948
|
|
|||
Balances as of December 31, 2016
|
|
$
|
270,687,598
|
|
|
$
|
270,687,598
|
|
|
$
|
541,375,196
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
139,823,948
|
|
|
$
|
143,789,738
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation, amortization and accretion expense
|
|
27,821,073
|
|
|
19,714,439
|
|
||
Inventory valuation adjustment
|
|
(1,921,883
|
)
|
|
(1,180,508
|
)
|
||
Other noncash expense
|
|
26,600
|
|
|
31,519
|
|
||
(Increase) decrease in receivables
|
|
118,085,181
|
|
|
(31,751,859
|
)
|
||
(Increase) decrease in receivables—due from related party
|
|
(8,186,237
|
)
|
|
10,120,413
|
|
||
(Increase) decrease in inventory
|
|
8,961,386
|
|
|
(7,925,220
|
)
|
||
(Increase) decrease in prepaid expenses and other
|
|
(1,557,090
|
)
|
|
3,583,343
|
|
||
Increase (decrease) in accounts payable
|
|
2,982,267
|
|
|
(559,087
|
)
|
||
Increase (decrease) in accounts payable—due to related party
|
|
1,202,881
|
|
|
(1,813,000
|
)
|
||
Decrease in accrued interest—due to related party
|
|
(1,769,505
|
)
|
|
(1,375,717
|
)
|
||
Increase (decrease) in taxes other than income taxes
|
|
27,083
|
|
|
(5,377
|
)
|
||
Increase (decrease) in other accrued expenses
|
|
90,695
|
|
|
(16,610
|
)
|
||
Net cash provided by operating activities
|
|
285,586,399
|
|
|
132,612,074
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(14,895,477
|
)
|
|
(449,459
|
)
|
||
Deferred turnaround and catalyst costs
|
|
(19,761,217
|
)
|
|
(1,003,320
|
)
|
||
Proceeds from insurance
|
|
—
|
|
|
5,132,222
|
|
||
Other investing activities, net
|
|
(193,318
|
)
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
|
(34,850,012
|
)
|
|
3,679,443
|
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Repayments of related party debt
|
|
(78,065,604
|
)
|
|
(63,945,148
|
)
|
||
Cash distributions to members
|
|
(50,000,000
|
)
|
|
(50,000,000
|
)
|
||
Net cash used in financing activities
|
|
(128,065,604
|
)
|
|
(113,945,148
|
)
|
||
Net increase in cash
|
|
122,670,783
|
|
|
22,346,369
|
|
||
Cash as of beginning of period
|
|
44,246,929
|
|
|
21,900,560
|
|
||
Cash as of end of period
|
|
$
|
166,917,712
|
|
|
$
|
44,246,929
|
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
|
||||
Accrued capital expenditures
|
|
2,610,533
|
|
|
980,294
|
|
||
Accrued turnaround and catalyst expenditures
|
|
1,050,980
|
|
|
1,658,120
|
|
||
Capitalized interest
|
|
616,942
|
|
|
113,844
|
|
||
Interest paid
|
|
9,566,760
|
|
|
15,025,126
|
|
•
|
turnaround costs, which are incurred in connection with planned major maintenance activities and which are deferred when incurred and amortized on a straight-line basis over the period of time estimated to lapse until the next turnaround occurs;
|
•
|
fixed-bed catalyst costs, representing the cost of catalyst that is changed out at periodic intervals when the quality of the catalyst has deteriorated beyond its prescribed function, which are deferred when incurred and amortized on a straight-line basis over the estimated useful live of the specific catalyst;
|
•
|
a license acquired in 2015 that provides for an increase in the feedstock that can be processed at the Plant per calendar year; and
|
•
|
utility deposits.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Receivables—trade
|
$
|
19,001,568
|
|
|
$
|
13,553,598
|
|
Blenders tax credit receivable
|
32,382,471
|
|
|
156,595,804
|
|
||
Commodity derivative contract receivables (see Note 11)
|
2,739,338
|
|
|
1,960,028
|
|
||
Other receivables
|
—
|
|
|
99,128
|
|
||
Total receivables
|
$
|
54,123,377
|
|
|
$
|
172,208,558
|
|
Receivables—due from related party
|
$
|
13,952,095
|
|
|
$
|
5,765,858
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Feedstocks
|
$
|
27,584,472
|
|
|
$
|
26,762,561
|
|
Finished products
|
6,167,691
|
|
|
15,989,490
|
|
||
Lower of cost or market inventory valuation reserve
|
(2,738,434
|
)
|
|
(4,660,317
|
)
|
||
Supplies
|
229,584
|
|
|
191,082
|
|
||
Inventories
|
$
|
31,243,313
|
|
|
$
|
38,282,816
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Processing units
|
$
|
387,530,163
|
|
|
$
|
382,835,319
|
|
Administrative building
|
2,790,785
|
|
|
2,790,785
|
|
||
Precious metals
|
5,164,318
|
|
|
5,228,462
|
|
||
Computer hardware
|
1,319,686
|
|
|
1,319,686
|
|
||
Capital spares
|
256,170
|
|
|
256,170
|
|
||
Asset retirement obligation
|
177,993
|
|
|
177,993
|
|
||
Construction in progress
|
14,766,679
|
|
|
4,838,974
|
|
||
Property, plant and equipment, at cost
|
412,005,794
|
|
|
397,447,389
|
|
||
Accumulated depreciation
|
(57,134,362
|
)
|
|
(41,217,164
|
)
|
||
Property, plant and equipment, net
|
$
|
354,871,432
|
|
|
$
|
356,230,225
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Balance as of beginning of year
|
|
$
|
197,361
|
|
|
$
|
187,427
|
|
Accretion expense
|
|
10,460
|
|
|
9,934
|
|
||
Balance as of end of year
|
|
$
|
207,821
|
|
|
$
|
197,361
|
|
Year Ending December 31:
|
|
||
2017
|
$
|
18,919
|
|
2018
|
19,487
|
|
|
2019
|
20,072
|
|
|
2020
|
20,674
|
|
|
2021
|
21,294
|
|
|
2022 - 2031
|
251,434
|
|
|
Total minimum rental payments
|
$
|
351,880
|
|
Year Ending December 31:
|
|
||
2017
|
$
|
337,967
|
|
2018
|
343,037
|
|
|
2019
|
348,182
|
|
|
2020
|
353,404
|
|
|
2021
|
358,705
|
|
|
2022 - 2031
|
3,652,371
|
|
|
Total minimum rental payments
|
$
|
5,393,666
|
|
•
|
Level 1
- Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2
- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities
|
•
|
Level 3
- Unobservable inputs for the asset or liability. Unobservable inputs reflect our own assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which might include occasional market quotes or sales of similar instruments or our own financial data such as internally developed pricing models, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant judgment.
|
|
December 31, 2016
|
||||||||||||||||||||||||||||||
|
Fair Value Hierarchy
|
|
Total Gross Fair Value
|
|
Effect of Counter-party Netting
|
|
Effect of Cash Collateral Netting
|
|
Net Carrying Value on Balance Sheet
|
|
Cash Collateral Paid or Received Not Offset
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|
|
|
|||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivative contracts
|
$
|
3,575,476
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,575,476
|
|
|
$
|
(3,575,476
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivative contracts
|
7,913,986
|
|
|
—
|
|
|
—
|
|
|
7,913,986
|
|
|
(3,575,476
|
)
|
|
(4,338,510
|
)
|
|
—
|
|
|
(2,739,338
|
)
|
|
December 31, 2015
|
|||||||||||||||||||||||||||||
|
Fair Value Hierarchy
|
|
Total Gross Fair Value
|
|
Effect of Counter-party Netting
|
|
Effect of Cash Collateral Netting
|
|
Net Carrying Value on Balance Sheet
|
|
Cash Collateral Paid or Received Not Offset
|
|||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|
|
|
||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commodity derivative contracts
|
$
|
10,255,207
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,255,207
|
|
|
(4,930,286
|
)
|
|
$
|
(3,364,893
|
)
|
|
$
|
1,960,028
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commodity derivative contracts
|
4,930,286
|
|
|
—
|
|
|
—
|
|
|
4,930,286
|
|
|
(4,930,286
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying Amount
|
|
Fair
Value
|
|
Carrying Amount
|
|
Fair
Value
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
166,917,712
|
|
|
$
|
166,917,712
|
|
|
$
|
44,246,929
|
|
|
$
|
44,246,929
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Debt
|
70,775,969
|
|
|
72,635,963
|
|
|
148,841,573
|
|
|
154,338,648
|
|
•
|
The fair value of cash is the carrying value due to the low level of credit risk of these assets (Level 1).
|
•
|
The fair value of debt is determined using the discounted cash flow method based on quoted prices provided by third-party brokers (Level 3).
|
Derivative Instrument
|
|
Notional Contract Volumes
|
|
Soybean oil:
|
|
|
|
Futures - long
|
|
88,859
|
|
Futures - short
|
|
147,598
|
|
Ultra-low-sulfur diesel:
|
|
|
|
Futures - long
|
|
168
|
|
Futures - short
|
|
651
|
|
|
|
|
December 31, 2016
|
||||||
|
Balance Sheet Location
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
||||
Commodity contracts
|
Receivables
|
|
$
|
3,575,476
|
|
|
$
|
7,913,986
|
|
|
|
|
December 31, 2015
|
||||||
|
Balance Sheet Location
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
||||
Commodity contracts
|
Receivables
|
|
$
|
10,255,207
|
|
|
$
|
4,930,286
|
|
Derivatives Designated as Economic Hedges
|
|
Location of Gain (Loss) Recognized in Income on Derivatives
|
|
|
|
|
||||
Year Ended December 31,
|
||||||||||
2016
|
|
2015
|
||||||||
Commodity contracts
|
|
Cost of sales
|
|
$
|
(6,098,622
|
)
|
|
$
|
13,654,081
|
|