(Mark One)
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/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2018
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OR
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/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
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SECURITIES 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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Page No.
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March 31,
2018 |
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December 30,
2017 |
||||
ASSETS
|
(unaudited)
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
122,869
|
|
|
$
|
106,774
|
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Restricted cash
|
142
|
|
|
142
|
|
||
Accounts receivable, net
|
413,659
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|
|
391,847
|
|
||
Inventories
|
373,121
|
|
|
358,183
|
|
||
Prepaid expenses
|
40,707
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|
|
38,326
|
|
||
Income taxes refundable
|
4,694
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|
|
4,509
|
|
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Other current assets
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15,888
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|
|
56,664
|
|
||
Total current assets
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971,080
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|
|
956,445
|
|
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Property, plant and equipment, less accumulated depreciation of
$1,133,063 at March 31, 2018 and $1,075,448 at December 30, 2017
|
1,657,609
|
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1,645,822
|
|
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Intangible assets, less accumulated amortization of
$399,331 at March 31, 2018 and $383,836 at December 30, 2017
|
659,855
|
|
|
676,500
|
|
||
Goodwill
|
1,309,608
|
|
|
1,301,093
|
|
||
Investment in unconsolidated subsidiaries
|
409,135
|
|
|
302,038
|
|
||
Other assets
|
63,037
|
|
|
62,284
|
|
||
Deferred income taxes
|
15,186
|
|
|
14,043
|
|
||
|
$
|
5,085,510
|
|
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$
|
4,958,225
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
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Current liabilities:
|
|
|
|
|
|
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Current portion of long-term debt
|
$
|
16,722
|
|
|
$
|
16,143
|
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Accounts payable, principally trade
|
188,048
|
|
|
217,417
|
|
||
Income taxes payable
|
11,290
|
|
|
12,300
|
|
||
Accrued expenses
|
290,809
|
|
|
313,623
|
|
||
Total current liabilities
|
506,869
|
|
|
559,483
|
|
||
Long-term debt, net of current portion
|
1,764,423
|
|
|
1,698,050
|
|
||
Other non-current liabilities
|
106,603
|
|
|
106,287
|
|
||
Deferred income taxes
|
268,376
|
|
|
266,708
|
|
||
Total liabilities
|
2,646,271
|
|
|
2,630,528
|
|
||
Commitments and contingencies
|
|
|
|
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|
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Stockholders’ equity:
|
|
|
|
|
|
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Common stock, $0.01 par value; 250,000,000 shares authorized;
168,046,483 and 167,892,500 shares issued at March 31, 2018
and at December 30, 2017, respectively
|
1,680
|
|
|
1,679
|
|
||
Additional paid-in capital
|
1,525,836
|
|
|
1,515,614
|
|
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Treasury stock, at cost; 3,398,821 and 3,239,063 shares at
March 31, 2018 and at December 30, 2017, respectively
|
(47,025
|
)
|
|
(44,063
|
)
|
||
Accumulated other comprehensive loss
|
(198,444
|
)
|
|
(209,524
|
)
|
||
Retained earnings
|
1,083,314
|
|
|
981,227
|
|
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Total Darling's stockholders’ equity
|
2,365,361
|
|
|
2,244,933
|
|
||
Noncontrolling interests
|
73,878
|
|
|
82,764
|
|
||
Total stockholders' equity
|
$
|
2,439,239
|
|
|
$
|
2,327,697
|
|
|
$
|
5,085,510
|
|
|
$
|
4,958,225
|
|
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Three Months Ended
|
||||||
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March 31,
2018 |
|
April 1,
2017 |
||||
Net sales
|
$
|
875,374
|
|
|
$
|
878,510
|
|
Costs and expenses:
|
|
|
|
|
|
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Cost of sales and operating expenses
|
678,099
|
|
|
687,966
|
|
||
Selling, general and administrative expenses
|
86,902
|
|
|
86,923
|
|
||
Depreciation and amortization
|
78,619
|
|
|
71,114
|
|
||
Total costs and expenses
|
843,620
|
|
|
846,003
|
|
||
Operating income
|
31,754
|
|
|
32,507
|
|
||
|
|
|
|
||||
Other expense:
|
|
|
|
|
|
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Interest expense
|
(23,124
|
)
|
|
(21,680
|
)
|
||
Foreign currency loss
|
(1,481
|
)
|
|
(264
|
)
|
||
Other expense, net
|
(2,516
|
)
|
|
(2,053
|
)
|
||
Total other expense
|
(27,121
|
)
|
|
(23,997
|
)
|
||
|
|
|
|
||||
Equity in net income of unconsolidated subsidiaries
|
97,154
|
|
|
706
|
|
||
Income before income taxes
|
101,787
|
|
|
9,216
|
|
||
|
|
|
|
||||
Income tax expense
|
3,712
|
|
|
1,818
|
|
||
|
|
|
|
||||
Net income
|
98,075
|
|
|
7,398
|
|
||
|
|
|
|
||||
Net income attributable to noncontrolling interests
|
(770
|
)
|
|
(1,569
|
)
|
||
|
|
|
|
||||
Net income attributable to Darling
|
$
|
97,305
|
|
|
$
|
5,829
|
|
|
|
|
|
||||
Basic income per share
|
$
|
0.59
|
|
|
$
|
0.04
|
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Diluted income per share
|
$
|
0.58
|
|
|
$
|
0.04
|
|
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Three Months Ended
|
||||||
|
March 31, 2018
|
|
April 1, 2017
|
||||
Net income
|
$
|
98,075
|
|
|
$
|
7,398
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
||||
Foreign currency translation
|
17,295
|
|
|
15,679
|
|
||
Pension adjustments
|
667
|
|
|
759
|
|
||
Natural gas swap derivative adjustments
|
22
|
|
|
—
|
|
||
Corn option derivative adjustments
|
(1,605
|
)
|
|
(1,102
|
)
|
||
Total other comprehensive income, net of tax
|
16,379
|
|
|
15,336
|
|
||
Total comprehensive income
|
$
|
114,454
|
|
|
$
|
22,734
|
|
Comprehensive income attributable to noncontrolling interests
|
1,287
|
|
|
1,247
|
|
||
Comprehensive income attributable to Darling
|
$
|
113,167
|
|
|
$
|
21,487
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net Income
|
$
|
98,075
|
|
|
$
|
7,398
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
78,619
|
|
|
71,114
|
|
||
Gain on disposal of property, plant, equipment and other assets
|
(462
|
)
|
|
(125
|
)
|
||
Gain on insurance proceeds from insurance settlements
|
(503
|
)
|
|
—
|
|
||
Deferred taxes
|
(2,649
|
)
|
|
(8,454
|
)
|
||
Increase in long-term pension liability
|
159
|
|
|
702
|
|
||
Stock-based compensation expense
|
8,992
|
|
|
6,732
|
|
||
Deferred loan cost amortization
|
2,939
|
|
|
2,176
|
|
||
Equity in net income of unconsolidated subsidiaries
|
(97,154
|
)
|
|
(706
|
)
|
||
Distributions of earnings from unconsolidated subsidiaries
|
—
|
|
|
25,000
|
|
||
Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
|
|
||||
Accounts receivable
|
(14,590
|
)
|
|
(753
|
)
|
||
Income taxes refundable/payable
|
(1,384
|
)
|
|
7,576
|
|
||
Inventories and prepaid expenses
|
(10,182
|
)
|
|
(10,660
|
)
|
||
Accounts payable and accrued expenses
|
(38,422
|
)
|
|
(8,365
|
)
|
||
Other
|
3,486
|
|
|
2,823
|
|
||
Net cash provided by operating activities
|
26,924
|
|
|
94,458
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(56,587
|
)
|
|
(62,292
|
)
|
||
Investment in unconsolidated subsidiary
|
(3,500
|
)
|
|
(2,250
|
)
|
||
Proceeds from sale of investment in subsidiary
|
2,805
|
|
|
—
|
|
||
Gross proceeds from disposal of property, plant and equipment and other assets
|
1,479
|
|
|
1,340
|
|
||
Proceeds from insurance settlement
|
503
|
|
|
3,301
|
|
||
Payments related to routes and other intangibles
|
(15
|
)
|
|
—
|
|
||
Net cash used by investing activities
|
(55,315
|
)
|
|
(59,901
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from long-term debt
|
3,876
|
|
|
8,649
|
|
||
Payments on long-term debt
|
(9,622
|
)
|
|
(9,265
|
)
|
||
Borrowings from revolving credit facility
|
135,184
|
|
|
47,000
|
|
||
Payments on revolving credit facility
|
(80,019
|
)
|
|
(52,327
|
)
|
||
Net cash overdraft financing
|
(331
|
)
|
|
(1,077
|
)
|
||
Deferred loan costs
|
(1,094
|
)
|
|
(1,135
|
)
|
||
Issuance of common stock
|
182
|
|
|
22
|
|
||
Minimum withholding taxes paid on stock awards
|
(2,018
|
)
|
|
(1,995
|
)
|
||
Distributions to noncontrolling interests
|
—
|
|
|
(433
|
)
|
||
Net cash provided/ (used) by financing activities
|
46,158
|
|
|
(10,561
|
)
|
||
Effect of exchange rate changes on cash
|
(1,672
|
)
|
|
309
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
16,095
|
|
|
24,305
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
106,916
|
|
|
114,857
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
123,011
|
|
|
$
|
139,162
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Accrued capital expenditures
|
$
|
(1,934
|
)
|
|
$
|
(2,787
|
)
|
Cash paid during the period for:
|
|
|
|
||||
Interest, net of capitalized interest
|
$
|
19,142
|
|
|
$
|
19,022
|
|
Income taxes, net of refunds
|
$
|
7,120
|
|
|
$
|
2,429
|
|
Non-cash financing activities
|
|
|
|
||||
Debt issued for assets
|
$
|
17
|
|
|
$
|
—
|
|
(1)
|
General
|
(2)
|
Summary of Significant Accounting Policies
|
(a)
|
Basis of Presentation
|
(b)
|
Fiscal Periods
|
(c)
|
Cash, Cash Equivalents and Restricted Cash
|
|
|
March 31, 2018
|
December 30, 2017
|
||||
Cash and cash equivalents
|
|
$
|
122,869
|
|
$
|
106,774
|
|
Restricted cash
|
|
142
|
|
142
|
|
||
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flow
|
|
$
|
123,011
|
|
$
|
106,916
|
|
(d)
|
Accounts Receivable and Allowance for Doubtful Accounts
|
(e)
|
Revenue Recognition
|
(f)
|
Foreign Currency Translation and Remeasurement
|
(g)
|
Reclassifications
|
(h)
|
Earnings Per Share
|
|
Net Income per Common Share (in thousands, except per share data)
|
||||||||||||||||||||
|
Three Months Ended
|
||||||||||||||||||||
|
|
|
March 31, 2018
|
|
|
|
|
|
April 1, 2017
|
|
|
||||||||||
|
Income
|
|
Shares
|
|
Per Share
|
|
Income
|
|
Shares
|
|
Per Share
|
||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income attributable to Darling
|
$
|
97,305
|
|
|
164,772
|
|
|
$
|
0.59
|
|
|
$
|
5,829
|
|
|
164,738
|
|
|
$
|
0.04
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Add: Option shares in the money and dilutive effect of non-vested stock awards
|
|
|
|
5,071
|
|
|
|
|
|
|
|
|
2,012
|
|
|
|
|
||||
Less: Pro forma treasury shares
|
|
|
|
(2,101
|
)
|
|
|
|
|
|
|
|
(886
|
)
|
|
|
|
||||
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to Darling
|
$
|
97,305
|
|
|
167,742
|
|
|
$
|
0.58
|
|
|
$
|
5,829
|
|
|
165,864
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Acquisitions and Dispositions
|
(4)
|
Inventories
|
|
March 31, 2018
|
|
December 30, 2017
|
||||
Finished product
|
$
|
176,932
|
|
|
$
|
171,277
|
|
Work in process
|
107,910
|
|
|
101,540
|
|
||
Raw material
|
32,648
|
|
|
33,173
|
|
||
Supplies and other
|
55,631
|
|
|
52,193
|
|
||
|
$
|
373,121
|
|
|
$
|
358,183
|
|
(5)
|
Intangible Assets
|
|
March 31, 2018
|
|
December 30, 2017
|
||||
Indefinite Lived Intangible Assets
|
|
|
|
||||
Trade names
|
$
|
55,473
|
|
|
$
|
54,682
|
|
|
55,473
|
|
|
54,682
|
|
||
Finite Lived Intangible Assets:
|
|
|
|
|
|
||
Routes
|
392,477
|
|
|
397,808
|
|
||
Permits
|
515,830
|
|
|
512,659
|
|
||
Non-compete agreements
|
3,890
|
|
|
3,963
|
|
||
Trade names
|
76,354
|
|
|
76,558
|
|
||
Royalty, consulting, land use rights and leasehold
|
15,162
|
|
|
14,666
|
|
||
|
1,003,713
|
|
|
1,005,654
|
|
||
Accumulated Amortization:
|
|
|
|
||||
Routes
|
(140,001
|
)
|
|
(136,592
|
)
|
||
Permits
|
(221,317
|
)
|
|
(211,264
|
)
|
||
Non-compete agreements
|
(2,497
|
)
|
|
(2,387
|
)
|
||
Trade names
|
(31,839
|
)
|
|
(30,235
|
)
|
||
Royalty, consulting, land use rights and leasehold
|
(3,677
|
)
|
|
(3,358
|
)
|
||
|
(399,331
|
)
|
|
(383,836
|
)
|
||
Total Intangible assets, less accumulated amortization
|
$
|
659,855
|
|
|
$
|
676,500
|
|
(6)
|
Goodwill
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Total
|
||||||||
Balance at December 30, 2017
|
|
|
|
|
||||||||
Goodwill
|
$
|
848,167
|
|
$
|
344,471
|
|
$
|
124,369
|
|
$
|
1,317,007
|
|
Accumulated impairment losses
|
(15,914
|
)
|
—
|
|
—
|
|
(15,914
|
)
|
||||
|
832,253
|
|
344,471
|
|
124,369
|
|
1,301,093
|
|
||||
Goodwill acquired during year
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Foreign currency translation
|
201
|
|
6,560
|
|
1,754
|
|
8,515
|
|
||||
Balance at March 31, 2018
|
|
|
|
|
|
|
|
|||||
Goodwill
|
848,368
|
|
351,031
|
|
126,123
|
|
1,325,522
|
|
||||
Accumulated impairment losses
|
(15,914
|
)
|
—
|
|
—
|
|
(15,914
|
)
|
||||
|
$
|
832,454
|
|
$
|
351,031
|
|
$
|
126,123
|
|
$
|
1,309,608
|
|
(7)
|
Investment in Unconsolidated Subsidiaries
|
(in thousands)
|
|
March 31, 2018
|
December 31, 2017
|
||||
Assets:
|
|
|
|
||||
Total current assets
|
|
$
|
295,775
|
|
$
|
202,778
|
|
Property, plant and equipment, net
|
|
475,218
|
|
435,328
|
|
||
Other assets
|
|
11,959
|
|
4,655
|
|
||
Total assets
|
|
$
|
782,952
|
|
$
|
642,761
|
|
Liabilities and members' equity:
|
|
|
|
||||
Total current portion of long term debt
|
|
$
|
—
|
|
$
|
17,023
|
|
Total other current liabilities
|
|
40,242
|
|
40,705
|
|
||
Total long term debt
|
|
—
|
|
36,730
|
|
||
Total other long term liabilities
|
|
458
|
|
450
|
|
||
Total members' equity
|
|
742,252
|
|
547,853
|
|
||
Total liabilities and member's equity
|
|
$
|
782,952
|
|
$
|
642,761
|
|
|
|
Three Months Ended
|
|||||
(in thousands)
|
|
March 31, 2018
|
March 31, 2017
|
||||
Revenues:
|
|
|
|
||||
Operating revenues
|
|
$
|
150,321
|
|
$
|
125,397
|
|
Expenses:
|
|
|
|
||||
Total costs and expenses less depreciation, amortization and accretion expense
|
|
(49,821
|
)
|
115,322
|
|
||
Depreciation, amortization and accretion expense
|
|
6,120
|
|
8,113
|
|
||
Total costs and expenses
|
|
(43,701
|
)
|
123,435
|
|
||
Operating income
|
|
194,022
|
|
1,962
|
|
||
Other income
|
|
377
|
|
223
|
|
||
Interest and debt expense, net
|
|
—
|
|
(990
|
)
|
||
Net income
|
|
$
|
194,399
|
|
$
|
1,195
|
|
(8)
|
Accrued Expenses
|
|
March 31, 2018
|
|
December 30, 2017
|
||||
Compensation and benefits
|
$
|
80,714
|
|
|
$
|
102,474
|
|
Accrued income, ad valorem, and franchise taxes
|
36,081
|
|
|
30,546
|
|
||
Accrued operating expenses
|
67,878
|
|
|
61,230
|
|
||
Other accrued expense
|
106,136
|
|
|
119,373
|
|
||
|
$
|
290,809
|
|
|
$
|
313,623
|
|
(9)
|
Debt
|
|
March 31, 2018
|
|
December 30, 2017
|
||||
Amended Credit Agreement:
|
|
|
|
||||
Revolving Credit Facility ($3.9 million denominated in CAD and $18.5 million denominated in euro at March 31, 2018)
|
$
|
55,374
|
|
|
$
|
—
|
|
Term Loan A ($51.7 million and $53.1 million denominated in CAD at March 31, 2018 and December 30, 2017, respectively)
|
94,924
|
|
|
96,365
|
|
||
Less unamortized deferred loan costs
|
(623
|
)
|
|
(671
|
)
|
||
Carrying value Term Loan A
|
94,301
|
|
|
95,694
|
|
||
|
|
|
|
||||
Term Loan B
|
505,000
|
|
|
505,000
|
|
||
Less unamortized deferred loan costs
|
(10,238
|
)
|
|
(10,578
|
)
|
||
Carrying value Term Loan B
|
494,762
|
|
|
494,422
|
|
||
|
|
|
|
||||
5.375% Senior Notes due 2022 with effective interest of 5.72%
|
500,000
|
|
|
500,000
|
|
||
Less unamortized deferred loan costs
|
(5,957
|
)
|
|
(6,638
|
)
|
||
Carrying value 5.375% Senior Notes due 2022
|
494,043
|
|
|
493,362
|
|
||
|
|
|
|
||||
4.75% Senior Notes due 2022 - Denominated in euro with effective interest of 5.10%
|
634,918
|
|
|
617,356
|
|
||
Less unamortized deferred loan costs - Denominated in euro
|
(8,529
|
)
|
|
(8,675
|
)
|
||
Carrying value 4.75% Senior Notes due 2022
|
626,389
|
|
|
608,681
|
|
||
|
|
|
|
||||
Other Notes and Obligations
|
16,276
|
|
|
22,034
|
|
||
|
1,781,145
|
|
|
1,714,193
|
|
||
Less Current Maturities
|
16,722
|
|
|
16,143
|
|
||
|
$
|
1,764,423
|
|
|
$
|
1,698,050
|
|
(10)
|
Income Taxes
|
(11)
|
Other Comprehensive Income
|
|
Three Months Ended
|
|||||||||||||||||
|
Before-Tax
|
Tax (Expense)
|
Net-of-Tax
|
|||||||||||||||
|
Amount
|
or Benefit
|
Amount
|
|||||||||||||||
|
March 31, 2018
|
April 1, 2017
|
March 31, 2018
|
April 1, 2017
|
March 31, 2018
|
April 1, 2017
|
||||||||||||
Defined benefit pension plans
|
|
|
|
|
|
|
||||||||||||
Amortization of prior service cost/(benefit)
|
$
|
9
|
|
$
|
9
|
|
$
|
(3
|
)
|
$
|
(3
|
)
|
$
|
6
|
|
$
|
6
|
|
Amortization of actuarial loss
|
888
|
|
1,203
|
|
(227
|
)
|
(450
|
)
|
661
|
|
753
|
|
||||||
Total defined benefit pension plans
|
897
|
|
1,212
|
|
(230
|
)
|
(453
|
)
|
667
|
|
759
|
|
||||||
Natural gas swap derivatives
|
|
|
|
|
|
|
||||||||||||
Loss/(gain) reclassified to net income
|
14
|
|
—
|
|
(4
|
)
|
—
|
|
10
|
|
—
|
|
||||||
Gain/(loss) activity recognized in other comprehensive income (loss)
|
16
|
|
—
|
|
(4
|
)
|
—
|
|
12
|
|
—
|
|
||||||
Total natural gas swap derivatives
|
30
|
|
—
|
|
(8
|
)
|
—
|
|
22
|
|
—
|
|
||||||
Corn option derivatives
|
|
|
|
|
|
|
||||||||||||
Loss/(gain) reclassified to net income
|
(668
|
)
|
(1,185
|
)
|
173
|
|
460
|
|
(495
|
)
|
(725
|
)
|
||||||
Gain/(loss) activity recognized in other comprehensive income (loss)
|
(1,497
|
)
|
(615
|
)
|
387
|
|
238
|
|
(1,110
|
)
|
(377
|
)
|
||||||
Total corn option derivatives
|
(2,165
|
)
|
(1,800
|
)
|
560
|
|
698
|
|
(1,605
|
)
|
(1,102
|
)
|
||||||
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation
|
17,295
|
|
15,679
|
|
—
|
|
—
|
|
17,295
|
|
15,679
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
$
|
16,057
|
|
$
|
15,091
|
|
$
|
322
|
|
$
|
245
|
|
$
|
16,379
|
|
$
|
15,336
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|||||
|
March 31, 2018
|
April 1, 2017
|
Statement of Operations Classification
|
||||
Derivative instruments
|
|
|
|
||||
Natural gas swap derivatives
|
$
|
(14
|
)
|
$
|
—
|
|
Cost of sales and operating expenses
|
Corn option derivatives
|
668
|
|
1,185
|
|
Cost of sales and operating expenses
|
||
|
654
|
|
1,185
|
|
Total before tax
|
||
|
(169
|
)
|
(460
|
)
|
Income taxes
|
||
|
485
|
|
725
|
|
Net of tax
|
||
Defined benefit pension plans
|
|
|
|
||||
Amortization of prior service cost
|
$
|
(9
|
)
|
$
|
(9
|
)
|
(a)
|
Amortization of actuarial loss
|
(888
|
)
|
(1,203
|
)
|
(a)
|
||
|
(897
|
)
|
(1,212
|
)
|
Total before tax
|
||
|
230
|
|
453
|
|
Income taxes
|
||
|
(667
|
)
|
(759
|
)
|
Net of tax
|
||
Total reclassifications
|
$
|
(182
|
)
|
$
|
(34
|
)
|
Net of tax
|
(a)
|
These items are included in the computation of net periodic pension cost. See Note 13 Employee Benefit Plans for additional information.
|
|
|
Three Months Ended March 31, 2018
|
|||||||||||
|
|
Foreign Currency
|
Derivative
|
Defined Benefit
|
|
||||||||
|
|
Translation
|
Instruments
|
Pension Plans
|
Total
|
||||||||
Accumulated Other Comprehensive Income (loss) December 30, 2017, attributable to Darling, net of tax
|
|
$
|
(183,161
|
)
|
$
|
1,372
|
|
$
|
(27,735
|
)
|
$
|
(209,524
|
)
|
Other comprehensive gain (loss) before reclassifications
|
|
17,295
|
|
(1,098
|
)
|
—
|
|
16,197
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
—
|
|
(485
|
)
|
667
|
|
182
|
|
||||
Reclassification of tax effect (a)
|
|
—
|
|
291
|
|
(5,073
|
)
|
(4,782
|
)
|
||||
Net current-period other comprehensive income
|
|
17,295
|
|
(1,292
|
)
|
(4,406
|
)
|
11,597
|
|
||||
Noncontrolling interest
|
|
517
|
|
—
|
|
—
|
|
517
|
|
||||
Accumulated Other Comprehensive Income (loss) March 31, 2018, attributable to Darling, net of tax
|
|
(166,383
|
)
|
$
|
80
|
|
$
|
(32,141
|
)
|
$
|
(198,444
|
)
|
(a)
|
Stranded tax effects reclassified from accumulated other comprehensive income (loss) to retained earnings from the adoption of ASU 2018-02.
|
|
Pension Benefits
|
|||||
|
Three Months Ended
|
|||||
|
March 31,
2018 |
April 1,
2017 |
||||
Service cost
|
$
|
799
|
|
$
|
735
|
|
Interest cost
|
1,625
|
|
1,669
|
|
||
Expected return on plan assets
|
(2,064
|
)
|
(1,788
|
)
|
||
Amortization of prior service cost
|
9
|
|
9
|
|
||
Amortization of net loss
|
888
|
|
1,203
|
|
||
Net pension cost
|
$
|
1,257
|
|
$
|
1,828
|
|
(14)
|
Derivatives
|
Functional Currency
|
|
Contract Currency
|
||||
Type
|
Amount
|
|
Type
|
Amount
|
||
Brazilian real
|
45,094
|
|
|
Euro
|
11,210
|
|
Brazilian real
|
74,534
|
|
|
U.S. dollar
|
22,735
|
|
Euro
|
76,963
|
|
|
U.S. dollar
|
95,421
|
|
Euro
|
7,627
|
|
|
Polish zloty
|
32,280
|
|
Euro
|
5,772
|
|
|
Japanese yen
|
763,515
|
|
Euro
|
86,745
|
|
|
Chinese renminbi
|
680,847
|
|
Euro
|
11,573
|
|
|
Australian dollar
|
18,600
|
|
Euro
|
3,001
|
|
|
British pound
|
2,642
|
|
Polish zloty
|
70,770
|
|
|
Euro
|
16,740
|
|
British pound
|
184
|
|
|
Euro
|
161
|
|
British pound
|
49
|
|
|
U.S. dollar
|
70
|
|
Japanese yen
|
371,342
|
|
|
U.S. dollar
|
3,375
|
|
Derivatives
Designated as
Cash Flow Hedges
|
Gain or (Loss)
Recognized in Other Comprehensive Income (“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)
|
|||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Corn options
|
$
|
(1,497
|
)
|
$
|
(615
|
)
|
$
|
668
|
|
$
|
1,185
|
|
$
|
(1,123
|
)
|
$
|
88
|
|
Natural gas swaps
|
16
|
|
—
|
|
(14
|
)
|
—
|
|
25
|
|
—
|
|
||||||
Soybean meal options
|
—
|
|
—
|
|
—
|
|
—
|
|
(648
|
)
|
—
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
(1,481
|
)
|
$
|
(615
|
)
|
$
|
654
|
|
$
|
1,185
|
|
$
|
(1,746
|
)
|
$
|
88
|
|
(a)
|
Amount recognized in accumulated OCI (effective portion) is reported as accumulated other comprehensive income/(loss) of approximately $
(1.5) million
and $
(0.6) million
recorded net of taxes of approximately $
0.4 million
and $
0.2 million
as of
March 31, 2018
and
April 1, 2017
, respectively.
|
(b)
|
Gains and (losses) reclassified from accumulated OCI into income (effective portion) for corn options and natural gas swaps are included in cost of sales, respectively, in the Company’s consolidated statements of operations.
|
(c)
|
Gains and (losses) recognized in income on derivatives (ineffective portion) for corn options, natural gas swaps and soybean meal options are 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
|
|||||
|
|
|
|
Three Months Ended
|
|||||
Derivatives not designated as hedging instruments
|
|
Location
|
|
March 31, 2018
|
April 1, 2017
|
||||
|
|
|
|
|
|
||||
Foreign Exchange
|
|
Foreign currency loss/(gain)
|
|
$
|
1,654
|
|
$
|
3,146
|
|
Foreign Exchange
|
|
Selling, general and administrative expense
|
|
489
|
|
(1,481
|
)
|
||
Corn options and futures
|
|
Net sales
|
|
(309
|
)
|
(22
|
)
|
||
Corn options and futures
|
|
Cost of sales and operating expenses
|
|
512
|
|
270
|
|
||
Soybean Meal
|
|
Net sales
|
|
—
|
|
(272
|
)
|
||
Soybean Oil
|
|
Net sales
|
|
—
|
|
45
|
|
||
Total
|
|
|
|
$
|
2,346
|
|
$
|
1,686
|
|
|
|
Fair Value Measurements at March 31, 2018 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 instruments
|
$
|
1,052
|
|
$
|
—
|
|
$
|
1,052
|
|
$
|
—
|
|
Total Assets
|
$
|
1,052
|
|
$
|
—
|
|
$
|
1,052
|
|
$
|
—
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
2,765
|
|
$
|
—
|
|
$
|
2,765
|
|
$
|
—
|
|
5.375% Senior notes
|
508,750
|
|
—
|
|
508,750
|
|
—
|
|
||||
4.75% Senior notes
|
665,076
|
|
—
|
|
665,076
|
|
—
|
|
||||
Term loan A
|
94,450
|
|
—
|
|
94,450
|
|
—
|
|
||||
Term loan B
|
510,353
|
|
—
|
|
510,353
|
|
—
|
|
||||
Revolver debt
|
54,544
|
|
—
|
|
54,544
|
|
—
|
|
||||
Total Liabilities
|
$
|
1,835,938
|
|
$
|
—
|
|
$
|
1,835,938
|
|
$
|
—
|
|
|
|
Fair Value Measurements at December 30, 2017 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 instruments
|
$
|
4,346
|
|
$
|
—
|
|
$
|
4,346
|
|
$
|
—
|
|
Total Assets
|
$
|
4,346
|
|
$
|
—
|
|
$
|
4,346
|
|
$
|
—
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
2,326
|
|
$
|
—
|
|
$
|
2,326
|
|
$
|
—
|
|
5.375% Senior notes
|
513,100
|
|
—
|
|
513,100
|
|
—
|
|
||||
4.75% Senior notes
|
646,681
|
|
—
|
|
646,681
|
|
—
|
|
||||
Term loan A
|
95,883
|
|
—
|
|
95,883
|
|
—
|
|
||||
Term loan B
|
511,616
|
|
—
|
|
511,616
|
|
—
|
|
||||
Total Liabilities
|
$
|
1,769,606
|
|
$
|
—
|
|
$
|
1,769,606
|
|
$
|
—
|
|
(16)
|
Contingencies
|
(17)
|
Business Segments
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
485,798
|
|
$
|
305,520
|
|
$
|
84,056
|
|
$
|
—
|
|
$
|
875,374
|
|
Cost of sales and operating expenses
|
369,088
|
|
249,185
|
|
59,826
|
|
—
|
|
678,099
|
|
|||||
Gross Margin
|
116,710
|
|
56,335
|
|
24,230
|
|
—
|
|
197,275
|
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
48,265
|
|
23,861
|
|
(1,398
|
)
|
16,174
|
|
86,902
|
|
|||||
Depreciation and amortization
|
46,789
|
|
20,640
|
|
8,471
|
|
2,719
|
|
78,619
|
|
|||||
Segment operating income/(loss)
|
21,656
|
|
11,834
|
|
17,157
|
|
(18,893
|
)
|
31,754
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
(45
|
)
|
—
|
|
97,199
|
|
—
|
|
97,154
|
|
|||||
Segment income/(loss)
|
21,611
|
|
11,834
|
|
114,356
|
|
(18,893
|
)
|
128,908
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(27,121
|
)
|
|||||||||
Income before income taxes
|
|
|
|
|
$
|
101,787
|
|
||||||||
|
|
|
|
|
|
||||||||||
Segment assets at March 31, 2018
|
$
|
2,589,281
|
|
$
|
1,525,149
|
|
$
|
809,895
|
|
$
|
161,185
|
|
$
|
5,085,510
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Three Months Ended April 1, 2017
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
552,624
|
|
$
|
266,226
|
|
$
|
59,660
|
|
$
|
—
|
|
$
|
878,510
|
|
Cost of sales and operating expenses
|
432,576
|
|
209,392
|
|
45,998
|
|
—
|
|
687,966
|
|
|||||
Gross Margin
|
120,048
|
|
56,834
|
|
13,662
|
|
—
|
|
190,544
|
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
44,837
|
|
24,977
|
|
3,263
|
|
13,846
|
|
86,923
|
|
|||||
Depreciation and amortization
|
43,719
|
|
17,601
|
|
6,845
|
|
2,949
|
|
71,114
|
|
|||||
Segment operating income/(loss)
|
31,492
|
|
14,256
|
|
3,554
|
|
(16,795
|
)
|
32,507
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
109
|
|
—
|
|
597
|
|
—
|
|
706
|
|
|||||
Segment income/(loss)
|
31,601
|
|
14,256
|
|
4,151
|
|
(16,795
|
)
|
33,213
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(23,997
|
)
|
|||||||||
Income before income taxes
|
|
|
|
|
$
|
9,216
|
|
||||||||
|
|
|
|
|
|
||||||||||
Segment assets at December 30, 2017
|
$
|
2,614,545
|
|
$
|
1,499,027
|
|
$
|
688,890
|
|
$
|
155,763
|
|
$
|
4,958,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18)
|
Revenue
|
|
Impact of changes in accounting policies
|
|||||||||
|
As reported
|
|
Adjustments
|
|
Balances without adoption of Topic 606
|
|||||
|
|
|
|
|
|
|||||
Net sales
|
$
|
875,374
|
|
|
46,187
|
|
|
$
|
921,561
|
|
|
|
|
|
|
|
|||||
Cost of sales and operating expenses
|
$
|
678,099
|
|
|
46,187
|
|
|
$
|
724,286
|
|
|
Three Months Ended March 31, 2018
|
|||||||||||
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Total
|
||||||||
Geographic Area
|
|
|
|
|
||||||||
North America
|
$
|
390,376
|
|
$
|
44,277
|
|
$
|
21,540
|
|
$
|
456,193
|
|
Europe
|
87,790
|
|
183,639
|
|
62,516
|
|
333,945
|
|
||||
China
|
5,678
|
|
43,912
|
|
—
|
|
49,590
|
|
||||
South America
|
—
|
|
14,344
|
|
—
|
|
14,344
|
|
||||
Other
|
1,954
|
|
19,348
|
|
—
|
|
21,302
|
|
||||
Net sales
|
$
|
485,798
|
|
$
|
305,520
|
|
$
|
84,056
|
|
$
|
875,374
|
|
|
|
|
|
|
||||||||
Major product types
|
|
|
|
|
||||||||
Fats
|
$
|
143,552
|
|
$
|
44,819
|
|
$
|
—
|
|
$
|
188,371
|
|
Used cooking oil
|
36,608
|
|
—
|
|
—
|
|
36,608
|
|
||||
Proteins
|
203,395
|
|
—
|
|
—
|
|
203,395
|
|
||||
Bakery
|
46,751
|
|
—
|
|
—
|
|
46,751
|
|
||||
Other rendering
|
31,362
|
|
—
|
|
—
|
|
31,362
|
|
||||
Food ingredients
|
—
|
|
233,923
|
|
—
|
|
233,923
|
|
||||
Bioenergy
|
—
|
|
—
|
|
62,516
|
|
62,516
|
|
||||
Biofuels
|
—
|
|
—
|
|
21,540
|
|
21,540
|
|
||||
Other
|
24,130
|
|
26,778
|
|
—
|
|
50,908
|
|
||||
Net sales
|
$
|
485,798
|
|
$
|
305,520
|
|
$
|
84,056
|
|
$
|
875,374
|
|
|
Three Months Ended April 1, 2017 (a)
|
|||||||||||
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Total
|
||||||||
Geographic Area Revenues
|
|
|
|
|
||||||||
North America
|
$
|
422,935
|
|
$
|
45,725
|
|
$
|
8,083
|
|
$
|
476,743
|
|
Europe
|
122,927
|
|
149,701
|
|
51,577
|
|
324,205
|
|
||||
China
|
4,734
|
|
41,660
|
|
—
|
|
46,394
|
|
||||
South America
|
—
|
|
12,974
|
|
—
|
|
12,974
|
|
||||
Other
|
2,028
|
|
16,166
|
|
—
|
|
18,194
|
|
||||
Net sales
|
$
|
552,624
|
|
$
|
266,226
|
|
$
|
59,660
|
|
$
|
878,510
|
|
|
|
|
|
|
||||||||
Major product types
|
|
|
|
|
||||||||
Fats
|
$
|
158,005
|
|
$
|
40,893
|
|
$
|
—
|
|
$
|
198,898
|
|
Used cooking oil
|
44,046
|
|
—
|
|
—
|
|
44,046
|
|
||||
Proteins
|
198,151
|
|
—
|
|
—
|
|
198,151
|
|
||||
Bakery
|
56,097
|
|
—
|
|
—
|
|
56,097
|
|
||||
Other rendering
|
73,600
|
|
—
|
|
—
|
|
73,600
|
|
||||
Food ingredients
|
—
|
|
206,279
|
|
—
|
|
206,279
|
|
||||
Bioenergy
|
—
|
|
—
|
|
51,577
|
|
51,577
|
|
||||
Biofuels
|
—
|
|
—
|
|
8,083
|
|
8,083
|
|
||||
Other
|
22,725
|
|
19,054
|
|
—
|
|
41,779
|
|
||||
Net sales
|
$
|
552,624
|
|
$
|
266,226
|
|
$
|
59,660
|
|
$
|
878,510
|
|
(19)
|
Related Party Transactions
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
899
|
|
$
|
1,436
|
|
$
|
120,534
|
|
$
|
—
|
|
$
|
122,869
|
|
Restricted cash
|
103
|
|
—
|
|
39
|
|
—
|
|
142
|
|
|||||
Accounts receivable
|
37,894
|
|
513,155
|
|
455,774
|
|
(593,164
|
)
|
413,659
|
|
|||||
Inventories
|
12,547
|
|
84,727
|
|
275,847
|
|
—
|
|
373,121
|
|
|||||
Income taxes refundable
|
2,270
|
|
—
|
|
2,424
|
|
—
|
|
4,694
|
|
|||||
Prepaid expenses
|
11,188
|
|
2,636
|
|
26,883
|
|
—
|
|
40,707
|
|
|||||
Other current assets
|
3,066
|
|
71
|
|
12,751
|
|
—
|
|
15,888
|
|
|||||
Total current assets
|
67,967
|
|
602,025
|
|
894,252
|
|
(593,164
|
)
|
971,080
|
|
|||||
Investment in subsidiaries
|
4,879,498
|
|
1,167,246
|
|
844,044
|
|
(6,890,788
|
)
|
—
|
|
|||||
Property, plant and equipment, net
|
282,431
|
|
503,200
|
|
871,978
|
|
—
|
|
1,657,609
|
|
|||||
Intangible assets, net
|
16,041
|
|
250,400
|
|
393,414
|
|
—
|
|
659,855
|
|
|||||
Goodwill
|
21,860
|
|
551,837
|
|
735,911
|
|
—
|
|
1,309,608
|
|
|||||
Investment in unconsolidated subsidiaries
|
7,344
|
|
—
|
|
401,791
|
|
—
|
|
409,135
|
|
|||||
Other assets
|
41,953
|
|
314,159
|
|
199,755
|
|
(492,830
|
)
|
63,037
|
|
|||||
Deferred taxes
|
—
|
|
—
|
|
15,186
|
|
—
|
|
15,186
|
|
|||||
|
$
|
5,317,094
|
|
$
|
3,388,867
|
|
$
|
4,356,331
|
|
$
|
(7,976,782
|
)
|
$
|
5,085,510
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||||||
Current portion of long-term debt
|
$
|
4,093
|
|
$
|
—
|
|
$
|
12,629
|
|
$
|
—
|
|
$
|
16,722
|
|
Accounts payable
|
593,331
|
|
44,043
|
|
139,193
|
|
(588,519
|
)
|
188,048
|
|
|||||
Income taxes payable
|
(383
|
)
|
373
|
|
11,300
|
|
—
|
|
11,290
|
|
|||||
Accrued expenses
|
75,308
|
|
25,988
|
|
194,158
|
|
(4,645
|
)
|
290,809
|
|
|||||
Total current liabilities
|
672,349
|
|
70,404
|
|
357,280
|
|
(593,164
|
)
|
506,869
|
|
|||||
Long-term debt, net of current portion
|
1,060,777
|
|
—
|
|
1,196,476
|
|
(492,830
|
)
|
1,764,423
|
|
|||||
Other noncurrent liabilities
|
69,169
|
|
—
|
|
37,434
|
|
—
|
|
106,603
|
|
|||||
Deferred income taxes
|
105,029
|
|
—
|
|
163,347
|
|
—
|
|
268,376
|
|
|||||
Total liabilities
|
1,907,324
|
|
70,404
|
|
1,754,537
|
|
(1,085,994
|
)
|
2,646,271
|
|
|||||
Total stockholders’ equity
|
3,409,770
|
|
3,318,463
|
|
2,601,794
|
|
(6,890,788
|
)
|
2,439,239
|
|
|||||
|
$
|
5,317,094
|
|
$
|
3,388,867
|
|
$
|
4,356,331
|
|
$
|
(7,976,782
|
)
|
$
|
5,085,510
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
1,724
|
|
$
|
2,993
|
|
$
|
102,057
|
|
$
|
—
|
|
$
|
106,774
|
|
Restricted cash
|
103
|
|
—
|
|
39
|
|
—
|
|
142
|
|
|||||
Accounts receivable
|
37,453
|
|
465,653
|
|
436,874
|
|
(548,133
|
)
|
391,847
|
|
|||||
Inventories
|
18,049
|
|
84,805
|
|
255,329
|
|
—
|
|
358,183
|
|
|||||
Income taxes refundable
|
1,591
|
|
—
|
|
2,918
|
|
—
|
|
4,509
|
|
|||||
Prepaid expenses
|
10,787
|
|
3,141
|
|
24,398
|
|
—
|
|
38,326
|
|
|||||
Other current assets
|
7,117
|
|
923
|
|
48,624
|
|
—
|
|
56,664
|
|
|||||
Total current assets
|
76,824
|
|
557,515
|
|
870,239
|
|
(548,133
|
)
|
956,445
|
|
|||||
Investment in subsidiaries
|
4,734,618
|
|
1,167,246
|
|
844,044
|
|
(6,745,908
|
)
|
—
|
|
|||||
Property, plant and equipment, net
|
278,121
|
|
501,842
|
|
865,859
|
|
—
|
|
1,645,822
|
|
|||||
Intangible assets, net
|
17,034
|
|
258,970
|
|
400,496
|
|
—
|
|
676,500
|
|
|||||
Goodwill
|
21,860
|
|
551,837
|
|
727,396
|
|
—
|
|
1,301,093
|
|
|||||
Investment in unconsolidated subsidiary
|
4,341
|
|
—
|
|
297,697
|
|
—
|
|
302,038
|
|
|||||
Other assets
|
42,078
|
|
314,166
|
|
193,923
|
|
(487,883
|
)
|
62,284
|
|
|||||
Deferred income taxes
|
—
|
|
—
|
|
14,043
|
|
—
|
|
14,043
|
|
|||||
|
$
|
5,174,876
|
|
$
|
3,351,576
|
|
$
|
4,213,697
|
|
$
|
(7,781,924
|
)
|
$
|
4,958,225
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||||||
Current portion of long-term debt
|
$
|
115
|
|
$
|
—
|
|
$
|
16,028
|
|
$
|
—
|
|
$
|
16,143
|
|
Accounts payable
|
555,894
|
|
37,466
|
|
169,033
|
|
(544,976
|
)
|
217,417
|
|
|||||
Income taxes payable
|
32
|
|
373
|
|
11,895
|
|
—
|
|
12,300
|
|
|||||
Accrued expenses
|
105,625
|
|
30,542
|
|
180,613
|
|
(3,157
|
)
|
313,623
|
|
|||||
Total current liabilities
|
661,666
|
|
68,381
|
|
377,569
|
|
(548,133
|
)
|
559,483
|
|
|||||
Long-term debt, net of current portion
|
1,030,736
|
|
—
|
|
1,155,197
|
|
(487,883
|
)
|
1,698,050
|
|
|||||
Other noncurrent liabilities
|
69,711
|
|
—
|
|
36,576
|
|
—
|
|
106,287
|
|
|||||
Deferred income taxes
|
106,543
|
|
—
|
|
160,165
|
|
—
|
|
266,708
|
|
|||||
Total liabilities
|
1,868,656
|
|
68,381
|
|
1,729,507
|
|
(1,036,016
|
)
|
2,630,528
|
|
|||||
Total stockholders’ equity
|
3,306,220
|
|
3,283,195
|
|
2,484,190
|
|
(6,745,908
|
)
|
2,327,697
|
|
|||||
|
$
|
5,174,876
|
|
$
|
3,351,576
|
|
$
|
4,213,697
|
|
$
|
(7,781,924
|
)
|
$
|
4,958,225
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net sales
|
$
|
119,625
|
|
$
|
344,603
|
|
$
|
467,808
|
|
$
|
(56,662
|
)
|
$
|
875,374
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
Cost of sales and operating expenses
|
95,868
|
|
271,237
|
|
367,656
|
|
(56,662
|
)
|
678,099
|
|
|||||
Selling, general and administrative expenses
|
43,778
|
|
12,837
|
|
30,287
|
|
—
|
|
86,902
|
|
|||||
Depreciation and amortization
|
11,059
|
|
26,291
|
|
41,269
|
|
—
|
|
78,619
|
|
|||||
Total costs and expenses
|
150,705
|
|
310,365
|
|
439,212
|
|
(56,662
|
)
|
843,620
|
|
|||||
Operating income/(loss)
|
(31,080
|
)
|
34,238
|
|
28,596
|
|
—
|
|
31,754
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(14,364
|
)
|
3,763
|
|
(12,523
|
)
|
—
|
|
(23,124
|
)
|
|||||
Foreign currency gains/(losses)
|
(23
|
)
|
(63
|
)
|
(1,395
|
)
|
—
|
|
(1,481
|
)
|
|||||
Other income/(expense), net
|
(3,410
|
)
|
(1,326
|
)
|
2,220
|
|
—
|
|
(2,516
|
)
|
|||||
Equity in net income/(loss) of unconsolidated subsidiaries
|
(498
|
)
|
—
|
|
97,652
|
|
—
|
|
97,154
|
|
|||||
Earnings in investments in subsidiaries
|
144,880
|
|
—
|
|
—
|
|
(144,880
|
)
|
—
|
|
|||||
Income/(loss) before taxes
|
95,505
|
|
36,612
|
|
114,550
|
|
(144,880
|
)
|
101,787
|
|
|||||
Income taxes (benefit)
|
(1,800
|
)
|
1,335
|
|
4,177
|
|
—
|
|
3,712
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
—
|
|
(770
|
)
|
—
|
|
(770
|
)
|
|||||
Net income/(loss) attributable to Darling
|
$
|
97,305
|
|
$
|
35,277
|
|
$
|
109,603
|
|
$
|
(144,880
|
)
|
$
|
97,305
|
|
|
|
|
|
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net sales
|
$
|
136,157
|
|
$
|
360,184
|
|
$
|
439,788
|
|
$
|
(57,619
|
)
|
$
|
878,510
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
Cost of sales and operating expenses
|
109,663
|
|
292,771
|
|
343,151
|
|
(57,619
|
)
|
687,966
|
|
|||||
Selling, general and administrative expenses
|
38,969
|
|
14,177
|
|
33,777
|
|
—
|
|
86,923
|
|
|||||
Depreciation and amortization
|
10,285
|
|
25,436
|
|
35,393
|
|
—
|
|
71,114
|
|
|||||
Total costs and expenses
|
158,917
|
|
332,384
|
|
412,321
|
|
(57,619
|
)
|
846,003
|
|
|||||
Operating income/(loss)
|
(22,760
|
)
|
27,800
|
|
27,467
|
|
—
|
|
32,507
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(13,586
|
)
|
4,023
|
|
(12,117
|
)
|
—
|
|
(21,680
|
)
|
|||||
Foreign currency gains/(losses)
|
(6
|
)
|
(25
|
)
|
(233
|
)
|
—
|
|
(264
|
)
|
|||||
Other income/(expense), net
|
(3,748
|
)
|
32
|
|
1,663
|
|
—
|
|
(2,053
|
)
|
|||||
Equity in net income/(loss) of unconsolidated subsidiaries
|
(373
|
)
|
—
|
|
1,079
|
|
—
|
|
706
|
|
|||||
Earnings in investments in subsidiaries
|
38,318
|
|
—
|
|
—
|
|
(38,318
|
)
|
—
|
|
|||||
Income/(loss) before taxes
|
(2,155
|
)
|
31,830
|
|
17,859
|
|
(38,318
|
)
|
9,216
|
|
|||||
Income taxes
|
(7,984
|
)
|
6,279
|
|
3,523
|
|
—
|
|
1,818
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
—
|
|
(1,569
|
)
|
—
|
|
(1,569
|
)
|
|||||
Net income/(loss) attributable to Darling
|
$
|
5,829
|
|
$
|
25,551
|
|
$
|
12,767
|
|
$
|
(38,318
|
)
|
$
|
5,829
|
|
|
|
|
|
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net income/(loss)
|
$
|
98,075
|
|
$
|
35,277
|
|
$
|
109,603
|
|
$
|
(144,880
|
)
|
$
|
98,075
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
—
|
|
—
|
|
17,295
|
|
—
|
|
17,295
|
|
|||||
Pension adjustments
|
566
|
|
—
|
|
101
|
|
—
|
|
667
|
|
|||||
Natural gas swap derivative adjustments
|
22
|
|
—
|
|
—
|
|
—
|
|
22
|
|
|||||
Corn option derivative adjustments
|
(1,605
|
)
|
—
|
|
—
|
|
—
|
|
(1,605
|
)
|
|||||
Total other comprehensive income/(loss), net of tax
|
(1,017
|
)
|
—
|
|
17,396
|
|
—
|
|
16,379
|
|
|||||
Total comprehensive income/(loss)
|
97,058
|
|
35,277
|
|
126,999
|
|
(144,880
|
)
|
114,454
|
|
|||||
Total comprehensive loss attributable to noncontrolling interest
|
—
|
|
—
|
|
1,287
|
|
—
|
|
1,287
|
|
|||||
Total comprehensive income/(loss) attributable to Darling
|
$
|
97,058
|
|
$
|
35,277
|
|
$
|
125,712
|
|
$
|
(144,880
|
)
|
$
|
113,167
|
|
|
|
|
|
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net income/(loss)
|
$
|
7,398
|
|
$
|
25,551
|
|
$
|
12,767
|
|
$
|
(38,318
|
)
|
$
|
7,398
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
—
|
|
—
|
|
15,679
|
|
—
|
|
15,679
|
|
|||||
Pension adjustments
|
641
|
|
—
|
|
118
|
|
—
|
|
759
|
|
|||||
Corn option derivative adjustments
|
(1,102
|
)
|
—
|
|
—
|
|
—
|
|
(1,102
|
)
|
|||||
Total other comprehensive income/(loss), net of tax
|
(461
|
)
|
—
|
|
15,797
|
|
—
|
|
15,336
|
|
|||||
Total comprehensive income/(loss)
|
6,937
|
|
25,551
|
|
28,564
|
|
(38,318
|
)
|
22,734
|
|
|||||
Total comprehensive income attributable to noncontrolling interest
|
—
|
|
—
|
|
1,247
|
|
—
|
|
1,247
|
|
|||||
Total comprehensive income/(loss) attributable to Darling
|
$
|
6,937
|
|
$
|
25,551
|
|
$
|
27,317
|
|
$
|
(38,318
|
)
|
$
|
21,487
|
|
|
|
|
|
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
||||||||||
Net income/(loss)
|
$
|
98,075
|
|
$
|
35,277
|
|
$
|
109,603
|
|
$
|
(144,880
|
)
|
$
|
98,075
|
|
Earnings in investments in subsidiaries
|
(144,880
|
)
|
—
|
|
—
|
|
144,880
|
|
—
|
|
|||||
Other operating cash flows
|
30,782
|
|
(24,262
|
)
|
(77,671
|
)
|
—
|
|
(71,151
|
)
|
|||||
Net cash provided by operating activities
|
(16,023
|
)
|
11,015
|
|
31,932
|
|
—
|
|
26,924
|
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(12,183
|
)
|
(13,396
|
)
|
(31,008
|
)
|
—
|
|
(56,587
|
)
|
|||||
Investment in subsidiaries and affiliates
|
(3,500
|
)
|
—
|
|
—
|
|
—
|
|
(3,500
|
)
|
|||||
Proceeds from sale of investment in subsidiary
|
—
|
|
—
|
|
2,805
|
|
—
|
|
2,805
|
|
|||||
Gross proceeds from sale of property, plant and equipment and other assets
|
828
|
|
321
|
|
330
|
|
—
|
|
1,479
|
|
|||||
Proceeds from insurance settlements
|
—
|
|
503
|
|
—
|
|
—
|
|
503
|
|
|||||
Payments related to routes and other intangibles
|
—
|
|
—
|
|
(15
|
)
|
—
|
|
(15
|
)
|
|||||
Net cash used in investing activities
|
(14,855
|
)
|
(12,572
|
)
|
(27,888
|
)
|
—
|
|
(55,315
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
Proceeds for long-term debt
|
—
|
|
—
|
|
3,876
|
|
—
|
|
3,876
|
|
|||||
Payments on long-term debt
|
(22
|
)
|
—
|
|
(9,600
|
)
|
—
|
|
(9,622
|
)
|
|||||
Borrowings from revolving facilities
|
62,000
|
|
—
|
|
73,184
|
|
—
|
|
135,184
|
|
|||||
Payments on revolving facilities
|
(29,000
|
)
|
—
|
|
(51,019
|
)
|
—
|
|
(80,019
|
)
|
|||||
Net cash overdraft financing
|
—
|
|
—
|
|
(331
|
)
|
—
|
|
(331
|
)
|
|||||
Deferred loan costs
|
(1,094
|
)
|
—
|
|
—
|
|
—
|
|
(1,094
|
)
|
|||||
Issuances of common stock
|
182
|
|
—
|
|
—
|
|
—
|
|
182
|
|
|||||
Minimum withholding taxes paid on stock awards
|
(2,013
|
)
|
—
|
|
(5
|
)
|
—
|
|
(2,018
|
)
|
|||||
Net cash used in financing activities
|
30,053
|
|
—
|
|
16,105
|
|
—
|
|
46,158
|
|
|||||
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
|
—
|
|
—
|
|
(1,672
|
)
|
—
|
|
(1,672
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Net increase/(decrease) in cash, cash equivalents and restricted cash
|
(825
|
)
|
(1,557
|
)
|
18,477
|
|
—
|
|
16,095
|
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
1,827
|
|
2,993
|
|
102,096
|
|
—
|
|
106,916
|
|
|||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
1,002
|
|
$
|
1,436
|
|
$
|
120,573
|
|
$
|
—
|
|
$
|
123,011
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||||||
Net income/(loss)
|
$
|
7,398
|
|
$
|
25,551
|
|
$
|
12,767
|
|
$
|
(38,318
|
)
|
$
|
7,398
|
|
Earnings in investments in subsidiaries
|
(38,318
|
)
|
—
|
|
—
|
|
38,318
|
|
—
|
|
|||||
Other operating cash flows
|
56,236
|
|
(9,676
|
)
|
40,500
|
|
—
|
|
87,060
|
|
|||||
Net cash provided by operating activities
|
25,316
|
|
15,875
|
|
53,267
|
|
—
|
|
94,458
|
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(18,732
|
)
|
(19,689
|
)
|
(23,871
|
)
|
—
|
|
(62,292
|
)
|
|||||
Investment in subsidiaries and affiliates
|
(2,250
|
)
|
—
|
|
—
|
|
—
|
|
(2,250
|
)
|
|||||
Gross proceeds from sale of property, plant and equipment and other assets
|
304
|
|
608
|
|
428
|
|
—
|
|
1,340
|
|
|||||
Proceeds from insurance settlements
|
—
|
|
—
|
|
3,301
|
|
—
|
|
3,301
|
|
|||||
Net cash used in investing activities
|
(20,678
|
)
|
(19,081
|
)
|
(20,142
|
)
|
—
|
|
(59,901
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
Proceeds for long-term debt
|
—
|
|
—
|
|
8,649
|
|
—
|
|
8,649
|
|
|||||
Payments on long-term debt
|
(1,522
|
)
|
—
|
|
(7,743
|
)
|
—
|
|
(9,265
|
)
|
|||||
Borrowings from revolving credit facility
|
47,000
|
|
—
|
|
—
|
|
—
|
|
47,000
|
|
|||||
Payments on revolving credit facility
|
(47,000
|
)
|
—
|
|
(5,327
|
)
|
—
|
|
(52,327
|
)
|
|||||
Net cash overdraft financing
|
—
|
|
—
|
|
(1,077
|
)
|
—
|
|
(1,077
|
)
|
|||||
Deferred loan costs
|
(1,135
|
)
|
—
|
|
—
|
|
—
|
|
(1,135
|
)
|
|||||
Issuances of common stock
|
22
|
|
—
|
|
—
|
|
—
|
|
22
|
|
|||||
Minimum withholding taxes paid on stock awards
|
(1,981
|
)
|
—
|
|
(14
|
)
|
—
|
|
(1,995
|
)
|
|||||
Distributions to noncontrolling interests
|
—
|
|
—
|
|
(433
|
)
|
—
|
|
(433
|
)
|
|||||
Net cash used in financing activities
|
(4,616
|
)
|
—
|
|
(5,945
|
)
|
—
|
|
(10,561
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
|
—
|
|
—
|
|
309
|
|
—
|
|
309
|
|
|||||
|
|
|
|
|
|
||||||||||
Net increase/(decrease) in cash, cash equivalents and restricted cash
|
22
|
|
(3,206
|
)
|
27,489
|
|
—
|
|
24,305
|
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
1,573
|
|
5,754
|
|
107,530
|
|
—
|
|
114,857
|
|
|||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
1,595
|
|
$
|
2,548
|
|
$
|
135,019
|
|
$
|
—
|
|
$
|
139,162
|
|
•
|
Finished product commodity prices
|
•
|
Segment results
|
•
|
Foreign currency
|
•
|
Corporate activities
|
•
|
Non-U.S. GAAP measures
|
|
Avg. Price
1st Quarter
2018
|
Avg. Price
1st Quarter
2017
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
Jacobsen:
|
|
|
|
|
|
MBM (Illinois)
|
$ 250.61/ton
|
$ 270.69/ton
|
$ (20.08)/ton
|
(7.4
|
)%
|
Feed Grade PM (Mid-South)
|
$ 250.16/ton
|
$ 287.42/ton
|
$ (37.26)/ton
|
(13.0
|
)%
|
Pet Food PM (Mid-South)
|
$ 781.27/ton
|
$ 635.89/ton
|
$ 145.38/ton
|
22.9
|
%
|
Feather meal (Mid-South)
|
$ 409.26/ton
|
$ 422.94/ton
|
$ (13.68)/ton
|
(3.2
|
)%
|
BFT (Chicago)
|
$ 26.14/cwt
|
$ 31.35/cwt
|
$ (5.21)/cwt
|
(16.6
|
)%
|
YG (Illinois)
|
$ 19.61/cwt
|
$ 23.78/cwt
|
$ (4.17)/cwt
|
(17.5
|
)%
|
Corn (Illinois)
|
$ 3.62/bushel
|
$ 3.69/bushel
|
$ (0.07)/bushel
|
(1.9
|
)%
|
Reuters:
|
|
|
|
|
|
Palm Oil (CIF Rotterdam)
|
$ 675.00/MT
|
$ 765.00/MT
|
$ (90.00)/MT
|
(11.8
|
)%
|
Soy meal (CIF Rotterdam)
|
$ 412.00/MT
|
$ 368.00/MT
|
$ 44.00/MT
|
12.0
|
%
|
|
Avg. Price
1st Quarter
2018
|
Avg. Price
4th Quarter
2017
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
Jacobsen:
|
|
|
|
|
|
MBM (Illinois)
|
$ 250.61/ton
|
$ 222.73/ton
|
$ 27.88/ton
|
12.5
|
%
|
Feed Grade PM (Mid-South)
|
$ 250.16/ton
|
$ 252.22/ton
|
$ (2.06)/ton
|
(0.8
|
)%
|
Pet Food PM (Mid-South)
|
$ 781.27/ton
|
$ 593.74/ton
|
$ 187.53/ton
|
31.6
|
%
|
Feather meal (Mid-South)
|
$ 409.26/ton
|
$ 361.46/ton
|
$ 47.80/ton
|
13.2
|
%
|
BFT (Chicago)
|
$ 26.14/cwt
|
$ 27.40/cwt
|
$ (1.26)/cwt
|
(4.6
|
)%
|
YG (Illinois)
|
$ 19.61/cwt
|
$ 23.18/cwt
|
$ (3.57)/cwt
|
(15.4
|
)%
|
Corn (Illinois)
|
$ 3.62/bushel
|
$ 3.38/bushel
|
$ 0.24/bushel
|
7.1
|
%
|
Reuters:
|
|
|
|
|
|
Palm Oil (CIF Rotterdam)
|
$ 675.00/MT
|
$ 702.00/MT
|
$ (27.00)/MT
|
(3.8
|
)%
|
Soy meal (CIF Rotterdam)
|
$ 412.00/MT
|
$ 356.00/MT
|
$ 56.00/MT
|
15.7
|
%
|
(in thousands, except percentages)
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
485,798
|
|
$
|
305,520
|
|
$
|
84,056
|
|
$
|
—
|
|
$
|
875,374
|
|
Cost of sales and operating expenses
|
369,088
|
|
249,185
|
|
59,826
|
|
—
|
|
678,099
|
|
|||||
Gross Margin
|
116,710
|
|
56,335
|
|
24,230
|
|
—
|
|
197,275
|
|
|||||
|
|
|
|
|
|
||||||||||
Gross Margin %
|
24.0
|
%
|
18.4
|
%
|
28.8
|
%
|
—
|
%
|
22.5
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
48,265
|
|
23,861
|
|
(1,398
|
)
|
16,174
|
|
86,902
|
|
|||||
Depreciation and amortization
|
46,789
|
|
20,640
|
|
8,471
|
|
2,719
|
|
78,619
|
|
|||||
Segment operating income/(loss)
|
21,656
|
|
11,834
|
|
17,157
|
|
(18,893
|
)
|
31,754
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
(45
|
)
|
—
|
|
97,199
|
|
—
|
|
97,154
|
|
|||||
Segment income/(loss)
|
21,611
|
|
11,834
|
|
114,356
|
|
(18,893
|
)
|
128,908
|
|
(in thousands, except percentages)
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Three Months Ended April 1, 2017
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
552,624
|
|
$
|
266,226
|
|
$
|
59,660
|
|
$
|
—
|
|
$
|
878,510
|
|
Cost of sales and operating expenses
|
432,576
|
|
209,392
|
|
45,998
|
|
—
|
|
687,966
|
|
|||||
Gross Margin
|
120,048
|
|
56,834
|
|
13,662
|
|
—
|
|
190,544
|
|
|||||
|
|
|
|
|
|
||||||||||
Gross Margin %
|
21.7
|
%
|
21.3
|
%
|
22.9
|
%
|
—
|
%
|
21.7
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
44,837
|
|
24,977
|
|
3,263
|
|
13,846
|
|
86,923
|
|
|||||
Depreciation and amortization
|
43,719
|
|
17,601
|
|
6,845
|
|
2,949
|
|
71,114
|
|
|||||
Segment operating income/(loss)
|
31,492
|
|
14,256
|
|
3,554
|
|
(16,795
|
)
|
32,507
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
109
|
|
—
|
|
597
|
|
—
|
|
706
|
|
|||||
Segment income/(loss)
|
31,601
|
|
14,256
|
|
4,151
|
|
(16,795
|
)
|
33,213
|
|
|
Fats
|
Proteins
|
Other Rendering
|
Total Rendering
|
Used Cooking Oil
|
Bakery
|
Other
|
Total
|
||||||||||||||||
Net sales three months ended April 1, 2017
|
$
|
158.0
|
|
$
|
198.2
|
|
$
|
73.6
|
|
$
|
429.8
|
|
$
|
44.0
|
|
$
|
56.1
|
|
$
|
22.7
|
|
$
|
552.6
|
|
Increase/(decrease) in sales volumes
|
4.8
|
|
7.3
|
|
—
|
|
12.1
|
|
1.0
|
|
(4.5
|
)
|
—
|
|
8.6
|
|
||||||||
Increase/(decrease) in finished product prices
|
(14.2
|
)
|
0.8
|
|
—
|
|
(13.4
|
)
|
(5.8
|
)
|
0.9
|
|
—
|
|
(18.3
|
)
|
||||||||
Increase/(decrease) due to currency exchange rates
|
4.4
|
|
10.3
|
|
0.5
|
|
15.2
|
|
0.1
|
|
—
|
|
—
|
|
15.3
|
|
||||||||
Freight revenue (1)
|
(9.5
|
)
|
(13.2
|
)
|
(1.3
|
)
|
(24.0
|
)
|
(2.7
|
)
|
(5.7
|
)
|
—
|
|
(32.4
|
)
|
||||||||
Other change (2)
|
—
|
|
—
|
|
(41.4
|
)
|
(41.4
|
)
|
—
|
|
—
|
|
1.4
|
|
(40.0
|
)
|
||||||||
Total change
|
(14.5
|
)
|
5.2
|
|
(42.2
|
)
|
(51.5
|
)
|
(7.4
|
)
|
(9.3
|
)
|
1.4
|
|
(66.8
|
)
|
||||||||
Net sales three months ended March 31, 2018
|
$
|
143.5
|
|
$
|
203.4
|
|
$
|
31.4
|
|
$
|
378.3
|
|
$
|
36.6
|
|
$
|
46.8
|
|
$
|
24.1
|
|
$
|
485.8
|
|
(1)
|
Represent impact from adoption of the new revenue standard on current year Feed Segment revenue as compared to the same period in fiscal 2017. See note 18 for impact on consolidated financial statements.
|
|
Three Months Ended
|
|||||
(dollars in thousands)
|
March 31,
2018 |
April 1,
2017 |
||||
Net income/(loss) attributable to Darling
|
$
|
97,305
|
|
$
|
5,829
|
|
Depreciation and amortization
|
78,619
|
|
71,114
|
|
||
Interest expense
|
23,124
|
|
21,680
|
|
||
Income tax expense/(benefit)
|
3,712
|
|
1,818
|
|
||
Foreign currency loss/(gain)
|
1,481
|
|
264
|
|
||
Other expense/(income), net
|
2,516
|
|
2,053
|
|
||
Equity in net (income)/loss of unconsolidated subsidiaries
|
(97,154
|
)
|
(706
|
)
|
||
Net income attributable to non-controlling interests
|
770
|
|
1,569
|
|
||
Adjusted EBITDA
|
$
|
110,373
|
|
$
|
103,621
|
|
|
|
|
||||
Foreign currency exchange impact (1)
|
(8,135
|
)
|
—
|
|
||
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP)
|
$
|
102,238
|
|
$
|
103,621
|
|
|
|
|
||||
DGD Joint Venture Adjusted EBITDA (Darling's Share)
|
$
|
100,071
|
|
$
|
5,037
|
|
Senior Notes:
|
|
||
5.375 % Notes due 2022
|
$
|
500,000
|
|
Less unamortized deferred loan costs
|
(5,957
|
)
|
|
Carrying value of 5.375% Notes due 2022
|
$
|
494,043
|
|
|
|
||
4.75 % Notes due 2022 - Denominated in euros
|
$
|
634,918
|
|
Less unamortized deferred loan costs
|
(8,529
|
)
|
|
Carrying value of 4.75% Notes due 2022
|
$
|
626,389
|
|
|
|
||
Amended Credit Agreement:
|
|
||
Term Loan A
|
$
|
94,924
|
|
Less unamortized deferred loan costs
|
(623
|
)
|
|
Carrying value of Term Loan A
|
94,301
|
|
|
|
|
||
Term Loan B
|
$
|
505,000
|
|
Less unamortized deferred loan costs
|
(10,238
|
)
|
|
Carrying value of Term Loan B
|
$
|
494,762
|
|
|
|
||
Revolving Credit Facility:
|
|
||
Maximum availability
|
$
|
1,000,000
|
|
Borrowings outstanding
|
55,375
|
|
|
Letters of credit issued
|
22,872
|
|
|
Availability
|
$
|
921,753
|
|
|
|
||
Other Debt
|
$
|
16,276
|
|
•
|
As of
March 31, 2018
, the Company had unused capacity of $
921.8 million
under the revolving loan facility, taking into account that the Company had $
55.4 million
in outstanding borrowings and letters of credit issued of $
22.9 million
.
|
•
|
As of
March 31, 2018
, the Company has borrowed all $
350.0 million
under the term loan A facility and repaid approximately CAD$
83.4 million
and $
156.8 million
, which when repaid, cannot be reborrowed. The term loan A facility is repayable in quarterly installments which commenced 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.
|
•
|
As of
March 31, 2018
, the Company has borrowed all $
525.0 million
under the terms of the term loan B facility and repaid approximately $
20.0 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 December 18, 2017, and continuing until the last day of each quarter period ending immediately prior to December 18, 2024; and one final installment in the amount of the relevant term loan B facility then outstanding, due on December 18, 2024. The term loan B facility will mature on December 18, 2024.
|
•
|
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 the base rate plus
1.00%
or LIBOR plus
2.00%
,
|
Other commercial commitments:
|
|
||
Standby letters of credit
|
$
|
22,872
|
|
Foreign bank guarantees
|
19,198
|
|
|
Total other commercial commitments:
|
$
|
42,070
|
|
Functional Currency
|
|
Contract Currency
|
|
Range of
|
U.S.
|
||||||
Type
|
Amount
|
|
Type
|
Amount
|
|
Hedge rates
|
Equivalent
|
||||
Brazilian real
|
45,094
|
|
|
Euro
|
11,210
|
|
|
3.85 - 4.21
|
$
|
13,580
|
|
Brazilian real
|
74,534
|
|
|
U.S. dollar
|
22,735
|
|
|
3.16 - 3.45
|
22,735
|
|
|
Euro
|
76,963
|
|
|
U.S. dollar
|
95,421
|
|
|
1.20 - 1.25
|
95,421
|
|
|
Euro
|
7,627
|
|
|
Polish zloty
|
32,280
|
|
|
4.21 - 4.24
|
9,404
|
|
|
Euro
|
5,772
|
|
|
Japanese yen
|
763,515
|
|
|
130.44 - 135.68
|
7,115
|
|
|
Euro
|
86,745
|
|
|
Chinese renminbi
|
680,847
|
|
|
7.73 - 7.97
|
106,944
|
|
|
Euro
|
11,573
|
|
|
Australian dollar
|
18,600
|
|
|
1.61
|
14,267
|
|
|
Euro
|
3,001
|
|
|
British pound
|
2,642
|
|
|
0.87 - 0.89
|
3,700
|
|
|
Polish zloty
|
70,770
|
|
|
Euro
|
16,740
|
|
|
4.21 - 4.23
|
20,731
|
|
|
British pound
|
184
|
|
|
Euro
|
161
|
|
|
1.14
|
259
|
|
|
British pound
|
49
|
|
|
U.S. dollar
|
70
|
|
|
1.43
|
70
|
|
|
Japanese yen
|
371,342
|
|
|
U.S. dollar
|
3,375
|
|
|
103.66 - 112.93
|
3,375
|
|
|
|
|
|
|
|
|
|
$
|
297,601
|
|
|
10.1
|
|||
|
10.2
|
|||
|
10.3
|
|||
|
31.1
|
|||
|
31.2
|
|||
|
32
|
|||
|
101
|
Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of March 31, 2018 and December 30, 2017; (ii) Consolidated Statements of Operations for the three months ended March 31, 2018 and April 1, 2017; (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2018 and April 1, 2017; (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and April 1, 2017; (v) Notes to the Consolidated Financial Statements.
|
|
|
DARLING INGREDIENTS INC.
|
|
|
|
|
|
|
|
|
|
Date:
|
May 9, 2018
|
By:
|
/s/ Brad Phillips
|
|
|
|
Brad Phillips
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer and Duly Authorized Officer)
|
(a)
|
General.
Subject to the requirements of Sections 2(b) and 2(c), the Grantee shall vest in his or her Performance Units based on the achievement of the performance-based conditions, as determined pursuant to
Appendix A
of this Agreement.
|
(b)
|
Written Certification of Performance Results
.
Following the end of the Performance Period, the Committee shall determine the vesting percentage in accordance with the terms of this Agreement. The vesting and settlement of the Performance Units is conditioned on the Committee first certifying in writing the performance results for the applicable Performance Period.
|
(c)
|
Employment Requirement.
No Performance Units shall become earned and vested following the Grantee’s separation from Service during the Performance Period, except as expressly provided in Section 2(d) below.
|
(d)
|
Termination of Service.
Except as otherwise provided in this Section, if the Grantee’s Service terminates prior to the end of the Performance Period for any reason, then the Performance Units shall be immediately forfeited.
|
(i)
|
Termination Due to Death or Disability.
If
the Grantee’s Service terminates as a result of the Grantee’s death or Disability prior to the end of the Performance Period, then the Grantee shall vest in a prorated portion of the Target Award, with such proration determined by multiplying the Target Award by the Pro-Rata Fraction. Subject to Section 4(n), within 60 days following the date of the Grantee’s termination of Service due to death or Disability, the Company shall issue or deliver Shares for the number of Performance Units that vest pursuant to this Section 2(d)(i) to the Grantee or Grantee’s beneficiary, as applicable.
|
(ii)
|
Termination without Cause, for Good Reason or due to Retirement.
If the Company terminates the Grantee’s Service without Cause or the Grantee terminates his or her Service for Good Reason or due to Retirement prior to the end of the Performance Period, then the Grantee shall be eligible to vest in a prorated portion of the Performance Units, with such proration determined by multiplying the number of Performance Units determined based on actual performance through the end of the Performance Period, as determined in accordance with
Appendix A
, by the Pro-Rata Fraction. Subject to Section 4(n), the vested Performance Units shall be settled in Shares within 60 days following the end of the Performance Period;
provided
,
however
, if the Grantee becomes eligible to receive a pro-rata award pursuant to this Section 2(d) and a Change of Control occurs following such termination of Service and prior to the end of the Performance Period, then the Grantee shall be eligible to vest in a prorated portion of the Performance Units, with such proration determined by multiplying the number of Performance Units determined based on the deemed attainment level of the performance goals as determined in accordance with Section 2(e), by the Pro-Rata Fraction, and the vested Performance Units shall be settled within thirty (30) days following such Change of Control.
|
(e)
|
Change of Control.
If a Change of Control occurs prior to the end of the Performance Period, then the number of Performance Units that are eligible for vesting shall be based on the greater of (i) the projected level of performance through the end of the Performance Period, as determined by the Committee prior to the date of the Change of Control based on performance through the date of such determination, and (ii) the Target Award, and the Performance Units shall be settled as follows: (A) if the Grantee remains in continuous Service through the end of the Performance Period, then the vested Performance Units shall be settled in accordance with Section 3(a), and (B) if, prior to the end of the Performance Period and following such Change of Control, the Grantee’s continuous Service is terminated by the Company without Cause, due to death or Disability or by the Grantee for Good Reason or due to Retirement, then the vested Performance Units shall be settled within 60 days following such termination of Service, subject to Section 4(n). Notwithstanding the foregoing, if the Performance Units are not effectively assumed or continued by the surviving or acquiring corporation in such Change of Control (as determined by the Committee prior to the date of the Change of Control), then the vested Performance Units shall be distributed within thirty (30) days of such Change of Control;
provided
,
however
, if the Performance Units constitute “nonqualified deferred compensation within the meaning of Section 409A of the Code and the Change of Control was not a “change in control event” within the meaning of Section 409A of the Code or to the extent distribution would be impermissible under Section 409A of the Code, then the vested Performance Units shall be settled upon the earlier to occur of (A) the date specified in Section 3(a) and (B) the Grantee’s termination of Service, subject to Section 4(n).
|
(f)
|
Fractional Shares.
Only a whole number of Shares will be issued in respect of vested Performance Units. If the number of Performance Units that are scheduled to vest pursuant to
Appendix A
is with respect to a fractional number of Shares, such number of Shares shall be rounded down to the nearest whole number, with any fractional portion forfeited.
|
(g)
|
Forfeiture.
To the extent any of the Performance Units fail to vest under this Section 2, then such Performance Units shall be immediately forfeited and all of the Grantee’s rights to receive Shares pursuant to such Performance Units shall immediately terminate without any payment of consideration by the Company.
|
(a)
|
Settlement in Shares.
Subject to Sections 2 and 4(n) of this Agreement, settlement of the vested Performance Units, if any, shall be effected in the form of issuance of whole Shares to the Grantee, as soon as practicable following the end of the Performance Period (but in any event no later than the March 15th occurring immediately following the end of the Performance Period). Such issuance or delivery shall be evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company. The Company shall pay all original issue or transfer taxes and all fees and expenses incident to such issuance or delivery, except as otherwise provided in Section 3(b). Prior to the issuance to the Grantee of Shares with respect to the vested Performance Units, the Grantee shall have no direct or secured claim in any specific assets of the Company or in such Shares, and will have the status of a general unsecured creditor of the Company.
|
(b)
|
Withholding Requirements.
|
(i)
|
Regardless of any action the Company takes with respect to any or all income tax, payroll tax or other tax-related withholding (“
Tax-Related Items
”), the Grantee acknowledges that the ultimate liability for all Tax-Related Items owed by the Grantee is and remains the Grantee’s responsibility and that the Company (A) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the award made under this Agreement, including the grant or vesting of the Performance Units, or the subsequent sale of Shares; and (B) does not commit to structure the terms of the grant or any aspect of this award to reduce or eliminate the Grantee’s liability for Tax-Related Items.
|
(ii)
|
Prior to the settlement of any vested Performance Units, the Grantee shall pay or make adequate arrangements satisfactory to the Company to satisfy all withholding obligations of the Company. In this regard, the Grantee authorizes the Company to withhold all applicable Tax-Related Items legally payable by the Grantee from the Grantee’s wages or other cash compensation paid to the Grantee by the Company. Alternatively, or in addition, to the extent permissible under applicable law, the Grantee may elect to satisfy his or her tax obligations by one of the following methods: (A) a check or cash payment to the Company, (B) delivery to the Company (either actual delivery or by attestation procedures established by the Company) of previously owned whole Shares having an aggregate Fair Market Value, determined as of the date on which such withholding obligation arises (the “
Tax Date
”), equal to the Tax-Related Items, (C) authorizing the Company to withhold whole Shares which would otherwise be issued or transferred to the Grantee having an aggregate Fair Market Value, determined as of the Tax Date, equal to the Tax-Related Items or (D) any combination of (A), (B) and (C). Shares to be delivered to the Company or withheld may not have a Fair Market Value in excess of the minimum amount of the Tax-Related Items (or such greater withholding amount to the extent permitted by applicable accounting rules without resulting in variable accounting treatment). The Company may refuse to issue and deliver Shares in payment of any vested Performance Units if the Grantee fails to comply with the Grantee’s obligations in connection with the Tax-Related Items as described in this Section 3(b).
|
(a)
|
Data Privacy and Other Acknowledgments.
By accepting the award provided for in this Agreement, the Grantee acknowledges and agrees that such award is subject to the provisions regarding data privacy and additional acknowledgments set forth in
Appendix B
. The Grantee shall review the provisions of
Appendix B
carefully, as this award shall be null and void absent the Grantee’s acceptance of such provisions. The Company reserves the right to impose other requirements on the award to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the award and to require the Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
|
(b)
|
Grantee Representations.
The Grantee hereby represents to the Company that the Grantee has read and fully understands the provisions of the Agreement and the Plan and the Grantee’s decision to participate in the Plan is completely voluntary. Further, the Grantee acknowledges that the Grantee is relying solely on his or her own advisors with respect to the tax consequences of this award.
|
(c)
|
Regulatory Restrictions on the Performance Units.
Notwithstanding any provision of this Agreement or the Plan, the obligation of the Company to issue Shares in connection with the grant of Performance Units shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of Shares pursuant to this Agreement prior to the satisfaction of all legal requirements relating to the issuance of such Shares, to their registration, qualification or listing or to an exemption from registration, qualification or listing.
|
(d)
|
No Right to Continued Service.
Nothing in this Agreement or the Plan shall confer upon the Grantee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any affiliated entity employing or retaining the Grantee) or of the Grantee, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause.
|
(e)
|
No Right as a Shareholder.
|
(i)
|
The Performance Units constitute an unfunded and unsecured obligation of the Company. The Grantee shall not have any rights of a stockholder of the Company with respect to any Shares underlying the Performance Units unless and until Shares are issued in settlement of the Performance Units. Upon such issuance of Shares, the Grantee shall be the record owner of the Shares unless and until such Shares are sold or otherwise disposed of, and as record owner shall be entitled to all rights of a stockholder of the Company (including voting rights).
|
(ii)
|
If a cash dividend is paid with respect to the Shares underlying the Performance Units, then the Target Award or, for dividends paid prior to settlement of the vested Performance Units in accordance with Section 3(a), the vested Performance Units shall increase by (A) the product of the total number of Shares subject to the Target Award or vested Performance Units, as applicable, immediately prior to the dividend payment date multiplied by the dollar amount of the cash dividend immediately prior to such dividend payment date, divided by (B) the Fair Market Value of a Share as of the applicable dividend payment date, such amount rounded down to the nearest whole number. Any such additional Shares shall be subject to the same vesting conditions and payment terms as applicable to the underlying Performance Units as provided in this Agreement.
|
(f)
|
Beneficiary.
The Grantee may designate a beneficiary to receive settlement in connection with the Performance Units in the event of the Grantee’s death in accordance with the Company’s beneficiary designation procedures, as in effect from time to time. If the Grantee does not designate a beneficiary, or if the Grantee’s designated beneficiary does not survive the Grantee, then the Grantee’s beneficiary will be the Grantee’s estate.
|
(g)
|
Notification.
Any notification required by the terms of this Agreement shall be given in writing and shall be deemed effective (i) upon personal delivery; (ii) upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid; or (iii) upon the Company’s sending of an email to the Grantee. A notice shall be addressed to the Company at its principal executive office and to the Grantee at the postal address that he or she most recently provided to the Company or at his or her Service email address, if any.
|
(h)
|
Entire Agreement.
This Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) relating to the subject matter hereof. In the event of a conflict between any provision of the Plan and this Agreement, the Plan shall control.
|
(i)
|
Waiver.
No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.
|
(j)
|
Nontransferability of Award
. The Performance Units may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of prior to the date such Performance Units are settled under Section 3 above, except as may be permitted by the Plan or as otherwise permitted by the Committee in its sole discretion or pursuant to rules adopted by the Committee in accordance with the Plan. Any attempt to dispose of the Performance Units or any interest in the Performance Units in a manner contrary to the restrictions set forth in this Agreement shall be void and of no effect.
|
(k)
|
Successors and Assigns.
The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Grantee, the Grantee’s assigns and the legal representatives, heirs and legatees of the Grantee’s estate, whether or not any such person shall have become a party to this Agreement and have agreed in writing to be joined herein and be bound by the terms hereof.
|
(l)
|
Choice of Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, as such laws are applied to contracts entered into and performed in such state, without regard to principles of conflict of law.
|
(m)
|
Award Subject to Clawback.
This award and any Shares acquired pursuant to this award are subject to forfeiture, recovery by the Company or other action pursuant to any clawback or recoupment policy which the Company may adopt from time to time, including without limitation any such policy which the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.
|
(n)
|
Compliance With Section 409A of the Code
. This Agreement and the Performance Units granted hereunder are intended to be exempt from or comply with Section 409A of the Code, and shall be interpreted and construed accordingly. To the extent this Agreement provides for the Performance Units to become vested and be settled upon the Grantee’s termination of Service, the applicable Shares shall be transferred to the Grantee or his or her beneficiary upon the Grantee’s “separation from service,” within the meaning of Section 409A of the Code; provided that if the Performance Units constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the Holder is a “specified employee,” within the meaning of Section 409A of the Code, then such Shares shall be transferred to the Grantee or his or her beneficiary upon the earlier to occur of (i) the six-month anniversary of such separation from service and (ii) the date of the Grantee’s death.
|
(a)
|
“
Cause
” shall mean, with respect to the Grantee,
|
(i)
|
any conviction or plea of
nolo contendere
to a felony;
|
(ii)
|
any willful misconduct by the Grantee in connection with the performance of the Grantee’s Service for the Company, including, without limitation, (A) misappropriation of funds of the Company, (B) harassment of or discrimination against individuals on account of gender, race, religion, national origin or disability or retaliation against an individual for making any claim that the Grantee has so harassed or discriminated against such individual or (C) breach of a written policy of the Company; or
|
(iii)
|
any disclosure of confidential or proprietary information of the Company or breach of any confidentiality, non-competition or non-solicitation covenant made by the Grantee for the benefit of the Company.
|
(b)
|
“
Disability
” shall mean that the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment as determined by the Board of Directors in its sole discretion.
|
(c)
|
“
Good Reason
” shall be defined as that term is defined in the Grantee’s offer letter or other applicable employment agreement with the Company, if any; or, if there is no such definition, “Good Reason” shall mean the occurrence of any of the following events without the Grantee’s consent, provided that the Grantee has complied with the Good Reason Process: (i) a material diminution in the Grantee’s responsibility, authority or duty;
|
(d)
|
“
Good Reason Process
” shall mean that (i) the Grantee reasonably determines in good faith that a Good Reason condition has occurred; (ii) the Grantee notifies the Company in writing of the occurrence of the Good Reason condition within sixty (60) days of such occurrence; (iii) the Grantee cooperates in good faith with the Company’s efforts, for a period of not less than thirty (30) days following such notice (the “
Cure Period
”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist following the Cure Period; and (v) the Grantee has a termination of Service within sixty (60) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, and the Grantee has a termination of Service due to such condition (notwithstanding its cure), then the Grantee will not be deemed to have had a termination of Service for Good Reason.
|
(e)
|
“
Pro-Rata Fraction
” shall mean a fraction with the numerator equal to the Grantee’s days of Service starting from the beginning of the Performance Period and ending on the date of termination of Service, and the denominator equal to the total number of calendar days in the Performance Period.
|
(f)
|
“
Retirement
” means the Grantee’s termination of Service after the attainment of (i) at least 55 years of age with at least ten years of Service or (ii) at least 65 years of age;
provided
,
however
, Retirement shall not be deemed to have occurred if the Grantee’s Service is terminated by the Company for Cause.
|
(g)
|
“
Service
” shall mean service as an employee of the Company or any of its Subsidiaries or Affiliates or as a member of the Board of Directors.
|
Grantee
:
|
[Name]
|
|
Shares Subject to Option
:
|
[#] Shares
|
|
Type of Option
:
|
Nonqualified Stock Option
|
|
Exercise Price
:
|
$[
] per Share
|
|
Grant Date
:
|
, 20
|
|
Vesting Commencement Date
:
|
, 20
|
|
Vesting
:
|
This option shall vest and become exercisable in accordance with the following schedule, subject to the Grantee’s continued Service with the Company as of the applicable vesting date:
|
|
|
Vesting Date
|
Percentage That Vests
|
Vesting Commencement Date
|
33-1/3%
|
|
|
First anniversary of Vesting Commencement Date
|
33-1/3% (total 66-2/3%)
|
|
Second anniversary of Vesting Commencement Date
|
33-1/3% (total 100%)
|
|
|
|
|
The option shall become fully vested and exercisable upon (i) termination of the Grantee’s Service by the Company without Cause or due to the Grantee’s death or Disability or (ii) termination of the Grantee’s Service by the Grantee due to Retirement.
|
|
|
Upon a Change of Control, the following shall apply:
|
|
|
1. If the option is not assumed, converted or replaced by the resulting entity in the Change of Control, then the option shall become fully vested and exercisable immediately prior to the consummation of a Change of Control, subject to the Grantee’s continued Service as of such date.
|
|
|
2. If the option is assumed, converted or replaced by the resulting entity in the Change of Control, then (a) the option shall continue to vest and become exercisable in acordance with the schedule above conditioned on the Grantee’s continued Service with the resulting entity in the Change of Control, and (b) in addition to the vesting provisions in case of termination of Service by the Company without Cause, due to the Grantee’s death or Disability or termination of Service by the Grantee due to Retirement as provided above, the Award shall become fully vested and exercisable immediately upon the Grantee’s termination of Service for Good Reason within two years following the Change of Control.
|
|
|
1
|
Exercise Period
:
|
The vested portion of this option may be exercised until the Expiration Date below.
|
|
Expiration Date
:
|
Upon the earliest to occur of (a)
, 20
, (b) the first anniversary of the Grantee’s death or Disability, (c) the date of termination of Grantee’s Service by the Company for Cause, (d) the 3
rd
anniversary of the date of termination of the Grantee’s Sevice by the Grantee due to Retirement or by the Company without Cause if the Grantee satisfies the requirements for Retirement as of the date of such termination or (e) the 90th day after any other termination of the Grantee’s Service. In addition, in case of a Change of Control in which the option is not assumed, converted or replaced by the resulting entity in the Change of Control, the Committee may cause the option, to the extent not exercised, to expire upon consummation of the Change of Control.
|
SECTION 1.
|
GRANT OF OPTION.
|
SECTION 2.
|
TRANSFER OR ASSIGNMENT OF OPTION.
|
SECTION 3.
|
EXERCISE PROCEDURES.
|
SECTION 4.
|
PAYMENT FOR SHARES.
|
SECTION 5.
|
TERM AND EXPIRATION.
|
SECTION 6.
|
INCENTIVE STOCK OPTIONS.
|
SECTION 7.
|
MISCELLANEOUS PROVISIONS.
|
SECTION 8.
|
DEFINITIONS.
|
Type of Option:
|
Nonqualified Stock Option
|
Incentive Stock Option
|
Number of Shares to be Acquired:
|
[###]
|
[###]
|
Exercise Price (per Share):
|
$[###]
|
$[###]
|
Purchase Price (all Shares):
|
$[###]
|
$[###]
|
Estimated Withholding Tax:
|
$[###]
|
[not applicable]
|
Subtotal:
|
$[###]
|
$[###]
|
Amount Paid:
$[####]
|
Signature:
|
|
Name:
|
|
Address:
|
|
|
|
SSN:
|
|
(a)
|
the Option Award is granted voluntarily by the Company, is discretionary in nature and may be modified, suspended or terminated by the Company at any time;
|
(b)
|
the grant of the Option Award is voluntary and occasional and does not create any contractual or other right to receive future awards of Option Awards or benefits in lieu of the Option Award, even if such awards have been awarded in the past;
|
(c)
|
all decisions with respect to future awards, if any, will be at the sole discretion of the Company;
|
(d)
|
the grant of the Option Award shall not create a right to further employment with your employer and shall not interfere with the ability of your employer to terminate your employment relationship at any time, with or without Cause;
|
(e)
|
you are voluntarily accepting the grant of the Option Award;
|
(f)
|
the Option Award and any payment made pursuant to the Option Award are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement benefits or welfare benefits or similar payments, and in no event should be considered as compensation for, or in any way relating to, past services for the Company or any of its Subsidiaries;
|
(g)
|
in accepting the grant of the Option Award, you expressly recognize that the Option Award is an award made solely by the Company, with principal offices at 251 O'Connor Ridge Blvd., #300, Irving, TX 75038, U.S.A., the Company is solely responsible for the administration of the Plan and the Agreement (collectively, the “
Plan Documents
”) and your participation in the Plan Documents; in the event that you are an employee of a Subsidiary, the Option Award and your participation in the Plan Documents will not be interpreted to form an employment contract or relationship with the Company; furthermore, the Option Award will not be interpreted to form an employment contract with any Subsidiary;
|
(h)
|
the future value of the Company shares which may be delivered upon exercise of the Option Award is unknown and cannot be predicted with certainty;
|
(i)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the Option Award resulting from termination of your employment by the Company or your employer (for any reason whatsoever and regardless of whether or not such termination is later found to be invalid or in breach of the employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any) or recoupment of all or any portion of any payment made pursuant to the Option Award as provided by any applicable Company policy on recoupment of incentive compensation and, in consideration of the grant of the Option Award to which you are not otherwise entitled, you irrevocably agree never to institute any claim against the Company or your employer, waive your ability, if any, to bring any such claim, and release the Company and your employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan Documents, you shall be deemed irrevocably to have agreed not to pursue such claim, and you agree to execute any and all documents necessary to request dismissal or withdrawal of such claim;
|
(j)
|
for purposes of the Option Award, your employment will be considered terminated as of the date you are no longer actively employed and providing services to the Company or one of its Subsidiaries, and your right, if any, to earn and be paid any portion of the Option Award (and any related dividend equivalents) pursuant to this Agreement after such termination of employment (for any reason whatsoever and regardless of whether or not such termination is later found to be invalid or in breach of the employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any) will be measured by the date you cease to be actively employed and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period mandated under the employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any); the Company, in its sole discretion, shall determine when you are no longer actively employed for purposes of the Option Award (including whether you may still be considered actively employed while on an approved leave of absence);
|
(k)
|
you are solely responsible for investigating and complying with any exchange control laws applicable to you in connection with any payment made pursuant to Option Award;
|
(l)
|
unless otherwise provided in the Plan Documents or by the Company in its discretion, the Option Award and the benefits evidenced by this award agreement do not create any entitlement to have the Option Award or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Company’s common stock;
|
(m)
|
neither your employer, the Company nor any of its Subsidiaries shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the Option Award or any payment made pursuant to the Option Award; and
|
(n)
|
the Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding the Option Award. You are hereby advised to consult with your personal tax, legal and financial advisors regarding the Option Award before taking any action in relation thereto.
|
1.
|
The limited liability company
Darling International Netherlands BV
, established under the laws of the Netherlands, having its statutory place of business in Amsterdam and holding office at Prins Bernhardplein 200, (1097 JB) Amsterdam (herein, “
Darling BV
”), and
|
2.
|
Mr. J.M.I.M. van der Velden, residing in Son at Zandstraat 60, 5691 CG (hereafter: “
Employee
”).
|
(A)
|
Employee has been employed by the VION Ingredients Group and/or its legal predecessors since 3 July 1989;
|
(B)
|
The VION Ingredients Group (currently named Darling Ingredients International) was acquired by Darling Inc Inc. (“
Darling Inc
”) as per 7 January 2014 (the “
Acquisition
”);
|
(C)
|
Following the Acquisition, the parties wish to continue the employment of Employee with Darling BV as the employer and to record the terms and conditions applicable to the continued employment of Employee agreed between them in writing in this agreement (the “
Employment Agreement
”); and
|
1.
|
Function
|
1.1.
|
Offices
|
(a)
|
Employee shall continue to be employed by Darling BV as Managing Director ERS.
|
(b)
|
Employee shall also serve as a member of the Executive Committee of Darling Inc. which is a committee appointed by the Board of Directors of Darling Inc. and reporting to the Chief Executive Officer of Darling Inc. who shall chair the Executive Committee.
|
1.2.
|
Employee is obligated to do and refrain from everything that an officer and director ought to do and refrain from, and shall devote his full working time, energy and skills to the success of Darling Inc. and any other companies affiliated to Darling BV (together “
Darling Group
”). Employee acknowledges that under U.S. federal law and the applicable laws of the State of Delaware, Employee will, in both his roles as officer and as director of Darling International, have fiduciary duties to both Darling International and its shareholders. Employee will be subject to and shall observe all policies of Darling Inc. applicable to its employees, executives, officers and directors.
|
1.3.
|
In his capacity as Managing Director ERS Employee will report to the CEO of Darling Ingredients International.
|
1.4.
|
Employee shall not perform any paid or unpaid side activities for or in relation to third parties or otherwise without the prior written approval of the CEO of Darling Ingredients International.
|
2.
|
Term
|
2.1.
|
This Employment Agreement has started with effect from 3 July 1989 for an indefinite period of time. This Employment Agreement will in any event terminate automatically (without any compensation being due) on the last day of the month during which Employee reaches the retirement date under the Employee's pension scheme (as applicable from time to time), but in any event no later than the date on which Employee will be eligible for state old-age pension benefits (
AOW
).
|
2.2.
|
This Employment Agreement is based on a 40- hour workweek. Employee is expected to work additional hours as part of this Employment Agreement as is required for the adequate fulfillment and execution of his position without being entitled to any additional remuneration.
|
2.3.
|
This Employment Agreement may be terminated in writing as per the last day of any calendar month, observing a notice period of three months for Employee and a notice period of six months for Darling BV. Darling BV will be entitled to release Employee from active duty during the notice period, whereby Employee will remain available for a proper handover of responsibilities to a successor.
|
2.4.
|
If this Employment Agreement terminates by the death of Employee, salary payments will be continued to the surviving relatives from the day of death up to and including the last day of the third month after the month of death of Employee. In addition, any accrued (and vested) entitlements under the Incentive Programs referenced in Section 4 hereto until the day of death will be paid to the surviving relatives in the customary manner and time and subject to the terms of the agreements governing such programs.
|
3.
|
Salary
|
3.1.
|
The remuneration of Employee is recorded in a remuneration package determined by the Compensation Committee of the Darling Inc.’s Board of Directors (the “
Compensation Committee
”), after consultation with the Chief Executive Officer of Darling Inc. The remuneration may be adjusted by the Compensation Committee annually, to reflect cost of living. The annual fixed income, including holiday allowance, amounts to EUR 262.500 gross (the “
Annual Fixed Salary
”) for the year 2014. Ultimately in December of each year, the parties will consult with each other with regard to the possible increase of the annual salary with effect from 1 January of the subsequent year.
|
3.2.
|
The Annual Fixed Salary, excluding holiday allowance, will be paid in 12 equal monthly installments after deduction of the mandatory statutory and agreed deductions.
|
3.3.
|
The holiday allowance will be paid in the month of May of the relevant year. For the calculation of the holiday allowance, a year is deemed to start on 1 January and to end on 31 December (the “
Holiday Year
”). In the event this Employment Agreement starts or terminates during the Holiday Year, the holiday allowance will be calculated on a pro rata basis.
|
4.
|
Incentive Programs
|
4.1.
|
Darling Inc. Incentive Plan
|
(a)
|
Employee shall be entitled to participate in the Employee bonus program maintained by Darling Inc. as in effect from time to time (the “
Bonus Program
”). Specifics of the Bonus Program will be determined annually by the Compensation Committee of Darling Inc.’s Board of Directors.
|
(b)
|
It is agreed and acknowledged that the bonus opportunity of Employee under the Bonus Program shall be no less favorable than the opportunity under Employee's 2013 long term and short term incentive arrangements (i.e. 32.5% of the Annual Fixed Salary under the long term incentive arrangement and 40% of the Annual Fixed Salary under the short term incentive arrangement). The specifics of the Bonus Program for 2014 will be communicated to Employee in a separate letter.
|
(c)
|
Participation levels and performance measures for the Bonus Program are determined annually by the Compensation Committee and are subject to change at the discretion of the Compensation Committee or Darling Inc.’s Board of Directors. Bonuses are not earned until the date they are paid, and participants must be employed on the date of payment to receive a bonus, subject to the discretion of the Compensation Committee or Darling Inc.’s Board of Directors to waive this requirement based on the circumstances of a participant’s departure (e.g., retirement). Payment of any bonus in a year does not entitle Employee to payment of a bonus in any preceding or subsequent year.
|
(d)
|
All equity based awards made to Employee under the Bonus Program shall be evidenced by an award agreement executed by Darling Inc. and Employee and will be subject to all applicable legal requirements and restrictions imposed on the Bonus Program pursuant to United States and other applicable law.
|
5.
|
Claw Back
|
5.1.
|
Parties agree as regards Employee's benefits under this Employment Agreement, that Darling BV has the right to unilaterally adjust and/or claw-back any awards made to the Employee (whether bonus or grants under the Incentive Programs referenced in Section 4 hereto)
if, and to the extent, (i) an independent auditor (to be appointed by the joint parties and paid for by Darling BV) has confirmed, on request of Darling BV, that such award or grant has been made on the basis of incorrect or incomplete information, and (ii) Darling BV has sufficient weighty grounds to effect such adjustment and/or claw-back taking into account the Dutch principle of reasonableness and fairness.
|
5.2.
|
If the conditions included under Section 5.1 (i) and (ii) are met, the Employee agrees to fully cooperate with the execution of any adjustment and/or claw-back under Section 5.1 hereof.
|
6.
|
Expenses
|
6.1.
|
Employee will receive a fixed monthly expense allowance of EUR 1.800 per annum.
|
7.
|
Car and Telephone
|
7.1.
|
For the purposes of performing his job, Darling BV will provide Employee with a car which may be used for private purposes within reasonableness. Maximum catalogue value including VAT and private motor vehicle and motorcycle tax ( BPM) will be determined according to the Darling BV car policy.
|
7.2.
|
All costs related to this car, including the costs of use for private purposes as mentioned under Section 7.1. shall be borne by Darling BV, except for the following costs which shall be borne by Employee:
|
(a)
|
the costs of fines in relation to traffic violations;
|
(b)
|
the costs associated with additions for tax purposes (
fiscale bijtelling
);
|
(c)
|
other costs which are not related to the performance of the function (such as toll, vignette, etc.).
|
7.3.
|
Employee is obliged to return the car provided to him to Darling BV, at the first request of Darling BV if there is a legal ground for such return. In the event of suspension, the car may be reclaimed by Darling BV immediately. Employee will in any event need to return the car made available to him to Darling BV as per the day this Employment Agreement terminates. Darling BV is no longer held to reimburse any travel expenses of Employee after the car has been returned.
|
7.4.
|
Darling BV will provide Employee with electronic communication tools. Employee may use these electronic communication tools for private purposes, both internally and externally, provided that the use thereof will not interfere with the daily work and is in compliance with further guidelines of Darling BV. The use of electronic communication tools should, however, primarily and essentially relate to the tasks/activities arising from the function.
|
7.5.
|
Darling BV may ask Employee to clarify any striking use of the electronic communication tools, and charge on possible costs for private purposes. Any tax consequences arising from the private use will be for the account of Employee.
|
8.
|
Insurances
|
8.1.
|
If and to the extent Darling BV has taken out a collective health insurance for its employees pursuant to the Dutch Health Insurance Act (
Zorgverzekeringswet
), Employee can participate to such group scheme. Employee remains, however, responsible for the payment of his nominal premium and any premiums for supplemental packages.
|
8.2.
|
Employee can make use of the ANW-Hiaatverzekering (related to shortfall under the Surviving Dependents Act) and the insurance for directors' liability as taken out by Darling BV, in accordance with relevant terms.
|
9.
|
Pension
|
9.1.
|
Darling BV has arranged for a pension scheme (
pensioenvoorziening
) for Employee. To this end, Employee has been included in the pension arrangement as meant in the basic pension scheme (
basispensioenreglement
) and the plus pension scheme (
pluspensioenreglement
) of Stichting Pensionfonds Son. The rules of the pension scheme, as amended from time to time, will apply to this participation. In accordance with the provisions of the pension scheme, Employee will have to pay a contribution (
eigen bijdrage
), which contribution will be made through a payroll deduction. The pension scheme rules have been provided to Employee. The pensionable salary is maximized to a maximum amount of EUR 400,435 for 2014. This amount will be reviewed annually as part of the Employees total remuneration package and a yearly indexation will be applied to such amount using the general increase percentage that applies for employees of Darling BV.
|
10.
|
Holidays
|
10.1.
|
Employee will be entitled to 30 holidays per calendar year, to be taken whilst taking account of the interests of Darling Group.
|
10.2.
|
Given the severity of his position and the recovery function of the holidays, the holidays are expected to be taken within the year that the holidays are granted. Given his position, Employee is free to determine when he will use his holidays, provided that he takes into account the interests of the Darling Group.
|
11.
|
Incapacity for work
|
11.1.
|
Notwithstanding the provisions of article 7:629 paragraph 3 up to and including 5 Dutch Civil Code, Employee will receive in case of incapacity for work during the first year of illness, however ultimately until the end of this Employment Agreement (in case that is earlier), to be calculated from the first day of the incapacity, 100% of the Annual Fixed Salary after deduction of any benefits or payments received by Employee pursuant to relevant state-provided social security or insurance arrangements taken out by Darling BV.
|
11.2.
|
From the 53
rd
week up to and including the 104
th
week of the respective period of illness, however ultimately until the end of this Employment Agreement (in case that is earlier), Darling BV will pay 70% of the Annual Fixed Salary, also after deduction of any benefits or payments received by Employee pursuant to relevant state-provided social security or insurance arrangements taken out by Darling BV.
|
12.
|
Confidentiality, documents
|
12.1.
|
Employee shall, both during the continuance of his employment and after the termination thereof, keep confidential all information regarding Darling Group, and its clients and relations, whereby confidentiality is imposed on him or of which he knows, or is ought to know, the secret or confidential nature, and he shall not use this information for other purpose than required in connection with the performance of the obligations arising from this Employment Agreement.
|
12.2.
|
Employee is prohibited to keep in any manner whatsoever documents, correspondence or copies thereof, that are in his possession in connection with the performance of his activities for the Darling Group, any longer than necessary for the purpose of performance of his activities. In any event Employee is obliged to hand over with immediate effect, even without any request thereto, such documents, correspondence or copies thereof at first request and/or at the termination of the employment, or when he has not performed his duties, for whatever reason, for a period longer than four weeks.
|
13.
|
Non-compete/non solicit
|
13.1.
|
During the employment of Employee and during the Restrictive Period (as defined here below), Employee shall not without prior written approval of Darling Inc. be permitted to do any of the following in any jurisdiction where Darling Group is active directly or indirectly in any capacity whatsoever, or has any business interests, at the time of termination of this Employment Agreement:
|
(a)
|
to work for or be involved with, in any manner, directly or indirectly, paid or unpaid, any person, organization, company or enterprise pursuing activities similar to the Darling Group, including the (former) VION Ingredients Group, and/or to have or take any interest in such organization, company or enterprise. This includes, without limitation, companies involved in slaughter by-products or other products or business (directly or indirectly) derived or following from the slaughtering business such as, without limitation, Saria, Gelita, Tessenderloo , Nitta, Ten Kate, Van Hessen.
|
(b)
|
to maintain in any manner whatsoever, directly or indirectly, business contacts with any person, organization, company or enterprise with whom during the last two years preceding the termination of this Employment Agreement Employee has had any business, to the extent Darling Group has a legitimate business interest in Employee refraining from maintaining such business contact;
|
(c)
|
to induce, directly or indirectly, present employees of Darling Group, including but not limited Darling BV, Darling Inc., Darling USA and Darling Canada, or persons who in the period of two years preceding the termination of this Employment Agreement have been or were employed by such company, to terminate their employment or to hire such employees.
|
13.2.
|
In view of Section 13.1, the restrictive period will be as follows (the “
Restrictive Period
”):
|
(a)
|
in the event Employee terminates this Employment Agreement through notice or otherwise, the Restrictive Period will be 18 months from the date of termination of this Employment Agreement;
|
(b)
|
in the event Darling BV terminates this Employment Agreement through notice, the Restrictive Period will be 18 months from the date notice has been served by Darling BV on Employee (and therefore 12 months from the date of termination of this Employment Agreement); provided, however, that in the event that Darling BV does not waive the non-compete clause Employee will be entitled to an additional severance which adequately reflects the imposed restrictions;
|
(c)
|
in the event Darling BV terminates this Employment Agreement with immediate effect for cause (
dringende reden
), the Restrictive Period will be 18 months from the date of termination of this Employment Agreement;
|
(d)
|
in the event this Employment Agreement is rescinded by a Court at the request of Darling BV for reasons other than cause (
dringende reden
), the restrictive period will be 12 months from the date of termination of this Employment Agreement.
|
(e)
|
in the event this Employment Agreement is rescinded by a Court at the request of Employee or at the request of Darling BV for cause (
dringende reden
), the restrictive period will be 18 months from the date of termination of this Employment Agreement.
|
14.
|
Penalty clause
|
14.1.
|
Employee will forfeit to Darling BV for a breach of Sections 12 and 13 hereof immediately, without prior notice or any judicial intervention being required, a penalty of EUR 10,000 per breach plus EUR 500 for each day that such breach continues, without prejudice to Darling BV’s right to claim the actual damages it has suffered through such breach. Section 7:650 subsections 3, 4 and 5 Dutch Civil Code and/or sections 6:92, 6:93 Dutch Civil Code (each time to the extent applicable) are explicitly excluded.
|
14.2.
|
It is acknowledged and agreed that reasonable compensation for the restrictions set out in Sections 12 and 13 hereof is included in Employee's remuneration package.
|
15.
|
Rights of intellectual or industrial property
|
15.1.
|
If Employee during, or within a period of two years after termination of this Employment Agreement has invented a certain product/working method (
voortbrengsel/werkmethode
) which is to be considered as a consequence of, or pursuant to, his activities at Darling Group and which may lead in The Netherlands or elsewhere to the inception of rights, including all rights of industrial or intellectual property and explicitly including: databases, know-how, trademarks, designs, drawings, product specifications, formulas, computer programs, etc., Darling Inc is entitled to this product/working method and the related rights.
|
15.2.
|
Employee does not have the right to mention his name or have his name mentioned in connection with the rights meant in this Section 15.1 of this Employment Agreement, with the exception of the provisions of Section 14 paragraph 1 of the Dutch Patent Act 1995 (
Rijksoctrooiwet 1995
). Employee hereby waives in relation to the rights as meant in this Section 15.1 his moral rights (
persoonlijkheidsrechten
) within the meaning of article 25 Dutch Copyright Act 1912 (
Auteurswet
1912
) and his possible entitlements to a monetary compensation in addition to his salary, all to the extent permitted by law.
|
15.3.
|
Employee shall promptly and without delay inform Darling Inc of the inception of any right as meant in this Section and will, to the extent required, make every effort to have Darling Inc obtain such right.
|
15.4.
|
Employee will do his utmost to ensure the maximum protection of a right as meant in Section 15.1 of this Employment Agreement, to the extent that it serves the interests of Darling Group and to the extent that it is in accordance with relevant policies.
|
15.5.
|
Employee acknowledges and agrees that his salary includes compensation for the fact that the rights pursuant to Section 15.1 of this Employment Agreement accrue to Darling Inc, as well as to his cooperation to ensure that these rights will accrue to Darling Inc.
|
16.
|
Gifts
|
16.1.
|
Employee is prohibited to, in relation to the performance of his duties during the term of his employment, without the prior written consent of Darling Inc, accept or stipulate from third parties, directly or in any manner indirectly, any commission, favor or compensation in whatever form or manner.
|
16.2.
|
The provisions of Section 16.1 do not apply to the customary business gift of small value, which do not exceed the retail value of EUR 100.
|
17.
|
Final provisions
|
17.1.
|
It is agreed between the parties that Darling BV and Darling Inc. will review the taxation of Employee's earnings under this Employment Agreement.
|
17.2.
|
The considerations (
overwegingen
) of this Employment Agreement form part of this Employment Agreement.
|
17.3.
|
This Employment Agreement constitutes the entire employment agreement between the parties and supersedes all (employment) agreements previously made and given by and between the Employee and the VION Ingredients Group and its affiliated companies. Notwithstanding the foregoing, Executive's entitlements under the VION Ingredients Incentive and Success Fee Plan (VISP) of 18 June 2013 will continue to have effect also after execution of this Employment Agreement.
|
17.4.
|
In this Employment Agreement, all references to Darling Inc or the affiliated undertakings or companies, means a reference to all companies belonging directly or indirectly to the Darling Group.
|
17.5.
|
The invalidity (
nietigheid
) of one or more provisions of this Employment Agreement shall not result in the invalidity of the remaining provisions of this Employment Agreement. The parties undertake to immediately hold consultations with each other in case any provision is void.
|
17.6.
|
This Employment Agreement shall be governed by the laws of The Netherlands.
|
17.7.
|
Any dispute arising under or in connection with this agreement, including disputes in relation to the existence or validity of this Employment Agreement shall be settled by the competent court in The Netherlands.
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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:
|
May 9, 2018
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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:
|
May 9, 2018
|
|
/s/ Randall C. Stuewe
|
|
/s/ Brad Phillips
|
|
Randall C. Stuewe
|
|
Brad Phillips
|
|
Chief Executive Officer
|
|
Chief Financial Officer
|
|
Date: May 9, 2018
|
|
Date: May 9, 2018
|