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What changed in DARLING INGREDIENTS INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of DARLING INGREDIENTS INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+473 added−420 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-28)

Top changes in DARLING INGREDIENTS INC.'s 2025 10-K

473 paragraphs added · 420 removed · 387 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

73 edited+10 added−11 removed109 unchanged
Biggest changePage 13 ▪ Section 306 of the FSMA provides that the FDA must refuse admission of food into the United States if a foreign food establishment or foreign government refuses to permit entry for an inspection. ▪ Section 102 of the FSMA amended facility registration requirements in the Federal Food, Drug and Cosmetic (“FD&C”) Act for domestic and foreign manufacturers, processors, packers or holders of food for human or animal consumption, to require that facility registrations be renewed during the fourth quarter of each even-numbered year, beginning October 1, 2012, and that additional information be included in such registrations.
Biggest changeThese authorities and regulations include: ▪ Mandatory recall authority for adulterated or misbranded foods where the use of or exposure to such foods is likely to cause serious adverse health consequences or death to humans or animals, if the responsible party fails to cease distribution and recall such adulterated or misbranded foods voluntarily. ▪ Regulations that define the FDA’s administrative detention authority to include the authority to detain an article of food if there is reason to believe the food is adulterated or misbranded. ▪ Section 306 of the FSMA provides that the FDA must refuse admission of food into the United States if a foreign food establishment or foreign government refuses to permit entry for an inspection. ▪ Section 102 of the FSMA amended facility registration requirements in the Federal Food, Drug and Cosmetic (“FD&C”) Act for domestic and foreign manufacturers, processors, packers or holders of food for human or animal consumption, to require that facility registrations be renewed during the fourth quarter of each even-numbered year, beginning October 1, 2012, and that additional information be included in such registrations.
Rousselot and Gelnex are global leading market providers of collagen for the Page 4 food, pharmaceutical and technical industries with operations in Europe, the United States, South America and China. CTH is a leading natural casings company for the sausage industry with operations in Europe, China and the United States.
Rousselot and Gelnex are global leading market providers of collagen for the food, pharmaceutical and technical industries with operations in Europe, the United States, Page 4 South America and China. CTH is a leading natural casings company for the sausage industry with operations in Europe and China.
The Feed Ingredients operating segment includes the Company’s global activities related to (i) the collection and processing of beef, poultry and pork animal by-products in North America, Europe and South America into non-food grade oils and protein meals, (ii) the collection and processing of bakery residuals in North America into Cookie Meal®, which is predominantly used in poultry and swine rations, (iii) the collection and processing of used cooking oil in North America and South America into non-food grade fats, (iv) the collection and processing of porcine and bovine blood in China, Europe, North America and Australia into blood plasma powder and hemoglobin, (v) the processing of selected portions of slaughtered animals into a variety of meat products for use in pet food in Europe, North America and South America, (vi) the processing of cattle hides and hog skins in North America, (vii) the production of organic fertilizers using protein produced from the Company’s animal by-products processing activities in North America and Europe, (viii) the rearing and processing of black soldier fly larvae into specialty proteins for use in animal feed and pet food in North America; and (ix) the provision of grease trap services to food service establishments in North America.
The Feed Ingredients operating segment includes the Company’s global activities related to (i) the collection and processing of beef, poultry and pork animal by-products in North America, Europe and South America into non-food grade oils and protein meals, (ii) the collection and processing of bakery residuals in North America into Cookie Meal®, which is predominantly used in poultry and swine rations, (iii) the collection and processing of used cooking oil in North America and South America into non-food grade fats, (iv) the collection and processing of porcine and bovine blood in China, Europe, North America and Australia into blood plasma powder and hemoglobin, (v) the processing of selected portions of slaughtered animals into a variety of meat products for use in pet food in Europe, North America and South America, (vi) the processing of cattle hides and hog skins in North America, (vii) the production of organic fertilizers using protein produced from the Company’s animal by-products processing activities in North America and Europe, (viii) the rearing and processing of black soldier fly larvae into specialty proteins and fats for use in animal feed and pet food in North America; and (ix) the provision of grease trap services to food service establishments in North America.
The Food Ingredients operating segment includes the Company’s global activities related to (i) the purchase and processing of beef and pork bone chips, beef hides, pig skins, and fish skins into collagen in Europe, China, South America and North America, (ii) the collection and processing of porcine and bovine intestines into natural casings in Europe, China and North America, (iii) the extraction and processing of porcine mucosa into crude heparin in Europe, (iv) the collection and refining of animal fat into food grade fat in Europe, and (v) the processing of bones to bone chips for the collagen industry and bone ash in Europe.
The Food Ingredients operating segment includes the Company’s global activities related to (i) the purchase and processing of beef and pork bone chips, beef hides, pig skins, and fish skins into collagen in Europe, China, South America and North America, (ii) the collection and processing of porcine and bovine intestines into natural casings in Europe and China, (iii) the extraction and processing of porcine mucosa into crude heparin in Europe, (iv) the collection and refining of animal fat into food grade fat in Europe, and (v) the processing of bones to bone chips for the collagen industry and bone ash in Europe.
A majority of our U.S. volume of rendering raw materials, including all of our significant poultry accounts, and substantially all of our bakery feed raw materials are acquired on a “formula basis,” which in most cases is set forth in contracts with our suppliers, generally with multi-year terms.
A majority of our U.S. volume of rendering raw materials, including substantially all of our significant poultry accounts, and substantially all of our bakery feed raw materials are acquired on a “formula basis,” which in most cases is set forth in contracts with our suppliers, generally with multi-year terms.
While there can be some temporary inventory accumulations at various North American and international locations, particularly port locations for export shipments, with the exception of collagen and natural casings, inventories rarely exceed three weeks’ production and, therefore, we use limited working capital to carry those inventories. Our limited inventories also reduce our exposure to fluctuations in finished-product prices.
While there can be some temporary inventory accumulations at various North American and international locations, particularly port locations for export shipments, and with the exception of collagen and natural casings, inventories rarely exceed three weeks’ production and, therefore, we use limited working capital to carry those inventories. Our limited inventories also reduce our exposure to fluctuations in finished-product prices.
FSMA also provides that, if the FDA determines that food manufactured, processed, packed, received, or held by a registered facility has a reasonable probability of causing serious adverse health consequences or death to humans or animals, the FDA may suspend the registration of a facility that created, caused, or was otherwise responsible for such reasonable probability, or knew or had reason to know of such probability and packed, received, or held the food. ▪ The FDA has issued final rules for preventive controls (“PCs”) for human food and animal feed (“Human Food PC Rule” and “Animal Food PC Rule,” respectively), which apply to registered FDA facilities that manufacture, process, pack and hold human or animal food and require these facilities to establish and implement written food safety plans, which include hazard analyses, PCs to ensure that significant hazards that are identified as needing to be controlled will be significantly reduced or prevented, monitoring of PCs, supply-chain controls if appropriate to control a significant hazard, recall plans, corrective action procedures, verification activities and record keeping standards.
FSMA also provides that, if the FDA determines that food manufactured, processed, packed, received, or held Page 13 by a registered facility has a reasonable probability of causing serious adverse health consequences or death to humans or animals, the FDA may suspend the registration of a facility that created, caused, or was otherwise responsible for such reasonable probability, or knew or had reason to know of such probability and packed, received, or held the food. ▪ The FDA has issued final rules for preventive controls (“PCs”) for human food and animal feed (“Human Food PC Rule” and “Animal Food PC Rule,” respectively), which apply to registered FDA facilities that manufacture, process, pack and hold human or animal food and require these facilities to establish and implement written food safety plans, which include hazard analyses, PCs to ensure that significant hazards that are identified as needing to be controlled will be significantly reduced or prevented, monitoring of PCs, supply-chain controls if appropriate to control a significant hazard, recall plans, corrective action procedures, verification activities and record keeping standards.
European Union and EU Member States • The European Union, which has competence to adopt legislation which is binding on the EU Member States and, as regards regulations, their citizens, related to inter alia , employment and social affairs, agriculture, environment, consumer protection and public health. • EU Member States must correctly transpose EU Directives into their national legislation and directly apply EU Regulations, and ensure adequate and effective enforcement, control and supervision of the relevant principles, including minimum safety and health requirements for the workplace and use of work equipment by workers, as well as the implementation and maintenance of a system of official controls and other activities as appropriate to the circumstances, such as relevant communications on food and feed safety and risk, food and feed safety surveillance and other monitoring activities covering all stages of production, processing and distribution.
European Union and EU Member States • The European Union, which has competence to adopt legislation which is binding on the EU Member States and, as regards regulations, their citizens, related to inter alia , employment and social affairs, agriculture, environment, consumer protection and public health. • EU Member States must correctly transpose EU Directives into their national legislation and directly apply EU Regulations, and ensure adequate and effective enforcement, control and supervision of the relevant principles, including minimum safety and health requirements for the workplace and use of work equipment by workers, as well Page 15 as the implementation and maintenance of a system of official controls and other activities as appropriate to the circumstances, such as relevant communications on food and feed safety and risk, food and feed safety surveillance and other monitoring activities covering all stages of production, processing and distribution.
Local authorities are responsible for delivering activities such as inspections, audits and surveillance, sampling in most food and feed establishments. • The United Kingdom’s Health and Safety Executive is the government body responsible for enforcing health and safety at work legislation, such as the Health and Safety at Work Act 1974 , and enforcing health and safety law in industrial workplaces, together with local authorities.
Local authorities are responsible for delivering activities such as inspections, audits and surveillance, sampling in most food and feed establishments. • The United Kingdom’s Health and Safety Executive (“HSE”)is the government body responsible for enforcing health and safety at work legislation, such as the Health and Safety at Work Act 1974 , and enforcing health and safety law in industrial workplaces, together with local authorities.
Food Ingredients Segment Our Food Ingredients segment consists principally of (i) the collagen business conducted by Darling Ingredients International under the Rousselot and Gelnex names, (ii) the natural casings and meat by-products business conducted by Darling Ingredients International under the CTH name and (iii) certain specialty products businesses conducted by Darling Ingredients International under the Sonac name.
Food Ingredients Segment Our Food Ingredients segment consists principally of (i) the collagen business conducted by Darling Ingredients International under the Rousselot and Gelnex names, (ii) the natural casings business conducted by Darling Ingredients International under the CTH name and (iii) certain specialty products businesses conducted by Darling Ingredients International under the Sonac name.
Page 16 United Kingdom • The Medicines and Healthcare products Regulatory Agency (“MHRA”), is an executive agency of the Department of Health and Social Care and is responsible for, inter alia , ensuring the safety of medicinal products for human and veterinary use. • The Department for Environment, Food and Rural Affairs (“DEFRA”) is responsible for environmental protection, food production and standards, agriculture, fisheries and rural communities. • The Animal and Plant Health Agency (“APHA”) is an executive agency of DEFRA and is responsible for protecting the health and welfare of the general public and animals from disease.
United Kingdom • The Medicines and Healthcare products Regulatory Agency (“MHRA”), is an executive agency of the Department of Health and Social Care and is responsible for, inter alia , ensuring the safety of medicinal products for human and veterinary use. • The Department for Environment, Food and Rural Affairs (“DEFRA”) is responsible for environmental protection, food production and standards, agriculture, fisheries and rural communities. • The Animal and Plant Health Agency (“APHA”) is an executive agency of DEFRA and is responsible for protecting the health and welfare of the general public and animals from disease.
Page 18 AVAILABLE INFORMATION We make available, free of charge, through our investor relations website, our reports on Forms 10-K, 10-Q and 8-K, and amendments to those reports, as well as all other filings with the SEC, as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act.
AVAILABLE INFORMATION We make available, free of charge, through our investor relations website, our reports on Forms 10-K, 10-Q and 8-K, and amendments to those reports, as well as all other filings with the SEC, as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act.
Oleo-chemical producers use fats as feedstocks to produce specialty ingredients used in paint, rubber, paper, concrete, plastics and a variety of other consumer and industrial products. Darling Ingredients International’s premium, value-added and branded products also command higher pricing, including with respect to collagen, natural casings, meat by-products, edible fat, heparin and specialty plasma products.
Oleo-chemical producers use fats as feedstocks to produce specialty ingredients used in paint, rubber, paper, concrete, plastics and a variety of other consumer and industrial products. Darling Ingredients International’s premium, value-added and branded products also command higher pricing, including with respect to collagen, natural casings, edible fat, heparin and specialty plasma products.
The APHA issues permits, approvals and registrations to plants carrying out certain activities related to the handling of animal by-products. Feed businesses need to be approved or registered with their local authority trading standards office. • The Food Standards Agency (“FSA”) is responsible for safeguarding public health, including in relation to food and feed.
The APHA issues permits, approvals and registrations to plants carrying out certain activities related to the handling of animal by-products. Feed businesses need to be approved or registered with their local authority trading standards office. Page 16 • The Food Standards Agency (“FSA”) is responsible for safeguarding public health, including in relation to food and feed.
The need for food service establishments in the United Page 11 States to comply with environmental regulations concerning the proper disposal of used restaurant cooking oil should continue to provide a growth area for this raw material source. The rendering industry is highly fragmented with a number of local slaughtering operations that provide us with raw materials.
The need for food service establishments in the United States to comply with environmental regulations concerning the proper disposal of used restaurant cooking oil should continue to provide a growth area for this raw material source. The rendering industry is highly fragmented with a number of local slaughtering operations that provide us with raw materials.
The Company's North American fertilizer products are predominantly sold to golf courses, sports facilities, organic farms and landscaping companies. • Our EnviroFlight business utilizes technologies which enable the rearing of non-pathogenic black soldier fly larvae, which larvae are then processed to produce specialty protein for use as an ingredient in animal feed and pet food. • Our hides operations process hides and skins from beef and hog processors, respectively, into outputs used in commercial applications, such as the leather industry.
The Company's North American fertilizer products are predominantly sold to golf courses, sports facilities, organic farms and landscaping companies. • Our EnviroFlight business utilizes technologies which enable the rearing of non-pathogenic black soldier fly larvae, which larvae are then processed to produce specialty proteins and oils for use as an ingredient in animal feed and pet food. • Our hides operations process hides and skins from beef and hog processors, respectively, into outputs used in commercial applications, such as the leather industry.
Certain large suppliers, such as large slaughterhouses, are furnished with bulk containers in which the raw material is loaded. We provide the remaining suppliers, primarily grocery stores and butcher shops, with containers in which to deposit the raw material. The containers are picked up by, or emptied into, the Company’s trucks on a periodic basis.
Certain large suppliers, such as large slaughterhouses, are furnished with bulk containers (typically trailers) in which the raw material is loaded. We provide the remaining suppliers, primarily grocery stores and butcher shops, with containers in which to deposit the raw material. The containers are picked up by, or emptied into, the Company’s trucks on a periodic basis.
Certain of our finished products are ingredients that compete with alternatives, such as corn, soybean oil, inedible corn oil, palm oils, soybean meal and heating oil, based on nutritional and Page 10 functional values; therefore, the actual pricing for those finished products, as well as competing products, can be quite volatile.
Certain of our finished products are ingredients that compete with alternatives, such as corn, soybean oil, inedible corn oil, palm oils, soybean meal and heating oil, based on nutritional and functional values; therefore, the actual pricing for those finished products, as well as competing products, can be quite volatile.
Page 12 HUMAN CAPITAL We are committed to having an engaged, diverse and inclusive workplace that fosters learning, development and innovation, and we are committed to building a culture and working environment that is inclusive and respectful for all, and where our employees can do their best work and feel valued for their contributions.
HUMAN CAPITAL We are committed to having an engaged, diverse and inclusive workplace that fosters learning, development and innovation, and we are committed to building a culture and working environment that is inclusive and respectful for all, and where our employees can do their best work and feel valued for their contributions.
Page 14 Management believes we are in compliance with these provisions of FSMA and the finalized rules. The FDA also has regulations governing food additives in animal feed and pet food, which could apply to the use of protein from black soldier fly larvae in such products.
Management believes we are in compliance with these provisions of FSMA and the finalized rules. The FDA also has regulations governing food additives in animal feed and pet food, which could apply to the use of protein from black soldier fly larvae in such products.
A number of our competitors for the procurement of raw material are experienced, well-capitalized companies that have significant operating experience and historic supplier relationships. Competition for available raw materials is based primarily on price and proximity to the supplier.
A number of our competitors for the procurement of raw material are experienced, well- Page 11 capitalized companies that have significant operating experience and historic supplier relationships. Competition for available raw materials is based primarily on price and proximity to the supplier.
The Company’s premium, value-added and branded products command significantly higher pricing relative to the Company’s principal finished product lines due to their enhanced qualities, which is a function of the Company’s specialized processing techniques and/or know-how. Customers for our premium, value-added and branded products include feed mills, pet food manufacturers, integrated poultry producers, the dairy industry and golf courses.
The Company’s premium, value-added and branded products command significantly higher pricing relative to the Company’s principal finished product lines due to their enhanced qualities, which is a function of the Company’s specialized processing and/or know-how. Customers for our premium, value-added and branded products include feed mills, pet food manufacturers, integrated poultry producers, the dairy industry and golf Page 10 courses.
In North America, we compete with other rendering, restaurant services and bakery residual businesses, and alternative methods of disposal of animal processing by-products and used restaurant cooking oil provided by trash haulers, waste management companies, biodiesel companies, anaerobic digestion companies and others. In addition, U.S. food service establishments have increasingly experienced theft of used cooking oil.
In North America, we compete with other rendering, restaurant services and bakery residual businesses, and alternative methods of disposal of animal processing by-products and used restaurant cooking oil provided by trash haulers, waste management companies, renewable energy companies, anaerobic digestion companies and others. In addition, U.S. food service establishments have increasingly experienced theft of used cooking oil.
The Fuel Ingredients operating segment includes the Company’s global activities related to (i) the Company’s share of the results of its equity investment in Diamond Green Diesel Holdings LLC, a joint venture with Valero Energy Corporation (“Valero”) to convert animal fats, recycled greases, used cooking oil, inedible corn oil, soybean oil, or other feedstocks that become economically and commercially viable into renewable diesel (“DGD” or the “DGD Joint Venture”) as described in Note 1 and Note 2 to the Company’s Consolidated Financial Statements for the period ended December 30, 2023 included herein, (ii) the conversion of organic sludge and food waste into biogas in Europe, (iii) the collection and conversion of fallen stock and certain animal by-products pursuant to applicable EU regulations into low-grade energy sources to be used in industrial applications in Europe, and (iv) the processing of manure into natural bio-phosphate in Europe.
The Fuel Ingredients operating segment includes the Company’s global activities related to (i) the Company’s share of the results of its equity investment in Diamond Green Diesel Holdings LLC, a joint venture with Valero Energy Corporation (“Valero”) to convert animal fats, recycled greases, used cooking oil, inedible corn oil, soybean oil, or other feedstocks that become economically and commercially viable into renewable fuels/products, such as renewable diesel and SAF (“DGD” or the “DGD Joint Venture”) as described in Note 1 and Note 2 to the Company’s Consolidated Financial Statements for the period ended December 28, 2024 included herein, (ii) the conversion of organic sludge and food waste into biogas in Europe, (iii) the collection and conversion of fallen stock and certain animal by-products pursuant to applicable EU regulations into low-grade energy sources to be used in industrial applications in Europe, and (iv) the processing of manure into natural bio-phosphate in Europe.
Since most of our raw materials are residual by-products of meat processing and other food production, we are not able to contract with our suppliers to increase supply if demand for our products increases.
Since most of our raw materials are residual by-products of meat processing Page 9 and other food production, we are not able to contract with our suppliers to increase supply if demand for our products increases.
During the 2023 fiscal year, the Company’s 10 largest raw materials suppliers in North America accounted for approximately 36% of the total raw material processed by the Company in North America, with one single supplier accounting for approximately 8% of the total raw material processed in North America.
During the 2024 fiscal year, the Company’s 10 largest raw materials suppliers in North America accounted for approximately 36% of the total raw material processed by the Company in North America, with one single supplier accounting for approximately 8% of the total raw material processed in North America.
Darling Ingredients International's specialized portfolio of over 345 products covers all animal origin raw material types and thereby offers a comprehensive, single source solution for suppliers.
Darling Ingredients International's specialized portfolio of over 350 products covers all animal origin raw material types and thereby offers a comprehensive, single source solution for suppliers.
In the United States, Darling is a partner with Valero Energy Corporation in Diamond Green Diesel, a renewable diesel facility, which converts used cooking oils, animal fats and other feedstocks into valuable biofuel products. In Canada, the Company is a leading recycler of animal by-products.
In the United States, Darling is a partner with Valero Energy Corporation in Diamond Green Diesel, a renewable fuel producer, which converts used cooking oils, animal fats and other feedstocks into valuable biofuel products. In Canada, the Company is a leading recycler of animal by-products.
Risk Factors, under the captions “ Seasonal factors and weather, including the physical impacts of climate changes, can impact the availability, quality and volume of raw materials that we process and negatively affect our operations; ” “ Our operations are subject to various laws, rules and regulations including those relating to the protection of the environment and to health and safety, and we could incur significant costs to comply with these requirements or be subject to sanctions or held liable for environmental damages; ” and “We may not be able to achieve reduction of our greenhouse gas emissions and other sustainability goals. ” INTELLECTUAL PROPERTY The Company maintains valuable trademarks, service marks, copyrights, trade names, trade secrets, proprietary technologies and similar intellectual property, and considers our intellectual property to be of material value.
Risk Factors, under the captions “ Seasonal factors and weather, including the physical impacts of climate changes, can impact the availability, quality and volume of raw materials that we process and negatively affect our operations; ” “ Our operations are subject to various laws, rules and regulations including those relating to the protection of the environment and to health and safety, and we could incur significant costs to comply with these requirements or be subject to sanctions or held liable for damages, including environmental damages; ” and “We may not be able to achieve our climate, sustainability or other such goals, targets or objectives. ” INTELLECTUAL PROPERTY The Company maintains valuable trademarks, service marks, copyrights, trade names, trade secrets, proprietary technologies and similar intellectual property, and considers our intellectual property to be of material value.
To facilitate growth and development, we’ve put several initiatives in place, including leadership training programs such as Darling Leadership Academy, Darling University and Darling Involve International Leadership Training. Combined with additional subject-specific training, these programs support skill building in the areas of communication, conflict resolution, decision making, inclusive leadership, performance management tactics and more.
To facilitate growth and development, we have put several initiatives in place, including leadership training programs such as Darling Leadership Academy, Darling University and Darling Involve and Explore International Leadership Training. Combined with additional subject-specific training, these programs support skill building in the areas of communication, conflict resolution, decision making, inclusive leadership, performance management tactics and more.
Non-food grade oils and fats produced and marketed by the Company are principally sold to third-parties to be used as ingredients in animal feed and pet food, as an ingredient for the production of biodiesel and renewable diesel, or to the oleo-chemical industry to be used as an ingredient in a wide variety of industrial applications.
Non-food grade oils and fats produced and marketed by the Company are principally sold to third parties to be used as ingredients in animal feed and pet food, as an ingredient for the production of biodiesel, renewable diesel and sustainable aviation fuel (“SAF”), or to the oleo-chemical industry to be used as an ingredient in a wide variety of industrial applications.
International Darling Ingredients International, our subsidiary, is a worldwide leader in the development and production of specialty ingredients from animal by-products for applications in the pharmaceutical, food, pet food, animal feed, industrial, fuel, bioenergy and fertilizer industries.
International Darling Ingredients International, our subsidiary, is a worldwide leader in the development and production of specialty ingredients from animal by-products for applications in the pharmaceutical, food, pet food, animal feed, industrial, fuel, renewable energy and fertilizer industries.
Darling sells these products in North America and throughout the world, primarily to producers of animal feed, pet food, biodiesel, fertilizer and other consumer and industrial ingredients, including oleo-chemicals, soaps and leather goods, for use as ingredients in their products or for further processing.
Darling sells these products in North America and throughout the world, primarily to producers of animal feed, pet food, renewable energy (including biofuels), fertilizer and other consumer and industrial ingredients, including oleo-chemicals, soaps and leather goods, for use as ingredients in their products or for further processing.
Charles Refinery in Norco, Louisiana (the “DGD St. Charles Plant”) and one located adjacent to Valero’s Port Arthur Refinery in Port Arthur, Texas (the “DGD Port Arthur Plant” and, together with the DGD St. Charles Plant, the “DGD Facilities”), with a combined renewable diesel production capacity of approximately 1.2 billion gallons per year.
Charles Plant”) and one located adjacent to Valero’s Port Arthur Refinery in Port Arthur, Texas (the “DGD Port Arthur Plant” and, together with the DGD St. Charles Plant, the “DGD Facilities”), with a Page 8 combined renewable diesel production capacity of approximately 1.2 billion gallons per year.
In China, the Company’s 10 largest raw material suppliers accounted for approximately 37% of the total raw material processed by the Company in China, with one single supplier accounting for approximately 14% of the total raw material processed in China.
In China, the Company’s 10 largest raw material suppliers accounted for approximately 36% of the total raw material processed by the Company in China, with one single supplier accounting for approximately 10% of the total raw material processed in China.
Darling Ingredients International operates a global network of 80 production facilities across five continents, including Europe, Asia, Australia, South America and North America covering all aspects of animal by-product processing through seven brands: Rendac (fuel), Sonac (proteins, fats, edible fats and blood products), FASA (proteins and fats), Ecoson (bioenergy and fertilizer), Rousselot (collagen), Gelnex (collagen) and CTH (natural casings).
Darling Ingredients International operates a global network of 83 production facilities across five continents, including Europe, Asia, Australia, South America and North America covering all aspects of animal by-product processing through multiple brands, some of which are: Rendac (fuel), Sonac (proteins, fats, edible fats and blood products), FASA (proteins and fats), Ecoson (bioenergy and fertilizer), Rousselot (collagen), Gelnex (collagen) and CTH (natural casings).
With a specialized collection fleet of approximately 350 trucks, Rendac collects raw materials in the Netherlands, Germany, Luxembourg and Belgium. This business is a market leader in the countries of Belgium, the Netherlands and Luxembourg (the "Benelux region") and certain parts of Germany, a predominantly regulated market with spare capacity requirements and long-term contracts with local governments.
With a specialized collection fleet of approximately 330 trucks, Rendac collects raw materials in the Netherlands, Germany, Luxembourg and Belgium. This business is a market leader in the countries of Belgium, the Netherlands and Luxembourg (the “Benelux region”) and certain parts of Germany, a predominantly regulated market with spare capacity requirements and long-term contracts with local governments.
For financial information about our operating segments and geographic areas, refer to Note 21 and Note 22 to the Company’s Consolidated Financial Statements for the period ended December 30, 2023 included herein.
For financial information about our operating segments and geographic areas, refer to Note 21 and Note 22 to the Company’s Consolidated Financial Statements for the period ended December 28, 2024 included herein.
In South America, the Company’s 10 largest raw material suppliers accounted for approximately 48% of the total raw material processed by the Company in South America, with one single supplier accounting for approximately 20% of the total raw material processed in South America.
In South America, the Company’s 10 largest raw material suppliers accounted for approximately 45% of the total raw material processed by the Company in South America, with one single supplier accounting for approximately 17% of the total raw material processed in South America.
Page 8 Fuel Ingredients Segment Our Fuel Ingredients segment consists of (i) our investment in the DGD Joint Venture and (ii) the bioenergy business conducted by Darling Ingredients International under the Ecoson and Rendac names. Diamond Green Diesel The DGD Joint Venture currently operates two renewable diesel plants, one located adjacent to Valero’s St.
Fuel Ingredients Segment Our Fuel Ingredients segment consists of (i) our investment in the DGD Joint Venture and (ii) the bioenergy business conducted by Darling Ingredients International under the Ecoson and Rendac names. Diamond Green Diesel The DGD Joint Venture currently operates two renewable diesel plants, one located adjacent to Valero’s St. Charles Refinery in Norco, Louisiana (the “DGD St.
In Europe, the Company’s 10 largest raw material suppliers accounted for approximately 34% of the total raw material processed by the Company in Europe, with one single supplier accounting for approximately 11% of the total raw material processed in Europe.
In Europe, the Company’s 10 largest raw material suppliers accounted for approximately 30% of the total raw material processed by the Company in Europe, with one single supplier accounting for approximately 9% of the total raw material processed in Europe.
In addition, at certain of our facilities, we are able to operate multiple process lines simultaneously, which provides us with the flexibility and capacity to manufacture a line of premium and value-added products in addition to our principal finished products.
In addition, at certain of our facilities, we are able to operate multiple process lines simultaneously, which provides us with the flexibility and capacity to separate certain raw material streams to manufacture premium and value-added products in addition to our principal finished products.
In fiscal year 2023, the Company generated $6.8 billion in revenues and $647.7 million in net income attributable to Darling. North America We are a leading provider of animal by-product processing, used cooking oil and bakery residual recycling and recovery solutions to the U.S. food industry.
In fiscal year 2024, the Company generated $5.7 billion in revenues and $278.9 million in net income attributable to Darling. North America We are a leading provider of animal by-product processing, used cooking oil and bakery residual recycling and recovery solutions to the U.S. food industry.
Fiscal Year 2023, 2022 and 2021 Net External Sales Darling’s net external sales from fiscal year 2023, 2022 and 2021 by operating segment were as follows (in thousands): Fiscal Year 2023 Fiscal Year 2022 Fiscal Year 2021 Net sales: Feed Ingredients $ 4,472,592 65.9 % $ 4,539,000 69.5 % $ 3,039,500 64.1 % Food Ingredients 1,752,065 25.8 1,459,630 22.3 1,271,629 26.8 Fuel Ingredients 563,423 8.3 533,574 8.2 430,240 9.1 Total $ 6,788,080 100.0 % $ 6,532,204 100.0 % $ 4,741,369 100.0 % Page 5 OPERATIONS Feed Ingredients Segment Our Feed Ingredients segment consists principally of (i) our U.S. ingredients and specialty products businesses, including our fats and proteins, used cooking oil, and trap grease collection business, our Canadian ingredients business, and the ingredients and specialty products businesses conducted by Darling Ingredients International under the Sonac and FASA names (proteins, fats and plasma products) and (ii) our bakery residuals business.
Fiscal Year 2024, 2023 and 2022 Total Net Sales Darling’s total net sales from fiscal year 2024, 2023 and 2022 by operating segment were as follows (in thousands): Fiscal Year 2024 Fiscal Year 2023 Fiscal Year 2022 Total net sales: Feed Ingredients $ 3,675,609 64.3 % $ 4,472,592 65.9 % $ 4,539,000 69.5 % Food Ingredients 1,489,101 26.1 1,752,065 25.8 1,459,630 22.3 Fuel Ingredients 550,465 9.6 563,423 8.3 533,574 8.2 Total $ 5,715,175 100.0 % $ 6,788,080 100.0 % $ 6,532,204 100.0 % Page 5 OPERATIONS Feed Ingredients Segment Our Feed Ingredients segment consists principally of (i) our U.S. ingredients and specialty products businesses, including our fats and proteins, used cooking oil, and trap grease collection business, our Canadian ingredients business, and the ingredients and specialty products businesses conducted by Darling Ingredients International under the Sonac and FASA names (proteins, fats and plasma products) and (ii) our bakery residuals business.
Page 17 • The Ministry of the Environment and Climate Change (Ministério do Meio Ambiente e Mudança do Clima - MMA), which regulates and supervises the implementation of the national policy for the environment. • Federal Environmental Agency (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis - IBAMA), which regulates and supervises the development of potentially pollutant activities in Brazil as well as is responsible for the Federal Technical Registry (Cadastro Técnico Federal – CTF), required for all the enterprises which develop potentially pollutant activities and/or use of natural resources. • Various local and State environmental agencies responsible for the State-Level and local-level control, supervision, monitoring and licensing process for pollution generating activities in the areas in which we operate. • Brazilian Federal Police, responsible for regulating and inspecting controlled chemical industrial products. • Brazilian Army , responsible for regulating and inspecting controlled chemical industrial products. • Federal Council of Veterinary Medicine (CFMV), and its regional counterparts (Reginal Councils of Veterinary Medicine – CRMV ), which guide, control, inspect, and regulate the exercise of certain professional categories, and issue the registration of companies (i.e., the Legal Entity Registration Certificate issued by the competent professional council – “CRPJ”) and the annotation of legally qualified professionals in charge of them (i.e., the Technical Responsibility Note issued by the competent professional council – “ART”). • Federal Council of Chemistry (CFQ) , and its regional counterparts (Regional Councils of Chemistry – CRQ), which guide, control, inspect, and regulate the exercise of certain professional categories, and issue the CRPJ (described above) and the ART (described above). • Brazilian Oil, Gas & Biofuels Regulatory Agency (ANP ), responsible for the regulation of the operation of biofuel production plants, an activity that one of our subsidiaries is engaged with. • National Land Transport Agency (ANTT ), which issues subscriptions on the National Register of Road Freight Transporters (RNTRC) and regulates road cargo transportation, an activity that one of our subsidiaries is engaged with.
Brazil • The Ministry of Agriculture and Cattle (Ministério da Agricultura, Pecuária) , which regulates the production of collagen and activities related to animal feed (i.e., animal slaughter by products). • Ministry of Labor (Ministério do Trabalho) , which regulates labor health and safety. • The Ministry of the Environment and Climate Change (Ministério do Meio Ambiente e Mudança do Clima - MMA), which regulates and supervises the implementation of the national policy for the environment. • Federal Environmental Agency (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis - IBAMA), which regulates and supervises the development of potentially pollutant activities in Brazil as well as is responsible for Page 17 the Federal Technical Registry (Cadastro Técnico Federal – CTF), required for all the enterprises which develop potentially pollutant activities and/or use of natural resources. • Various local and State environmental agencies responsible for the State-Level and local-level control, supervision, monitoring and licensing process for pollution generating activities in the areas in which we operate. • Brazilian Federal Police, responsible for regulating and inspecting controlled chemical industrial products. • Brazilian Army , responsible for regulating and inspecting controlled chemical industrial products. • Federal Council of Veterinary Medicine (CFMV), and its regional counterparts (Reginal Councils of Veterinary Medicine – CRMV ), which guide, control, inspect, and regulate the exercise of certain professional categories, and issue the registration of companies (i.e., the Legal Entity Registration Certificate issued by the competent professional council – “CRPJ”) and the annotation of legally qualified professionals in charge of them (i.e., the Technical Responsibility Note issued by the competent professional council – “ART”). • Federal Council of Chemistry (CFQ) , and its regional counterparts (Regional Councils of Chemistry – CRQ), which guide, control, inspect, and regulate the exercise of certain professional categories, and issue the CRPJ (described above) and the ART (described above). • Brazilian Oil, Gas & Biofuels Regulatory Agency (ANP ), responsible for the regulation of the operation of biofuel production plants, an activity that one of our subsidiaries is engaged with. • National Land Transport Agency (ANTT ), which issues subscriptions on the National Register of Road Freight Transporters (RNTRC) and regulates road cargo transportation, an activity that one of our subsidiaries is engaged with. • The Office of the Comptroller General (CGU) , the Public Prosecutor’s Office (Minestério Público da União) , and the Attorney General’s Office (AGU) , which enforce the Brazilian corporate anti-corruption law.
We offer online and in-person training for employees throughout their career. This begins with onboarding training for all new employees on a variety of topics, from cybersecurity to business ethics. Further training is then customized to each employee’s role, responsibilities and individual career aspirations.
This begins with onboarding training for all new employees on a variety of topics, from cybersecurity to business ethics. Further training is then customized to each employee’s role, responsibilities and individual career aspirations.
Approximately 91% of Darling's U.S. volume of raw materials in fiscal year 2023 was acquired on a "formula" basis.
Approximately 91% of Darling's U.S. volume of raw materials in fiscal year 2024 was acquired on a “formula” basis.
Natural Casings and Meat By-Products The CTH business of Darling Ingredients International is a leading natural casings company for the sausage business with operations in Europe, China and the United States.
Natural Casings The CTH business of Darling Ingredients International is a leading natural casings company for the sausage business with operations in Europe and China.
We have registered or applied for registration of certain of our intellectual property, including the tricolor triangle used in our signage and logos and the names “Darling,” “Darling Ingredients”, “Griffin Industries,” “Dar Pro Solutions,” “Dar Pro,” “Rousselot,” “Gelnex,” “Sonac,” “FASA,” “Ecoson,” “Rendac,” “Rothsay,” “Nature Safe,” “CleanStar,” “Peptan,” “Cookie Meal,” and “Bakery Feeds,” and certain patents, both domestically and internationally, relating to the process for preparing nutritional supplements and the drying and processing of raw materials.
We have registered or applied for registration of certain of our intellectual property, including the tricolor triangle used in our signage and logos and the names “Darling,” “Darling Ingredients”, “Griffin Industries,” “Dar Pro Solutions,” “Dar Pro,” “Rousselot,” “Gelnex,” “Sonac,” “FASA,” “Ecoson,” “Rendac,” “Rothsay,” “Nature Safe,” “CleanStar,” “Peptan,” “Nextida,” “Cookie Meal,” and “Bakery Feeds,” and certain patents, both domestically and internationally, relating to raw material collection, storage, monitoring and protection from theft, new products, new uses and applications for products and processes for preparing nutritional supplements and the drying and processing of raw materials.
As of December 30, 2023, the Company employed globally approximately 15,800 persons full-time. While we have no national or multi-plant union contracts, at December 30, 2023, approximately 17% of the Company’s North American employees were covered by multiple collective bargaining agreements. In addition, approximately 66% of Darling Ingredients International's employees are covered by various collective bargaining agreements.
As of December 28, 2024, the Company employed globally approximately 15,500 persons full-time. While we have no national or multi-plant union contracts, at December 28, 2024, approximately 16% of the Company’s North American employees were covered by multiple collective bargaining agreements. In addition, approximately 64% of Darling Ingredients International's employees are covered by various collective bargaining agreements.
The animal by-products are ground and heated to evaporate water and separate fats from animal tissue, as well as to sterilize and make the material suitable as an ingredient for animal feed. The separated fats, tallows and greases are then centrifuged and/or refined for purity. The remaining solid product is pressed to remove additional oils to create protein meals.
The animal by-products are ground and heated to evaporate and remove water and separate fats from animal tissue, as well as to sterilize and make the material suitable as an ingredient for animal feed. The separated fats, tallows and greases are then centrifuged and/or refined for purity.
The Company’s website is https://www.darlingii.com and the address for the Company’s investor relations website is https://ir.darlingii.com . Information contained on these websites is not and should not be deemed to be a part of this report or any filing filed with, or furnished to, the SEC by us. Alternatively, these reports may be accessed at the SEC’s website at https://www.sec.gov.
Page 18 The Company’s website is https://www.darlingii.com and the address for the Company’s investor relations website is https://www.darlingii.com/investors . Information contained on these websites is not and should not be deemed to be a part of this report or any filing filed with, or furnished to, the SEC by us.
Collagen Rousselot and Gelnex are global leading market providers of collagen for the food, nutraceutical, pharmaceutical and technical (e.g., photographic) industries with operations in Europe, China, South America and the United States. Rousselot and Gelnex have a network of 16 production plants and 12 sales locations, covering sales into more than 80 countries.
Collagen Rousselot (which includes Gelnex) is a global leading market provider of collagen for the food, nutraceutical, pharmaceutical and technical (e.g., photographic) industries with operations in Europe, China, South America and the United States. Rousselot has a network of 16 production plants and 11 sales locations, covering sales into more than 85 countries.
Accordingly, we are committed to the health, safety and wellness of our employees. In this regard, we have a strong health and safety program that focuses on implementing policies and training programs, as well as performing self-audits, all designed to keep our employees injury free. We retain talent by providing employees with training, mentoring and career development.
In this regard, we have a strong health and safety program that focuses on implementing policies and training programs, as well as performing self-audits, all designed to keep our employees injury free. Page 12 We retain talent by providing employees with training, mentoring and career development. We offer online and in-person training for employees throughout their career.
In addition, the slaughter rates in the meat processing industry are subject to economic conditions and, as a result, during periods of economic decline, the availability, quantity and quality of raw materials available to the independent renderers decreases. These factors have been offset, in part, however, by increasing environmental consciousness.
In addition, the slaughter rates in the meat processing industry are subject to economic conditions and, as a result, during periods of economic decline, the availability, quantity and quality of raw materials available to the independent renderers decreases.
Feed mills purchase meals, fats, blood products, and Cookie Meal® for use as feed ingredients. Pet food manufacturers require stringent feed safety certifications and consistently demand premium additives that are high in protein and nutritional content. As a result, pet food manufacturers typically purchase only premium or value-added products under supply contracts with us.
Feed mills purchase meals, fats, blood products, and Cookie Meal® for use as feed ingredients. Pet food manufacturers require stringent feed safety certifications and consistently demand premium additives with certain qualities and specifications. As a result, pet food manufacturers may purchase premium or value-added products under supply contracts with us.
Because of these processing controls, we are able to produce premium products that typically have higher protein and energy content and lower moisture than standard finished products, and such products command premium prices. International Operations Darling Ingredients International’s ingredients and specialty products businesses are operated under the Sonac and FASA names by our Sonac C3 and Sonac Blood business activities.
Because of these processing controls, we are able to produce premium products with in-demand qualities compared to our standard finished products, and such premium products command premium prices. International Operations Darling Ingredients International’s ingredients and specialty products businesses are operated under the Sonac and FASA names by our Sonac C3 and Sonac Blood business activities.
Page 15 • The Securities and Exchange Commission (“SEC”), which enforces the U.S. federal securities laws, including rules governing disclosures required in annual, quarterly and other reports filed by publicly traded companies, and (with the DOJ) the Foreign Corrupt Practices Act (“FCPA”), and other matters.
Occupational Safety and Health Administration (“OSHA”), which is the main federal agency charged with the enforcement of worker safety and health legislation. • The Securities and Exchange Commission (“SEC”), which enforces the U.S. federal securities laws, including rules governing disclosures required in annual, quarterly and other reports filed by publicly traded companies, and (with the DOJ) the Foreign Corrupt Practices Act (“FCPA”), and other matters.
Used Cooking Oil The Company is a leading collector and processor of used cooking oil in North America for use as a valuable low carbon fuel and feed ingredient. The Company estimates it collects used cooking oil from approximately 173,000 locations in the U.S. The Company’s primary customer for this product is the DGD Joint Venture.
Used Cooking Oil The Company is a leading collector and processor of used cooking oil in North America for use as a feed ingredient and feedstock for the production of valuable low carbon biofuels. The Company estimates it collects used cooking oil from approximately 162,700 locations in the U.S.
In some instances, these containers are unloaded directly onto our trucks, while in other instances used cooking oil is pumped through a vacuum hose into the truck.
Used cooking oil is placed in various sizes and types of containers and supplied to the Company under mutually agreeable contract terms. In some instances, these containers are unloaded directly onto our trucks, while in other instances used cooking oil is pumped through a vacuum hose into the truck.
The activities of this business are divided into two categories: • CTH Casings harvests, sorts and sells hog and sheep casings for worldwide food markets, particularly sausage manufacturers, and harvests, processes and sells hog and beef bowel package items for global pharmaceutical, food and feed market segments.
CTH Casings harvests, sorts and sells hog and sheep casings for worldwide food markets, particularly sausage manufacturers, and harvests, processes and sells hog and beef bowel package items for global pharmaceutical, food and feed market segments. CTH holds a leading position in the highly fragmented global casings market.
Under a “formula” arrangement, the charge or credit for raw materials is tied to Page 9 published finished product prices for a competing ingredient after deducting a fixed processing fee.
Under a “formula” arrangement, the charge or credit for raw materials is tied to published prices for finished products or competing or related ingredients after deducting processing, freight and other fees.
The protein meal is then sifted through screens and ground further if necessary to produce an appropriately sized protein meal. The primary finished products derived from the processing of animal by-products are MBM, PM (both feed grade and pet food), PG, tallow, feather meal and blood meal.
The primary finished products derived from the processing of animal by-products are MBM, PM (both feed grade and pet food), PG, tallow, feather meal and blood meal.
See Item 1A “Risk Factors - Our business may be affected by the impact of animal related disease, such as BSE and other food safety issues,” for more information regarding the BSE Feed Rule. • The United States Department of Agriculture (“USDA”), which has authority over meat, poultry, and egg products and inspects producers to ensure compliance with applicable laws and regulations.
See Item 1A “Risk Factors - Our business may be affected by the impact of animal related disease, such as BSE, and by other food safety issues,” for more information regarding the BSE Feed Rule.
We market certain of our finished products under our Dar Pro Ingredients brand, certain specialty products under the Sonac and FASA names, collagen products under the Rousselot and Gelnex names and natural casings and meat by-products under the CTH name.
We market certain of our finished products under our Dar Pro Ingredients brand, certain specialty products under the Sonac and FASA names, collagen products under the Rousselot and Gelnex names and natural casings under the CTH name. See Note 22 of Notes to Consolidated Financial Statements included herein for a breakdown of the Company’s sales by geographic regions.
Page 6 Raw materials: Used cooking oil is collected from restaurants, food service establishments, industrial operations and grocery stores. Many of our suppliers operate stores that are part of national chains. Used cooking oil is placed in various sizes and types of containers and supplied to the Company under mutually agreeable contract terms.
The Company’s primary customer for this product is the DGD Joint Venture. Page 6 Raw materials: Used cooking oil is collected from restaurants, food service establishments, industrial operations and grocery stores. Many of our suppliers operate stores that are part of national chains.
Charles Plant at market rates; however, the DGD Joint Venture is not obligated to purchase all or any part of its feedstock requirements from us. The DGD Joint Venture’s renewable diesel is sold under the Diamond Green Diesel® brand primarily to obligated parties who produce or import petroleum-based fuels into areas subject to renewable fuels obligations.
Charles Plant at market rates; however, the DGD Joint Venture is not obligated to purchase all or any part of its feedstock requirements from us.
Furthermore, in January 2023, the DGD Joint Venture partners approved a capital project at the DGD Port Arthur Plant to provide the plant with the capability to upgrade approximately fifty percent (50%) of its current 470 million gallon annual production capacity to sustainable aviation fuel (SAF).
Furthermore, in November 2024, the DGD Joint Venture completed a capital project at the DGD Port Arthur Plant to provide the plant with the capability to upgrade approximately 50% of its current 470 million gallon annual production capacity to SAF. The DGD Facilities receive feedstocks primarily by rail and trucks owned by third parties as well as imports via ships.
Rousselot and Gelnex’s profitability is mainly driven by their ability to timely transfer increases in net raw material costs to their customers in order to realize a relatively stable added value per kilogram of collagen, in combination with a strong focus on operations excellence and product quality.
Rousselot’s profitability is mainly driven by value recognized for high quality and supply reliability, and its ability to transfer increases in net raw material costs to its customers on a timely basis, allowing it to realize a relatively stable margin per kilogram of collagen. Rousselot produces collagen from pigskin, beef hides, animal bones and fish.
We believe many end customers focus on collagen quality and consistency, supply reliability, application know-how and regulatory support and are therefore relatively less price sensitive to collagen products.
We have experienced that many customers value quality and consistency, supply reliability, application know-how and regulatory support and therefore, price volatility is typically less than other Darling products.
The DGD Joint Venture sells renewable diesel domestically and exports renewable diesel into global markets, primarily Canada and Europe. Renewable diesel is distributed primarily by rail and ships owned by third-parties.
The DGD Joint Venture markets its renewable fuels/products both domestically and internationally into regions with established low-carbon programs or voluntary demand, with most such production distributed primarily by rail and ships owned by third parties.
Rousselot and Gelnex enter into formal arrangements related to raw material purchases that differ by raw material type, by duration and by regional area. Rousselot and Gelnex market their hydrolyzed collagen under the “Peptan” and “Peptinex” brands; this fast-growing specialty ingredient is positioned specifically towards nutritional supplement customers focusing on improved bone, joint and skin health.
Rousselot markets its collagen products under different brands, such as the “Peptan”, “Peptinex” and “Nextida™” brands; which are fast-growing specialty ingredient brands positioned specifically towards nutritional supplements for customers focusing on improved bone, joint, skin and other targeted health benefits.
With the Rousselot and Gelnex collagen business, the Company is part of the growing global collagen market. Collagen is a functional ingredient, which means that it has a role in the end product by adding a critical property to it that is largely non-substitutable.
Collagen is a functional ingredient, which means that it typically acts as a critical component in a larger end product. Due to its functionality and characteristics, collagen is used in a large variety of end products and its demand is growing.
Removed
Collagen is used in a large variety of end products, but only small amounts are used in most products. Currently, available substitutes are limited and do not have the broad functionality required for most usages.
Added
The remaining solid product is pressed to remove additional oils to create protein meals. The protein meal is then sifted through screens and ground further if necessary to produce an appropriately sized protein meal.
Removed
Rousselot and Gelnex collagen products have higher sales prices relative to the Company’s other end products, but comprise a minimal portion of the cost of final products in many segments, for example the pharmaceutical end markets.
Added
While collagen sells at a higher price per unit than many other Darling products, in many cases it only comprises a small portion of a customer’s end product cost, such as for many pharmaceutical end markets.
Removed
Rousselot and Gelnex are involved in all four types of collagen (pigskin, hide, bone and fish). Raw material prices are mainly driven by the availability and quality of raw material, and sales prices are mainly driven by market demand and the expected availability of collagen supply. As such, securing sufficient raw material positions is key to the business.
Added
Raw material prices are mainly driven by quality and supply versus demand. Finished product sales prices are also mainly driven by market supply and demand by product and quality. Rousselot enters into formal arrangements related to raw material purchases that differ by raw material type, by duration and by regional area.
Removed
CTH holds a leading position in the highly fragmented global casings market. • CTH Meat By-Products harvests, purchases and processes hog, sheep and beef meat for customers in the global food and European pet food industries. In the meat by-products market, CTH is a major player with established sales networks in Europe and Asia.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, the operation of a joint venture such as this involves a number of risks that could harm our business and result in the DGD Joint Venture not performing as expected, such as: • problems integrating or developing operations, personnel, technologies or products; • the unanticipated breakdown or failure of equipment or processes, including any unforeseen issues that may arise in connection with the operation of the DGD Facilities or completion and startup of any expansion or capital projects, such as the SAF capital project currently underway at the DGD Port Arthur Plant, or the possibility of equipment failure as a result of materials degradation; • the inaccuracy of our assumptions about prices for the renewable diesel that the DGD Joint Venture currently produces and the SAF that the DGD Joint Venture will produce upon completion of the SAF capital project; • unforeseen engineering or environmental issues, including new or more stringent environmental regulations affecting operations; • unforeseen capital contributions required under the DGD LLC Agreement; Page 23 • the inaccuracy of our assumptions about the timing and amount of anticipated revenues and operating costs including feedstock prices; • the diversion of management time and resources; • difficulty in obtaining and maintaining permits and other regulatory issues, potential license revocation and changes in legal requirements; • difficulties in establishing and maintaining relationships with suppliers and end user customers; • the risk that one or more competitive new renewable diesel plants are constructed that use different technologies from the DGD Joint Venture and result in the marketing of products that are more effective as a substitute for carbon-based fuels or less expensive than the products marketed by the DGD Joint Venture; • performance below expected levels of output or efficiency; • disruptions in the ability of the pipelines, vessels, or railroads to transport feedstocks or products because of weather events (such as hurricanes), accidents, derailment, collision, fire, explosion, governmental regulations, or third-party actions; • reliance by the DGD Joint Venture on Valero and its adjacent refinery facility for many services and processes; • possible impairment of the acquired assets, including intangible assets, in connection with the occurrence of any other risks associated with the DGD Joint Venture; • possible third-party claims of intellectual property infringement; • inability to source sufficient feedstocks for the operation or having to increase utilization of feedstocks that produce lower margin product; and • being forced to sell our equity interests in the DGD Joint Venture pursuant to buy/sell provisions in the DGD LLC Agreement such that we would no longer continue to realize the benefits of the DGD Joint Venture.
Biggest changeIn addition, the operation of a joint venture such as this involves a number of risks that could harm our business and result in the DGD Joint Venture not performing as expected, such as: • problems integrating or developing operations, personnel, technologies or products; • the unanticipated breakdown or failure of equipment or processes, including any unforeseen issues that may arise in connection with the operation of the DGD Facilities or completion and startup of any expansion or capital projects or the possibility of equipment failure as a result of materials degradation; • the inaccuracy of our assumptions about prices or demand for the renewable diesel or SAF that the DGD Joint Venture produces; Page 23 • unforeseen engineering or environmental issues, including new or more stringent environmental regulations affecting operations; • unforeseen capital contributions required under the DGD LLC Agreement; • the inaccuracy of our assumptions about the timing and amount of anticipated revenues and operating costs including feedstock prices; • the diversion of management time and resources; • difficulties in obtaining and maintaining permits and other regulatory issues, potential license revocations and changes in legal requirements; • adverse changes in government policies, programs and/or mandates around the world that benefit biofuels, including, without limitation, reductions, dilutions or terminations of government credits, incentives and/or subsidies for biofuels or programs or mandates requiring biofuel use; • changes in supply and demand for biofuels, including potential overproduction of biofuels against demand resulting in diminished returns and potential dilution of government credits, incentives and/or subsidies; • difficulties in establishing and maintaining relationships with suppliers and end user customers; • the risk that one or more competitive new renewable diesel or SAF plants are constructed that use different technologies from the DGD Joint Venture and result in the marketing of products that are more effective as a substitute for carbon-based fuels or less expensive than the products marketed by the DGD Joint Venture; • performance below expected levels of output or efficiency; • disruptions in the ability of the pipelines, vessels, or railroads to transport feedstocks or products because of weather events (such as hurricanes), accidents, derailment, collision, fire, explosion, government regulations, or third-party actions; • reliance by the DGD Joint Venture on Valero and its adjacent refinery facility for many services and processes; • possible impairment of the acquired assets, including intangible assets, in connection with the occurrence of any other risks associated with the DGD Joint Venture; • possible third-party claims of intellectual property infringement; • inability to source sufficient feedstocks for the operation or having to increase utilization of feedstocks that produce lower margin product; and • being forced to sell our equity interests in the DGD Joint Venture pursuant to buy/sell provisions in the DGD LLC Agreement such that we would no longer continue to realize the benefits of the DGD Joint Venture.
To the extent suppliers of raw materials look to alternate methods of disposal, whether as a result of our collection fees being deemed too expensive, the payments we offer being deemed too low or otherwise, our raw material supply will decrease and our collection fee revenues will decrease, which could materially and adversely affect our business, results of operations and financial condition.
To the extent suppliers of raw materials look to alternate methods of disposal, whether as a result of our collection fees being deemed too expensive, the payments we offer being deemed too low or otherwise, our raw material supply and/or collection fee revenues will decrease, which could materially and adversely affect our business, results of operations and financial condition.
We continue to monitor existing and proposed laws and regulations in the jurisdictions in which we operate and to consider actions we may take to potentially mitigate the unfavorable impact, if any, of such laws or regulations.
We continue to monitor existing and proposed laws and regulations in the jurisdictions in which we operate and consider actions we may take to potentially mitigate the unfavorable impact, if any, of such laws or regulations.
Risks Related to Legal and Regulatory Compliance Our operations are subject to various laws, rules and regulations including those relating to the protection of the environment and to health and safety, and we could incur significant costs to comply with these requirements or be subject to sanctions or held liable for environmental damages.
Risks Related to Legal and Regulatory Compliance Our operations are subject to various laws, rules and regulations including those relating to the protection of the environment and to health and safety, and we could incur significant costs to comply with these requirements or be subject to sanctions or held liable for damages, including environmental damages.
Unlike indebtedness, where principal and interest customarily are payable on specified due dates, in the case of common stock, (i) dividends are payable only when and if declared by our board of directors or a duly authorized committee of the board and (ii) as a corporation, we are restricted under applicable Delaware law to making dividend payments and redemption payments only from legally available assets.
Unlike indebtedness, where principal and interest customarily are payable on specified due dates, in the case of common stock, (i) dividends are payable only when and if declared by our board of directors or a duly authorized committee of the board of directors and (ii) as a corporation, we are restricted under applicable Delaware law to making dividend payments and redemption payments only from legally available assets.
We are a party to various lawsuits, claims and loss contingencies arising in the ordinary course of business, including insured worker's compensation, auto, and general liability claims, assertions by certain regulatory and governmental agencies related to various matters including labor and employment, employee benefits, occupational safety and health, wage and hour, compliance, sustainability, permitting requirements, environmental matters, including air, wastewater and storm water discharges from the Company’s processing facilities and other federal, state and local issues, litigation involving tort, contract, statutory, labor, employment, and other claims, and tax matters.
We are a party to various lawsuits, claims and loss contingencies arising in the ordinary course of business, including insured worker's compensation, auto, and general liability claims, assertions by certain regulatory and governmental agencies related to various matters including labor and employment, employee benefits, occupational safety and health, wage and hour, compliance, sustainability, permitting requirements, environmental matters, including odor, air, wastewater and storm water discharges from the Company’s processing facilities and other federal, state and local issues, litigation involving tort, contract, statutory, labor, employment, and other claims, and tax matters.
Cyber-attacks can also be executed within the various supply chains in which the Company operates, which could impact the availability of raw materials, transport of finished goods, port operations, markets, prices or product demand. Furthermore, we are subject to complex and evolving laws and regulations regarding privacy, know-your-customer requirements, data protection, cross-border data movement and other matters.
Cyber-attacks can also be executed within the various supply chains in which the Company operates, which could impact the availability of raw materials, transport of finished goods, port operations, markets, prices or product demand. Furthermore, we are subject to complex and evolving laws and regulations regarding, cybersecurity, privacy, know-your-customer requirements, data protection, cross-border data movement and other matters.
Under some environmental laws, such as the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 in the United States, also known as the Superfund law, responsibility for the cost of cleanup of a contaminated site can be imposed upon current or former site owners and operators, or upon any party that sent waste to the site, regardless of the lawfulness of the activities that led to the contamination.
Under some environmental laws, such as the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 in the United States (“CERCLA”), also known as the Superfund law, responsibility for the cost of cleanup of a contaminated site can be imposed upon current or former site owners and operators, or upon any party that sent waste to the site, regardless of the lawfulness of the activities that led to the contamination.
Similarly, our failure or perceived failure to pursue or fulfill our goals, targets, and objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines that we announce, or at all, could have the same negative impacts, as well as expose us to government enforcement actions and private litigation.
Similarly, our failure or perceived failure to pursue or fulfill our goals, targets, and objectives, to comply with ethical, environmental, sustainability or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines that we announce, or at all, could have the same negative impacts, as well as expose us to government enforcement actions and private litigation.
These developments may continue to adversely affect European and worldwide economic conditions, as uncertainties remain relating to certain aspects of the UK’s future economic, trading and legal relationships with the EU and with other countries. These effects could have an adverse effect on our business, investments and future operations in Europe. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
These developments may continue to adversely affect European and worldwide economic conditions, as uncertainties remain relating to certain aspects of the UK’s future economic, trading and legal relationships with the EU and with other countries. These effects could have an adverse effect on our business, investments and future operations in the UK and Europe. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
We could also experience impairment of our reputation if any of these events were to occur. Increased information technology security threats and more sophisticated computer crime pose a risk to our systems, networks, products and services, while data privacy laws continue to proliferate presenting heightened regulatory risk.
We could also experience impairment of our reputation if any of these events were to occur. Increased information technology security threats and more sophisticated computer crime pose a risk to our systems, networks, products and services, while data privacy and cybersecurity laws continue to proliferate presenting heightened regulatory risk.
Although the indentures that govern the senior notes and the credit agreement governing the senior secured credit facilities contain restrictions on our incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and the additional indebtedness that we and our subsidiaries could incur in compliance with these restrictions could be substantial.
Although certain of the indentures that govern the senior notes and the credit agreement governing the senior secured credit facilities contain restrictions on our incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and the additional indebtedness that we and our subsidiaries could incur in compliance with these restrictions could be substantial.
Furthermore, rapid and material changes in finished goods prices, including competing agricultural-based alternative ingredients, generally have an immediate and, often times, material impact on the Company’s gross margin and profitability resulting from the brief lapse of time between the procurement of the raw materials and the sale of the finished goods.
Furthermore, rapid and material changes in finished goods prices, including competing agricultural-based alternative ingredients, generally have an immediate and, often times, material impact on the Company’s gross margin and profitability resulting from the lapse of time between the procurement of the raw materials and the sale of the finished goods.
Product liability or other claims and product recalls may also lead to increased scrutiny or investigations by federal, state and foreign regulatory agencies of our operations and could have a material adverse effect on our brands, business, results of operations and financial condition.
Product liability or other claims and product recalls may also lead to increased scrutiny or investigations by federal, state and foreign regulatory agencies of our operations and could have a material adverse effect on our brands, business, reputation, results of operations and financial condition.
In addition, from time to time certain of our international operations make contractual prepayments to raw material suppliers in the ordinary course of business, which may subject the Company to financial risk should any such supplier experience financial difficulties or cease operations.
In addition, from time to time certain of our international operations make contractual prepayments to raw material suppliers in the ordinary course of business, which may subject the Company to financial risk should any such supplier experience financial difficulties, bankruptcy or cease operations.
While we expect that our geographical diversity reduces our exposure to risks in any one country or part of the world, it also subjects us to the various risks and uncertainties relating to international sales and operations, including: • imposition of tariffs, quotas, trade barriers and other trade protection measures imposed by the United States against foreign countries or by foreign countries against others regarding the importation of poultry, beef and pork products, in addition to operating, import or export licensing requirements imposed by various foreign countries; • imposition of border restrictions by foreign countries with respect to the import of poultry, beef and pork products due to animal disease or other perceived health or safety issues; • change in existing trade agreements, such as the United States-Mexico-Canada Agreement (“USMCA”), which could negatively impact our business; • impact of currency exchange rate fluctuations between the U.S. dollar and foreign currencies, particularly the euro, the Brazilian real, the Canadian dollar, the Chinese renminbi, the British pound, the Japanese yen, the Australian dollar and the Polish zloty, which may reduce the U.S. dollar value of the revenues, profits and cash flows we receive from non-U.S. markets or of our assets in non-U.S. countries or increase our supply costs, as measured in U.S. dollars in those markets; • exchange controls and other limits on our ability to import raw materials, import or export finished products or to repatriate earnings from overseas, such as exchange controls in effect in China, that may limit our ability to repatriate earnings from those countries; • different regulatory structures (including creditor rights that may be different than in the United States) and unexpected changes in regulatory environments (including, without limitation, in China), including changes resulting in potentially adverse tax consequences or imposition of onerous trade restrictions, price controls, industry controls, animal and human food safety controls, employee welfare schemes or other government controls; • political or economic instability, social or labor unrest or changing macroeconomic conditions (such as high inflation rates) or other changes in political, economic or social conditions in the respective jurisdictions; • changes in tax laws or to tax rates in any of the jurisdictions in which we operate and adverse outcomes from tax audits; • compliance with and enforcement of a wide variety of complex U.S. and non-U.S. laws, treaties and regulations, including, without limitation, anti-bribery laws such as the U.S.
While we expect that our geographical diversity reduces our exposure to risks in any one country or part of the world, it also subjects us to various risks and uncertainties relating to international sales and operations, including: • imposition of tariffs, quotas, trade barriers and other trade protection measures imposed by the United States against foreign countries or by foreign countries against others regarding the importation of poultry, beef and pork products, gelatin and collagen products, fats and oils, and/or biofuels, in addition to operating, import or export licensing requirements imposed by various foreign countries; • imposition of border restrictions by foreign countries with respect to the import of poultry, beef and pork products due to animal disease or other perceived health or safety issues; • change in existing trade agreements, such as the United States-Mexico-Canada Agreement (“USMCA”), which could negatively impact our business; • impact of currency exchange rate fluctuations between the U.S. dollar and foreign currencies, particularly the euro, the Brazilian real, the Canadian dollar, the Chinese renminbi, the British pound, the Japanese yen, the Australian dollar and the Polish zloty, which may reduce the U.S. dollar value of the revenues, profits and cash flows we receive from non-U.S. markets or of our assets in non-U.S. countries or increase our supply costs, as measured in U.S. dollars in those markets; • exchange controls and other limits on our ability to import raw materials, import or export finished products or to repatriate earnings from overseas, such as exchange controls in effect in China, that may limit our ability to repatriate earnings from those countries; • different regulatory structures (including creditor rights that may be different than in the United States) and unexpected changes in regulatory environments (including, without limitation, in China), including changes resulting in potentially adverse tax consequences or imposition of onerous trade restrictions, price controls, industry controls, animal and human food safety controls, employee welfare schemes or other government controls; • political or economic instability, social or labor unrest or changing macroeconomic conditions (such as high inflation rates) or other changes in political, economic or social conditions in the respective jurisdictions; Page 26 • changes in tax laws or to tax rates in any of the jurisdictions in which we operate and adverse outcomes from tax audits; • compliance with, and enforcement of, a wide variety of complex U.S. and non-U.S. laws, treaties and regulations, including, without limitation, anti-bribery laws such as the U.S.
Depending on market conditions, we either charge a collection fee to offset a portion of the cost incurred in collecting raw material, collect on a no pay/no charge basis or will pay for the raw material.
Depending on market conditions, we either charge a collection fee to offset a portion of the cost incurred in collecting raw material, collect on a no pay/no charge basis or pay for the raw material.
Similar laws outside the United States impose liability for environmental cleanup, often under the polluter pays theory of liability but also based upon ownership in some circumstances. There can be no assurance that we will not face extensive costs or penalties that would have a material adverse effect on our financial condition and results of operations.
Similar laws outside the United States impose liability for environmental cleanup, often under the polluter pays theory of liability but also based upon ownership in some circumstances. There can be no assurance that we will not face extensive costs or penalties that would have a material adverse effect on our Page 29 financial condition and results of operations.
Among other things, these information systems process incoming customer orders and outgoing supplier orders, manage inventory, and allow us to efficiently collect raw materials and distribute products, process Page 38 and bill shipments to and collect cash from our customers, respond to customer and supplier inquiries, contribute to our overall internal control processes, maintain records of our property, plant and equipment, record and pay amounts due vendors and other creditors and manage our human resource function.
Among other things, these information systems process incoming customer orders and outgoing supplier orders, manage inventory, and allow us to efficiently collect raw materials and distribute products, process and bill shipments to and collect cash from our customers, respond to customer and supplier inquiries, contribute to our overall internal control processes, maintain records of our property, plant and equipment, record and pay amounts due vendors and other creditors and manage our human resource function.
Additionally, our worker’s compensation, auto and general liability policies contain significant deductibles or self-insured retentions. We develop bi-yearly and record quarterly an estimate of our projected insurance-related liabilities. We estimate the liabilities associated with the risks retained by us, in part, by considering historical claims Page 41 experience, demographic and severity factors and other actuarial assumptions.
Additionally, our worker’s compensation, auto and general liability policies contain significant Page 43 deductibles or self-insured retentions. We develop bi-yearly and record quarterly an estimate of our projected insurance-related liabilities. We estimate the liabilities associated with the risks retained by us, in part, by considering historical claims experience, demographic and severity factors and other actuarial assumptions.
This Page 24 amount is subject to increase by the Administrator of the EPA. The volume mandates for 2022 were 2.76 billion gallons for biomass-based diesel, 5.63 billion RINs for advanced biofuel, and 20.63 billion RINs for total renewable fuel. In June of 2023, the EPA published a final rule that establishes required RFS volumes for 2023, 2024, and 2025.
This amount is subject to increase by the Administrator of the EPA. The volume mandates for 2022 were 2.76 billion gallons for biomass-based diesel, 5.63 billion RINs for advanced biofuel, and 20.63 billion RINs for total renewable fuel. In June of 2023, the EPA published a final rule that establishes required RFS volumes for 2023, 2024, and 2025.
Only pigs from ASF-free zones, breeding pigs and piglets are allowed to move beyond their respective region. Such restrictions on the movement of pigs from one region to another may affect slaughter numbers within certain regions and thereby reduce volumes of raw material supplied to our locations that, within the same region, process blood and makes collagen from pork skins.
Only pigs from ASF-free zones, breeding pigs and piglets are allowed to move beyond their respective region. Such restrictions on the movement of pigs from one region to another may affect slaughter numbers within certain regions and thereby reduce volumes of raw material supplied to our locations that, within the same region, process blood and make collagen from pork skins.
In addition, after an operating facility affected by such an event and unscheduled shutdown is restored, there could be no assurance that customers who in the interim choose to use alternative disposal services would return to use our services. We may incur losses and additional costs as a result of our hedging transactions.
In addition, after an operating facility affected by such Page 28 an event and unscheduled shutdown is restored, there could be no assurance that customers who in the interim choose to use alternative disposal services would return to use our services. We may incur losses and additional costs as a result of our hedging transactions.
Any tightening in credit supply could negatively affect our customers’ ability to pay for our products on a timely basis or at all and could result in a requirement for additional bad debt reserves. Although many of our customer contracts are formula-based, continued volatility in the commodities markets could negatively impact our revenues and overall profits.
Any tightening in credit supply could negatively affect our customers’ ability to pay for our products on a timely basis or at all and could result in a requirement for additional bad debt reserves. Although many of our customer contracts are formula-based, continued volatility in the commodities markets could negatively impact our Page 38 revenues and overall profits.
The board of directors also has the power, without stockholder approval, to set the terms of any such classes or series of preferred shares that may be issued, including the designations, preferences, limitations and relative rights senior to the rights of our common stock with respect to dividends or upon the liquidation, dissolution or winding up of our business and other terms.
The board of directors also has the power, without stockholder approval, to set the terms of any such Page 37 classes or series of preferred shares that may be issued, including the designations, preferences, limitations and relative rights senior to the rights of our common stock with respect to dividends or upon the liquidation, dissolution or winding up of our business and other terms.
“ Management Discussion and Analysis of Financial Condition and Results of Operations ” - “ Senior Secured Credit Facilities ,” “6 % Senior Notes due 2030, ” “ 5.25% Senior Notes due 2027 ” and “3.625 % Senior Notes due 2026 .” We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
“ Management Discussion and Analysis of Financial Condition and Results of Operations ” - “ Senior Secured Credit Facilities, ” “ 5.25% Senior Notes due 2027 ” and “3.625 % Senior Notes due 2026 .” We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
The full impact of the amended CCPA on us and others in our industry remains uncertain because regulations that are necessary to fully implement the law have not been finalized. Those include regulations that would be the first in the US to comprehensively regulate the use of artificial Page 39 intelligence when used to make decisions about individuals.
The full impact of the amended CCPA on us and others in our industry remains uncertain because regulations that are necessary to fully implement the law have not been finalized. Those include regulations that would be the first in the US to comprehensively regulate the use of artificial intelligence when used to make decisions about individuals.
The closure or divestiture of all or part of a manufacturing plant or facility could result in future charges and disruptions or losses of customer and/or supplier relationships that could be significant to our business, results of operations and financial condition. We may not be able to achieve our climate, sustainability or other such goals, targets or objectives.
The closure or divestiture of all or Page 45 part of a manufacturing plant or facility could result in future charges and disruptions or losses of customer and/or supplier relationships that could be significant to our business, results of operations and financial condition. We may not be able to achieve our climate, sustainability or other such goals, targets or objectives.
Freedom of movement between the UK and EU has ended, meaning neither UK nor EU citizens are able to live and work in the EU or UK, respectively, without certain visas (other than short-term visits for specific purposes (e.g., attending meetings, conducting training) in accordance with local immigration laws).
Freedom of movement between the UK and EU has ended, meaning neither UK nor EU citizens are able to live and work in the EU or UK, respectively, without certain visas (other than short-term visits for specific purposes (e.g., attending meetings, conducting Page 46 training) in accordance with local immigration laws).
Risks and uncertainties that may affect, or have affected, our business, operating results and financial condition include, but are not limited to, the following: • The prices of many of our products are subject to significant volatility; • Our business is dependent on the procurement of raw materials, which is the most competitive aspect of our business; • The DGD Joint Venture subjects us to a number of risks; • Our renewable energy businesses may be affected by energy policies around the world; • We are highly dependent on natural gas, diesel fuel and electricity, the price of which can be volatile, and such dependency could materially adversely affect our business; • A significant percentage of our revenue is attributable to a limited number of suppliers and customers; • Certain of our operating facilities are highly dependent upon a single or a few suppliers; • We face risks associated with our international activities, which could negatively affect our sales to customers in foreign countries and our operations and assets in such countries; • Seasonal factors and weather, including the physical impacts of climate changes, can impact the availability, quality and volume of raw materials that we process and negatively affect our operations; • If we or our customers are the subject of product liability or other claims or product recalls, we may incur significant and unexpected costs and our business reputation could be adversely affected; • In certain markets we are highly dependent upon a single operating facility and various events beyond our control could cause an interruption in the operation of our facilities, which could adversely affect our business in those markets; • We may incur losses and additional costs as a result of our hedging transactions; • Media campaigns related to feed and food ingredient production or fuel production present reputational and other risks; • An impairment in the carrying value of our goodwill or other intangible assets may have a material adverse effect on our results of operations; Page 19 • Our operations are subject to various laws, rules and regulations including those relating to the protection of the environment and to health and safety, and we could incur significant costs to comply with these requirements or be subject to sanctions or held liable for environmental damages; • Our business may be negatively impacted by the occurrence of any disease correctly or incorrectly linked to animals; • Our business may be affected by the impact of animal related disease, such as BSE and other food safety issues; • P andemics, epidemics or disease outbreaks, such as coronavirus (“COVID-19”), may disrupt our business, including, among other things, our supply chain and production processes, each of which could materially affect our operations, liquidity, financial condition and results of operations; • We may be subject to work stoppages at our operating facilities, which could cause interruptions in the manufacturing or distribution of our products; • Certain U.S. multiemployer defined benefit pension plans to which we contribute are underfunded and these plans may require minimum funding contributions; • Our substantial level of indebtedness could adversely affect our financial condition; • Despite our existing level of indebtedness, we and our subsidiaries may still be able to incur substantially more indebtedness, which could further exacerbate the risks to our financial condition described above; • We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful; • Our ability to repay our indebtedness depends in part on the performance of our subsidiaries, including our non-guarantor subsidiaries, and their ability to make payments; • The market price of our common stock has been and may continue to be volatile, which could cause the value of your investment to decline; • Our ability to pay any dividends on our common stock may be limited and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock; • Future sales of our common stock or the issuance of other equity may adversely affect the market price of our common stock; • Our common stock is an equity security and is subordinate to our existing and future indebtedness; • The issuance of shares of preferred stock could adversely affect holders of common stock, which may negatively impact your investment; • We may incur material costs and liabilities in complying with government regulations; • Downturns and volatility in global economies and commodity and credit markets could materially adversely affect our business, results of operations and financial condition; • We may not successfully identify and complete acquisitions on favorable terms or achieve anticipated synergies relating to any acquisitions, and such acquisitions could result in unknown liabilities, unforeseen operating difficulties and expenditures and require significant management resources; • Our business may be adversely impacted by fluctuations in foreign currency exchange rates, which could affect our ability to comply with our financial covenants; • Large capital projects can take many years to complete, and market conditions could deteriorate over time, negatively impacting project returns; • Changes in consumer preference could negatively impact our business; • If we experience difficulties or a significant disruption in our information systems or if we fail to implement new systems and software successfully, our business could be materially adversely affected; • Increased information technology security threats and more sophisticated computer crime pose a risk to our systems, networks, products and services, while data privacy laws continue to proliferate presenting heightened regulatory risk; • Our success is dependent on our key personnel; • We could have a material weakness in our internal control over financial reporting that would require remediation; • Changes in our tax rates or exposure to additional income tax liabilities could impact our profitability; • Litigation or regulatory proceedings may materially adversely affect our business, results of operations and financial condition; • Our European pension funds may require minimum funding contributions; • The insurance coverage that we maintain may not cover, or fully cover, all operational risks, and if the number or severity of claims for which we are self-insured increases, if we are required to accrue or pay additional amounts Page 20 because the claims prove to be more severe than our recorded liabilities, if our insurance premiums increase or if we are unable to obtain insurance at acceptable rates or at all, our financial condition and results of operations may be materially adversely affected; • We may divest certain of our brands or businesses from time to time, which could adversely affect us; • Terrorist attacks or acts of war may cause damage or disruption to us and our employees, facilities, information systems, security systems, suppliers and customers, which could materially and adversely affect our net sales, costs and expenses and financial condition; • We may be unable to protect our intellectual property rights; • Our products, processes, methods, and equipment may infringe upon the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products; • The healthcare reform legislation in the United States, its implementing regulations, and subsequent healthcare developments could impact the healthcare benefits we are required to provide our employees in the United States and cause our compensation costs to increase, potentially reducing our net income and adversely affecting our cash flows; • We may incur significant charges and experience disruptions or losses of customer and/or supplier relationships in the event we close or divest all or part of a manufacturing plant or facility; • We may not be able to achieve our climate, sustainability or other such goals, targets or objectives; and • The United Kingdom's withdrawal from the EU could have an adverse effect on our business, investments and future operations in Europe.
Risks and uncertainties that may affect, or have affected, our business, operating results and financial condition include, but are not limited to, the following: • The prices of many of our products are subject to significant volatility; • Our business is dependent on the procurement of raw materials, which is the most competitive aspect of our business; • The DGD Joint Venture subjects us to a number of risks; • Our renewable energy businesses may be affected by energy policies around the world; • We are highly dependent on natural gas, diesel fuel and electricity, the prices of which can be volatile, and such dependency could materially adversely affect our business; • A significant percentage of our revenue is attributable to a limited number of suppliers and customers; • Certain of our operating facilities are highly dependent upon a single or a few suppliers; • We face risks associated with our international activities, which could negatively affect our sales to customers in foreign countries and our operations and assets in such countries; • Seasonal factors and weather, including the physical impacts of climate changes, can impact the availability, quality and volume of raw materials that we process and negatively affect our operations; • If we or our customers are the subject of product liability or other claims or product recalls, we may incur significant and unexpected costs and our business reputation could be adversely affected; • In certain markets we are highly dependent upon a single operating facility and various events beyond our control could cause an interruption in the operation of our facilities, which could adversely affect our business in those markets; • We may incur losses and additional costs as a result of our hedging transactions; • Media campaigns related to feed and food ingredient production or fuel production present reputational and other risks; • An impairment in the carrying value of our goodwill or other intangible assets may have a material adverse effect on our results of operations; • Our operations are subject to various laws, rules and regulations including those relating to the protection of the environment and to health and safety, and we could incur significant costs to comply with these requirements or be subject to sanctions or held liable for damages, including environmental damages; • Our business may be negatively impacted by the occurrence of any disease correctly or incorrectly linked to animals; Page 19 • Our business may be affected by the impact of animal related disease, such as BSE, and by other food safety issues; • P andemics, epidemics or disease outbreaks, such as coronavirus (“COVID-19”), may disrupt our business, including, among other things, our supply chain and production processes, each of which could materially affect our operations, liquidity, financial condition and results of operations; • We may be subject to work stoppages at our operating facilities, which could cause interruptions in the manufacturing or distribution of our products; • Certain U.S. multiemployer defined benefit pension plans to which we contribute are underfunded and these plans may require minimum funding contributions or we may be subject to liabilities due to a termination of, or our withdrawal from, such plans; • The proposed Employment Rights Bill is set to overhaul employment law in the UK, with a number of employees friendly proposals which could have an adverse effect on our business due to increased costs associated with being an employer; • Our substantial level of indebtedness could adversely affect our financial condition; • Despite our existing level of indebtedness, we and our subsidiaries may still be able to incur substantially more indebtedness, which could further exacerbate the risks to our financial condition described above; • We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful; • Our ability to repay our indebtedness depends in part on the performance of our subsidiaries, including our non-guarantor subsidiaries, and their ability to make payments; • The market price of our common stock has been and may continue to be volatile, which could cause the value of your investment to decline; • Our ability to pay any dividends on our common stock may be limited and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock; • Future sales of our common stock or the issuance of other equity may adversely affect the market price of our common stock; • Our common stock is an equity security and is subordinate to our existing and future indebtedness; • The issuance of shares of preferred stock could adversely affect holders of common stock, which may negatively impact your investment; • We may incur material costs and liabilities in complying with government regulations; • Downturns and volatility in global economies and commodity and credit markets could materially adversely affect our business, results of operations and financial condition; • We may not successfully identify and complete acquisitions on favorable terms or achieve anticipated synergies relating to any acquisitions, and such acquisitions could result in unknown liabilities, unforeseen operating difficulties and expenditures and require significant management resources; • Our business may be adversely impacted by fluctuations in foreign currency exchange rates, which could affect our ability to comply with our financial covenants; • Large capital projects can take many years to complete, and market conditions could deteriorate over time, negatively impacting project returns; • Changes in consumer preference could negatively impact our business; • If we experience difficulties or a significant disruption in our information systems or if we fail to implement new systems and software successfully, our business could be materially adversely affected; • Increased information technology security threats and more sophisticated computer crime pose a risk to our systems, networks, products and services, while data privacy and cybersecurity laws continue to proliferate presenting heightened regulatory risk; • Artificial intelligence could subject the Company to loss through various internal and external risks; • Our success is dependent on our key personnel; • We could have a material weakness in our internal control over financial reporting that would require remediation; • Changes in our tax rates or exposure to additional income tax liabilities could impact our profitability; • Litigation or regulatory proceedings may materially adversely affect our business, results of operations and financial condition; • Our European pension funds may require minimum funding contributions; Page 20 • The insurance coverage that we maintain may not cover, or fully cover, all operational risks, and if the number or severity of claims for which we are self-insured increases, if we are required to accrue or pay additional amounts because the claims prove to be more severe than our recorded liabilities, if our insurance premiums increase or if we are unable to obtain insurance at acceptable rates or at all, our financial condition and results of operations may be materially adversely affected; • We may divest certain of our brands or businesses from time to time, which could adversely affect us; • Terrorist attacks or acts of war may cause damage or disruption to us and our employees, facilities, information systems, security systems, suppliers and customers, which could materially and adversely affect our net sales, costs and expenses and financial condition; • We may be unable to protect our intellectual property rights; • Our products, processes, methods, and equipment may infringe upon the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products; • The healthcare reform legislation in the United States, its implementing regulations, and subsequent healthcare developments could impact the healthcare benefits we are required to provide our employees in the United States and cause our compensation costs to increase, potentially reducing our net income and adversely affecting our cash flows; • We may incur significant charges and experience disruptions or losses of customer and/or supplier relationships in the event we close or divest all or part of a manufacturing plant or facility; • We may not be able to achieve our climate, sustainability or other such goals, targets or objectives; and • The United Kingdom's withdrawal from the EU could have an adverse effect on our business, investments and future operations in Europe.
There may also be adverse publicity associated with litigation or regulatory proceedings that may decrease customer confidence in our business, regardless of whether the allegations are valid or whether we are ultimately found liable. As a result, litigation or regulatory proceedings may have a material adverse effect on our business, results of Page 40 operations and financial condition.
There may also be adverse publicity associated with litigation or regulatory proceedings that may decrease customer confidence in our business, regardless of whether the allegations are valid or whether we are ultimately Page 42 found liable. As a result, litigation or regulatory proceedings may have a material adverse effect on our business, results of operations and financial condition.
The testing of goodwill for impairment requires us to make significant estimates about our future performance and cash flows, as well as other assumptions. These estimates can be affected by numerous factors, including changes in economic, industry or market conditions, changes in Page 28 business operations or regulation, or changes in competition.
The testing of goodwill for impairment requires us to make significant estimates about our future performance and cash flows, as well as other assumptions. These estimates can be affected by numerous factors, including changes in economic, industry or market conditions, changes in business operations or regulation, or changes in competition.
For example, on December 20, 2019, former President Trump signed Public Law 116-94, a spending bill that included provisions repealing the so-called “Cadillac” tax on certain high-cost employer-sponsored insurance plans and the annual fee imposed on certain health insurance providers based on market share.
For example, on December 20, 2019, then President Trump signed Public Law 116-94, a spending bill that included provisions repealing the so-called “Cadillac” tax on certain high-cost employer-sponsored insurance plans and the annual fee imposed on certain health insurance providers based on market share.
A judgment against us or against one of our customers for whom we manufacture or provide products on a product liability or other claim, or our or their Page 27 agreement to settle a product liability or other claim, or a product recall, could also result in substantial and unexpected expenditures, which would reduce operating income and cash flow.
A judgment against us or against one of our customers for whom we manufacture or provide products on a product liability or other claim, or our or their agreement to settle a product liability or other claim, or a product recall, could also result in substantial and unexpected expenditures, which would reduce operating income and cash flow.
Our fleets and drivers are subject to federal, state, local and foreign laws and licensing requirements applicable to commercial fleets, their cargo and their hours and methods of operation. Failure to comply with Page 29 these laws and regulations in any location could materially adversely affect our business, results of operations, financial condition and reputation.
Our fleets and drivers are subject to federal, state, local and foreign laws and licensing requirements applicable to commercial fleets, their cargo and their hours and methods of operation. Failure to comply with these laws and regulations in any location could materially adversely affect our business, results of operations, financial condition and reputation.
Page 37 We may not successfully identify and complete acquisitions on favorable terms or achieve anticipated synergies relating to any acquisitions, and such acquisitions could result in unknown liabilities, unforeseen operating difficulties and expenditures and require significant management resources. We regularly review potential acquisitions of complementary businesses, services or products.
We may not successfully identify and complete acquisitions on favorable terms or achieve anticipated synergies relating to any acquisitions, and such acquisitions could result in unknown liabilities, unforeseen operating difficulties and expenditures and require significant management resources. We regularly review potential acquisitions of complementary businesses, services or products.
The TSE Regulation establishes a “feed ban” consisting of a ban on the use of processed animal protein (“PAP”), in feed for ruminants according to which only Page 31 certain animal proteins considered to be safe (such as fishmeal) can be used, but under very strict conditions.
The TSE Regulation establishes a “feed ban” consisting of a ban on the use of processed animal protein (“PAP”), in feed for ruminants according to which only certain animal proteins considered to be safe (such as fishmeal) can be used, but under very strict conditions.
If we issue preferred shares in the future that have a preference over the common stock with respect to the payment of dividends or upon liquidation, dissolution or winding up, or if we issue preferred shares with voting rights that Page 36 dilute the voting power of the common stock, the rights of holders of the common stock or the market price of the common stock could be adversely affected.
If we issue preferred shares in the future that have a preference over the common stock with respect to the payment of dividends or upon liquidation, dissolution or winding up, or if we issue preferred shares with voting rights that dilute the voting power of the common stock, the rights of holders of the common stock or the market price of the common stock could be adversely affected.
If we experience difficulties or a significant disruption in our information systems or if we fail to implement new systems and software successfully, our business could be materially adversely affected. We depend on information systems throughout our business to collect and process data that is critical to our operations and accurate financial reporting.
Page 39 If we experience difficulties or a significant disruption in our information systems or if we fail to implement new systems and software successfully, our business could be materially adversely affected. We depend on information systems throughout our business to collect and process data that is critical to our operations and accurate financial reporting.
Other diseases that are highly contagious within a species, but do not affect other animals and are not transmissible to humans, such as porcine epidemic diarrhea (“PED”) virus, may significantly impact production of the susceptible livestock or poultry species in a country or region.
Other diseases that are highly contagious within a species, but do not affect other animals and are not transmissible to humans, such as porcine epidemic diarrhea (“PED”) virus, may significantly impact production of the susceptible livestock or animal species in a country or region.
As a result of the occurrence of ASF in North America, the Animal and Plant Health Inspection Service (“APHIS”), on September 24, 2021, submitted plans to the World Organization for Animal Health (OIE) for the declaration of a new ASF protection zone in Puerto Rico and the U.S. Virgin Islands.
As a result of the occurrence of ASF in North America, the Animal and Plant Health Inspection Service (“APHIS”), on September 24, 2021, submitted plans to the World Organization for Animal Health (“OIE”) for the declaration of a new ASF protection zone in Puerto Rico and the U.S. Virgin Islands.
The risks described above also apply to the DGD Joint Venture and its business and operations. Risks Related to our Labor Force We may be subject to work stoppages at our operating facilities, which could cause interruptions in the manufacturing or distribution of our products.
The risks described above also apply to the DGD Joint Venture and its business and operations. Page 33 Risks Related to our Labor Force We may be subject to work stoppages at our operating facilities, which could cause interruptions in the manufacturing or distribution of our products.
In the past few years, ASF has become widespread in multiple Chinese, Vietnamese and Philippine provinces and has been reported in Cambodia, Laos, Myanmar, Timor-Leste, Indonesia, Malaysia, and Thailand in South East Asia and the People's Democratic Republic of Korea, the Republic of Korea, Mongolia, Bhutan and India.
In the past few years, ASF has become Page 30 widespread in multiple Chinese, Vietnamese and Philippine provinces and has been reported in Cambodia, Laos, Myanmar, Timor-Leste, Indonesia, Malaysia, and Thailand in South East Asia and the People's Democratic Republic of Korea, the Republic of Korea, Mongolia, Bhutan and India.
For example, where domestic legislation has already been enacted to implement an EU directive, there may be relevant context in applying the framework of the EUWA 2018 (i.e., the continued application of the supremacy Page 44 of EU law and the principle of “indirect effect”).
For example, where domestic legislation has already been enacted to implement an EU directive, there may be relevant context in applying the framework of the EUWA 2018 (i.e., the continued application of the supremacy of EU law and the principle of “indirect effect”).
Under the RFS program, the EPA is required by statute to set annual quotas for the volume of renewable fuels that must be blended into petroleum-based transportation fuels consumed in the U.S. 14 months prior to the compliance year.
Under the RFS program, the EPA is required by statute to set annual quotas for the volume of renewable fuels that must be blended into petroleum-based transportation fuels consumed in the U.S. 14 months prior to the compliance Page 24 year.
We may not be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, such alternative actions may not allow us to meet our scheduled debt service obligations and our other cash needs.
We may not be able to effect any such Page 35 alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, such alternative actions may not allow us to meet our scheduled debt service obligations and our other cash needs.
Also, the United Kingdom (with the exception of Northern Ireland), as a former a member of the EU is classified as controlled BSE risk. A change in the BSE status of one or more EU Member States may have a negative impact on Darling Ingredients International.
Also, the United Kingdom (with the exception of Northern Ireland), as a former a member of the EU is classified as controlled BSE risk. A change in the BSE status Page 32 of one or more EU Member States may have a negative impact on Darling Ingredients International.
Page 42 The healthcare reform legislation in the United States and its implementing regulations could impact the healthcare benefits we are required to provide our employees in the United States and cause our compensation costs to increase, potentially reducing our net income and adversely affecting our cash flows.
Page 44 The healthcare reform legislation in the United States and its implementing regulations could impact the healthcare benefits we are required to provide our employees in the United States and cause our compensation costs to increase, potentially reducing our net income and adversely affecting our cash flows.
Our operations subject us to various and increasingly stringent environmental, health and safety requirements in the various jurisdictions where we operate, including those governing air emissions, wastewater discharges, the management, storage and disposal of materials in connection with our facilities, occupational health and safety, product packaging and labeling and our handling of hazardous materials and wastes, such as gasoline and diesel fuel used by our trucking fleet and operations.
Our operations subject us to various and increasingly stringent environmental, health and safety requirements in the various jurisdictions where we operate, including those governing air emissions and odor, wastewater discharges, storm water discharges, the management, storage and disposal of materials in connection with our facilities, occupational health and safety, product packaging and labeling and our handling of hazardous materials and wastes, such as gasoline and diesel fuel used by our trucking fleet and operations.
We compete with other rendering businesses and alternative methods of disposal of animal by-products, bakery residue and used cooking oil provided by trash haulers, waste management companies and biodiesel companies, as well as the alternative of illegal disposal. See Item 1.
We compete with other rendering businesses and alternative methods of disposal of animal by-products, bakery residue and used cooking oil provided by trash haulers, waste management companies and biofuel companies, as well as the alternative of illegal disposal. See Item 1.
As a producer of meat-centric food products, we are subject to risks associated with the outbreak of disease in pork, beef livestock, and poultry flocks, including Foot-and-Mouth Disease (FMD), Avian Influenza and BSE. The outbreak of disease could adversely affect our supply of raw materials, increase the cost of production, and reduce operating margins.
Page 31 As a producer of meat-centric food products, we are subject to risks associated with the outbreak of disease in pork, beef livestock, and poultry flocks, including Foot-and-Mouth Disease, Avian Influenza and BSE. The outbreak of disease could adversely affect our supply of raw materials, increase the cost of production, and reduce operating margins.
We may engage in capital projects, such as the DGD Joint Venture SAF project underway at the DGD Port Arthur Plant, based on the forecasted project economics and level of return on the capital to be employed in the project. Large-scale projects take many years to complete, and market conditions can change from our forecast.
We may engage in capital projects, such as the recently completed DGD Joint Venture SAF project at the DGD Port Arthur Plant, based on the forecasted project economics and level of return on the capital to be employed in the project. Large-scale projects take many years to complete, and market conditions can change from our forecast.
Additionally, the outbreak of disease may hinder our ability to market and sell products. We have developed business continuity plans for various disease scenarios; however no assurance given that these plans will be effective in eliminating the negative effects of any such diseases on our operating results.
Additionally, the outbreak of disease may hinder our ability to market and sell products. We have developed business continuity plans for various disease scenarios; however, there is no assurance that these plans will be effective in eliminating the negative effects of any such diseases on our operating results.
Our failure to hire and retain a sufficient number of truck drivers to operate our fleet could negatively impact our ability to collect and transport raw material in an efficient and cost-effective manner.
Our failure to hire and retain a sufficient number of truck drivers to operate our fleet could negatively impact our ability to collect and transport raw materials in an efficient and cost-effective manner.
In addition to the risk factors discussed in this report, the price and volume volatility of our common stock may be affected by: • actual or anticipated fluctuations in ingredient prices; • actual or anticipated variations in our operating results; • our earnings releases and financial performance; • changes in financial estimates or buy/sell recommendations by securities analysts; • our ability to repay our debt; • our access to financial and capital markets to refinance our debt; • performance of our joint venture investments, including the DGD Joint Venture; • our dividend policy; • market conditions in the industry and the general state of the securities markets; • investor perceptions of us and the industry and markets in which we operate; • governmental legislation or regulation; • currency and exchange rate fluctuations that impact our earnings and balance sheet; and Page 35 • general economic and market conditions, such as U.S. or global reactions to economic developments, including regional recessions, inflation, currency devaluations or political unrest.
In addition to the risk factors discussed in this report, the price and volume volatility of our common stock may be affected by: • actual or anticipated fluctuations in ingredient prices; • actual or anticipated variations in our operating results; • our earnings releases and financial performance; • changes in financial estimates or buy/sell recommendations by securities analysts; • our ability to repay our debt; • our access to financial and capital markets to refinance our debt; • performance of our joint venture investments, including the DGD Joint Venture; • our dividend policy; • market conditions in the industry and the general state of the securities markets; • investor perceptions of us and the industry and markets in which we operate; • governmental legislation or regulation; Page 36 • governmental policies affecting biofuels and/or biofuel feedstocks; • currency and exchange rate fluctuations that impact our earnings and balance sheet; and • general economic and market conditions, such as U.S. or global reactions to economic developments, including regional recessions, inflation, currency devaluations or political unrest.
It is possible that these laws may be interpreted and applied by various jurisdictions in a manner inconsistent with our current or future practices or inconsistent with one another.
It is possible that these laws may be interpreted and applied by various jurisdictions in a manner inconsistent with our current or future practices or Page 40 inconsistent with one another.
We are highly dependent on natural gas, diesel fuel and electricity, the price of which can be volatile, and such dependency could materially adversely affect our business.
We are highly dependent on natural gas, diesel fuel and electricity, the prices of which can be volatile, and such dependency could materially adversely affect our business.
Page 26 Seasonal factors and weather, including the physical impacts of climate changes, can impact the availability, quality and volume of raw materials that we process and negatively affect our operations.
Seasonal factors and weather, including the physical impacts of climate changes, can impact the availability, quality and volume of raw materials that we process and negatively affect our operations.
Pension Protection Act, which went into effect in January 2008, requires underfunded pension plans to improve their funding ratios within prescribed intervals based on the level of their underfunding. As a result, our required contributions to these plans may increase in the future.
In addition, the U.S. Pension Protection Act, which went into effect in January 2008, requires underfunded pension plans to improve their funding ratios within prescribed intervals based on the level of their underfunding. As a result, our required contributions to these plans may increase in the future.
In addition, the introduction of new EU legislation applicable to the agri-food sector could create additional compliance requirements and enforcement risks for us. Regulation (EU) 2019/1381, as amended (“Food Transparency Regulation”), strengthens transparency requirements in EU food law. The European Food Safety Authority (“EFSA”) must disclose scientific data, studies and other information supporting applications, including supplementary information supplied by applicants.
In addition, EU legislation applicable to the agri-food sector could create additional compliance requirements and enforcement risks for us. For example, Regulation (EU) 2019/1381, as amended (“Food Transparency Regulation”), strengthens transparency requirements in EU food law. The European Food Safety Authority (“EFSA”) must disclose scientific data, studies and other information supporting applications, including supplementary information supplied by applicants.
While the credit agreement governing the senior secured credit facilities, the indentures governing our senior notes and the agreements governing certain of our other indebtedness will limit the ability of certain of our subsidiaries to incur consensual restrictions on their ability to make other intercompany payments to us, these limitations are subject to certain significant qualifications and exceptions.
While the credit agreement governing the senior secured credit facilities and potentially, the agreements governing certain of our other indebtedness will limit the ability of certain of our subsidiaries to incur consensual restrictions on their ability to make other intercompany payments to us, these limitations are subject to certain significant qualifications and exceptions.
Page 21 Our business is dependent on the procurement of raw materials, which is the most competitive aspect of our business. Our management believes that the most competitive aspect of our business is the procurement of raw materials rather than the sale of finished products.
Our business is dependent on the procurement of raw materials, which is the most competitive aspect of our business. Our management believes that the most competitive aspect of our business is the procurement of raw materials rather than the sale of finished products.
The DGD Joint Venture subjects us to a number of risks. In January 2011, Darling, through a wholly-owned subsidiary, entered into a limited liability company agreement (as subsequently amended, the “DGD LLC Agreement”) with a wholly-owned subsidiary of Valero to form the DGD Joint Venture, which was formed to design, engineer, construct and operate the DGD St. Charles Plant.
Page 22 The DGD Joint Venture subjects us to a number of risks. In January 2011, Darling, through a wholly-owned subsidiary, entered into a limited liability company agreement (as subsequently amended, the “DGD LLC Agreement”) with a wholly-owned subsidiary of Valero to form the DGD Joint Venture, which was formed to design, engineer, construct and operate the DGD St.
Further, as such laws and regulations change, we may sometimes be required to commit to unplanned capital expenditures in order to continue to comply with workplace safety requirements at our facilities. In addition, we operate and maintain an extensive vehicle fleet to transport products to and from customer locations in all jurisdictions where we have facilities.
Further, as such laws and regulations change, we may sometimes be required to commit to unplanned capital expenditures in order to continue to comply with workplace safety requirements at our facilities. In addition, we operate and maintain an extensive vehicle fleet to transport products to and from customer locations.
Virgin Islands are territories of the U.S., export markets will close to all live pigs, pork meat and pork byproducts produced in the U.S. if ASF finds its way into Puerto Rico or the U.S. Virgin islands.
Virgin Islands are territories of the U.S., export markets will close to all live pigs, pork meat and pork by-products produced in the U.S. if ASF finds its way into Puerto Rico or the U.S. Virgin islands.
Page 30 Our business may be affected by the impact of animal related disease, such as BSE and other food safety issues.
Our business may be affected by the impact of animal related disease, such as BSE, and by other food safety issues.
The credit agreement governing our Page 34 senior secured credit facilities and the indentures governing our senior notes restrict our ability to use the proceeds from the disposition of assets, debt incurrence or sales of equity to repay other indebtedness.
The credit agreement governing our senior secured credit facilities and certain indentures governing our senior notes restrict our ability to use the proceeds from the disposition of assets, debt incurrence or sales of equity to repay other indebtedness.
The Company’s Fuel Ingredients segment, which converts fats and oils into renewable diesel, organic sludge and food waste into biogas, and fallen stock into low-grade energy sources, is impacted by world energy prices for oil, electricity and natural gas, as well as potential competition from the adoption of non-rendered feedstock in biodiesel markets.
Page 21 The Company’s Fuel Ingredients segment, which converts fats and oils into renewable diesel, SAF, organic sludge and food waste into biogas, and fallen stock into low-grade energy sources, is impacted by world energy prices for oil, electricity and natural gas, as well as potential competition from the adoption of non-rendered feedstock in biofuel markets.
In addition to seasonal impacts, depending upon the location of our facilities and those of our suppliers, our operations could be subject to weather impacts, including the physical impacts of climate changes, changes in rainfall patterns, water shortages, changing sea levels, changing storm patterns and intensities and changing temperature levels.
In addition to seasonal impacts, depending on the location of our facilities and those of our suppliers, our operations could be Page 27 subject to weather impacts, including the physical impacts of climate changes, changes in rainfall patterns, water shortages, changing sea levels, changing storm patterns and intensities and changing temperature levels.
Page 25 Certain of our operating facilities are highly dependent upon a single or a few suppliers. Certain of our operating facilities are highly dependent on one or a few suppliers.
Certain of our operating facilities are highly dependent upon a single or a few suppliers. Certain of our operating facilities are highly dependent on one or a few suppliers.
Business operators must notify EFSA of curtained detailed information concerning any study commissioned or carried out by them to support an application or a notification.
Business operators must notify EFSA of protected and detailed information concerning any study commissioned or carried out by them to support an application or a notification.
Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act 2010, the Brazilian corporate anti-corruption law and similar anti-corruption legislation in many jurisdictions in which we or our joint venture partners operate, as well as economic and trade sanctions enforced by the U.S.
Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act 2010, anti-corruption laws of the EU Member States, the Brazilian corporate anti-corruption law and similar anti-corruption legislation in many jurisdictions in which we or our joint venture partners operate, as well as economic and trade sanctions enforced by the U.S.
Markets and/or prices for our biofuels, biogases and green electricity, including those of DGD, may be impacted by worldwide government policies relating to renewable energy and greenhouse gas emissions (“GHG”).
Markets and/or prices for our biofuels, biogases and green electricity, including those of DGD, may be impacted by government policies around the world relating to renewable energy and greenhouse gas emissions (“GHG”).
As a result, the solvency of EU pension funds are mostly regulated on a national level.
As a result, the solvency of EU pension funds is mostly regulated on a national level.
A majority of the Company’s U.S. volume of animal by-product raw materials, including all of its significant U.S. poultry accounts, and substantially all of the Company’s U.S. bakery feed raw materials, are acquired on a “formula basis,” which allow us to adjust our costs of materials based on changes in the price of our finished products, and are in most cases set forth in contracts with our suppliers, generally with multi-year terms.
A majority of the Company’s U.S. volume of animal by-product raw materials, including its significant U.S. accounts, and substantially all of the Company’s U.S. bakery feed raw materials, are acquired on a “formula basis,” which allows us to adjust our costs of materials based on changes in the price of our finished products, and are in most cases set forth in contracts with our suppliers.
See the section entitled “Risk Factors - Risks Related to the Company-Our biofuels business may be affected by energy policies of U.S. and foreign governments. ” Additionally, there may be new entrants into the renewable fuels industry or new technologies developed that could meet demand for lower-carbon transportation fuels and modes of transportation in a more efficient or less costly manner than our technologies and products, which could also have a material adverse effect on the DGD Joint Venture.
See the section entitled “Risk Factors - Risks Related to the Company-Our renewable energy businesses may be affected by energy policies around the world.” Additionally, there may be new entrants into the renewable fuels industry or new technologies developed that could meet demand for lower-carbon transportation fuels and modes of transportation in a more efficient or less costly manner than our technologies and products, which could also have a material adverse effect on the DGD Joint Venture.
The disease has been detected in both domestic and feral pigs in several EU (primarily Eastern European) Member States in the past years, and the European Union has taken measures to address the “unprecedented spread” of ASF.
The disease has been detected in both domestic and feral pigs in several EU (primarily Eastern European) Member States in the past years, and the EU has taken measures to address the spread of ASF.
Our current financing arrangements permit us to pay cash dividends on our common stock within limitations defined by the terms of our existing indebtedness, including our senior secured credit facility, 6% senior notes due 2030, 5.25% senior notes due 2027 and 3.625% senior notes due 2026 and any other indentures or other financing arrangements that we enter into in the future.
Our current financing arrangements permit us to pay cash dividends on our common stock within limitations defined by the terms of our existing indebtedness, including our senior secured credit facility, and 3.625% senior notes due 2026 and any other indentures or other financing arrangements that we enter into in the future that include similar limitations.
A significant percentage of our revenue is attributable to a limited number of suppliers and customers. In fiscal year 2023, the Company’s top ten customers for finished products accounted for approximately 38% of product sales. In addition, the Company’s top ten raw material suppliers accounted for approximately 27% of its raw material supply in the same period.
A significant percentage of our revenue is attributable to a limited number of suppliers and customers. In fiscal year 2024, the Company’s top ten customers for finished products accounted for approximately 36% of product sales. In addition, the Company’s top ten raw material suppliers accounted for approximately 26% of its raw material supply in the same period.
This damage could adversely affect our financial results. An impairment in the carrying value of our goodwill or other intangible assets may have a material adverse effect on our results of operations. As of December 30, 2023, the Company had approximately $2.5 billion of goodwill.
This damage could adversely affect our financial results. An impairment in the carrying value of our goodwill or other intangible assets may have a material adverse effect on our results of operations. As of December 28, 2024, the Company had approximately $2.3 billion of goodwill.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+0 added−0 removed21 unchanged
Biggest changeIn addition to the Company’s active monitoring of certain critical third-parties for cybersecurity threats and attacks, the Company also has certain critical third-parties who access its information systems subject to controls designed to mitigate risks from cyber-attacks originating within infected third-party information systems. Moreover, the Company conducts diligence of certain of its third-party service providers with attention to cybersecurity risks.
Biggest changeIn addition to the Company’s active monitoring of certain critical third parties for cybersecurity threats and attacks, the Company also has certain critical third parties who access its information systems subject to controls designed to mitigate risks from cyber-attacks originating within infected third-party information systems.
Page 45 The Company implements cybersecurity policies and controls within acquired entities as part of its integration process over time, typically in a phased approach, and with time periods for full execution varying depending on multiple factors, including the size and geographic scope of the acquired entity’s operations; the status of the acquired entity’s security including security systems, tools and personnel; security risks within the acquired entity; and the availability and quality of any interim defenses which can be implemented to protect both the Company and the acquired entity or to prevent threats at the acquired entity from reaching the Company’s systems.
The Company implements cybersecurity policies and controls within acquired entities as part of its integration process over time, typically in a phased approach, and with time periods for full execution varying depending on multiple factors, including the size and geographic scope of the acquired entity’s operations; the status of the acquired entity’s security including security systems, tools and personnel; security risks within the acquired entity; and the availability and quality of any interim defenses which can be implemented to protect both the Company and the acquired entity or to prevent threats at the acquired entity from reaching the Company’s systems.
The Company also has an internal Cybersecurity Committee comprised of leadership across multiple internal functions that meets regularly to review, with the Director of Global Cybersecurity and the Chief Information Officer, active and thwarted cybersecurity incidents, systemic threats, attack trends and techniques, counter and preventative measures and defenses being implemented to enhance security.
Page 47 The Company also has an internal Cybersecurity Committee comprised of leadership across multiple internal functions that meets regularly to review, with the Director of Global Cybersecurity and the Chief Information Officer, active and thwarted cybersecurity incidents, systemic threats, attack trends and techniques, counter and preventative measures and defenses being implemented to enhance security.
Board engagement in these matters includes dialogue and questions, board member insights and perspectives from their industry experience and subject matter expertise and strategic suggestions and considerations for Company management to evaluate, all as part of the board’s oversight of Company cybersecurity risks.
Board engagement in these matters includes dialogue and questions, board member insights and perspectives from their industry experience and subject matter expertise and strategic Page 48 suggestions and considerations for Company management to evaluate, all as part of the board’s oversight of Company cybersecurity risks.
As of the date of this report, we have not identified any risks from cybersecurity threats, including those from any previous cybersecurity incidents, that have materially affected us, our business strategy, results of operation or financial condition.
Moreover, the Company conducts diligence of certain of its third-party service providers with attention to cybersecurity risks. As of the date of this report, we have not identified any risks from cybersecurity threats, including those from any previous cybersecurity incidents, that have materially affected us, our business strategy, results of operation or financial condition.
The Company’s Chief Information Officer and Director of Global Cybersecurity have also had discussions about various cybersecurity topics with a board member in response to requests.
The Company’s Chief Information Officer and Director of Global Cybersecurity are also available to board members to discuss questions concerning cybersecurity matters.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed1 unchanged
Biggest changeLouis, Illinois, United States Animal By-Products Ellenwood, Georgia, United States Animal By-Products Fayetteville, North Carolina, United States Animal By-Products Grapeland, Texas, United States Animal By-Products Hamilton, Michigan, United States Animal By-Products Henderson, Kentucky, United States Fertilizer Henderson, Kentucky, United States Bakery Residuals Hickson, Ontario, Canada Animal By-Products Honey Brook, Pennsylvania, United States Bakery Residuals Houston, Texas, United States Animal By-Products Itauba, Brazil Animal By-Products Jackson, Mississippi, United States Animal By-Products Jaraguari, Brazil Animal By-Products Kansas City, Kansas, United States Animal By-Products Kansas City, Kansas, United States Protein Refining Knoxville, Tennessee, United States Animal By-Products Lewiston, North Carolina, United States Animal By-Products Lexington, Nebraska, United States Animal By-Products Lingen, Germany Blood Linkwood, Maryland, United States Animal By-Products Linville, Virginia, United States Animal By-Products Loenen, Netherlands Animal By-Products Los Angeles, California, United States Animal By-Products Luohe, China Blood Maquoketa, Iowa, United States Blood Marshville, North Carolina, United States Bakery Residuals Maryborough, Australia Blood Maysville, Kentucky, United States Protein Refining Mason City, Illinois, United States Animal By-Products McBride, Missouri, United States Bakery Residuals Mering, Germany Blood Page 48 Mifflintown, Pennsylvania, United States Wet Pet Food Moorefield, Ontario, Canada Animal By-Products Muscatine, Iowa, United States Protein Refining Newark, New Jersey, United States Animal By-Products Newberry, Indiana, United States Animal By-Products North Baltimore, Ohio, United States Bakery Residuals Nova Brescia, Brazil Animal By-Products Omaha, Nebraska, United States Protein Refining Omaha, Nebraska, United States Animal By-Products Osetnica, Poland Animal By-Products Paducah, Kentucky, United States Wet Pet Food Pocahontas, Arkansas, United States * Animal By-Products Ravenna, Nebraska, United States Wet Pet Food Rose Hill, North Carolina, United States Animal By-Products Rose Hill, North Carolina, United States Fat Extraction Russellville, Kentucky, United States Animal By-Products Saint-Catherine, Quebec, Canada* Used Cooking Oil San Angelo, Texas, United States Blood San Francisco, California, United States * Animal By-Products São Domingos do Araguaia, Brazil Animal By-Products Sioux City, Iowa, United States Animal By-Products Smyrna, Georgia, United States Trap Processing Springdale, Arkansas, United States Wet Pet Food Son, Netherlands Animal By-Products Starke, Florida, United States Animal By-Products Suzhou, China Blood Tacoma, Washington, United States * Animal By-Products Tama, Iowa, United States Animal By-Products Tampa, Florida, United States Animal By-Products Terre Hill, Pennsylvania, United States Animal By-Products Truro, Novia Scotia, Canada Used Cooking Oil Tubarão, Brazil Animal By-Products Turlock, California, United States Animal By-Products Turlock, California, United States Fertilizer Uberaba, Brazil Animal By-Products Union City, Tennessee, United States Animal By-Products Usnice, Poland Animal By-Products Veribest, Texas, United States Animal By-Products Wadesborro, North Carolina, United States Animal By-Products Wahoo, Nebraska, United States Animal By-Products Ward, South Carolina, United States Animal By-Products Watts, Oklahoma, United States Bakery Residuals/Protein Refining Wichita, Kansas, United States Animal By-Products Winchester, Virginia, United States Animal By-Products Winesburg, Ohio, United States * Animal By-Products Winnipeg, Manitoba, Canada Animal By-Products Xanxerê, Brazil Animal By-Products Xinguara, Brazil Animal By-Products Food Ingredients Segment Almere, Netherlands Casings Amparo, Brazil Collagen Angouleme, France Collagen Araguaìna, Brazil Collagen Da'an, China Collagen Del Rio Monday, Paraguay Collagen Dubuque, Iowa, United States Collagen Eindhoven, Netherlands Fat Elsholz, Germany Fat Erolzheim, Germany Fat Gent, Belgium Collagen Girona, Spain Collagen Harlingen, Netherlands Fat Page 49 Ilse-Sur-La-Sorgue, France Collagen Ità, Brazil Collagen Kaiping, China Collagen Lubien, Poland Fat Nazàrio, Brazil Collagen Portage, Indiana, United States Collagen Porto, Portugal Casings Presidente Epitacio, Brazil Collagen Sorriso, Brazil Collagen Stoke-on Trent, United Kingdom Bone Versmold, Germany Fat Vuren, Netherlands Bone Wenzhou, China Collagen Fuel Ingredients Segment Antwerp, Belgium Digester Belm-Icker, Germany Bioenergy Denderleeuw, Belgium Bioenergy Denderleeuw, Belgium Digester Jagel, Germany Bioenergy Rotenburg, Germany Bioenergy Son, Netherlands Bioenergy Son, Netherlands Digester * Leased Rent expense for our leased properties was $20.2 million in the aggregate in fiscal 2023.
Biggest changeLouis, Illinois, United States Animal By-Products Ellenwood, Georgia, United States Animal By-Products Fayetteville, North Carolina, United States Animal By-Products Grapeland, Texas, United States Animal By-Products Hamilton, Michigan, United States Animal By-Products Henderson, Kentucky, United States Fertilizer Henderson, Kentucky, United States Bakery Residuals Hickson, Ontario, Canada Animal By-Products Honey Brook, Pennsylvania, United States Bakery Residuals Houston, Texas, United States Animal By-Products Itauba, Brazil Animal By-Products Jackson, Mississippi, United States Animal By-Products Jaraguari, Brazil Animal By-Products Kansas City, Kansas, United States Animal By-Products Kansas City, Kansas, United States Protein Refining Knoxville, Tennessee, United States Animal By-Products Krasnystaw, Poland Animal By-Products Page 49 Lewiston, North Carolina, United States Animal By-Products Lexington, Nebraska, United States Animal By-Products Lingen, Germany Blood Linkwood, Maryland, United States Animal By-Products Linville, Virginia, United States Animal By-Products Loenen, Netherlands Animal By-Products Los Angeles, California, United States Animal By-Products Luohe, China Blood Maquoketa, Iowa, United States Blood Marshville, North Carolina, United States Bakery Residuals Maryborough, Australia Blood Maysville, Kentucky, United States Protein Refining Mason City, Illinois, United States Animal By-Products McBride, Missouri, United States Bakery Residuals Mering, Germany Blood Mifflintown, Pennsylvania, United States Wet Pet Food Mirowice, Poland Animal By-Products Moorefield, Ontario, Canada Animal By-Products Muscatine, Iowa, United States Protein Refining Newark, New Jersey, United States Animal By-Products Newberry, Indiana, United States Animal By-Products North Baltimore, Ohio, United States Bakery Residuals Nova Brescia, Brazil Animal By-Products Omaha, Nebraska, United States Protein Refining Omaha, Nebraska, United States Animal By-Products Osetnica, Poland Animal By-Products Paducah, Kentucky, United States Wet Pet Food Pocahontas, Arkansas, United States * Animal By-Products Pszczonów, Poland Animal By-Products Ravenna, Nebraska, United States Wet Pet Food Rose Hill, North Carolina, United States Animal By-Products/Fat Extraction Russellville, Kentucky, United States Animal By-Products Saint-Catherine, Quebec, Canada* Used Cooking Oil San Angelo, Texas, United States Blood San Francisco, California, United States * Animal By-Products São Domingos do Araguaia, Brazil Animal By-Products Sioux City, Iowa, United States Animal By-Products Smyrna, Georgia, United States Trap Processing Springdale, Arkansas, United States Wet Pet Food Son, Netherlands Animal By-Products Starke, Florida, United States Animal By-Products Suzhou, China Blood Tacoma, Washington, United States * Animal By-Products Tama, Iowa, United States Animal By-Products Tampa, Florida, United States Animal By-Products Terre Hill, Pennsylvania, United States Animal By-Products Truro, Novia Scotia, Canada Used Cooking Oil Tubarão, Brazil Animal By-Products Turlock, California, United States Animal By-Products Turlock, California, United States Fertilizer Uberaba, Brazil Animal By-Products Union City, Tennessee, United States Animal By-Products Usnice, Poland Animal By-Products Veribest, Texas, United States Animal By-Products Wadesborro, North Carolina, United States Animal By-Products Wahoo, Nebraska, United States Animal By-Products Ward, South Carolina, United States Animal By-Products Watts, Oklahoma, United States Bakery Residuals/Protein Refining Wichita, Kansas, United States Animal By-Products Winchester, Virginia, United States Animal By-Products Winesburg, Ohio, United States * Animal By-Products Winnipeg, Manitoba, Canada Animal By-Products Page 50 Xanxerê, Brazil Animal By-Products Xinguara, Brazil Animal By-Products Food Ingredients Segment Almere, Netherlands Casings Amparo, Brazil Collagen Angouleme, France Collagen Araguaìna, Brazil Collagen Da'an, China Collagen Dubuque, Iowa, United States Collagen Eindhoven, Netherlands Fat Elsholz, Germany Fat Erolzheim, Germany Fat Gent, Belgium Collagen Girona, Spain Collagen Harlingen, Netherlands Fat Ilse-Sur-La-Sorgue, France Collagen Ità, Brazil Collagen Kaiping, China Collagen Lubien, Poland Fat Minga Guazú, Paraguay Collagen Nazàrio, Brazil Collagen Portage, Indiana, United States Collagen Porto, Portugal Casings Presidente Epitacio, Brazil Collagen Sorriso, Brazil Collagen Stoke-on Trent, United Kingdom Bone Versmold, Germany Fat Vuren, Netherlands Bone Wenzhou, China Collagen Fuel Ingredients Segment Antwerp, Belgium Digester Belm-Icker, Germany Bioenergy Denderleeuw, Belgium Bioenergy Denderleeuw, Belgium Digester Jagel, Germany Bioenergy Rotenburg, Germany Bioenergy Son, Netherlands Bioenergy Son, Netherlands Digester Świdnica, Poland Bioenergy * Leased Rent expense for our leased properties was $22.1 million in the aggregate in fiscal 2024.
Page 46 Page 47 LOCATION DESCRIPTION Feed Ingredients Segment Albertville, Alabama, United States Bakery Residuals Amarillo, Texas, United States Animal By-Products Aquiraz, Brazil Animal By-Products Baltimore, Maryland, United States Used Cooking Oil Bastrop, Texas, United States Animal By-Products Bellevue, Nebraska, United States Animal By-Products Berlin, Wisconsin, United States Animal By-Products Blue Earth, Minnesota, United States Animal By-Products Blue Island, Illinois, United States Used Cooking Oil/Trap Processing Boa Vista do Sul, Brazil Animal By-Products Boise, Idaho, United States Animal By-Products Burgum, Netherlands Animal By-Products Butler, Kentucky, United States Animal By-Products Butler, Kentucky, United States Bakery Residuals Cacoal, Brazil Animal By-Products Capela de Santana, Brazil Animal By-Products Carambei, Brazil Animal By-Products Clinton, Iowa, United States Animal By-Products Coldwater, Michigan, United States Animal By-Products Collinsville, Oklahoma, United States Animal By-Products Cruzeiro do Sul, Brazil Animal By-Products Cruzeiro do Sul, Brazil Animal By-Products Dallas, Texas, United States Animal By-Products Denver, Colorado, United States Animal By-Products Des Moines, Iowa, United States Animal By-Products Doswell, Virginia, United States Bakery Residuals Dundas, Ontario, Canada Animal By-Products Dourados, Brazil Animal By-Products East Dublin, Georgia, United States Animal By-Products E.
LOCATION DESCRIPTION Feed Ingredients Segment Albertville, Alabama, United States Bakery Residuals Amarillo, Texas, United States Animal By-Products Aquiraz, Brazil Animal By-Products Baltimore, Maryland, United States Used Cooking Oil Bastrop, Texas, United States Animal By-Products Bellevue, Nebraska, United States Animal By-Products Berlin, Wisconsin, United States Animal By-Products Blue Earth, Minnesota, United States Animal By-Products Blue Island, Illinois, United States Used Cooking Oil/Trap Processing Boa Vista do Sul, Brazil Animal By-Products Boise, Idaho, United States Animal By-Products Burgum, Netherlands Animal By-Products Butler, Kentucky, United States Animal By-Products Butler, Kentucky, United States Bakery Residuals Cacoal, Brazil Animal By-Products Capela de Santana, Brazil Animal By-Products Carambei, Brazil Animal By-Products Clinton, Iowa, United States Animal By-Products Coldwater, Michigan, United States Animal By-Products Collinsville, Oklahoma, United States Animal By-Products Cruzeiro do Sul, Brazil Animal By-Products Cruzeiro do Sul, Brazil Animal By-Products Dallas, Texas, United States Animal By-Products Denver, Colorado, United States Animal By-Products Des Moines, Iowa, United States Animal By-Products Doswell, Virginia, United States Bakery Residuals Dundas, Ontario, Canada Animal By-Products Dourados, Brazil Animal By-Products East Dublin, Georgia, United States Animal By-Products E.
ITEM 2. PROPERTIES As of December 30, 2023, the Company’s corporate headquarters is located at 5601 N MacArthur Boulevard, Irving, Texas, 75038. As of December 30, 2023, the Company operates a global network of over 260 locations, including 188 production facilities, across five continents.
ITEM 2. PROPERTIES As of December 28, 2024, the Company’s corporate headquarters is located at 5601 N MacArthur Boulevard, Irving, Texas, 75038. As of December 28, 2024, the Company operates a global network of over 260 locations, including 187 production facilities, across five continents.
All of the processing facilities are owned except for 10 leased facilities and the Company owns and leases a network of transfer stations. The following is a listing of a majority of the Company’s operating plants as of December 30, 2023 by operating segment with a description of the plants principal process.
All of the processing facilities are owned except for 11 leased facilities and the Company owns and leases a network of transfer stations. The following is a listing of a majority of the Company’s operating plants as of December 28, 2024 by operating segment with a description of the plant’s principal process.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

4 edited+0 added−1 removed21 unchanged
Biggest changeAt December 30, 2023 and December 31, 2022, the reserves for insurance, regulatory, governmental, environmental, litigation and tax contingencies reflected on the balance sheet in accrued expenses and other non-current liabilities was approximately $95.1 million and $92.1 million, respectively.
Biggest changeAs a result of the matters discussed above, the Company has established loss reserves for insurance, regulatory, governmental, environmental and litigation. At December 28, 2024 and December 30, 2023, the reserves for insurance, Page 51 regulatory, governmental, environmental and litigation reflected on the balance sheet in accrued expenses and other non-current liabilities was approximately $97.1 million and $95.1 million, respectively.
In March 2016, the Company received another letter from the EPA notifying the Company that it had issued a Record of Decision Page 50 (the “ROD”) selecting a remedy for the lower 8.3 miles of the Lower Passaic River area at an estimated cost of $1.38 billion.
In March 2016, the Company received another letter from the EPA notifying the Company that it had issued a Record of Decision (the “ROD”) selecting a remedy for the lower 8.3 miles of the Lower Passaic River area at an estimated cost of $1.38 billion.
The Company has insurance recovery receivables reflected on the balance sheet in other assets of approximately $36.0 million as of December 30, 2023 and December 31, 2022, related to the insurance contingencies.
The Company has insurance recovery receivables reflected on the balance sheet in other assets of approximately $39.0 million and $36.0 million as of December 28, 2024 and December 30, 2023, related to the insurance contingencies.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. Page 51 PART II
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. Page 52 PART II
Removed
As a result of the matters discussed above, the Company has established loss reserves for insurance, regulatory, governmental, environmental, litigation and tax contingencies.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+4 added−1 removed2 unchanged
Biggest changeIssuer Purchases of Equity Securities On December 9, 2021, the Company’s Board of Directors approved the extension for an additional two years ending August 13, 2024 of its previously announced share repurchase program and refreshed and increased the amount of the program up to an aggregate amount of $500.0 million of the Company’s Common Stock depending on market conditions.
Biggest changeIssuer Purchases of Equity Securities The Company’s Board of Directors approved a share repurchase program in August 2017, which was refreshed on June 21, 2024 up to an aggregate of $500.0 million of the Company’s Common Stock depending on market conditions and extended to August 13, 2026.
Page 52 The stock price performance shown on the following graph only reflects the change in the Company’s stock price relative to the noted indices and is not necessarily indicative of future price performance. EQUITY COMPENSATION PLANS The information required by this Item with respect to Item 201(d) of Regulation S-K appears in Item 12 of this report. ITEM 6.
Page 54 The stock price performance shown on the following graph only reflects the change in the Company’s stock price relative to the noted indices and is not necessarily indicative of future price performance. EQUITY COMPENSATION PLANS The information required by this Item with respect to Item 201(d) of Regulation S-K appears in Item 12 of this report. ITEM 6.
The agreements underlying the Company’s senior secured credit facilities and senior notes permit the Company to pay cash dividends on its common stock within limitations defined in such agreements.
The agreements underlying the Company’s senior secured credit facilities and certain of the Company’s senior notes permit the Company to pay cash dividends on its common stock within limitations defined in such agreements.
Separate from this share repurchase program, a total of 344,522 shares were withheld from equity award recipients to cover payroll taxes on the vesting of shares of restricted stock, restricted stock units, exercised options and the strike price on exercised options during fiscal 2023 pursuant to the terms of our 2017 Omnibus Incentive Plan and 2012 Omnibus plan, as amended.
Separate from this share repurchase program, a total of 215,219 shares were withheld from equity award recipients to cover payroll taxes on the vesting of shares of restricted stock, restricted stock units, exercised options and the strike price on exercised options during fiscal 2024 pursuant to the terms of our 2017 Omnibus Incentive Plan and 2012 Omnibus Incentive Plan, as amended.
Holders The Company has been notified by its stock transfer agent that as of February 22, 2024, there were 80 holders of record of the common stock. Dividend Policy The Company has not paid any dividends on its common stock since January 3, 1989 and does not expect to pay cash dividends in 2024.
Holders The Company has been notified by its stock transfer agent that as of February 20, 2025, there were 77 holders of record of the common stock. Dividend Policy The Company has not paid any dividends on its common stock since January 3, 1989 and does not expect to pay cash dividends in 2025.
Common Stock Performance Graph Set forth below is a line graph comparing the change in the cumulative total stockholder return on the Company’s common stock with the cumulative total return of the Russell 2000 Index and the Dow Jones US Waste and Disposal Service Index for the period from December 29, 2018 to December 30, 2023, assuming the investment of $100 on December 29, 2018 and the reinvestment of dividends.
Common Stock Performance Graph Set forth below is a line graph comparing the change in the cumulative total stockholder return on the Company’s common stock with the cumulative total return of the Russell 2000 Index and the Dow Jones US Waste and Disposal Service Index for the period from December 28, 2019 to December 28, 2024, assuming the investment of $100 on December 28, 2019 and the reinvestment of dividends.
Under this program, we repurchased 926,167 shares for approximately $52.9 million including commissions in fiscal 2023. As of the date of this report, the Company had approximately $321.6 million remaining in its share repurchase program initially approved in August 2017 and subsequently extended to August 13, 2024.
Under this program, we repurchased 958,953 shares for approximately $34.3 million including commissions in fiscal 2024. As of the date of this report, the Company had approximately $494.9 million remaining under the share repurchase program. The following table is a summary of equity securities purchased by the Company during the fourth quarter of fiscal 2024.
Removed
The Company did not purchase any equity securities under the share repurchase program during the fourth quarter of fiscal 2023.
Added
ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as part of Publicly Announced Plans or Programs (4) Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased Under the Plan or Programs at End of Period.
Added
October 2024: September 29, 2024 through October 26, 2024 3,583 $ 37.14 — $ 500,000,000 November 2024: October 27, 2024 through November 23, 2024 519 $ 41.67 — $ 500,000,000 December 2024: November 24, 2024 through December 28, 2024 154,525 $ 33.70 151,970 $ 494,922,461 Total 158,627 (3) $ 35.98 151,970 $ 494,922,461 Page 53 (1) All shares purchased during the fourth quarter were acquired by the Company pursuant to the announced share repurchase program (other than shares withheld for taxes on restricted stock and exercised options and the strike price on exercised options).
Added
(2) The average price paid per share is calculated on a trade date basis and excludes commissions. (3) Includes 6,657 shares withheld for taxes on restricted stock and options.
Added
(4) Represents purchases made during the quarter under the authorization from the Company's Board of Directors, as announced, to repurchase up to an aggregate of $500 million of the Company's common stock over the period ending August 13, 2026, unless extended or shortened by the Board of Directors.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

140 edited+19 added−13 removed110 unchanged
Biggest changeIn thousands, except for percentages Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Fiscal Year Ended December 30, 2023 Net Sales $ 4,472,592 $ 1,752,065 $ 563,423 $ — $ 6,788,080 Cost of sales and operating expenses 3,385,859 1,310,581 446,620 — 5,143,060 Gross Margin 1,086,733 441,484 116,803 — 1,645,020 Gross Margin % 24.3 % 25.2 % 20.7 % — % 24.2 % Loss/(gain) on sale of assets 814 (8,144) (91) — (7,421) Selling, general and administrative expenses 310,363 128,464 23,543 80,164 542,534 Restructuring and asset impairment charges 4,026 14,527 — — 18,553 Depreciation and amortization 360,249 94,991 34,466 12,309 502,015 Acquisition and integration costs — — — 13,884 13,884 Change in fair value of contingent consideration (7,891) — — — (7,891) Equity in net income of Diamond Green Diesel — — 366,380 — 366,380 Segment operating income/ (loss) 419,172 211,646 425,265 (106,357) 949,726 Equity in net income of other unconsolidated subsidiaries 5,011 — — — 5,011 Segment income/(loss) 424,183 211,646 425,265 (106,357) 954,737 In thousands, except for percentages Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Fiscal Year Ended December 31, 2022 Net Sales $ 4,539,000 $ 1,459,630 $ 533,574 $ — $ 6,532,204 Cost of sales and operating expenses 3,473,506 1,102,250 426,853 — 5,002,609 Gross Margin 1,065,494 357,380 106,721 — 1,529,595 Gross Margin % 23.5 % 24.5 % 20.0 % — % 23.4 % Gain on sale of assets (3,426) (1,008) (60) — (4,494) Selling, general and administrative expenses 258,781 101,681 13,690 62,456 436,608 Restructuring and asset impairment charges 8,557 21,109 — — 29,666 Depreciation and amortization 295,249 59,029 29,500 10,943 394,721 Acquisition and integration costs — — — 16,372 16,372 Equity in net income of Diamond Green Diesel — — 372,346 — 372,346 Segment operating income/(loss) 506,333 176,569 435,937 (89,771) 1,029,068 Equity in net income of other unconsolidated subsidiaries 5,102 — — — 5,102 Segment income/(loss) 511,435 176,569 435,937 (89,771) 1,034,170 Feed Ingredients Segment Raw material volume .
Biggest changeIn thousands, except for percentages Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Fiscal Year Ended December 28, 2024 Total net sales $ 3,675,609 $ 1,489,101 $ 550,465 $ — $ 5,715,175 Cost of sales and operating expenses (1) 2,886,125 1,115,348 435,864 — 4,437,337 Gross Margin 789,484 373,753 114,601 — 1,277,838 Gross Margin % 21.5 % 25.1 % 20.8 % — % 22.4 % Gain on sale of assets (669) (1,758) (1,730) — (4,157) Selling, general and administrative expenses (2) 279,095 119,604 32,370 61,036 492,105 Restructuring and asset impairment charges 3,671 2,123 — — 5,794 Depreciation and amortization 350,141 109,102 35,876 8,706 503,825 Acquisition and integration costs — — — 7,842 7,842 Change in fair value of contingent consideration (46,706) — — — (46,706) Equity in net income of Diamond Green Diesel — — 149,082 — 149,082 Segment operating income/ (loss) 203,952 144,682 197,167 (77,584) 468,217 Equity in net income of other unconsolidated subsidiaries 11,994 — — — 11,994 Segment income/(loss) 215,946 144,682 197,167 (77,584) 480,211 In thousands, except for percentages Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Fiscal Year Ended December 30, 2023 Total net sales $ 4,472,592 $ 1,752,065 $ 563,423 $ — $ 6,788,080 Cost of sales and operating expenses (1) 3,385,859 1,310,581 446,620 — 5,143,060 Gross Margin 1,086,733 441,484 116,803 — 1,645,020 Gross Margin % 24.3 % 25.2 % 20.7 % — % 24.2 % Loss/(gain) on sale of assets 814 (8,144) (91) — (7,421) Selling, general and administrative expenses (2) 310,363 128,464 23,543 80,164 542,534 Restructuring and asset impairment charges 4,026 14,527 — — 18,553 Depreciation and amortization 360,249 94,991 34,466 12,309 502,015 Acquisition and integration costs — — — 13,884 13,884 Change in fair value of contingent consideration (7,891) — — — (7,891) Equity in net income of Diamond Green Diesel — — 366,380 — 366,380 Segment operating income/(loss) 419,172 211,646 425,265 (106,357) 949,726 Equity in net income of other unconsolidated subsidiaries 5,011 — — — 5,011 Segment income/(loss) 424,183 211,646 425,265 (106,357) 954,737 (1) Cost of sales and operating expenses includes the cost of raw materials, collection costs of the raw materials and factory expenses including direct labor.
The Feed Ingredients operating segment includes the Company’s global activities related to (i) the collection and processing of beef, poultry and pork animal by-products in North America, Europe and South America into non-food grade oils and protein meals, (ii) the collection and processing of bakery residuals in North America into Cookie Meal®, which is predominantly used in poultry and swine rations, (iii) the collection and processing of used cooking oil in North America and South America into non-food grade fats, (iv) the collection and processing of porcine and bovine blood in China, Europe, North America and Australia into blood plasma powder and hemoglobin, (v) the processing of selected portions of slaughtered animals into a variety of meat products for use in pet food in Europe, North America and South America, (vi) the processing of cattle hides and hog skins in North America, (vii) the production of organic fertilizers using protein produced from the Company’s animal by-products processing activities in North America and Europe, (viii) the rearing and processing of black soldier fly larvae into specialty proteins for use in animal feed and pet food in North America, and (ix) the provision of grease trap services to food service establishments in North America.
The Feed Ingredients operating segment includes the Company’s global activities related to (i) the collection and processing of beef, poultry and pork animal by-products in North America, Europe and South America into non-food grade oils and protein meals, (ii) the collection and processing of bakery residuals in North America into Cookie Meal®, which is predominantly used in poultry and swine rations, (iii) the collection and processing of used cooking oil in North America and South America into non-food grade fats, (iv) the collection and processing of porcine and bovine blood in China, Europe, North America and Australia into blood plasma powder and hemoglobin, (v) the processing of selected portions of slaughtered animals into a variety of meat products for use in pet food in Europe, North America and South America, (vi) the processing of cattle hides and hog skins in North America, (vii) the production of organic fertilizers using protein produced from the Company’s animal by-products processing activities in North America and Europe, (viii) the rearing and processing of black soldier fly larvae into specialty proteins and fats for use in animal feed and pet food in North America, and (ix) the provision of grease trap services to food service establishments in North America.
The Food Ingredients operating segment includes the Company’s global activities related to (i) the purchase and processing of beef and pork bone chips, beef hides, pig skins, and fish skins into collagen in Europe, China, South America and North America, (ii) the collection and processing of porcine and bovine intestines into natural casings in Europe, China and North America, (iii) the extraction and processing of porcine mucosa into crude heparin in Europe, (iv) the collection and refining of animal fat into food grade fat in Europe, and (v) the processing of bones to bone chips for the collagen industry and bone ash in Europe.
The Food Ingredients operating segment includes the Company’s global activities related to (i) the purchase and processing of beef and pork bone chips, beef hides, pig skins, and fish skins into collagen in Europe, China, South America and North America, (ii) the collection and processing of porcine and bovine intestines into natural casings in Europe and China, (iii) the extraction and processing of porcine mucosa into crude heparin in Europe, (iv) the collection and refining of animal fat into food grade fat in Europe, and (v) the processing of bones to bone chips for the collagen industry and bone ash in Europe.
Although the costs of raw materials for the Feed Ingredients segment are generally based upon actual or anticipated finished goods selling prices, rapid and material changes in finished goods prices, including competing agricultural-based alternative ingredients, generally have an immediate and often times, material impact on the Company’s gross margin and profitability resulting from the brief lapse of time between the procurement of the raw materials and the sale of the finished goods.
Although the costs of raw materials for the Feed Ingredients segment are generally based upon actual or anticipated finished goods selling prices, rapid and material changes in finished goods prices, including competing agricultural-based alternative ingredients, generally have an immediate and often times, material impact on the Company’s gross margin and profitability resulting from the lapse of time between the procurement of the raw materials and the sale of the finished goods.
Any of a decline in raw material availability, a decline in agricultural-based alternative ingredients prices, increases in energy prices or the impact of U.S. and foreign regulation (including, without limitation, China), changes in foreign exchange rates, imposition of currency controls and currency devaluations has the potential to adversely impact the Company’s liquidity.
Any of a decline in raw material availability, a decline in agricultural-based alternative ingredients prices, increases in energy prices or the impact of U.S. and foreign regulation or tariffs (including, without limitation, China), changes in foreign exchange rates, imposition of currency controls and currency devaluations has the potential to adversely impact the Company’s liquidity.
Sales prices for the principal products that the Company sells are typically influenced by sales prices for agricultural-based ingredients, the prices of which are based on established commodity markets and are subject to volatile changes. Any decline in these prices has the potential to adversely impact the Company’s liquidity.
Sales prices for many of the principal products that the Company sells are typically influenced by sales prices for agricultural-based ingredients, the prices of which are based on established commodity markets and are subject to volatile changes. Any decline in these prices has the potential to adversely impact the Company’s liquidity.
The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below under the heading “Forward Looking Statements” and in Item 1A of this report under the heading “Risk Factors.” Fiscal Year 2023 Overview The Company is a global developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a wide range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy and fertilizer industries.
The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below under the heading “Forward Looking Statements” and in Item 1A of this report under the heading “Risk Factors.” Fiscal Year 2024 Overview The Company is a global developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a wide range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy and fertilizer industries.
In fiscal 2023, the Company performed a quantitative approach to valuing goodwill and indefinite-lived intangible assets at October 28, 2023 and as a result determined the fair values of the Company’s reporting units containing goodwill exceeded the related carrying values.
In fiscal 2023, the Company performed a quantitative approach to valuing goodwill and indefinite-lived intangible assets at October 28, 2023 and as a result determined that fair values of the Company’s reporting units containing goodwill exceeded the related carrying values.
In fiscal 2022 and fiscal 2023, the Company completed several acquisitions including two significant rendering operations, Valley Proteins in North America (the “Valley Acquisition”) and the FASA Group in South America (the “FASA Acquisition”), and a significant collagen operation with processing located in South America and North America (the “Gelnex Acquisition”).
In fiscal 2022 and fiscal 2023, the Company completed several acquisitions including two significant rendering operations, Valley Proteins in North America (the “Valley Acquisition”) and the FASA Group in South America (the “FASA Acquisition”), and a significant collagen operation, Gelnex, with processing located in South America and North America (the “Gelnex Acquisition”).
These factors, coupled with volatile prices for natural gas and diesel fuel, currency exchange fluctuations, general performance of the U.S. and global economies, disturbances in world financial, credit, commodities and stock markets, and any decline in consumer confidence, including the inability of consumers and companies to obtain credit due to lack of liquidity in the financial markets, among others, could negatively impact the Company’s results of operations in fiscal year 2024 and thereafter.
These factors, coupled with volatile prices for natural gas and diesel fuel, currency exchange fluctuations, general performance of the U.S. and global economies, disturbances in world financial, credit, commodities and stock markets, and any decline in consumer confidence, including the inability of consumers and companies to obtain credit due to lack of liquidity in the financial markets, among others, could negatively impact the Company’s results of operations in fiscal year 2025 and thereafter.
GAAP measures These indicators and their importance are discussed below. Page 56 Finished Product Commodity Prices Prices for finished product commodities that the Company produces in the Feed Ingredients segment are reported each business day on the Jacobsen Index (the “Jacobsen”), an established North American trading price publisher. The Jacobsen reports industry sales from the prior day's activity by product.
GAAP measures These indicators and their importance are discussed below. Page 58 Finished Product Commodity Prices Prices for finished product commodities that the Company produces in the Feed Ingredients segment are reported each business day on the Jacobsen Index (the “Jacobsen”), an established North American trading price publisher. The Jacobsen reports industry sales from the prior day's activity by product.
Additionally, the Company evaluates the impact of foreign currency exchange on operating cash flow, which is defined as segment operating income (loss) plus depreciation and amortization.
Additionally, the Company evaluates the impact of foreign exchange on operating cash flow, which is defined as segment operating income (loss) plus depreciation and amortization.
The effective tax rate for fiscal year 2023 differs from the statutory rate of 21% due primarily to biofuel tax incentives, the relative mix of earnings among jurisdictions with different tax rates, state income taxes, certain taxable income Page 60 inclusion items in the U.S. based on foreign earnings and losses that provided no tax benefit.
The effective tax rate for fiscal year 2023 differs from the statutory rate of 21% due primarily to biofuel tax incentives, the relative mix of earnings among jurisdictions with different tax rates, state income taxes, certain taxable income inclusion items in the U.S. based on foreign earnings and losses that provided no tax benefit.
However, the amounts shown below for Adjusted EBITDA differ from the amounts calculated under similarly titled definitions in the Company’s Senior Secured Credit Facilities, 6% Notes, 5.25% Notes and 3.625% Notes, as those definitions permit further adjustments to reflect certain other non-recurring costs, non-cash charges and cash dividends from the DGD Joint Venture.
However, the amounts shown below for Adjusted EBITDA differ from the amounts calculated under similarly titled definitions in the Company’s Senior Secured Credit Facilities, 6% Notes, 5.25% Notes and 3.625% Notes, as those definitions permit further adjustments to reflect certain other nonrecurring costs, non-cash charges and cash dividends from the DGD Joint Venture.
The Amended Credit Agreement also permits Darling and the other borrowers thereunder to incur ancillary facilities provided by any revolving lender party to the Senior Secured Credit Facilities (with certain restrictions). Up to $1.46 billion of the revolving credit facility is available to be borrowed by Darling, Darling Canada, Darling NL, Darling Ingredients International Holding B.V.
The Amended Credit Agreement also permits Darling and the other borrowers thereunder to incur ancillary facilities provided by any revolving lender party to the Senior Secured Credit Facilities (with certain restrictions). Up to $1.46 billion of the revolving credit facility is available to be borrowed by Darling, Darling Page 65 Canada, Darling NL, Darling Ingredients International Holding B.V.
On June 23, 2023, the DGD Joint Venture entered into an amended and restated credit agreement for $400.0 million senior, unsecured revolving credit facility, with CoBank ACB acting as lead arranger and the administrative agent for the lending group, which is comprised of Farm Credit System institutions.
On June 23, 2023, the DGD Joint Venture entered into an amended and restated credit agreement consisting of a $400.0 million senior, unsecured revolving credit facility, with CoBank ACB acting as lead arranger and the administrative agent for the lending group, which is comprised of Farm Credit System institutions.
The Company has also attempted to structure the Company’s consolidated indebtedness in such a way as to maximize the Company’s ability to move cash from the Company’s subsidiaries to Darling or another subsidiary that will have fewer limitations on the ability to make upstream payments, whether to Darling or directly to the Company’s lenders as a Guarantor.
The Company has also attempted to structure the Company’s consolidated indebtedness in such a way as to maximize the Company’s ability to move cash from the Company’s subsidiaries to Darling or another subsidiary that will have fewer limitations on the ability to Page 67 make upstream payments, whether to Darling or directly to the Company’s lenders as a Guarantor.
During the measurement period, not to exceed one year Page 69 from the date of the acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date.
During the measurement period, not to exceed one year from the date of the acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date.
In the fourth quarter of fiscal 2023, the Company’s management decided to close or transfer operations for three feed segment locations in the U.S. for optimization opportunities. As a result, the Company incurred asset impairment charges to its feed segment long-lived assets of approximately $2.9 million.
In fiscal 2023, the Company’s management decided to close or transfer operations for three feed segment locations in the U.S. for optimization opportunities. As a result, the Company incurred asset impairment charges to its feed segment long-lived assets of approximately $2.9 million in fiscal 2023.
The Company’s operating results can vary significantly due to changes in factors such as the fluctuation in commodity prices and energy prices, weather conditions, crop harvests, Page 55 government policies and programs, changes in global demand, changes in standards of living, protein consumption, and global production of competing ingredients.
The Company’s operating results can vary significantly due to changes in factors such as the fluctuation in commodity prices and energy prices, weather conditions, crop harvests, Page 57 government policies and programs, changes in global demand, changes in standards of living, protein consumption, and global production of competing ingredients.
In addition, certain of the Company’s premium branded finished products may sell at prices that may be higher than the closest product on the related Jacobsen or Reuters index. During fiscal year 2023, the Company’s actual sales prices by product trended with the disclosed Jacobsen and Reuters prices.
In addition, certain of the Company’s premium branded finished products may sell at prices that may be higher than the closest product on the related Jacobsen or Reuters index. During fiscal year 2024, the Company’s actual sales prices by product trended with the disclosed Jacobsen and Reuters prices.
It is possible, depending upon a number of factors that are not determinable at this time or within the control of the Company, that the fair value of these three reporting units could decrease in the future and result in an impairment to goodwill.
It is possible, depending upon a number of factors that are not determinable at this time or within the control of the Company, that the fair value of these two reporting units could decrease in the future and result in an impairment to goodwill.
In addition, in the second quarter of fiscal 2022, the Company lost a large raw material customer at a plant location in Canada that resulted in a long-lived asset impairment charge in the feed segment of approximately $8.6 million.
In addition, in the second quarter of fiscal 2022, the Company lost a large raw material customer at a Page 72 plant location in Canada that resulted in a long-lived asset impairment charge in the feed segment of approximately $8.6 million.
Page 54 Corporate Activities principally includes unallocated corporate overhead expenses, acquisition-related expenses, interest expense net of interest income, and other non-operating income and expenses. Economic Conditions and Uncertainties Global Economic Conditions We operate globally and have operations in numerous countries.
Page 56 Corporate Activities principally includes unallocated corporate overhead expenses, acquisition-related expenses, interest expense net of interest income, and other non-operating income and expenses. Economic Conditions and Uncertainties Global Economic Conditions We operate globally and have operations in numerous countries.
Consequently, the Company’s gross margin and profitability in this segment can be influenced by the movement of finished goods prices from the time the raw materials were procured until the finished goods are sold. The Company’s Fuel Ingredients segment converts fats into renewable diesel, organic sludge and food waste into biogas, and fallen stock into low-grade energy sources.
Consequently, the Company’s gross margin and profitability in this segment can be influenced by the movement of finished goods prices from the time the raw materials were procured until the finished goods are sold. The Company’s Fuel Ingredients segment converts fats into renewable fuels/products, organic sludge and food waste into biogas, and fallen stock into low-grade energy sources.
Charles Plant, the Company contributed a total of approximately $111.7 million for completion of the DGD St. Charles Plant, and each partner has subsequently made $528.8 million in additional capital contributions to the DGD Joint Venture.
Charles Plant, the Company contributed a total of approximately $111.7 million for completion of the DGD St. Charles Plant, and each partner has subsequently made $618.8 million in additional capital contributions to the DGD Joint Venture.
Darling has also stepped up collection efforts by providing indoor used cooking oil collection units in exchange for extended collection Page 67 contracts at eating establishments and has moved to more of a centralized digital marketing effort with restaurant chains and franchise groups and invested in internet search engine key words to improve visibility with restaurants.
Darling has also stepped up collection efforts by providing indoor used cooking oil collection units in exchange for extended collection contracts at restaurant establishments and has moved to more of a centralized digital marketing effort with restaurant chains and franchise groups and invested in internet search engine key words to improve visibility with restaurants.
The Fuel Ingredients operating segment includes the Company’s global activities related to (i) the Company’s share of the results of its equity investment in Diamond Green Diesel Holdings LLC, a joint venture with Valero Energy Corporation (“Valero”) to convert animal fats, recycled greases, used cooking oil, inedible corn oil, soybean oil, or other feedstocks that become economically and commercially viable into renewable diesel (“DGD” or the “DGD Joint Venture”) as described in Note 1 and Note 2 to the Company’s Consolidated Financial Statements for the period ended December 30, 2023 included herein, (ii) the conversion of organic sludge and food waste into biogas in Europe, (iii) the collection and conversion of fallen stock and certain animal by-products pursuant to applicable E.U. regulations into low-grade energy sources to be used in industrial applications, and (iv) the processing of manure into natural bio-phosphate in Europe.
The Fuel Ingredients operating segment includes the Company’s global activities related to (i) the Company’s share of the results of its equity investment in Diamond Green Diesel Holdings LLC, a joint venture with Valero Energy Corporation (“Valero”) to convert animal fats, recycled greases, used cooking oil, inedible corn oil, soybean oil, or other feedstocks that become economically and commercially viable into renewable fuels/products, such as renewable diesel and SAF (“DGD” or the “DGD Joint Venture”) as described in Note 1 and Note 2 to the Company’s Consolidated Financial Statements for the period ended December 28, 2024 included herein, (ii) the conversion of organic sludge and food waste into biogas in Europe, (iii) the collection and conversion of fallen stock and certain animal by-products pursuant to applicable E.U. regulations into low-grade energy sources to be used in industrial applications, and (iv) the processing of manure into natural bio-phosphate in Europe.
As of the date of this report, no decision has been made as to non-ordinary course material cash usages at this time; however, potential usages could include: opportunistic capital expenditures and/or acquisitions and joint ventures; investments relating to the Company’s renewable energy strategy, including, without limitation, potential required funding obligations with respect to the DGD Joint Venture SAF project or potential investments in additional renewable diesel or SAF projects; investments in response to governmental regulations relating to human and animal food safety or other regulations; unexpected funding required by the legislation, regulation or mass termination of multiemployer plans; and paying dividends or repurchasing stock, subject to limitations under the Amended Credit Agreement, the 6% Indenture, the 5.25% Indenture and the 3.625% Indenture, as well as suitable cash conservation to withstand adverse commodity cycles.
As of the date of this report, no decision has been made as to non-ordinary course material cash usages at this time; however, potential usages could include: opportunistic capital expenditures and/or acquisitions and joint ventures; investments relating to the Company’s renewable energy strategy, including, without limitation, potential investments in additional renewable diesel or SAF projects; investments in response to governmental regulations relating to human and animal food safety or other regulations; unexpected funding required by the legislation, regulation or mass termination of multiemployer plans; and paying dividends or repurchasing stock, subject to limitations under the Amended Credit Agreement, the 6% Indenture, the 5.25% Indenture and the 3.625% Indenture, as well as suitable cash conservation to withstand adverse commodity cycles.
A decline in commodities prices, a rise in Page 68 energy prices, a slowdown in the U.S. or international economy, high inflation rates or other factors, could cause the Company to fail to meet management's expectations or could cause liquidity concerns.
A decline in commodities prices, a rise in energy prices, a slowdown in the U.S. or international economy, high inflation rates or other factors, could cause the Company to fail to meet management's expectations or could cause liquidity concerns.
See “Risk Factors - Our business may be adversely impacted by fluctuations in foreign currency exchange rates, which could affect our ability to comply with our financial covenants” and “- Our ability to repay our indebtedness depends in part on the performance of our subsidiaries, including our non-guarantor subsidiaries, and their ability to make payments” in Item 1A of this Annual Report on Form 10-K for the fiscal year ended December 30, 2023.
See “Risk Factors - Our business may be adversely impacted by fluctuations in foreign currency exchange rates, which could affect our ability to comply with our financial covenants” and “- Our ability to repay our indebtedness depends in part on the performance of our subsidiaries, including our non-guarantor subsidiaries, and their ability to make payments” in Item 1A of this Annual Report on Form 10-K for the fiscal year ended December 28, 2024.
Equity in Net Income of Other Unconsolidated Subsidiaries. The change in this line item is not significant and primarily represents the Company’s pro rata share of the net income from its foreign unconsolidated subsidiaries. Income Taxes.
Equity in Net Income of Other Unconsolidated Subsidiaries. The change in this line item is not significant and primarily represents the Company’s pro rata share of the net income from its foreign unconsolidated subsidiaries. Page 62 Income Taxes.
The self-insurance reserve is composed of estimated liability for claims arising for workers’ compensation and for auto liability and general liability claims. The self-insurance reserve liability is determined annually, based upon a third-party actuarial estimate.
The self-insurance reserve is composed of estimated liability for claims arising for workers’ compensation, auto liability, general liability and medical claims liability. The self-insurance reserve liability and medical claims liability are determined annually, based upon a third-party actuarial estimate.
Cash Flows and Liquidity Risks Management believes that the Company’s cash flows from operating activities consistent with the level generated in fiscal year 2023, unrestricted cash and funds available under the Amended Credit Agreement, will be sufficient to meet the Company’s working capital needs and maintenance and compliance-related capital expenditures, scheduled debt and interest payments, income tax obligations, and other contemplated needs through the next twelve months.
Page 70 Cash Flows and Liquidity Risks Management believes that the Company’s cash flows from operating activities consistent with the level generated in fiscal year 2024, unrestricted cash and funds available under the Amended Credit Agreement, will be sufficient to meet the Company’s working capital needs and maintenance and compliance-related capital expenditures, scheduled debt and interest payments, income tax obligations, and other contemplated needs through the next twelve months.
When assessing the recoverability of goodwill and other indefinite lived intangible assets, the Company may first assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit, including goodwill, or an other indefinite lived intangible asset is less than its carrying amount.
When assessing the recoverability of goodwill and other indefinite lived intangible assets, the Company may first assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit, including goodwill, or other indefinite lived intangible assets are less than its carrying amount.
The term A-1 facility borrowings are repayable in quarterly installments of 0.25% of the aggregate principle amount of the relevant term A-1 facility on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter following the second anniversary of December 9, 2021 and continuing until the last day of such quarterly period ending immediately prior to the term A-1 facility maturity date of December 9, 2026 and one final installment in the amount of the term A-1 facility then outstanding, due and payable on December 9, 2026. • As of December 30, 2023, the Company has borrowed all $500.0 million under the terms of the term A-2 facility and has repaid $18.8 million, which when repaid by the Company cannot be reborrowed.
The term A-1 facility borrowings are repayable in quarterly installments of 0.25% of the aggregate principle amount of the relevant term A-1 facility on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter following the second anniversary of December 9, 2021 and continuing until the last day of such quarterly period ending immediately prior to the term A-1 facility maturity date of December 9, 2026 and one final installment in the amount of the term A-1 facility then outstanding, due and payable on December 9, 2026. • As of December 28, 2024, the Company has borrowed all $500.0 million under the terms of the term A-2 facility and has repaid $28.1 million, which when repaid by the Company cannot be reborrowed.
No assurance can be given that the minimum pension funding requirements will not increase in the future. The Company has made required and tax deductible discretionary contributions to its domestic pension plans in fiscal year 2023 and fiscal year 2022 of approximately $0.2 million and $2.0 million, respectively.
No assurance can be given that the minimum pension funding requirements will not increase in the future. The Company has made required and tax deductible discretionary contributions to its domestic pension plans in fiscal year 2024 and fiscal year 2023 of approximately $0.4 million and $0.2 million, respectively.
Numerous factors could have adverse consequences to the Company that cannot be estimated at this time, such as negative impacts from the Russia-Ukraine war and the Israeli-Palestinian conflict and those other factors discussed below under the heading “Forward Looking Statements”.
Numerous factors could have adverse consequences to the Company that cannot be estimated at this time, such as negative impacts from the Russia-Ukraine war, the Israeli-Palestinian conflict and other Middle Eastern conflicts and those other factors discussed below under the heading “Forward Looking Statements”.
Certain of the policies require management to make significant and subjective estimates or assumptions regarding uncertainties, including the business and economic uncertainty resulting from the Russia-Ukraine war and the Israeli-Palestinian conflict and associated conflicts and the high interest rate and inflationary cost environment, and as a result, such estimates may deviate from actual results and significantly impact our financial results.
Certain of the policies require management to make significant and subjective estimates or assumptions regarding uncertainties, including the business and economic uncertainty resulting from the Russia-Ukraine war, the Israeli-Palestinian conflict and other Middle Eastern conflicts and the high interest rate and inflationary cost environment, and as a result, such estimates may deviate from actual results and significantly impact our financial results.
Disturbances in world financial, credit, commodities and stock markets, including inflationary, deflationary and recessionary conditions, could have a negative impact on the Company’s results of operations. Any such disturbances or disruptions may also magnify the impact of other risks described in this Annual Report on Form 10-K for the fiscal year ended December 30, 2023.
Disturbances in world financial, credit, commodities and stock markets, including inflationary, deflationary and recessionary conditions, could have a negative impact on the Company’s results of operations. Any such disturbances or disruptions may also magnify the impact of other risks described in this Annual Report on Form 10-K for the fiscal year ended December 28, 2024.
Average Jacobsen and Reuters prices (at the specified delivery point) for fiscal year 2023, compared to average Jacobsen and Reuters prices for fiscal year 2022 are as follows: Avg. Price Fiscal Year 2023 Avg.
Average Jacobsen and Reuters prices (at the specified delivery point) for fiscal year 2024, compared to average Jacobsen and Reuters prices for fiscal year 2023 are as follows: Avg. Price Fiscal Year 2024 Avg.
Non-food grade oils and fats produced and marketed by the Company are principally sold to third parties to be used as ingredients in animal feed and pet food, as an ingredient for the production of renewable diesel and biodiesel, or to the oleo-chemical industry to be used as an ingredient in a wide variety of industrial applications.
Non-food grade oils and fats produced and marketed by the Company are principally sold to third parties to be used as ingredients in animal feed and pet food, as an ingredient for the production of biofuels (such as renewable diesel and SAF), or to the oleo-chemical industry to be used as an ingredient in a wide variety of industrial applications.
Management believes that Adjusted EBITDA is useful in evaluating the Company’s operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of financing, income taxes and certain non-cash and other items that may vary for different companies for reasons unrelated to overall operating performance.
Management believes that Adjusted EBITDA is useful in evaluating the Company's operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of financing, income taxes, non-cash and certain other items that may vary for different companies for reasons unrelated to overall operating performance and also believes this information is useful to investors.
As of December 30, 2023, under the equity method of accounting the Company has an investment in the DGD Joint Venture of approximately $2.2 billion included on the consolidated balance sheet. The Company’s original investment in DGD has expanded since 2011 to the point that it is now integral to how the Company operates its business.
As of December 28, 2024, under the equity method of accounting the Company has an investment in the DGD Joint Venture of approximately $2.2 billion included on the Consolidated Balance Sheet. The Company’s original investment in DGD has expanded since 2011 to the point that it is now integral to how the Company operates its business.
The Amended Credit Agreement provides for senior secured credit facilities in the aggregate principal amount of $3.725 billion comprised of (i) the Company’s $525.0 million term loan B facility, (ii) the Company’s $400.0 million term A-1 facility, (iii) the Company’s $500.0 million term A-2 facility, (iv) the Company’s $300.0 million term A-3 facility, (v) the Company’s $500.0 million term A-4 facility and (vi) the Company’s $1.5 billion five-year revolving credit facility (up to $150.0 million of which will be available for a letter of credit sub-limit and $50.0 million of which will be available for a swingline sub-limit) (collectively, the “Senior Secured Credit Facilities”).
The Amended Credit Agreement provides for senior secured credit facilities in the aggregate principal amount of $3.725 billion, which matures on December 9, 2026 and is comprised of (i) the Company’s $525.0 million term loan B facility, (ii) the Company’s $400.0 million term A-1 facility, (iii) the Company’s $500.0 million term A-2 facility, (iv) the Company’s $300.0 million term A-3 facility, (v) the Company’s $500.0 million term A-4 facility and (vi) the Company’s $1.5 billion five-year revolving credit facility (up to $150.0 million of which will be available for a letter of credit sub-limit and $50.0 million of which will be available for a swingline sub-limit) (collectively, the “Senior Secured Credit Facilities”).
In addition to those factors discussed under the heading “Risk Factors” in Item 1A of this report and elsewhere in this report, and in the Company’s other public filings with the SEC, important factors that could cause actual results to differ materially from the Company’s expectations include: existing and unknown future limitations on the ability of the Company’s direct and indirect subsidiaries to make their cash flow available to the Company for payments on the Company’s indebtedness or other purposes; reduced demands or prices for biofuels, biogases or renewable electricity; global demands for grain and Page 71 oilseed commodities, which have exhibited volatility, and can impact the cost of feed for cattle, hogs and poultry, thus affecting available rendering feedstock and selling prices for the Company’s products; reductions in raw material volumes available to the Company due to weak margins in the meat production industry as a result of higher feed costs, reduced consumer demand, reduced volume due to government regulations affecting animal production or other factors, reduced volume from food service establishments, or otherwise; reduced demand for animal feed; reduced finished product prices, including a decline in fat, used cooking oil, protein or collagen (including, without limitation, collagen peptides and gelatin) finished product prices; changes to government policies around the world relating to renewable fuels and GHG emissions that adversely affect prices, margins or markets (including for the DGD Joint Venture), including programs like the U.S. government's renewable fuel standard, low carbon fuel standards (“LCFS”) and tax credits for biofuels both in the United States and abroad; climate related adverse results, including with respect to the Company’s climate goals, targets or commitments; possible product recall resulting from developments relating to the discovery of unauthorized adulterations to food or food additives or products which do not meet specifications, contract requirements or regulatory standards; the occurrence of 2009 H1N1 flu (initially known as Swine Flu), highly pathogenic strains of avian influenza (collectively known as Bird Flu), SARS, BSE, PED or other diseases associated with animal origin in the United States or elsewhere, such as the outbreak of ASF in China and elsewhere; the occurrence of pandemics, epidemics or disease outbreaks, such as the COVID-19 outbreak; unanticipated costs and/or reductions in raw material volumes related to the Company’s compliance with the existing or unforeseen new U.S. or foreign (including, without limitation, China) regulations (including new or modified animal feed, Bird Flu, SARS, PED, BSE or ASF or similar or unanticipated regulations) affecting the industries in which the Company operates or its value added products; risks associated with the DGD Joint Venture, including possible unanticipated operating disruptions, a decline in margins on the products produced by the DGD Joint Venture and issues relating to the announced SAF upgrade project; risks and uncertainties relating to international sales and operations, including imposition of tariffs, quotas, trade barriers and other trade protections imposed by foreign countries; tax changes, such as the introduction of a global minimum tax; difficulties or a significant disruption (including, without limitation, due to cyber-attack) in the Company’s information systems, networks or the confidentiality, availability or integrity of our data or failure to implement new systems and software successfully; risks relating to possible third-party claims of intellectual property infringement; increased contributions to the Company’s pension and benefit plans, including multiemployer and employer-sponsored defined benefit pension plans as required by legislation, regulation or other applicable U.S. or foreign law or resulting from a U.S. mass withdrawal event; bad debt write-offs; loss of or failure to obtain necessary permits and registrations; continued or escalated conflict in the Middle East, North Korea, Ukraine or elsewhere, including the Russia-Ukraine war and the Israeli-Palestinian conflict and other associated or emerging conflicts in the Middle East; uncertainty regarding the exit of the U.K. from the European Union; and/or unfavorable export or import markets.
In addition to those factors discussed under the heading “Risk Factors” in Item 1A of this report and elsewhere in this report, and in the Company’s other public filings with the SEC, important factors that could cause actual results to differ materially from the Company’s expectations include: existing and unknown future limitations on the ability of the Company’s direct and indirect subsidiaries to make their cash flow available to the Company for payments on the Company’s indebtedness or other purposes; reduced demands or prices for biofuels, biogases or renewable electricity; global demands for grain and oilseed commodities, which have exhibited volatility, and can impact the cost of feed for cattle, hogs and poultry, thus affecting available rendering feedstock and selling prices for the Company’s products; reductions in raw material volumes available to the Company due to weak margins in the meat production industry as a result of higher feed costs, reduced consumer demand, reduced volume due to government regulations affecting animal production or other factors, reduced volume from food service establishments, or otherwise; reduced demand for animal feed; reduced finished product prices, including a decline in fat, used cooking oil, protein or collagen (including, without limitation, collagen peptides and gelatin) finished product prices; changes to government policies around the world relating to renewable fuels and GHG emissions that adversely affect prices, margins or markets (including for the DGD Joint Venture), including programs like renewable fuel standards, low carbon fuel standards (“LCFS”), renewable fuel mandates and tax credits for biofuels or loss or diminishment of tax credits due to failure to satisfy any eligibility requirements, including, without limitation, in relation to the blenders tax credit or CFPC; climate related adverse results, including with respect to the Company’s climate goals, targets or commitments; possible product recall resulting from Page 74 developments relating to the discovery of unauthorized adulterations to food or food additives or products which do not meet specifications, contract requirements or regulatory standards; the occurrence of 2009 H1N1 flu (initially known as Swine Flu), highly pathogenic strains of avian influenza (collectively known as Bird Flu), SARS, BSE, PED or other diseases associated with animal origin in the U.S. or elsewhere, such as the outbreak of ASF in China and elsewhere; the occurrence of pandemics, epidemics or disease outbreaks, such as the COVID-19 outbreak; unanticipated costs and/or reductions in raw material volumes related to the Company’s compliance with the existing or unforeseen new U.S. or foreign (including, without limitation, China) regulations (including new or modified animal feed, Bird Flu, SARS, PED, BSE or ASF or similar or unanticipated regulations) affecting the industries in which the Company operates or its value added products; risks associated with the DGD Joint Venture, including possible unanticipated operating disruptions and a decline in margins on the products produced by the DGD Joint Venture; risks and uncertainties relating to international sales and operations, including imposition of tariffs, quotas, trade barriers and other trade protections by foreign countries; tax changes, such as global minimum tax measures, or issues related to administration, guidance and/or regulations associated with biofuel policies, including CFPC, and risks associated with the qualification and sale of such credits; difficulties or a significant disruption (including, without limitation, due to cyber-attack) in the Company’s information systems, networks or the confidentiality, availability or integrity of our data or failure to implement new systems and software successfully; risks relating to possible third-party claims of intellectual property infringement; increased contributions to the Company’s pension and benefit plans, including multiemployer and employer-sponsored defined benefit pension plans as required by legislation, regulation or other applicable U.S. or foreign law or resulting from a U.S. mass withdrawal event; bad debt write-offs; loss of or failure to obtain necessary permits and registrations; continued or escalated conflict in the Middle East, North Korea, Ukraine or elsewhere, including the Russia-Ukraine war and the Israeli-Palestinian conflict and other associated or emerging conflicts in the Middle East; uncertainty regarding the exit of the U.K. from the European Union; uncertainty regarding any administration changes in the U.S. or elsewhere around the world, including, without limitation, impacts to trade, tariffs and/or policies impacting the Company (such as biofuel policies and mandates); and/or unfavorable export or import markets.
In December 2022, the Company’s management reviewed our global network of collagen plants for optimization opportunities and decided to close our Peabody, Massachusetts, plant in 2023. As a result of the restructuring, the Company incurred a goodwill impairment charge in the food Page 70 segment of approximately $2.7 million.
In fiscal 2022, the Company’s management reviewed our global network of collagen plants for optimization opportunities and decided to close our Peabody, Massachusetts, plant in 2023. As a result of the restructuring, the Company incurred a goodwill impairment charge in the food segment of approximately $2.7 million.
The term A-4 facility borrowings are repayable in quarterly installments of 0.625% of the aggregate principle amount of the relevant term A-4 facility on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter following the borrowings or termination date and continuing until the last day of such quarterly period ending March 31, 2025, and quarterly installments of 1.25% of the aggregate principle amount of the relevant term A-4 facility due and payable on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter ending June 30, 2025 and continuing until the last day of such quarterly period ending immediately prior to the term A-4 facility maturity date of December 9, 2026 and one final installment in the amount of the term A-4 facility then outstanding, due and payable on December 9, 2026. • As of December 30, 2023, the Company had repaid all $525.0 million it had borrowed under the terms of the term loan B facility, none of which can be reborrowed. • The interest rate applicable to any borrowings under the revolving loan facility will equal the adjusted term secured overnight financing rate (SOFR) for U.S. dollar borrowings or the adjusted euro interbank rate (EURIBOR) for euro borrowings or the adjusted daily simple Sterling overnight index average (SONIA) for British pound borrowings or the Canadian dollar offered rate (CDOR) for Canadian dollar borrowings plus 1.50% per annum or base rate or the adjusted term SOFR for U.S. dollar borrowings or Canadian prime rate for Canadian dollar borrowings or the adjusted daily simple European short term rate (ESTR) for euro borrowings or the adjusted daily SONIA rate for British pound borrowings plus 0.50% per annum subject to certain step-ups or step-downs based on the Company’s total leverage ratio.
The term A-4 facility borrowings are repayable in quarterly installments of 0.625% of the aggregate principle amount of the relevant term A-4 facility on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter following the borrowings or termination date and continuing until the last day of such quarterly period ending March 31, 2025, and quarterly installments of 1.25% of the aggregate principle amount of the relevant term A-4 facility due and payable on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter ending June 30, 2025 and continuing until the last day of such quarterly period ending immediately prior to the term A-4 facility maturity date of December 9, 2026 and one final installment in the amount of the term A-4 facility then outstanding, due and payable on December 9, 2026. • As of December 28, 2024, the Company had repaid all $525.0 million it had borrowed under the terms of the term loan B facility, none of which can be reborrowed. • The interest rate applicable to any borrowings under the revolving credit facility will equal (i) the adjusted term secured overnight financing rate (SOFR) for U.S. dollar borrowings or the adjusted euro interbank rate (EURIBOR) for euro borrowings or the adjusted daily simple Sterling overnight index average (SONIA) for British pound Page 66 borrowings, in each case plus 1.75% per annum or (ii) the base rate or the adjusted term SOFR for a one-month interest period for U.S. dollar borrowings or the Canadian prime rate for Canadian dollar borrowings or the adjusted daily simple European short term rate (ESTR) for euro borrowings or the adjusted daily SONIA rate for British pound borrowings, in each case plus 0.75% per annum, and in each case of clauses (i) and (ii), subject to certain step-ups and step-downs based on the Company’s total leverage ratio.
Results of Operations Fiscal Year Ended December 30, 2023 Compared to Fiscal Year Ended December 31, 2022 Operating Performance Metrics Other operating performance metrics which management routinely monitors as an indicator of operating performance include: • Finished product commodity prices • Segment results • Foreign currency exchange • Corporate activities • Non-U.S.
Results of Operations Fiscal Year Ended December 28, 2024 Compared to Fiscal Year Ended December 30, 2023 Operating Performance Metrics Other operating performance metrics which management routinely monitors as an indicator of operating performance include: • Finished product commodity prices • Segment results • Foreign currency exchange • Corporate activities • Non-U.S.
The Company’s off-balance sheet contractual obligations and commercial commitments as of December 30, 2023 relate to letters of credit, foreign bank guarantees, forward purchase agreements and employment agreements. The Company has excluded these items from the balance sheet in accordance with U.S. GAAP.
The Company’s off-balance sheet contractual obligations and commercial commitments as of December 28, 2024 relate to letters of credit, foreign bank guarantees, forward purchase agreements and employment agreements. The Company has excluded these items from the balance sheet in accordance with U.S. GAAP.
The commitments will be recorded on the balance sheet of the Company when delivery of these commodities or products occurs and ownership passes to the Company during the remainder of fiscal 2024 and through fiscal 2028, in accordance with accounting principles generally accepted in the United States.
The commitments will be recorded on the balance sheet of the Company when delivery of these commodities or products occurs and ownership passes to the Company during the remainder of fiscal 2025 and through fiscal 2029, in accordance with accounting principles generally accepted in the United States.
For additional information on risk factors that could impact our results, please refer to “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K for the fiscal year ended December 30, 2023.
For additional information on risk factors that could impact our results, please refer to “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K for the fiscal year ended December 28, 2024.
Programs like the National Renewable Fuel Standard Program (“RFS”) and low carbon fuel standards (“LCFS”) (such as in the state of California) and tax credits for biofuels both in the United States and abroad are subject to revision and change which may impact the demand for and/or price of our finished products.
National Renewable Fuel Standard Program (“RFS”) and low carbon fuel standards (“LCFS”) (such as in the state of California), tax credits for biofuels and mandates for biofuel use both in the United States and abroad are subject to revision and change which may impact the demand for and/or price of our finished products.
The discussion and analysis of our financial condition and results of operations for the year ended December 31, 2022 compared to the year ended January 1, 2022 are included in Item 7. Management's Discussion and Analysis of Financial Condition and Results in our 2022 Form 10-K and is incorporated herein by reference.
The discussion and analysis of our financial condition and results of operations for the year ended December 30, 2023 compared to the year ended December 31, 2022 are included in Item 7. Management's Discussion and Analysis of Financial Condition and Results in our 2023 Form 10-K and is incorporated herein by reference.
Additionally, the Company has made required and tax deductible discretionary contributions to its foreign pension plans in fiscal year 2023 of approximately $4.1 million, as compared to $3.6 million in contributions in fiscal year 2022. The U.S. Pension Protection Act of 2006 (“PPA”) went into effect in January 2008.
Page 68 Additionally, the Company has made required and tax deductible discretionary contributions to its foreign pension plans in fiscal year 2024 of approximately $3.3 million, as compared to $4.1 million in contributions in fiscal year 2023. The U.S. Pension Protection Act of 2006 (“PPA”) went into effect in January 2008.
The classification of long-term debt in the Company’s December 30, 2023 consolidated balance sheet is based on the contractual repayment terms of the 6% Notes, the 5.25% Notes, the 3.625% Notes and debt issued under the Amended Credit Agreement.
The classification of long-term debt in the Company’s December 28, 2024 Consolidated Balance Sheet is based on the contractual repayment terms of the 6% Notes, the 5.25% Notes, the 3.625% Notes and debt issued under the Amended Credit Agreement.
Legal challenges or changes to, a failure to enforce, reductions in the mandated volumes under, or discontinuing or suspension of any of these programs could have a negative impact on our business and results of operations.
Legal challenges, changes to, a failure to enforce, reductions in the mandated volumes under, or discontinuation, amendment, modification, or suspension of any of these programs could have a negative impact on our business and results of operations.
The interest rate applicable to any borrowing under the delayed draw term A-1 facility and term A-3 facility will equal the adjusted term SOFR plus a minimum of 1.50% per annum subject to certain step-ups based on the Company’s total leverage ratio.
The interest rate applicable to any borrowing under the term A-1 facility and term A-3 facility will equal the adjusted term SOFR plus 1.875% per annum subject to certain step-ups and step-downs based on the Company’s total leverage ratio with a minimum of 1.50%.
The Company’s effective tax rate excluding the federal and state impact of the biofuel tax incentives is 28.4% for fiscal year 2023 compared to 26.9% for fiscal year 2022. Non-U.S.
The Company’s effective tax rate excluding the federal and state impact of the biofuel tax incentives is 43.9% for fiscal year 2024 compared to 28.4% for fiscal year 2023. Non-U.S.
Based upon current actuarial estimates, the Company expects to make payments of approximately $0.8 million in order to meet minimum pension funding requirements to its domestic plans in fiscal year 2024. In addition, the Company expects to make payments of approximately $3.6 million under its foreign pension plans in fiscal year 2024.
Based upon current actuarial estimates, the Company expects to make payments of approximately $0.4 million in order to meet minimum pension funding requirements to its domestic plans in fiscal year 2025. In addition, the Company expects to make payments of approximately $3.4 million under its foreign pension plans in fiscal year 2025.
The Company is currently evaluating this ASU to determine its impact on the Company’s disclosure, but does not expect this update to have a material impact on the Company’s consolidated financial statements other than additional information to be provided in the foot note disclosure.
The Company is currently evaluating this ASU to determine its impact on the Company’s disclosure, but does not expect this update to have a material impact on the Company’s consolidated financial statements other than additional information that is provided in the footnote disclosure.
The net periodic benefit cost for fiscal year 2023 would increase by approximately $0.6 million if the discount rate was 0.5% lower at a weighted average of 4.12%. The net periodic benefit cost for fiscal year 2023 would decrease by approximately $0.7 million if the discount rate was 0.5% higher at a weighted average of 5.12%.
The projected net periodic benefit cost for fiscal year 2025 would increase by approximately $0.6 million if the discount rate was 0.5% lower at a weighted average of 4.34%. The projected net periodic benefit cost for fiscal year 2025 would decrease by approximately $0.7 million if the discount rate was 0.5% higher at a weighted average of 5.34%.
Page 64 Other debt consists of U.S., European and Chinese overdraft ancillary facilities, U.S., European and Brazilian finance lease obligations and note arrangements in U.S., Brazilian, Chinese and European notes that are not part of the Amended Credit Agreement, 6% Notes, 5.25% Notes or 3.625% Notes.
Other debt consists of U.S., European, Canadian and Chinese overdraft ancillary facilities, U.S., European and Brazilian finance lease obligations and note arrangements in the U.S., Brazil, China and Europe that are not part of the Amended Credit Agreement, 6% Notes, 5.25% Notes or 3.625% Notes.
The term A-2 facility borrowings are repayable in quarterly installments of 0.625% of the aggregate principle amount of the relevant term A-2 facility on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter following the borrowings or September 30, 2022 and continuing until the last day of such quarterly period ending March 31, 2025, and quarterly installments of 1.25% of the aggregate principle amount of the relevant term A-2 facility due and payable on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter ending June 30, 2025 and continuing until the last day of such quarterly period ending immediately prior to the term A-2 facility maturity date of December 9, 2026 and one final installment in the amount of the term A-2 facility then outstanding, due and payable on December 9, 2026. • As of December 30, 2023, the Company has borrowed all $300.0 million under the terms of the term A-3 facility and has made no repayments.
The term A-2 facility borrowings are repayable in quarterly installments of 0.625% of the aggregate principle amount of the relevant term A-2 facility on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter following the borrowings or September 30, 2022 and continuing until the last day of such quarterly period ending March 31, 2025, and quarterly installments of 1.25% of the aggregate principle amount of the relevant term A-2 facility due and payable on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter ending June 30, 2025 and continuing until the last day of such quarterly period ending immediately prior to the term A-2 facility maturity date of December 9, 2026 and one final installment in the amount of the term A-2 facility then outstanding, due and payable on December 9, 2026. • As of December 28, 2024, the Company has borrowed all $300.0 million under the terms of the term A-3 facility and has repaid $2.3 million, which when repaid by the Company cannot be reborrowed.
As of December 30, 2023, the Company has an aggregate accrued liability of approximately $4.7 million representing the present value of scheduled withdrawal liability payments on the remaining multiemployer plans that have given notices of withdrawals.
As of December 28, 2024, the Company has an aggregate accrued liability of approximately $4.4 million representing the present value of scheduled withdrawal liability payments on the remaining multiemployer plans that have given notices of withdrawals.
As of December 30, 2023, the Company believes it is in compliance with all financial covenants under the Amended Credit Agreement, as well as all of the other covenants contained in the Amended Credit Agreement, the 6% Indenture, the 5.25% Indenture and the 3.625% Indenture.
As of December 28, 2024, the Company is in compliance with all financial covenants under the Amended Credit Agreement, and believes it is in compliance with all of the other covenants contained in the Amended Credit Agreement, the 6% Indenture, the 5.25% Indenture and the 3.625% Indenture.
Page 65 Accrued Insurance and Pension Plan Obligations Based upon the annual actuarial estimate, current accruals and claims paid during fiscal year 2023, the Company has accrued approximately $13.3 million as of December 30, 2023 that it expects will become due during the next twelve months in order to meet obligations related to the Company’s self-insurance reserves and accrued insurance obligations, which are included in current accrued expenses at December 30, 2023.
Accrued Insurance and Pension Plan Obligations Based upon the annual actuarial estimate, current accruals and claims paid during fiscal year 2024, the Company has accrued approximately $21.2 million as of December 28, 2024 that it expects will become due during the next twelve months in order to meet obligations related to the Company’s self-insurance reserves and accrued insurance obligations, which are included in current accrued expenses at December 28, 2024.
The revolving credit facility matures June 23, 2026 and is non-recourse to the joint venture partners. As of December 30, 2023, the DGD Joint Venture had borrowings outstanding of $250.0 million under this unsecured revolving credit facility. Based on the sponsor support agreements executed in connection with the initial construction of the DGD St.
The revolving credit facility matures June 23, 2026 and is non-recourse to the joint venture partners. As of December 28, 2024, the DGD Joint Venture had no borrowings outstanding under this unsecured revolving credit facility. Based on the sponsor support agreements executed in connection with the initial construction of the DGD St.
In 2023, 2022 and 2021, DGD was the Company’s largest finished product customer in terms of sales, with the Company recording sales to DGD in those years of $1.3 billion, $1.1 billion and $521.7 million, respectively. From a procurement, production and distribution standpoint, DGD has become integral to Darling’s base business.
In 2024, 2023 and 2022, DGD was the Company’s largest finished product customer in terms of total net sales, with the Company recording total net sales to DGD in those years of $968.9 million, $1.3 billion and $1.1 billion, respectively. From a procurement, production and distribution standpoint, DGD has become integral to Darling’s base business.
Goodwill was approximately $2.5 billion and $2.0 billion at December 30, 2023 and December 31, 2022, respectively. Pension Liability The Company has retirement and pension plans covering a substantial number of its domestic and foreign employees.
Goodwill was approximately $2.3 billion and $2.5 billion at December 28, 2024 and December 30, 2023, respectively. Pension Liability The Company has retirement and pension plans covering a substantial number of its domestic and foreign employees.
The discount rate applied to the Company’s pension liability is the interest rate used to calculate the present value of the pension benefit obligation. The weighted average discount rate was 4.62% at December 30, 2023 and 4.82% at December 31, 2022, respectively.
The discount rate applied to the Company’s pension liability is the interest rate used to calculate the present value of the pension benefit obligation. The weighted average discount rate was 4.84% at December 28, 2024 and 4.62% at December 30, 2023, respectively.
However, based on the Company’s annual impairment testing at October 28, 2023, the fair value of three of the Company’s six reporting units had a fair value that was not substantially in excess of their carrying values.
However, based on the Company’s annual impairment testing at October 26, 2024, the fair value of two of the Company’s six reporting units had a fair value that was not substantially in excess of their carrying values.
The interest rate applicable to any borrowing under the delayed draw term A-2 facility and term A-4 facility will equal the adjusted term SOFR plus 1.50% per annum subject to certain step-ups or step-downs based on the Company’s total leverage ratio. 6% Senior Notes due 2030.
The interest rate applicable to any borrowing under the term A-2 facility and term A-4 facility will equal the adjusted term SOFR plus 1.75% per annum subject to certain step-ups and step-downs based on the Company’s total leverage ratio with a minimum of 1.00%. 6% Senior Notes due 2030.
The Company is prohibited under the Amended Credit Agreement, the 6% Indenture, the 5.25% Indenture and the 3.625% Indenture from entering (or allowing such subsidiaries to enter) into contractual limitations on the Company’s subsidiaries’ ability to declare dividends or make other payments or distributions to the Company.
The Company is prohibited under the Amended Credit Agreement from entering (or allowing such subsidiaries to enter) into contractual limitations on the Company’s subsidiaries’ ability to declare dividends or make other payments or distributions to the Company.
The program runs through August 13, 2024, unless further extended or shortened by the Board of Directors. During fiscal year 2023, the Company repurchased approximately $52.9 million, including commissions, of its common stock in the open market. As of December 30, 2023, the Company had approximately $321.6 million remaining in its share repurchase program.
The program runs through August 13, 2026, unless further extended or shortened by the Board of Directors. During fiscal year 2024, the Company repurchased approximately $34.3 million, including commissions, of its common stock in the open market. As of December 28, 2024, the Company had approximately $494.9 million remaining in its share repurchase program.
Adjusted EBITDA is calculated below and represents, for any relevant period, net income/(loss) plus depreciation and amortization, restructuring and asset impairment charges, acquisition and integrations costs, change in fair value of contingent consideration, interest expense, income tax expense, other income/(expense) and equity in net (income)/loss of unconsolidated subsidiaries.
Adjusted EBITDA is calculated below and represents for any relevant period, net income/(loss) plus depreciation and amortization, restructuring and asset impairment charges, acquisition and integration costs, change in fair value of contingent consideration, foreign currency loss/(gain), net income/(loss) attributable to non-controlling interests, interest expense, income tax provision, other income/(expense) and equity in net (income)/loss of unconsolidated subsidiaries.
Capital expenditures related to compliance with environmental regulations were $64.8 million in fiscal year 2023, $54.7 million in fiscal year 2022 and $40.6 million in fiscal year 2021.
Capital expenditures related to compliance with environmental regulations were $67.4 million in fiscal year 2024, $64.8 million in fiscal year 2023 and $54.7 million in fiscal year 2022.
At December 30, 2023, the Company had unrestricted cash of $126.5 million and funds available under the revolving credit facility of $832.5 million, compared to unrestricted cash of $127.0 million and funds available under the revolving credit facility of $1.313 billion at December 31, 2022.
At December 28, 2024, the Company had unrestricted cash of $76.0 million and funds available under the revolving credit facility of $1.16 billion, compared to unrestricted cash of $126.5 million and funds available under the revolving credit facility of $832.5 million at December 30, 2023.
The average rates assumption used in this calculation was the actual average rate for fiscal year 2023 of €1.00:$1.08, R$1.00:$0.20 and C$1.00:$0.74 as compared to the average rate for fiscal year 2022 of €1.00:$1.05, R$1.00:$0.19 and C$1.00:$0.77, respectively. Corporate Activities Selling, General and Administrative Expenses.
The average rates used in this calculation were the average rates for fiscal year 2024 of €1.00:$1.08, R$1.00:$0.19 and C$1.00:$0.73 as compared to the average rates for fiscal year 2023 of €1.00:$1.08, R$1.00:$0.20 and C$1.00:$0.74, respectively. Corporate Activities Selling, General and Administrative Expenses.
Furthermore, in January 2023, the DGD Joint Venture partners approved a capital project at the DGD Port Arthur Plant to provide the plant with the capability to upgrade approximately fifty percent (50%) of its current 470 million gallon annual production capacity to sustainable aviation fuel (SAF).
Furthermore, in November 2024, the DGD Joint Venture completed a capital project at the DGD Port Arthur Plant to provide the plant with the capability to upgrade approximately fifty percent (50%) of its current 470 million gallon annual production capacity to SAF.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

22 edited+1 added−1 removed8 unchanged
Biggest changeType Amount Type Amount Hedge rates Equivalent Brazilian real 170,788 Euro 31,272 5.34 - 5.66 $ 35,282 Brazilian real 1,546,487 U.S. dollar 292,015 4.84 - 6.09 292,015 Euro 48,435 U.S. dollar 52,622 1.06 - 1.11 52,622 Euro 40,614 Polish zloty 176,500 4.33 - 4.36 44,879 Euro 11,177 Japanese yen 1,741,390 154.81 - 161.79 12,351 Euro 25,043 Chinese renminbi 195,270 7.79 - 7.82 27,673 Euro 18,373 Australian dollar 30,150 1.62 - 1.65 20,302 Euro 2,797 British pound 2,415 0.86 3,091 Polish zloty 35,023 Euro 8,066 4.34 - 4.36 8,901 Polish zloty 2,941 U.S. dollar 740 3.97 740 British pound 149 Euro 173 0.86 190 British pound 75 U.S. dollar 95 0.79 95 Japanese yen 145,199 U.S. dollar 994 141.64 - 148.95 994 U.S. dollar 1,050 Japanese yen 149,000 141.89 1,050 U.S. dollar 562,340 Euro 519,182 1.08 562,340 Australian dollar 162 Euro 100 1.62 110 $ 1,062,635 The above foreign currency contracts had an aggregate fair value of approximately $5.0 million and are included in other current assets, accrued expenses and noncurrent liabilities at December 30, 2023.
Biggest changeType Amount Type Amount Hedge rates Equivalent Brazilian real 515,922 Euro 80,054 5.66 - 7.12 $ 83,233 Brazilian real 2,864,438 U.S. dollar 506,181 5.09 - 7.29 506,181 Euro 37,123 U.S. dollar 39,104 1.04 - 1.09 39,104 Euro 87,275 Polish zloty 373,446 4.26 - 4.30 90,958 Euro 10,875 Japanese yen 1,753,983 159.72 - 163.31 11,334 Euro 25,413 Chinese renminbi 195,569 7.60 - 7.79 26,485 Euro 18,141 Australian dollar 29,770 1.64 - 1.67 18,906 Euro 4,075 British pound 3,384 0.82 - 0.83 4,247 Polish zloty 47,915 Euro 11,211 4.27 - 4.28 11,682 Polish zloty 469 U.S. dollar 116 4.06 116 British pound 346 Euro 416 0.83 433 British pound 247 U.S. dollar 312 1.26 312 Japanese yen 23,557 U.S. dollar 154 152.97 154 U.S. dollar 71 Japanese yen 10,807 153.29 71 U.S. dollar 562,340 Euro 519,182 1.08 562,340 Australian dollar 478 U.S. dollar 305 0.64 305 $ 1,355,861 The above foreign currency contracts had an aggregate fair value of approximately $14.3 million and are included in other current assets, accrued expenses and noncurrent liabilities at December 28, 2024.
These amounts are included in other current assets, accrued expenses and noncurrent liabilities on the balance sheet, with an offset recorded in accumulated other comprehensive loss. In fiscal 2023, the Company also entered into cross currency swaps that are designated as cash flow hedges. The notional amount of these swaps was €519.2 million.
These amounts are included in other current assets, other assets, accrued expenses and noncurrent liabilities on the balance sheet, with an offset recorded in accumulated other comprehensive loss. In fiscal 2023, the Company also entered into cross currency swaps that are designated as cash flow hedges. The notional amount of these swaps was €519.2 million.
As a result, the Company is affected by changes in foreign currency exchange rates, particularly with respect to the euro, Brazilian real, Canadian dollar, Australian dollar, Chinese renminbi, Polish zloty, British pound and Japanese yen. Page 74
As a result, the Company is affected by changes in foreign currency exchange rates, particularly with respect to the euro, Brazilian real, Canadian dollar, Australian dollar, Chinese renminbi, Polish zloty, British pound and Japanese yen. Page 77
Predominantly all of the Company’s finished products are commodities that are generally sold at prices prevailing at the time of sale. Additionally, with acquisition of foreign entities we are exposed to foreign currency exchange risks, imposition of currency controls and the possibility of currency devaluation.
Most of the Company’s finished products are commodities that are generally sold at prices prevailing at the time of sale. Additionally, with acquisition of foreign entities we are exposed to foreign currency exchange risks, imposition of currency controls and the possibility of currency devaluation.
These amounts are included in other current assets and noncurrent liabilities on the balance sheet, with an offset recorded in accumulated other comprehensive loss. In fiscal 2023, fiscal 2022 and fiscal 2021, the Company entered into foreign exchange option and forward contracts that are considered cash flow hedges.
These amounts are included in other current assets on the balance sheet, with an offset recorded in accumulated other comprehensive loss. In fiscal 2024, fiscal 2023 and fiscal 2022, the Company entered into foreign exchange option and forward contracts that are considered cash flow hedges.
The Company intends to take physical delivery of the commodities under certain of the Company’s natural gas and diesel fuel instruments and accordingly, these contracts are not subject to the requirements of fair value accounting because they qualify as normal purchases as defined in Financial Accounting Standards Board (“FASB”) authoritative guidance.
The Company intends to take physical delivery of the commodities under certain of the Company’s natural gas and diesel fuel instruments and accordingly, these contracts are not subject to the requirements of fair value accounting because they qualify as normal purchases as defined in FASB authoritative guidance.
This leaves approximately $1.36 billion over the next year that will actually be subject to changing interest rates and the Company estimates that a 1% increase in interest rates will increase the Company’s annual interest expense by approximately $13.6 million. Foreign Exchange The Company has significant international operations and is subject to certain opportunities and risks, including currency fluctuations.
This leaves approximately $956.1 million over the next year that will be subject to changing interest rates and the Company estimates that a 1% increase in interest rates will increase the Company’s annual interest expense by approximately $9.6 million. Foreign Exchange The Company has significant international operations and is subject to certain opportunities and risks, including currency fluctuations.
At December 30, 2023, the Company had the following outstanding forward contracts that were entered into to hedge the future payments of intercompany notes, and foreign currency transactions in currencies other than the functional currency and forecasted transactions in currencies other than the functional currency (in thousands): Page 73 Functional Currency Contract Currency Range of U.S.
At December 28, 2024, the Company had the following outstanding forward contracts that were entered into to hedge the future payments of intercompany notes, and foreign currency transactions in currencies other than the functional currency and forecasted transactions in currencies other than the functional currency (in thousands): Page 76 Functional Currency Contract Currency Range of U.S.
The amounts are included in other current assets and accrued expenses on the balance sheet, with an offset recorded in accumulated other comprehensive loss. In fiscal 2022 and fiscal 2021, the Company entered into corn option contracts that are considered cash flow hedges.
These amounts are included in other assets, accrued expenses and noncurrent liabilities on the balance sheet, with an offset recorded in accumulated other comprehensive loss. In fiscal 2024 and fiscal 2022, the Company entered into corn option and forward contracts that are considered cash flow hedges.
Interest Rate Sensitivity At December 30, 2023, the Company’s fixed rate debt obligations consist of the 6% Notes, the 5.25% Notes, the 3.625% Notes and other immaterial debt that accrue interest at an annual weighted average fixed rate of approximately 5.29%.
Interest Rate Sensitivity At December 28, 2024, the Company’s fixed rate debt obligations consist of the 6% Notes, the 5.25% Notes, the 3.625% Notes and other immaterial debt that accrue interest at an annual weighted average fixed rate of approximately 5.39%.
Under the terms of the foreign exchange contracts, the Company hedged a portion of its forecasted sales in currencies other than the functional currency through the fourth quarter of fiscal 2024. At December 30, 2023, the aggregate fair value of these foreign exchange contracts was approximately $15.9 million.
Under the terms of the foreign exchange contracts, the Company hedged a portion of its forecasted sales in currencies other than the functional currency through the fourth quarter of fiscal 2026. At December 28, 2024, the aggregate fair value of these foreign exchange contracts was approximately $32.6 million.
At December 30, 2023, the Company had foreign currency forward contracts and interest rate swaps outstanding that qualified and were designated for hedge accounting as well as corn forward contracts and foreign currency forward contracts that did not qualify and were not designated for hedge accounting.
Page 75 At December 28, 2024, the Company had foreign currency options and forward contracts, interest rate swaps and corn options and forward contracts outstanding that qualified and were designated for hedge accounting as well as corn options and forward contracts and foreign currency forward contracts that did not qualify and were not designated for hedge accounting.
Heating oil swaps and options are entered into with the intent of managing the overall cost of diesel fuel usage by reducing the potential impact of seasonal weather demands on diesel fuel that increases diesel fuel prices.
Heating oil swaps and options are entered into with the intent of managing the overall cost of diesel fuel usage by reducing the potential impact of seasonal weather demands on diesel fuel that increases diesel fuel prices. Soybean meal forward contracts and options are entered into with the intent of managing the impact of changing prices for poultry meal sales.
Additionally, we reclassify amounts from accumulated other comprehensive income/(loss) associated with the interest rate differential between the U.S. dollar and a Euro to interest expense. At December 30, 2023, the aggregate fair value of these cross currency swaps was approximately $10.8 million.
Additionally, we reclassify amounts from accumulated other comprehensive loss associated with the interest rate differential between the U.S. dollar and euro to interest expense. At December 28, 2024, the aggregate fair value of these cross currency swaps was approximately $22.2 million.
The Company had corn forward contracts that are marked to market because they did not qualify for hedge accounting at December 30, 2023. These contracts have an aggregate fair value of approximately $0.3 million and are included in current other assets and accrued expenses at December 30, 2023.
The Company had corn option and forward contracts that are marked to market with the changes in the fair value recorded to earnings because they did not qualify for hedge accounting at December 28, 2024. These contracts have an aggregate fair value of approximately $1.0 million and are included in other current assets and accrued expenses at December 28, 2024.
Under the terms of the interest rate swaps, the Company hedged a portion of its variable rate debt into the first quarter of 2026. At December 30, 2023, the aggregate fair value of these interest rate swaps was approximately $3.7 million.
Under the terms of the interest rate swaps, the Company hedged a portion of its variable rate debt into the first quarter of 2026. At December 28, 2024, the aggregate fair value of these interest rate swaps was approximately $4.2 million.
As of December 30, 2023, the Company had forward purchase agreements in place for purchases of approximately $98.7 million of finished and raw material products during the next five years.
As of December 28, 2024, the Company had forward purchase agreements in place for purchases of approximately $141.8 million of finished and raw material products during the next five years.
As of December 30, 2023, the Company has long-term debt of approximately $2.3 billion that is subject to variable interest rates under the Company’s Senior Secured Credit Facilities.
As of December 28, 2024, the Company has long-term debt of approximately $1.9 billion that is subject to variable interest rates under the Company’s Senior Secured Credit Facilities.
Under the terms of the corn option contracts the Company hedged a portion of its forecasted sales of BBP into the second quarter of fiscal 2023. At December 30, 2023, the aggregate fair value of the corn contracts was zero.
Under the terms of the corn option and forward contracts the Company hedged a portion of its forecasted sales of BBP into the second quarter of fiscal 2025. At December 28, 2024, the aggregate fair value of the corn contracts was $0.1 million.
At December 30, 2023, the Company had forward purchase agreements in place for purchases of approximately $191.9 million of natural gas and diesel fuel and approximately $35.5 million of other commitments during the next three years.
At December 28, 2024, the Company had forward purchase agreements in place for purchases of approximately $128.7 million of natural gas and diesel fuel and approximately $29.2 million of other commitments during the next three years.
Foreign currency forward contracts and options are entered into to mitigate the foreign exchange rate risk for transactions designated in a currency other than the local functional currency.
Corn options and future contracts are entered into with the intent of managing U.S. forecasted sales of BBP by reducing the impact of changing prices. Foreign currency forward contracts and options are entered into to mitigate the foreign exchange rate risk for transactions designated in a currency other than the local functional currency.
In fiscal 2023, fiscal 2022 and fiscal 2021, the Company entered into soybean meal forward contracts to hedge a portion of its forecasted poultry meal sales into the fourth quarter of fiscal 2023. At December 30, 2023, the aggregate fair value of the soybean meal contracts was zero.
These amounts are included in other current assets and accrued expenses on the balance sheet, with an offset recorded in accumulated other comprehensive loss. In fiscal 2023 and fiscal 2022, the Company entered into soybean meal forward contracts to hedge a portion of its forecasted poultry meal sales.
Removed
Soybean meal forward contracts and options are Page 72 entered into with the intent of managing the impact of changing prices for poultry meal sales. Corn options and future contracts are entered into with the intent of managing U.S. forecasted sales of BBP by reducing the impact of changing prices.
Added
At December 28, 2024, there are no outstanding soybean meal forward contracts designated as cash flow hedges.

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