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What changed in DARLING INGREDIENTS INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of DARLING INGREDIENTS INC.'s 2022 and 2023 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 2023 report.

+437 added−380 removedSource: 10-K (2023-02-27) vs 10-K (2022-03-01)

Top changes in DARLING INGREDIENTS INC.'s 2023 10-K

437 paragraphs added · 380 removed · 313 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

56 edited+17 added−12 removed118 unchanged
Biggest changeEuropean 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. • The European Commission, Directorate-General for Health and Food Safety , which is responsible for EU policy on food safety and health and for monitoring the implementation of related EU legislation, including but not limited to food, feed, human and animal health, technical uses of animal by-products and packaging. • The European Medicines Agency , which is responsible for the scientific evaluation, supervision and safety monitoring of human and veterinary medicinal products in the EU and establishes guidance amongst others for bovine-containing medicinal products for human or veterinary use, and maximum residue limits. • The European Food Safety Authority , which advises the European Commission, the European Parliament and the EU Member States on food safety matters, including on animal feed, animal health and welfare, biological hazards and contaminants.
Biggest changeRelevant Agencies and Authorities include, but are not limited to: • The European Medicines Agency , which is responsible for the scientific evaluation, supervision and safety monitoring of medicinal products for human and veterinary use in the EU and establishes guidance amongst others for bovine-containing medicinal products for human or veterinary use, and maximum residue limits. • The European Chemicals Agency , which is responsible for the implementation of Regulation (EC) No 1907/2006 on the Registration, Evaluation, Authorisation and Restriction of Chemicals. • The European Food Safety Authority , which advises the European Commission, the European Parliament and the EU Member States on food safety matters, including on animal feed, animal health and welfare, biological hazards and contaminants. • The Council of Europe's , European Directorate for the Quality of Medicine and Healthcare , which establishes quality standards for safe medicinal products for human and veterinary use in Europe by developing guidance and standards in the areas of blood transfusion, organ, cell and tissue transportation and consumer health issues. • The EU Member States’ national competent authorities responsible for, including but not limited to, human and animal medicinal products, issuing permits, approvals and registrations to establishments or plants engaged in certain activities related to the handling of animal by-products and food and feed production, human and animal health and feed production, environmental regulation, including waste management, collection and transport of animal by-products, as well as health and safety of workers.
Page 6 Raw materials: Used cooking oil is collected from restaurants, food service establishments 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 supplied to the Company under mutually agreeable contract terms.
Page 6 Raw materials: Used cooking oil is collected from restaurants, food service establishments 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 market for the collection and processing of fallen stock in these regions is regulated, and government contracts provide for exclusivity of the service to the contracted partner. Raw materials pricing and supply contracts We have two primary pricing arrangements-formula and non-formula arrangements with our suppliers of poultry, beef, pork, bakery residuals and used cooking oil.
The market for the collection and processing of fallen stock in these regions is regulated, and government contracts provide for exclusivity of the service to the contracted partner. Raw materials pricing and supply contracts We have two primary pricing arrangements (formula and non-formula) with our suppliers of poultry, beef, pork, bakery residuals and used cooking oil.
While the Company's principal finished products are generally sold at prices prevailing at the time of sale, the Page 10 Company's ability to deliver large quantities of finished products from multiple locations and to coordinate sales from a central location enables us to sell into the market with the highest return.
While the Company's principal finished products are generally sold at prices prevailing at the time of sale, the Company's ability to deliver large quantities of finished products from multiple locations and to coordinate sales from a central Page 10 location enables us to sell into the market with the highest return.
The amount of bakery residuals we process generally increases during the summer from June to September. Collagen sales generally decline in the summer. CLIMATE CHANGE There is a growing concern that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather patterns and the frequency of extreme weather and natural disasters.
The amount of bakery residuals we process generally increases during the summer from June to September. Collagen sales generally decline in the summer. CLIMATE CHANGE There is a growing global concern that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather patterns and the frequency of extreme weather and natural disasters.
We are subject to physical, operational, transitional and financial risks associated with climate change and global, regional and local weather conditions, as well as by legal, regulatory and market responses to market change.
We are subject to physical, operational, transitional and financial risks associated with climate change and global, regional and local weather conditions, as well as by legal, regulatory and market responses to climate change.
Within the USDA, two agencies exercise direct regulatory oversight of our activities: - Animal and Plant Health Inspection Service (“APHIS”) certifies facilities and claims made for exported materials to meet importing country requirements and establishes and enforces import requirements for live animals and animal by-products as well as plant products, and Page 14 - Food Safety and Inspection Service (“FSIS”) regulates sanitation and biosecurity of our facilities and our food safety programs at plants producing edible fats and meats, among other things.
Within the USDA, two agencies exercise direct regulatory oversight of our activities: Page 14 - Animal and Plant Health Inspection Service (“APHIS”) certifies facilities and claims made for exported materials to meet importing country requirements and establishes and enforces import requirements for live animals and animal by-products as well as plant products, and - Food Safety and Inspection Service (“FSIS”) regulates sanitation and biosecurity of our facilities and our food safety programs at plants producing edible fats and meats, among other things.
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 and Europe 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 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 and North 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 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.
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,” “Sonac,” “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,” “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.
A majority of Darling's Canadian ingredients volume of rendering raw materials are acquired based on prices fixed on a quarterly basis with suppliers, with the remaining portion acquired on a “formula basis.” Darling Ingredients International (including North American operations) acquires a majority of its volume of rendering raw materials at spot or quarterly fixed prices and, in general, has no long term contracts with its key suppliers.
A majority of Darling's Canadian ingredients volume of rendering raw materials are acquired based on prices fixed on a monthly basis with suppliers, with the remaining portion acquired on a “formula basis.” Darling Ingredients International (including North American operations) acquires a majority of its volume of rendering raw materials at spot or quarterly fixed prices and, in general, has no long term contracts with its key suppliers.
We operate over 135 processing and transfer facilities in the United States to produce finished products such as protein (primarily meat and bone meal (“MBM”) and poultry meal (“PM”)), meat products for the pet food industry, blood products (plasma and whole blood), collagen, fats (primarily bleachable fancy tallow (“BFT”), poultry grease (“PG”) and yellow grease (“YG”)), bakery by-products (“BBP”) and hides, as well as a range of branded and value-added products.
We operate over 155 processing and transfer facilities in the United States to produce finished products such as protein (primarily meat and bone meal (“MBM”) and poultry meal (“PM”)), meat products for the pet food industry, blood products (plasma and whole blood), collagen, fats (primarily bleachable fancy tallow (“BFT”), poultry grease (“PG”) and yellow grease (“YG”)), bakery by-products (“BBP”) and hides, as well as a range of branded and value-added products.
Page 17 AVAILABLE INFORMATION We make available, free of charge, through our investor relations web site, 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 web site, 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.
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 2 to the Company's Consolidated Financial Statements for the period ended January 1, 2022 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 diesel (“DGD” or the “DGD Joint Venture”) as described in Note 2 to the Company's Consolidated Financial Statements for the period ended December 31, 2022 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.
COMPETITION We believe we are the only global ingredients company with products generated principally from animal-origin raw material types; however, we compete with a number of regional and local players in our various sub-segments and end markets. The procurement of raw materials currently presents greater challenges to our business than the sale of finished products.
COMPETITION We believe we are the only global ingredients company with products generated principally from animal-origin raw material types; however, we compete with a number of regional and local players in our various sub-segments and end markets. The procurement of raw materials generally presents greater challenges to our business than the sale of finished products.
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 Page 11 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.
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 Page 11 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 credit received or amount charged for raw materials under both formula and non-formula arrangements is based on various factors, including the type of raw materials, demand for the raw materials, the expected value of the finished product to be produced, the anticipated yields, the volume of material generated by the supplier and processing and transportation costs.
The credit received or amount charged for raw Page 9 materials under both formula and non-formula arrangements is based on various factors, including the type of raw materials, demand for the raw materials, the expected value of the finished product to be produced, the anticipated yields, the volume of material generated by the supplier and processing and transportation costs.
We market certain of our finished products under our Dar Pro Ingredients brand, certain specialty products under the Sonac name, collagen products under the Rousselot name and natural casings and meat by-products 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.
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 name and natural casings and meat by-products 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.
With a specialized collection fleet of approximately 260 trucks, Rendac collects raw materials in the Netherlands, Germany, Luxembourg and Belgium. This business is a market leader in the countries of Belgium, 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 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.
Renewable diesel is a low-carbon transportation fuel that is interchangeable with diesel produced from petroleum and is produced at the DGD Norco Facility using an advanced hydroprocessing-isomerization process licensed from UOP LLC, known as the Ecofining™ Process, and a pretreatment process developed by the Desmet Ballestra Group to convert fats (animal fats, used cooking oils, distillers corn oil and vegetable oils) into renewable diesel, renewable naphtha and other light end renewable hydrocarbons.
Renewable diesel is a low-carbon transportation fuel that is interchangeable with diesel produced from petroleum and is produced at the DGD Facilities using an advanced hydroprocessing-isomerization process licensed from UOP LLC, known as the Ecofining™ Process, and a pretreatment process developed by the Desmet Ballestra Group to convert fats (animal fats, used cooking oils, distillers corn oil and vegetable oils) into renewable diesel, renewable naphtha and other light end renewable hydrocarbons.
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 name by our Sonac C3 and Sonac Blood business activities.
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.
With respect to our North American operations, we have trading departments located at our corporate headquarters in Irving, Texas and at our regional office in Cold Spring, Kentucky.
With respect to our North American operations, we have trading departments located at our corporate headquarters in Irving, Texas, at our regional office in Cold Spring, Kentucky and our regional office in Winchester, Virginia.
Collagen Rousselot is a global leading market provider of collagen for the food, nutritional pharmaceutical and technical (e.g., photographic) industries with operations in Europe, China, South America and the United States. Rousselot has a network of 11 production plants and six sales locations, covering sales into more than 75 countries.
Collagen Rousselot 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 11 production plants and six sales locations, covering sales into more than 70 countries.
Darling Ingredients International operates a global network of 65 production facilities across five continents covering all aspects of animal by-product processing through five brands: Rendac (fuel), Sonac (proteins, fats, edible fats and blood products), Ecoson (bioenergy and fertilizer), Rousselot (collagen) and CTH (natural casings).
Darling Ingredients International operates a global network of 74 production facilities across five continents covering all aspects of animal by-product processing through six brands: Rendac (fuel), Sonac (proteins, fats, edible fats and blood products), FASA (proteins and fats), Ecoson (bioenergy and fertilizer), Rousselot (collagen) and CTH (natural casings).
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 120,000 locations. 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 valuable low carbon fuel and feed ingredient. The Company estimates it collects used cooking oil from approximately 191,000 locations in the U.S. The Company’s primary customer for this product is the DGD Joint Venture.
Certain of the Company's geographic regions facilities are highly dependent on one or a few suppliers.
Certain of the Company's geographic regions' facilities are highly dependent on one or a few suppliers.
Page 4 Operating Segments The Company's business operates within three reportable operating segments: Feed Ingredients, Food Ingredients and Fuel Ingredients.
Operating Segments The Company's business operates within three reportable operating segments: Feed Ingredients, Food Ingredients and Fuel Ingredients.
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 January 1, 2022 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 31, 2022 included herein.
In South America, the Company's 10 largest raw material suppliers accounted for approximately 62% of the total raw material processed by the Company in South America, with one single supplier accounting for approximately 15% of the total raw material processed in South America.
In South America, the Company's 10 largest raw material suppliers accounted for approximately 52% of the total raw material processed by the Company in South America, with one single supplier accounting for approximately 23% of the total raw material processed in South America.
In Europe, the Company's 10 largest raw material suppliers accounted for approximately 31% of the total raw material processed by the Company in Europe, with one single supplier accounting for approximately 12% 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 11% of the total raw material processed in Europe.
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 7% of the total raw material processed in China.
In China, the Company's 10 largest raw material suppliers accounted for approximately 34% of the total raw material processed by the Company in China, with one single supplier accounting for approximately 9% of the total raw material processed in China.
While we have no national or multi-plant union contracts, at January 1, 2022, approximately 19% of the Company's North American employees were covered by multiple collective bargaining agreements. In addition, approximately 44% of Darling Ingredients International's employees are covered by various collective bargaining agreements. Management believes that our relations with our employees and their representatives are satisfactory.
While we have no national or multi-plant union contracts, at December 31, 2022, approximately 16% of the Company's North American employees were covered by multiple collective bargaining agreements. In addition, approximately 30% of Darling Ingredients International's employees are covered by various collective bargaining agreements. Management believes that our relations with our employees and their representatives are satisfactory.
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; ” and “ Our operations are subject to various laws, rules and regulations 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 changes. ” 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 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.
In fiscal year 2021, the Company generated $4.7 billion in revenues and $650.9 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.
In fiscal year 2022, the Company generated $6.5 billion in revenues and $737.7 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.
The Human Food PC Rule also updates existing Current Good Manufacturing Practices (“CGMPs”), and the Animal Food PC Rule establishes minimum CGMPs for the production, holding and distribution of the human or animal food. ▪ The FDA has issued a regulation relating to Foreign Supplier Verification Programs (“FSVP Rule”) requiring that importers of both human and animal food must develop, follow and maintain written procedures verifying that their foreign suppliers produce food in a manner that provides the same level of public health protection as the Human Food PC Rule, Animal Food PC Rule, or FDA’s regulations established under FSMA regarding produce safety, as appropriate, and must ensure that the suppliers’ food is not adulterated and is not misbranded with respect to allergen labeling of human food. ▪ Under FSMA, the Sanitary Transportation Food Act of 2005, and FDA’s regulation, sanitary transportation practices must be used to transport human and animal foods to prevent such food from being adulterated during transport and applies to shippers, loaders, carriers by motor vehicle or rail vehicle, and receivers engaged in the transportation of food. ▪ The FDA has finalized a rule that requires registered human food facilities to conduct a vulnerability assessment and implement mitigation strategies, including a written food defense plan, to prevent or mitigate potential acts of intentional adulteration of food that could harm the public health. ▪ The FDA has proposed to establish additional traceability recordkeeping requirements for persons that manufacture, process, pack, or hold foods that appear on a list of “high risk” foods.
The Human Food PC Rule also updates existing Current Good Manufacturing Practices (“CGMPs”), and the Animal Food PC Rule establishes minimum CGMPs for the production, holding and distribution of the human or animal food. ▪ The FDA has issued a regulation relating to Foreign Supplier Verification Programs (“FSVP Rule”) requiring that importers of both human and animal food must develop, follow and maintain written procedures verifying that their foreign suppliers produce food in a manner that provides the same level of public health protection as the Human Food PC Rule, Animal Food PC Rule, or FDA’s regulations established under FSMA regarding produce safety, as appropriate, and must ensure that the suppliers’ food is not adulterated and is not misbranded with respect to allergen labeling of human food. ▪ Under FSMA, the Sanitary Transportation Food Act of 2005, and FDA’s regulation, sanitary transportation practices must be used to transport human and animal foods to prevent such food from being adulterated during transport and applies to shippers, loaders, carriers by motor vehicle or rail vehicle, and receivers engaged in the transportation of food. ▪ The FDA has finalized a rule that requires registered human food facilities to conduct a vulnerability assessment and implement mitigation strategies, including a written food defense plan, to prevent or mitigate potential acts of intentional adulteration of food that could harm the public health. ▪ The FDA issued a final rule establishing the Laboratory Accreditation for Analyses of Foods (“LAAF”) program as required by FSMA section 202(a).
During the 2021 fiscal year, the Company's 10 largest raw materials suppliers in North America accounted for approximately 31% of the total raw material processed by the Company in North America, with one single supplier accounting for approximately 7% of the total raw material processed in North America.
During the 2022 fiscal year, the Company's 10 largest raw materials suppliers in North America accounted for approximately 33% 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.
Approximately 88% of Darling's U.S. volume of raw materials in fiscal year 2021 was acquired on a "formula" basis.
Approximately 89% of Darling's U.S. volume of raw materials in fiscal year 2022 was acquired on a "formula" basis.
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. As of January 1, 2022, the Company employed globally approximately 9,900 persons full-time.
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. As of December 31, 2022, the Company employed globally approximately 14,600 persons full-time.
Fiscal Year 2021, 2020 and 2019 Net External Sales Darling’s net external sales from fiscal year 2021, 2020 and 2019 continuing operations by operating segment were as follows (in thousands): Fiscal Year 2021 Fiscal Year 2020 Fiscal Year 2019 Net sales: Feed Ingredients $ 3,039,500 64.1 % $ 2,072,104 58.0 % $ 1,970,561 58.6 % Food Ingredients 1,271,629 26.8 1,185,701 33.2 1,119,085 33.3 Fuel Ingredients 430,240 9.1 314,118 8.8 274,259 8.1 Total $ 4,741,369 100.0 % $ 3,571,923 100.0 % $ 3,363,905 100.0 % Page 5 OPERATIONS Feed Ingredients Segment Our Feed Ingredients segment consists principally of (i) our U.S. ingredients business, 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 name (proteins, fats and plasma products) and (ii) our bakery residuals business.
Fiscal Year 2022, 2021 and 2020 Net External Sales Darling’s net external sales from fiscal year 2022, 2021 and 2020 by operating segment were as follows (in thousands): Fiscal Year 2022 Fiscal Year 2021 Fiscal Year 2020 Net sales: Feed Ingredients $ 4,539,000 69.5 % $ 3,039,500 64.1 % $ 2,072,104 58.0 % Food Ingredients 1,459,630 22.3 1,271,629 26.8 1,185,701 33.2 Fuel Ingredients 533,574 8.2 430,240 9.1 314,118 8.8 Total $ 6,532,204 100.0 % $ 4,741,369 100.0 % $ 3,571,923 100.0 % Page 5 OPERATIONS Feed Ingredients Segment Our Feed Ingredients segment consists principally of (i) our U.S. ingredients and speciality 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 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 commenced operations in June 2013 and operates a renewable diesel plant located next 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. Page 8 Diamond Green Diesel The DGD Joint Venture currently operates two renewable diesel plants, one located adjacent to Valero’s St.
The tentative list of high risk foods includes certain fruits and vegetables, shell eggs, and certain types of seafood, among other products. Entities that are subject to the rule would be required to establish and maintain traceability program records containing required information.
The list of high risk foods includes certain fruits and vegetables, shell eggs, and certain types of seafood, among other products. Entities that are subject to the rule will be required to establish and maintain traceability program records containing required information. The compliance date for all persons subject to the rule is January 20, 2026.
Value-added products include edible fats, blood products, bone products, protein meals and fats. Rousselot is a global leading market provider of collagen for the 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 is a global leading market provider of collagen for the food, pharmaceutical and technical industries with operations in Europe, the United States, South Page 4 America and China. CTH is a leading natural casings company for the sausage industry with operations in Europe, China and the United States.
Under the LAAF program, FDA will recognize accreditation bodies that will accredit laboratories to the standards established in this final rule. Laboratories accredited to the LAAF standard (“LAAF-accredited laboratories”) are authorized to conduct certain food testing as described in the rule. Management believes we are in compliance with these provisions of FSMA and the finalized rules.
Under the LAAF program, FDA will recognize accreditation bodies that will accredit laboratories to the standards established in this final rule. Laboratories accredited to the LAAF standard (“LAAF-accredited laboratories”) are authorized to conduct certain food testing as described in the rule.
Page 16 • The Canadian Department of the Environment (“Environment Canada”), which ensures compliance with Canadian federal air and water discharge and wildlife management requirements and the various provincial and local environmental ministries and agencies. • The Canadian Technical Standards and Safety Authority (“TSSA”), a non-profit organization that regulates the safety of fuels and pressure vessels and boilers.
Page 16 Canada • The Canadian Food Inspection Agency (“CFIA”), which regulates animal health and the disposal of animals and their products or by-products. • Canadian provincial ministries of agriculture and the environment , which regulate food safety and quality, air and water discharge requirements and the disposal of deadstock. • The Canadian Department of the Environment (“Environment Canada”), which ensures compliance with Canadian federal air and water discharge and wildlife management requirements and the various provincial and local environmental ministries and agencies. • The Canadian Technical Standards and Safety Authority (“TSSA”), a non-profit organization that regulates the safety of fuels and pressure vessels and boilers.
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.
Australia • The Australian Quarantine and Inspection Service , which regulates the import and export of agricultural products, including animal by-products. • The Department of Agriculture, Fisheries and Forestry , which administers meat and animal by-product legislation. • PrimeSafe , which is the principal regulator of meat and animal by-product businesses in the State of Victoria. • The Australian Competition and Consumer Commission , which regulates Australia’s competition and consumer protection law. • The Australian Securities and Investments Commission , which regulates Australia’s company and financial services laws. • Worksafe Victoria , which is the regulator responsible for administering and enforcing occupational health and safety laws and regulations in the State of Victoria. • Environment Protection Authority Victoria , which administers environmental protection laws in Victoria. • Goulburn-Murray Rural Water Corporation , which manages allocation and use of water under local water laws in Victoria.
Australia • The Australian Quarantine and Inspection Service , which regulates the import and export of agricultural products, including animal by-products. • The Department of Agriculture, Fisheries and Forestry , which administers meat and animal by-product legislation. • PrimeSafe , which is the principal regulator of meat and animal by-product businesses in the State of Victoria. • The Australian Competition and Consumer Commission , which regulates Australia’s competition and consumer protection law. • The Australian Securities and Investments Commission , which regulates Australia’s company and financial services laws.
Renewable diesel is distributed primarily by rail and ships owned by third-parties. We account for the DGD Joint Venture as an “investment in an unconsolidated subsidiary.” Bioenergy In Europe, Ecoson produces green power from biogas production out of organic sludge and food waste for combined heat plant installations.
We account for the DGD Joint Venture as an “investment in an unconsolidated subsidiary.” Bioenergy In Europe, Ecoson produces green power from biogas production out of organic sludge and food waste for combined heat plant installations. Ecoson is the largest industrial digestion operation in the Netherlands and Belgium. In addition, Ecoson's fat refinery produces refined fats and fatty acids.
We are a party to a raw material supply agreement with the DGD Joint Venture pursuant to which we are obligated to offer to supply the DGD Joint Venture a portion of the feedstock requirements at the DGD Norco Facility at market rates; however, the DGD Joint Venture is not obligated to purchase all or any part of its feedstock requirements from us.
We are a party to a raw material supply agreement with the DGD Joint Venture pursuant to which we are obligated to offer to supply the DGD Joint Venture a portion of the feedstock requirements at the DGD St.
We also acquire raw material under “non-formula” arrangements whereby suppliers are either paid a fixed price, are not paid, or are charged a Page 9 collection fee, depending on various economic and competitive factors.
Under a “formula” arrangement, the charge or credit for raw materials is tied to published finished product prices for a competing ingredient after deducting a fixed processing fee. We also acquire raw material under “non-formula” arrangements whereby suppliers are either paid a fixed price, are not paid, or are charged a collection fee, depending on various economic and competitive factors.
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. The DGD Joint Venture sells renewable diesel domestically and exports renewable diesel into global markets, primarily Canada and Europe.
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.
United Kingdom • 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. • The United Kingdom’s Animal and Plant Health Agency issues permits, approvals and registrations to plants carrying out certain activities related to the handling of animal by-products.
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.
Additionally, in January 2021, we and our DGD Joint Venture partner approved the construction of a new facility to be located next to Valero’s Port Arthur Refinery in Port Arthur, Texas, capable of producing 470 million gallons per year of renewable diesel and 20 million gallons per year of renewable naphtha and having similar logistics flexibilities as those of the DGD Norco Facility.
Additionally, in November 2022 the DGD Joint Venture completed the construction of the DGD Port Arthur Plant, with a name plate capacity to produce 470 million gallons per year of renewable diesel and 20 million gallons per year of renewable naphtha and having similar logistics flexibilities as those of the DGD St. Charles Plant.
Darling Ingredients International's specialized portfolio of over 320 products covers all animal origin raw material types and thereby offers a comprehensive, single source solution for suppliers. Darling Ingredients International’s rendering and specialties business has leading positions across Europe and China, with European operations in the Netherlands, Belgium, Germany, Poland and Italy under the Ecoson, Rendac and Sonac brand names.
Darling Ingredients International's specialized portfolio of over 340 products covers all animal origin raw material types and thereby offers a comprehensive, single source solution for suppliers.
The EU Directives may allow EU Member States to maintain or establish more stringent measures in their own legislation.
The EU Directives may allow EU Member States to maintain or establish more stringent measures in their own legislation. In general, each EU Member State is responsible for regulating health and safety at work and labor inspection services and is in charge of controlling compliance with applicable legislation and regulations.
In October 2021, the DGD Joint Venture completed an expansion of the DGD Norco Facility that increased its renewable diesel production by 410 million gallons per year, so that it is now capable of producing 700 million gallons per year of renewable diesel as well as separating renewable naphtha (approximately 30 million gallons) and other light end renewable hydrocarbons for sale into low carbon fuel markets.
Charles Plant that increased its renewable diesel production capability to up to 750 million gallons per year of renewable diesel, as well as separating renewable naphtha (approximately 30 million gallons) and other light end renewable hydrocarbons for sale into low carbon fuel markets, at a total cost, including naphtha production and improved logistics capability, of approximately $1.1 billion.
Page 15 • The Council of Europe's , European Directorate for the Quality of Medicine and Healthcare , which establishes quality standards for safe medicinal products for human and veterinary use in Europe by developing guidance and standards in the areas of blood transfusion, organ, cell and tissue transportation and consumer health issues. • The European Commission, Directorate-General for the Environment , which is responsible for EU policy on the environment and for monitoring the implementation of related EU legislation, including but not limited to Directive 2010/75/EU on Industrial Emissions (Integrated Pollution Prevention and Control) and, together with other Directorate-Generals of the European Commission, the Best Available Techniques Reference Document on the Slaughterhouses and Animal By-products Industries. • The European Chemicals Agency , which is responsible for the implementation of Regulation (EC) No 1907/2006 on the Registration, Evaluation, Authorisation and Restriction of Chemicals. • EU Member States must correctly transpose EU Directives in their national legislation and apply EU Regulations, and in particular ensure adequate and effective enforcement, control and supervision of the relevant principles such as minimum safety and health requirements for the workplace and use of work equipment by workers.
Relevant Directorate Generals include, but are not limited to: • Directorate-General for Health and Food Safety , which is responsible for EU policy on food safety and health and for monitoring the implementation of related EU legislation, including but not limited to food, feed, human and animal health, technical uses of animal by-products and packaging. • Directorate-General for the Environment , which is responsible for EU policy on the environment and for monitoring the implementation of related EU legislation, including but not limited to Directive 2010/75/EU on Industrial Emissions (Integrated Pollution Prevention and Control) and, together with other Directorate-Generals of the European Commission, the Best Available Techniques Reference Document on the Slaughterhouses and Animal By-products Industries.
Removed
Charles Refinery in Norco, Louisiana (the “DGD Norco Facility”).
Added
In fiscal 2022, the Company completed several acquisitions including two material rendering operations, Valley Proteins in North America and the FASA Group in South America. See Note 3 to the Company's Consolidated Financial Statements for more information.
Removed
The expansion of the DGD Norco Facility was completed and became operational in October 2021, at a total cost, including naphtha production and improved logistics capability, of approximately $1.1 billion, which was substantially funded by DGD Joint Venture cash flow.
Added
Darling Ingredients International’s rendering and specialties business has leading positions across Europe, China and South America, with European operations in the Netherlands, Belgium, Germany, Poland and Italy under the Ecoson, Rendac, Sonac and FASA brand names. Value-added products include edible fats, blood products, bone products, protein meals and fats.
Removed
Construction is underway, and the new plant is anticipated to commence operations in the first quarter of 2023, with the total cost of the expansion project estimated to be approximately $1.45 billion, which will be substantially funded by DGD Joint Venture cash flow.
Added
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.
Removed
Once operational, the new plant is expected to increase the DGD Joint Venture’s total renewable diesel production capacity to approximately 1.2 billion gallons per year. The DGD Norco Facility receives feedstocks primarily by rail and trucks owned by third-parties.
Added
The DGD Joint Venture was formed in January 2011 to design, engineer, construct and operate the DGD St. Charles Plant, which reached mechanical completion and began production of renewable diesel and certain other co-products in late June 2013. In October 2021, the DGD Joint Venture completed an expansion of the DGD St.
Removed
Ecoson is the largest industrial digestion operation in the Netherlands, with an output matching the annual use of energy needs of approximately 14,000 households. In addition, Ecoson's fat refinery produces refined fats and fatty acids. Ecoson also processes manure into natural biophosphate for use as fertilizer and green gas.
Added
The DGD Port Arthur Plant was completed at a total cost of approximately $1.43 billion.
Removed
Under a “formula” arrangement, the charge or credit for raw materials is tied to published finished product prices for a competing ingredient after deducting a fixed processing fee.
Added
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).
Removed
In response to the COVID-19 Page 12 pandemic, we implemented significant changes that we determined were in the best interests of our employees, as well as the communities in which we operate.
Added
Work on the project is underway, with completion expected in 2025 at a total estimated cost of approximately $315 million. The DGD Facilities receive feedstocks primarily by rail and trucks owned by third-parties as well as imports via ships.
Removed
These included comprehensive cleaning of work areas, temperature scans, additional hygiene measures, face coverings and social distancing protocols, travel restrictions, limitation of access to our facilities, a work from home strategy and the use of collaboration tools to stay connected. We retain talent by providing employees with training, mentoring and career development.
Added
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.
Removed
The deadline for comments to the proposed rule was November 23, 2020 and the final rule is pending. ▪ The FDA issued a final rule establishing the Laboratory Accreditation for Analyses of Foods (“LAAF”) program as required by FSMA section 202(a).
Added
Ecoson also processes manure into natural biophosphate for use as fertilizer and green gas.
Removed
In general, each EU Member State is responsible for regulating health and safety at work and labor inspection services and is in charge of controlling compliance with applicable legislation and regulations. • The Dutch Food and Consumer Product Safety Authority (Nederlandse Voedsel- en Warenautoriteit) , which issues permits, approvals and registrations to establishments or plants engaged in certain activities related to the handling of animal by-products and food and feed production. • The Belgian Federal Agency for the Safety of the Food Chain (FASFC) (Federaal Agentschap voor de veiligheid van de voedselketen (FAVV) or Agence fédérale pour la sécurité de la chaîne alimentaire (AFSCA)) , which issues federal permits, authorizations, approvals and registrations to establishments or plants engaged in certain activities related to the handling of animal by-products and food and feed production. • At a regional level in Belgium, the Public Waste Agency of Flanders (Openbare Vlaamse Afvalstoffenmaatschappij) , the Soil and Waste Department of the Public Service of Wallonia ( Département du Sol et des Déchets du Service Public de Wallonie ) and Brussels Environment ( Leefmilieu Brussel or Bruxelles Environnement ), which issues regional permits, approvals and registrations to establishments or plants carrying out certain activities related to the handling of animal by-products and food and feed production. • The German competent authorities at state (Länder) level , which issue permits, approvals and registrations to establishments or plants carrying out certain activities related to the handling of animal by-products and food and feed production. • The Polish, the General Veterinary Inspectorate ( G³ówny Inspektorat Weterynarii ), which issues permits, approvals and registrations to establishments or plants engaged in certain activities related to the handling of animal by-products and food and feed production.
Added
In addition, we continue to Page 12 monitor COVID-19 and will continue, as appropriate, to implement operational guidelines in our organization consistent with the applicable governmental and regulatory policies in the geographies we operate intended to protect our employees and prevent the spread of the virus. We retain talent by providing employees with training, mentoring and career development.
Removed
Feed businesses need to be approved or registered with their local authority trading standards office.
Added
In September 2022, FDA launched a LAAF Dashboard which maintains a list of FDA-recognized Accreditation Bodies for the LAAF Program. ▪ The FDA has issued a final rule establishing additional traceability recordkeeping requirements for persons that manufacture, process, pack, or hold foods that appear on a list of “high risk” foods.
Removed
Canada • The Canadian Food Inspection Agency (“CFIA”), which regulates animal health and the disposal of animals and their products or by-products. • Canadian provincial ministries of agriculture and the environment , which regulate food safety and quality, air and water discharge requirements and the disposal of deadstock.
Added
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 in their national legislation and apply EU Regulations, and in particular ensure adequate and effective enforcement, control and supervision of the relevant principles such as minimum safety and health requirements for the workplace and use of work equipment by workers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

101 edited+37 added−12 removed262 unchanged
Biggest changeMany of our raw materials are derived directly or indirectly from animal by-products, which results in the following challenges: • In North America, consolidation within the meat processing industry has resulted in bigger and more efficient slaughtering operations, the majority of which utilize “captive” renderers (rendering operations integrated with the meat or poultry packing operation). • Concurrently, there has been limited to no growth in the number of small U.S. meat processors, which have historically been a dependable source of supply for non-captive or independent U.S. renderers, such as us. • The slaughter rates in the U.S. and international meat processing industry are subject to decline during poor economic conditions when consumers generally reduce their consumption of protein, and as a result, during such periods of decline, the availability, quantity and quality of raw materials available to independent renderers, such as us, decreases.
Biggest changeMany of our raw materials are derived directly or indirectly from animal by-products, which results in the following challenges: Page 20 • In North America, consolidation within the meat processing industry has resulted in bigger and more efficient slaughtering operations, the majority of which utilize “captive” rendering (rendering operations integrated with the meat or poultry packing operation). • Concurrently, there has been limited to no growth in the number of small U.S. meat processors, which have historically been a dependable source of supply for non-captive or independent U.S. renderers, such as us. • The slaughter rates in the U.S. and international meat processing industry are subject to decline during poor economic conditions when consumers generally reduce their consumption of protein, and as a result, during such periods of decline, the availability, quantity and quality of raw materials available to independent renderers, such as us, decreases. • In addition, the Company has seen an increase in the use of used cooking oil in the production of biofuels, which has increased competition for the collection of used cooking oil from restaurants and other food service establishments and contributed to an increase in the frequency and magnitude of theft of used cooking oil in the United States. • Furthermore, a decline in the general performance of the global economy (including a decline in consumer confidence and inflation) and an inability of consumers and companies to obtain credit in the financial markets could have a negative impact on our raw material volume, such as through the forced closure of any of our raw material suppliers.
Our insurance may not be adequate to cover all liabilities we incur in connection with product liability and/or other claims, whether or not legitimate, or product recalls, whether voluntary or mandatory, and we may not be able to maintain our existing insurance or obtain comparable insurance at a reasonable cost for such matters.
Our insurance may not cover or be adequate to cover all liabilities we incur in connection with product liability and/or other claims, whether or not legitimate, or product recalls, whether voluntary or mandatory, and we may not be able to maintain our existing insurance or obtain comparable insurance at a reasonable cost for such matters.
The insurance coverage that we maintain may not 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.
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.
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 associated with commodities markets; • 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 biofuels business may be affected by energy policies of U.S. and foreign governments; • 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; • Media campaigns related to feed and food ingredient 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 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; Page 18 • P andemics, epidemics or disease outbreaks, such as the novel 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; • 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; • Our success is dependent on our key personnel; • We could incur 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 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 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 may divest of 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 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; • We may incur significant charges in the event we close or divest all or part of a manufacturing plant or facility; • We may not be able to achieve reduction of our greenhouse gas emissions and other sustainability goals; and Page 19 • The vote by the United Kingdom mandating its 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 associated with commodities markets; • 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 biofuels business may be affected by energy policies of U.S. and foreign governments; • 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; Page 18 • 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; • 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 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 the novel 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; • 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 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; Page 19 • We may divest of 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 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; • 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 reduction of our greenhouse gas emissions and other sustainability goals; and • The United Kingdom's withdrawal from the EU could have an adverse effect on our business, investments and future operations in Europe.
The potential for future terrorist attacks, the U.S. and international responses to terrorist attacks and other acts of war or hostility, including the ongoing conflicts in the Middle East, North Korea and Ukraine, may cause economic and political uncertainties and cause our business to suffer in ways that cannot currently be predicted.
The potential for future terrorist attacks, the U.S. and international responses to terrorist attacks and other acts of war or hostility, including the ongoing conflicts in the Middle East, Africa, North Korea and Ukraine, may cause economic and political uncertainties and cause our business to suffer in ways that cannot currently be predicted.
The UK introduced legislation with effect from January 13, 2019 to implement certain parts of IORP Directive II: (i) the Occupational Pension Schemes (Governance) Page 37 (Amendment) Regulations 2018, SI 2018/1103, which implemented the governance provisions; (ii) the Occupational Pension Schemes (Cross-border Activities) (Amendment) Regulations 2018, SI 2018/1102, which implemented the requirements relating to cross-border activity and cross-border transfers; and (iii) the Pension Protection Fund (Pensionable Service) and Occupational Pension Schemes (Investment and Disclosure) (Amendment and Modification) Regulations 2018, SI 2018/988, which (among other things) made amendments to the content requirements of statements of investment principles so as to require trustees to state, from October 1, 2019, their policy on ‘financially material considerations’.
The UK introduced legislation with effect from January 13, 2019 to implement certain parts of IORP Directive II: (i) the Occupational Pension Schemes (Governance) (Amendment) Regulations 2018, SI 2018/1103, which implemented the governance provisions; (ii) the Occupational Pension Schemes (Cross-border Activities) (Amendment) Regulations 2018, SI 2018/1102, which implemented the requirements relating to cross-border activity and cross-border transfers; and (iii) the Pension Protection Fund (Pensionable Service) and Occupational Pension Schemes (Investment and Disclosure) (Amendment and Modification) Regulations 2018, SI 2018/988, which (among other things) made amendments to the content requirements of statements of investment principles so as to require trustees to state, from October 1, 2019, their policy on ‘financially material considerations’.
A majority of the Company's Canadian volume of animal by-product raw materials are acquired based on prices fixed on a quarterly basis with suppliers, with the remaining portion acquired on a “formula basis.” A majority of Darling Ingredients International’s volume of animal by-product raw materials are acquired at spot or quarterly fixed prices.
A majority of the Company's Canadian volume of animal by-product raw materials are acquired based on prices fixed on a monthly basis with suppliers, with the remaining portion acquired on a “formula basis.” A majority of Darling Ingredients International’s volume of animal by-product raw materials are acquired at spot or quarterly fixed prices.
Although no global disease pandemic among humans has been linked to Bird Flu or other emerging diseases as of the date of this report, governments may be pressured to address these concerns, including by executive action such as temporarily closing certain businesses, including meat and animal processing facilities, within jurisdictions suspected of contributing to the spread of such diseases or by legislative or other policy action, such as prohibiting imports of animals, meat and animal by-products from countries or regions where the disease is detected or suspected.
Page 28 Although no global disease pandemic among humans has been linked to Bird Flu or other emerging diseases as of the date of this report, governments may be pressured to address these concerns, including by executive action such as temporarily closing certain businesses, including meat and animal processing facilities, within jurisdictions suspected of contributing to the spread of such diseases or by legislative or other policy action, such as prohibiting imports of animals, meat and animal by-products from countries or regions where the disease is detected or suspected.
In addition to the risk factors discussed in this report, the price and volume volatility of our common stock may be affected by: Page 32 • 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 • general economic and market conditions, such as U.S. or global reactions to economic developments, including regional recessions, 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: Page 33 • 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 • general economic and market conditions, such as U.S. or global reactions to economic developments, including regional recessions, inflation, currency devaluations or political unrest.
This healthcare reform legislation and its applicable implementing regulations contain provisions that could materially impact our future healthcare costs, including the contributions we are required to make to our benefit plans.
This healthcare reform legislation and its applicable implementing regulations contain provisions that could materially impact our healthcare costs, including the contributions we are required to make to our benefit plans.
Page 33 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.
Page 34 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.
Violations of the FCPA or other anti-bribery laws, or of OFAC or other economic sanctions laws, or allegations of such violations, could result in lengthy investigations and possibly disrupt our business, lead to criminal and/or civil legal proceedings brought by governmental Page 34 agencies and/or third parties, result in material fines and legal and other costs and have a material adverse effect on our reputation, business, results of operations, cash flows and financial condition.
Violations of the FCPA or other anti-bribery laws, or of OFAC or other economic sanctions laws, or allegations of such violations, could result in lengthy investigations and possibly disrupt our business, lead to criminal and/or civil legal proceedings brought by governmental agencies and/or third parties, result in material fines and legal and other costs and have a material adverse effect on our reputation, business, results of operations, cash flows and financial condition.
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, 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, 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.
Should our international operations continue to expand, they will represent a larger part of our business and such exchange rate fluctuations may have a greater impact on our business, financial condition and results of operations. Large capital projects can take many years to complete, and market conditions could deteriorate over time, negatively impacting project returns.
Should our international operations continue to expand, they will represent a larger part of our business and such exchange rate fluctuations may have a greater impact on our business, financial condition and results of operations. Page 36 Large capital projects can take many years to complete, and market conditions could deteriorate over time, negatively impacting project returns.
To deter Page 29 fraudulent practices, the Official Controls Regulation introduces more stringent rules for financial penalties, imposed by EU Member States. Those penalties must reflect the economic advantage of the operator or a percentage of the operator’s turnover. The Regulation also introduces new provisions to protect whistle-blowers to encourage and facilitate the reporting of non-compliance.
To deter fraudulent practices, the Official Controls Regulation introduces more stringent rules for financial penalties, imposed by EU Member States. Those penalties must reflect the economic advantage of the operator or a percentage of the operator’s turnover. The Regulation also introduces new provisions to protect whistle-blowers to encourage and facilitate the Page 30 reporting of non-compliance.
The quality and volume of the finished products that we are able to produce could be negatively impacted by unseasonable or severe weather or unexpected declines in the volume of raw materials available during holidays, which in turn could have a material adverse effect on our business, results of operations and financial condition.
The quality and volume of the finished products that we Page 25 are able to produce could be negatively impacted by unseasonable or severe weather or unexpected declines in the volume of raw materials available during holidays, which in turn could have a material adverse effect on our business, results of operations and financial condition.
“ 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.
“ 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.
If any of these risks described above were to materialize and the operations of the DGD Joint Venture were significantly disrupted, it could have a material adverse effect on our business, financial condition and results of operations. Page 22 Our biofuels business may be affected by energy policies of U.S. and foreign governments.
If any of these risks described above were to materialize and the operations of the DGD Joint Venture were significantly disrupted, it could have a material adverse effect on our business, financial condition and results of operations. Our biofuels business may be affected by energy policies of U.S. and foreign governments.
Fortunately, the OIE has established procedures for countries to recognize protection zones and limit bans of affected products to the protection zone and allow trade to continue with regions of the country outside of the protection zone. As of the date of this report, ASF has not Page 27 been reported in the United States, Canada or South America.
Fortunately, the OIE has established procedures for countries to recognize protection zones and limit bans of affected products to the protection zone and allow trade to continue with regions of the country outside of the protection zone. As of the date of this report, ASF has not been reported in the United States, Canada or South America.
As a result, we may be unable to fully realize our expected returns, which could negatively impact our financial condition, results of operations, and cash flows. Page 35 Changes in consumer preference could negatively impact our business. The food and pet food industries in general are subject to changing consumer trends, demands and preferences.
As a result, we may be unable to fully realize our expected returns, which could negatively impact our financial condition, results of operations, and cash flows. Changes in consumer preference could negatively impact our business. The food and pet food industries in general are subject to changing consumer trends, demands and preferences.
While in fiscal 2021, the amount of tax credits for biofuels impacting the Company was material, legal challenges or changes to, a failure to enforce, reductions in the mandated volumes under, or discontinuing any of these programs could have a negative impact on our business and results of operations.
While in fiscal 2022, the amount of tax credits for biofuels impacting the Company was material, legal challenges or changes to, a failure to enforce, reductions in the mandated volumes under, or discontinuing any of these programs could have a negative impact on our business and results of operations.
Risks Related to Legal and Regulatory Compliance Our operations are subject to various laws, rules and regulations 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 environmental damages.
In the UK and the EU, pension funds are generally subject to the Institution for Occupational Retirement Provision Directive (Directive 2003/41/EC) (the “IORP Directive”) as implemented in the relevant EU Member States (and the UK). The IORP Directive provides for certain general solvency requirements but allows EU Member States discretion to impose specific national requirements.
In the UK and the EU, pension funds are generally subject to the Institution for Occupational Retirement Provision Directive (Directive 2003/41/EC) (the “IORP Directive”) as implemented in the relevant EU Member States (and the UK). The Page 38 IORP Directive provides for certain general solvency requirements but allows EU Member States discretion to impose specific national requirements.
We also require a significant amount of electricity in operating certain of our facilities, a disruption of which or a significant increase in the cost of which could have a material adverse effect on the business and results of operations of the affected facility. A significant percentage of our revenue is attributable to a limited number of suppliers and customers.
We also require a significant amount of electricity in operating certain of our facilities, a significant increase in the cost of which could have a material adverse effect on the business and results of operations of the affected facility. A significant percentage of our revenue is attributable to a limited number of suppliers and customers.
“ 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 .” The issuance of shares of preferred stock could adversely affect holders of common stock, which may negatively impact your investment.
“ 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 .” The issuance of shares of preferred stock could adversely affect holders of common stock, which may negatively impact your investment.
We may engage in capital projects, such as the DGD Joint Venture expansion project, 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 DGD Joint Venture expansion project in Port Arthur, 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.
The EPA has also announced a regulatory endangerment finding relating to GHG emissions that has led to further regulation of GHG emissions. Legislation to regulate GHG emissions has periodically been proposed in the U.S. Congress, and a growing number of states and foreign countries are taking action to require reductions in GHG emissions.
The EPA has also issued a regulatory endangerment finding relating to GHG emissions that has led to further regulation of GHG emissions. Legislation to regulate GHG emissions has periodically been proposed in the U.S. Congress, and a growing number of states and foreign countries are taking action to require reductions in GHG emissions.
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 (“Food Transparency Regulation”) has applied since March 27, 2021. The Food Transparency Regulation strengthens transparency requirements in EU food law.
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”) has applied since March 27, 2021. The Food Transparency Regulation strengthens transparency requirements in EU food law.
Page 36 Our success is dependent on our key personnel. Our success depends to a significant extent upon a number of key employees, including members of senior management. The loss of the services of one or more of these key employees could have a material adverse effect on our results of operations and prospects.
Our success is dependent on our key personnel. Our success depends to a significant extent upon a number of key employees, including members of senior management. The loss of the services of one or more of these key employees could have a material adverse effect on our results of operations and prospects.
Page 21 The DGD Joint Venture is dependent on governmental energy policies and programs, such as the National Renewable Fuel Standard Program (“RFS”) and low carbon fuel standards (“LCFS”) (such as in the state of California), which positively impact the demand for and price of renewable diesel.
The DGD Joint Venture is dependent on governmental energy policies and programs, such as the National Renewable Fuel Standard Program (“RFS”) and low carbon fuel standards (“LCFS”) (such as in the state of California), which positively impact the demand for and price of renewable diesel.
Any pathogen, such as Salmonella , that is correctly or incorrectly associated with our Page 28 finished products could have a negative impact on the demand for our finished products and could have a material adverse effect on our business, reputation, results of operations or financial condition.
Any pathogen, such as Salmonella , that is correctly or incorrectly associated with our finished products could have a negative impact on the demand for our finished products and could have a material adverse effect on our business, reputation, results of operations or financial condition.
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 North American Free Trade Agreement (“NAFTA”), which could negatively impact our business; • impact of currency exchange rate fluctuations between the U.S. dollar and foreign currencies, particularly the euro, the Canadian dollar, the Chinese renminbi, the Brazilian real, the British pound, the Japanese yen, the 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 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 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 Canadian dollar, the Chinese renminbi, the Brazilian real, 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 Page 24 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.
Given the competitive nature of our industry, we could be adversely affected by violations of various countries’ antitrust, competition and consumer protection laws. These laws generally prohibit companies and individuals from engaging in anticompetitive and unfair business practices.
Page 35 Given the competitive nature of our industry, we could be adversely affected by violations of various countries’ antitrust, competition and consumer protection laws. These laws generally prohibit companies and individuals from engaging in anticompetitive and unfair business practices.
Page 38 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.
Page 39 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 Page 30 may also be subject to general country strikes or work stoppages unrelated to our business or collective bargaining agreements that could have a direct or indirect adverse effect on our business, results of operation or financial condition.
We may also be subject to general country strikes or work stoppages unrelated to our business or collective bargaining agreements that could have a direct or indirect adverse effect on our business, results of operation or financial condition.
The failure to hire and retain such personnel could materially adversely affect our business, results of operations and financial condition. We could incur a material weakness in our internal control over financial reporting that would require remediation.
The failure to hire and retain such personnel could materially adversely affect our business, results of operations and financial condition. We could have a material weakness in our internal control over financial reporting that would require remediation.
Compliance with these and similar regulations could increase the cost of new fleet vehicles and increase our operating expenses. Compliance with future GHG regulations may require expenditures that could materially adversely affect our business, results of operations and financial condition.
Compliance with these and similar regulations could Page 27 increase the cost of new fleet vehicles and increase our operating expenses. Compliance with future GHG regulations may require expenditures that could materially adversely affect our business, results of operations and financial condition.
Certain U.S. multiemployer defined benefit pension plans to which we contribute are underfunded and these plans may require minimum funding contributions. We participate in various U.S. multiemployer pension plans which provide defined benefits to certain employees covered by labor contracts.
Page 31 Certain U.S. multiemployer defined benefit pension plans to which we contribute are underfunded and these plans may require minimum funding contributions. We participate in various U.S. multiemployer pension plans which provide defined benefits to certain employees covered by labor contracts.
On September 7, 2021, the European Commission relaxed the “feed ban” to allow the feeding of non-ruminant farmed animals with insect PAP, reauthorize the feeding of poultry with pig PAP, the feeding of pigs with poultry PAP and allow the use of ruminant derived gelatin in feeds for non-ruminant farmed animals.
In September 2021, the European Commission relaxed the “feed ban” to allow the feeding of non-ruminant farmed animals with insect PAP, reauthorize the feeding of poultry with pig PAP, the feeding of pigs with poultry PAP and allow the use of ruminant derived gelatin in feeds for non-ruminant farmed animals.
In 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 Norco Facility or completion and startup of any expansion projects, including the Port Arthur expansion project, 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 produces; • unforeseen engineering or environmental issues, including new or more stringent environmental regulations affecting operations; • 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; 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.
In 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 projects, 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 produces; • 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; • 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; Page 22 • 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; 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.
Page 24 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.
As a result of our international operations, we could be adversely affected by additional non-U.S. regulations regarding BSE and other food safety issues.
Page 29 As a result of our international operations, we could be adversely affected by additional non-U.S. regulations regarding BSE and other food safety issues.
Business operators will need to notify EFSA of the title and the scope of any study commissioned or carried out by them to support an application or a notification, as well as the laboratory or testing facility carrying out that study, and its starting and planned completion dates.
Business operators must notify EFSA of the title and the scope of any study commissioned or carried out by them to support an application or a notification, as well as the laboratory or testing facility carrying out that study, and its starting and planned completion dates.
“ 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 .” Page 31 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.
“ 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 .” Page 32 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 operate in certain jurisdictions subject to the Paris Agreement, which mandates reduced GHG emissions in certain participating countries, and the Page 26 EPA’s rule establishing mandatory GHG reporting for certain activities may apply to some of our facilities if we exceed the applicable thresholds.
We operate in certain jurisdictions subject to the Paris Agreement, which mandates reduced GHG emissions in certain participating countries. The EPA’s rule establishing mandatory GHG reporting for certain activities may apply to some of our facilities if we exceed the applicable thresholds.
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. Page 25 Media campaigns related to feed and food ingredient production present reputational and other risks.
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. Media campaigns related to feed and food ingredient production or fuel production present reputational and other risks.
We cannot assure that the ACA, as currently enacted or as repealed or amended in the future, will not adversely affect our business and financial results and we cannot predict how future federal or state legislative or administrative changes relating to healthcare reform will affect our business.
We cannot assure that healthcare coverage laws, as currently enacted or as repealed or amended in the future, will not adversely affect our business and financial results and we cannot predict how future federal or state legislative or administrative changes relating to healthcare reform will affect our business.
If the testing performed indicates that impairment has occurred, we are required to record a non-cash impairment charge for the difference between the carrying value of the goodwill and the fair value of the goodwill in the period the determination is made.
If the testing performed indicates that impairment has occurred, we are required to record a non-cash impairment charge for the difference between the carrying value of the reporting unit, including goodwill, and the fair value of the reporting unit, including goodwill, in the period the determination is made.
Regulation (EC) No 2017/625 (“Official Controls Regulation”) requires that the EU Member States verify compliance with agri-food chain rules through official controls. The scope of the Official Controls Regulation has been extended and will now cover official controls to verify compliance with food and feed law, animal health and welfare, plant health and animal-by products rules.
Related, Regulation (EC) 2017/625, as amended (“Official Controls Regulation”) requires that the EU Member States verify compliance with agri-food chain rules through official controls. The scope of the Official Controls Regulation has been extended and will now cover official controls to verify compliance with food and feed law, animal health and welfare, plant health and animal-by products rules.
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 Page 39 annual fee imposed on certain health insurance providers based on market share.
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.
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 Norco Facility.
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.
Moreover, the effects of the implementation and application of the EU-UK trade and Cooperations Agreement and any other relevant agreements that may be made between the UK and the EU, and the divergence of laws applicable in the EU and UK as the UK adopts its own legislation will continue to present legal uncertainty.
Moreover, the application of the EU-UK Trade and Cooperation Agreement and any other relevant agreements that may be made between the UK and the EU, and the divergence of laws applicable in the EU and UK as the UK adopts its own legislation will continue to present legal uncertainty.
Page 23 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.
Our facilities are subject to various federal, state, provincial and local environmental and other permitting requirements of the countries in which we operate and our facilities are located. Periodically, these permits may be reviewed and subject to amendment or withdrawal.
Our facilities are subject to various federal, state, provincial and local laws, rules and regulations including environmental and other permitting requirements of the countries in which we operate and our facilities are located. Periodically, these permits may be reviewed and subject to amendment or withdrawal.
The closure or divestiture of all or part of a manufacturing plant or facility could result in future charges that could be significant to our business, results of operations and financial condition. We may not be able to achieve reduction of our greenhouse gas emissions and other sustainability goals.
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 reduction of our greenhouse gas emissions and other sustainability goals.
We have approximately 9,900 employees world-wide and are subject to a wide range of local, provincial and national laws and regulations governing the health and safety of workers, including, for example, OSHA in the United States.
We have approximately 14,600 employees world-wide and are subject to a wide range of local, provincial and national laws and regulations governing the health and safety of workers, including, for example, OSHA in the United States.
Even if we achieve the goals, targets, and objectives we set, we may not realize all of the benefits that we expected at the time such goals, targets, and objectives were established. The vote by the United Kingdom mandating its withdrawal from the EU could have an adverse effect on our business, investments and future operations in Europe.
Even if we achieve the goals, targets, and objectives we set, we may not realize all of the benefits that we expected at the time such goals, targets, and objectives were established. The United Kingdom's withdrawal from the EU could have an adverse effect on our business, investments and future operations in Europe.
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. Our operations are highly dependent on the use of natural gas, diesel fuel and electricity.
Page 23 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.
Prices for our finished products may be impacted by worldwide government policies relating to renewable fuels and greenhouse gas emissions (“GHG”). Programs like RFS and LCFS and tax credits for biofuels both in the United States and abroad may positively impact the demand for our finished products.
Prices for our finished products may be impacted by worldwide government policies relating to renewable fuels and greenhouse gas emissions (“GHG”). Programs like RFS and LCFS and tax credits for biofuels both in the United States and abroad are subject to revision and change which may impact the demand for our finished products.
Among other things, the European Food Safety Authority (“EFSA”) will be required to disclose scientific data, studies and other information supporting applications, including supplementary information supplied by applicants, taking into account the protection of confidential information and of personal data.
Among other things, the European Food Safety Authority (“EFSA”) shall disclose scientific data, studies and other information supporting applications, including supplementary information supplied by applicants, taking into account the protection of confidential information and of personal data.
We may incur significant charges in the event we close or divest all or part of a manufacturing plant or facility. We periodically assess our manufacturing operations in order to manufacture and distribute our products in the most efficient manner.
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 periodically assess our manufacturing operations in order to manufacture and distribute our products in the most efficient manner.
Individuals or organizations can use social media platforms to publicize inappropriate or inaccurate stories or perceptions about the feed and food ingredient production industries or our company. Such practices could cause damage to the reputations of our company and/or the feed and food ingredient production industries in general. This damage could adversely affect our financial results.
Individuals or organizations can use social media platforms to publicize inappropriate or inaccurate stories or perceptions about the feed and food ingredient production industries, fuel production industry or our Company. Such practices could cause damage to the reputations of our Company and/or the feed and food ingredient production industries or fuel production industry in general.
As a result, imports of products that are derived from animal by-products into the EU from the UK must follow third country rules, including being accompanied by an export health certificate or model declaration form, and may be subject to veterinary checks and having to enter through designated board Page 40 inspection posts.
As a result, UK exports of products that are derived from animal by-products entering the EU must follow third country rules, including being accompanied by an export health certificate or model declaration form, and can be subjected to veterinary checks or having to enter through designated board inspection posts.
We could be adversely affected if the CPRA or other state, federal or international data privacy or security laws or regulations require changes in our business practices or privacy policies, or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, financial condition and results of operations.
We could be adversely affected if the CCPA, including as amended by CPRA, or other state, federal or international data privacy or security laws or regulations are interpreted in a manner that would require changes in our business practices or privacy policies, or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, financial condition and results of operations.
In fiscal year 2021, the Company's top ten customers for finished products accounted for approximately 31% of product sales. In addition, the Company's top ten raw material suppliers accounted for approximately 25% of its raw material supply in the same period.
In fiscal year 2022, the Company's top ten customers for finished products accounted for approximately 40% 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.
Furthermore, under current law, a termination of, our voluntary withdrawal from or a mass withdrawal of all contributing employers from any underfunded multiemployer defined benefit plan to which we contribute would require us to make payments to the plan for our proportionate share of such multiemployer plan’s unfunded vested liabilities.
Furthermore, under current law, a termination of, our voluntary withdrawal from or a mass withdrawal of all contributing employers from any underfunded multiemployer defined benefit plan to which we contribute would require us to make payments to the plan for our proportionate share of such multiemployer plan’s unfunded vested liabilities, which could be significant and have an adverse effect on our financial condition.
These developments and the impact of the terms of the Protocol may delay imports/exports between the EU and the UK, and within the UK itself where imports/exports are with Northern Ireland, and may entail additional costs.
These developments and the impact of the terms of the Protocol can cause import/export delays between the EU and the UK, and can entail additional costs within the UK itself, where imports/exports are with Northern Ireland.
While we currently have no international, national or multi-plant union contracts, as of January 1, 2022 approximately 19% of Darling’s U.S. employees, 24% of Canadian employees and 44% of Darling Ingredients International’s employees were covered by various collective bargaining agreements.
While we currently have no international, national or multi-plant union contracts, as of December 31, 2022 approximately 13% of Darling’s U.S. employees, 48% of Canadian employees and 30% of Darling Ingredients International’s employees were covered by various collective bargaining agreements.
There have also been various judicial challenges to the ACA. For example, on June 17, 2021, the U.S. Supreme Court dismissed a judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. There is uncertainty regarding any healthcare reform that the Biden administration and U.S.
There have also been various judicial challenges to the ACA. For example, on June 17, 2021, the U.S. Supreme Court dismissed a judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
As of January 1, 2022, our total indebtedness, including trade debt, was approximately $1.5 billion and we had undrawn commitments available for additional borrowings under the revolving loan facility included as part of our senior secured credit facilities of up to approximately $1.286 billion and a delayed draw term A loan availability of $400.0 million (after giving effect to approximately $160.0 million of revolver borrowing, $3.8 million of outstanding letters of credit and $50.3 million of ancillary facilities).
As of December 31, 2022, our total indebtedness, including trade debt, was approximately $3.4 billion and we had undrawn commitments available for additional borrowings under the revolving loan facility included as part of our senior secured credit facilities of up to approximately $1.3 billion and under delayed draw term A loans of $800.0 million (after giving effect to approximately $135.0 million of revolver borrowing, $3.9 million of outstanding letters of credit and $48.1 million of ancillary facilities).
The determination of BSE status is based on a risk assessment and the implementation of a surveillance program. For each risk category there are trade rules to provide the necessary guarantees for protecting public and animal health. Currently, the following EU Member States are classified as having a controlled BSE risk: France and Greece.
The determination of BSE status is based on a risk assessment and the implementation of a surveillance program. For each risk category there are trade rules to provide the necessary guarantees for protecting public and animal health.
Congress may propose, if any, including whether additional legislative reform will be enacted and whether any proposals will encompass or potentially alter the full-time employee healthcare coverage requirements and reporting obligations imposed on large employers like us.
There is uncertainty regarding any future healthcare reform that the administration or Congress may propose, if any, including whether any proposals will encompass or potentially alter the full-time employee healthcare coverage requirements and reporting obligations imposed on large employers like us.
Pursuant to the requirements established by the Energy Independence and Security Act of 2007, the finalized 2010 RFS regulation mandated the domestic use of biomass-based diesel (biodiesel, renewable diesel or renewable jet fuel) of 1.0 billion gallons in 2012 and a minimum of 1.0 billion gallons of biomass-based diesel for each year from 2012 through 2022, which amount is subject to increase by the Administrator of the EPA.
Pursuant to the requirements established by the Energy Independence and Security Act of 2007, the finalized 2010 RFS regulation mandated the domestic use of biomass-based diesel (biodiesel, renewable diesel or renewable jet fuel) of 1.0 billion gallons in 2012 and a minimum of 1.0 billion gallons of biomass-based diesel for 2012 and subsequent years.
The sixth and most recent case of BSE was reported in a six-year-old mixed-breed beef cow in August, 2018, which was the second case of BSE since the World Organization for Animal Health (the “OIE”) characterized the United States’ BSE status as one of “negligible risk” in 2013.
The sixth and most recent case of BSE was reported in a six-year-old mixed-breed beef cow in August, 2018, which was the second case of BSE since the OIE characterized the United States’ BSE status as one of “negligible risk” in 2013. Subsequently on May 24, 2022, the OIE characterized Canada's BSE status as one of “negligible risk”.
We also consume significant volumes of diesel fuel to operate our fleet of tractors and trucks used to collect raw materials, and diesel fuel prices represent a significant component of cost of collection expenses included in cost of sales. Prices for both natural gas and diesel fuel can be volatile and therefore represent an ongoing challenge to our operating results.
We also consume significant volumes of diesel fuel to operate our fleet of tractors and trucks used to collect raw materials, and diesel fuel prices represent a significant component of cost of collection expenses included in cost of sales.
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 January 1, 2022, the Company had approximately $1.2 billion of goodwill.
This damage could adversely affect our financial results. Page 26 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 31, 2022, the Company had approximately $2.0 billion of goodwill.
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. ” Similarly, the DGD Joint Venture is subject to the risk that new or changing technologies may be developed that could meet demand for renewable diesel under governmental mandates in a more efficient or less costly manner than the technologies used by the DGD Joint Venture, which could negatively affect the price of renewable diesel and have a material adverse effect on the DGD Joint Venture.
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.
Any such inadequacy of, or inability to obtain, insurance coverage could have a material adverse effect on our business, financial condition and results of operations.
Any such inadequacy of, or inability to obtain, insurance coverage could have a material adverse effect on our business, financial condition and results of operations. We may divest of certain of our brands or businesses from time to time, which could adversely affect us.
Former President Trump also signed two executive orders and other directives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by ACA.
Former President Trump also signed two executive orders and other Page 40 directives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. While Congress has not passed comprehensive repeal legislation, bills affecting the implementation of the ACA have been signed into law.
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 is taking measures to address the “unprecedented spread” of ASF. On July 28, 2021, ASF was confirmed in the Dominican Republic and subsequently in Haiti on September 30, 2021.
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.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLouis, Illinois, United States Animal By-Products Ellenwood, Georgia, United States Animal By-Products Fresno, California, 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 Page 41 Jackson, Mississippi, United States Animal By-Products Kansas City, Kansas, United States Animal By-Products Kansas City, Kansas, United States Protein Refining Lexington, Nebraska, United States Animal By-Products Lingen, Germany Blood Loenen, Netherlands Animal By-Products Los Angeles, California, United States Animal By-Products Luohe, China Blood Maquoketa, Iowa, United States Blood Marshville, North Carolina, United States Bakery Residuals Maryborough, Australia Blood Maysville, Kentucky, United States Protein Refining Maysville, Kentucky, United States Bakery Residuals Mason City, Illinois, United States Animal By-Products Mering, Germany Blood Moorefield, Ontario, Canada Animal By-Products Muscatine, Iowa, United States Bakery Residuals Newark, New Jersey, United States Animal By-Products Newberry, Indiana, United States Animal By-Products North Baltimore, Ohio, United States Bakery Residuals 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 Russellville, Kentucky, United State Animal By-Products Saint-Catherine, Quebec, Canada* Used Cooking Oil San Francisco, California, United States * 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 Truro, Novia Scotia, Canada Used Cooking Oil Turlock, California, United States Animal By-Products Turlock, California, United States Fertilizer Union City, Tennessee, United States Animal By-Products Usnice, Poland Animal By-Products Wahoo, Nebraska, United States Animal By-Products Watts, Oklahoma, United States Bakery Residuals/Protein Refining Wichita, Kansas, United States Animal By-Products Winesburg, Ohio, United States * Animal By-Products Winnipeg, Manitoba, Canada Animal By-Products Food Ingredients Segment Almere, Netherlands Casings Amparo, Brazil Collagen Angouleme, France 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 Kaiping, China Collagen Page 42 Lubien, Poland Fat Peabody, Massachusetts, United States Collagen Porto, Portugal Casings Presidente Epitacio, Brazil Collagen Stoke-on Trent, United Kingdom Bone Versmold, Germany Fat Vuren, Netherlands Bone Wenzhou, China Collagen Fuel Ingredients Segment 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 $17.6 million in the aggregate in fiscal 2021.
Biggest changeLouis, Illinois, United States Animal By-Products Ellenwood, Georgia, United States Animal By-Products Fayetteville, North Carolina, United States Animal By-Products Fresno, California, 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 Mifflintown, Pennsylvania, United States Wet Pet Food Moorefield, Ontario, Canada Animal By-Products Muscatine, Iowa, United States Bakery Residuals Newark, New Jersey, United States Animal By-Products Newberry, Indiana, United States Animal By-Products North Baltimore, Ohio, United States Bakery Residuals 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 State Animal By-Products Saint-Catherine, Quebec, Canada* Used Cooking Oil Page 43 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 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 Kaiping, China Collagen Lubien, Poland Fat Peabody, Massachusetts, United States Collagen Porto, Portugal Casings Presidente Epitacio, 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 Page 44 Son, Netherlands Digester * Leased Rent expense for our leased properties was $16.6 million in the aggregate in fiscal 2022.
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 January 1, 2022 by operating segment with a description of the plants principal process.
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 31, 2022 by operating segment with a description of the plants principal process.
ITEM 2. PROPERTIES As of January 1, 2022, the Company's corporate headquarters is located at 5601 N MacArthur Boulevard, Irving, Texas, 75038. As of January 1, 2022, the Company operates a global network of over 200 locations, including 145 production facilities, across five continents.
ITEM 2. PROPERTIES As of December 31, 2022, the Company's corporate headquarters is located at 5601 N MacArthur Boulevard, Irving, Texas, 75038. As of December 31, 2022, the Company operates a global network of over 260 locations, including 185 production facilities, across five continents.
LOCATION DESCRIPTION Feed Ingredients Segment Albertville, Alabama, United States Bakery Residuals 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 Boise, Idaho, United States Animal By-Products Bryan, Texas, United States Bakery Residuals Burgum, Netherlands Animal By-Products Butler, Kentucky, United States Animal By-Products Butler, Kentucky, United States Bakery Residuals Clinton, Iowa, United States Animal By-Products Coldwater, Michigan, United States Animal By-Products Collinsville, Oklahoma, United States 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 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 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 Bernailillo, New Mexico, United States Used Cooking Oil 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 Page 42 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 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company accepted this settlement offer, and the settlement became effective on April 16, 2021 following the completion of the EPA's administrative approval process. On September 30, 2016, Occidental Chemical Corporation (“OCC”) entered into an agreement with the EPA to perform the remedial design for the cleanup plan for the lower 8.3 miles of the Passaic River.
Biggest changeOn September 30, 2016, Occidental Chemical Corporation (“OCC”) entered into an agreement with the EPA to perform the remedial design for the cleanup plan for the lower 8.3 miles of the Passaic River.
According to the complaint, OCC has incurred or is incurring costs which include the estimated cost to complete the remedial design for the cleanup plan for the lower 8.3 miles of the Passaic River.
According to the complaint, OCC has incurred or is incurring costs which include the estimated cost to complete the remedial design for the cleanup plan for the lower 8.3 miles of the Lower Passaic River.
OCC is also seeking a declaratory judgment to hold the defendants liable for their proper shares of future response costs, including the remedial action for the lower 8.3 miles of the Passaic River.
OCC is also seeking a declaratory judgment to hold the defendants liable for their proper shares of future response costs, including the remedial action for the lower 8.3 miles of the Lower Passaic River.
The Company, along with 40 of the other defendants, had previously received a release from OCC of its CERCLA contribution claim of $165 million associated with the costs to design the remedy for the lower 8.3 miles of the Passaic River.
The Company, along with 40 of the other defendants, had previously received a release from OCC of its CERCLA contribution claim of $165 million associated with the costs to design the remedy for the lower 8.3 miles of the Lower Passaic River.
On June 30, 2018, OCC filed a complaint in the United States District Court for the District of New Jersey against over 100 companies, including the Company, seeking cost recovery or contribution for costs under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) relating to various investigations and cleanups OCC has conducted or is conducting in connection with the Passaic River.
On June 30, 2018, OCC filed a complaint in the United States District Court for the District of New Jersey against over 100 companies, including the Company, seeking cost recovery or contribution for costs under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) relating to various Page 45 investigations and cleanups OCC has conducted or is conducting in connection with the Lower Passaic River.
Subsequently, the EPA Page 43 conducted a settlement analysis using a third-party allocator and offered early cash out settlements to those PRP's for whom the third-party allocator determined did not discharge any of the COC's.
Subsequently, the EPA conducted a settlement analysis using a third-party allocator and offered early cash out settlements to those PRP's for whom the third-party allocator determined did not discharge any of the COC's.
In December 2009, the Company, along with numerous other entities, received notice from the United States Environmental Protection Agency (“EPA”) that the Company (as alleged successor-in-interest to The Standard Tallow Corporation) is considered a potentially responsible party (a “PRP”) with respect to alleged contamination in the lower 17-mile area of the Passaic River which is part of the Diamond Alkali Superfund Site located in Newark, New Jersey.
In December 2009, the Company, along with numerous other entities, received notice from the United States Environmental Protection Agency (“EPA”) that the Company (as alleged successor-in-interest to The Standard Tallow Corporation) is considered a potentially responsible party (a “PRP”) with respect to alleged contamination in the lower 17-mile stretch of the Passaic River (the “Lower Passaic River”) which is part of the Diamond Alkali Superfund Site located in Newark, New Jersey.
As a result of the matters discussed above, the Company has established loss reserves for insurance, environmental, litigation and tax contingencies. At January 1, 2022 and January 2, 2021, the reserves for insurance, environmental, litigation and tax contingencies reflected on the balance sheet in accrued expenses and other non-current liabilities were approximately $78.4 million and $66.2 million, respectively.
As a result of the matters discussed above, the Company has established loss reserves for insurance, environmental, litigation and tax contingencies. At December 31, 2022 and January 1, 2022, the reserves for insurance, environmental, litigation and tax contingencies reflected on the balance sheet in accrued expenses and other non-current liabilities were approximately $92.1 million and $78.4 million, respectively.
The Company has insurance recovery receivables of approximately $31.8 million and $27.0 million as of January 1, 2022 and January 2, 2021, related to insurance contingencies.
The Company has insurance recovery receivables of approximately $36.0 million and $31.8 million as of December 31, 2022 and January 1, 2022, related to insurance contingencies.
Removed
The Company is engaged in other legal proceedings from time to time. The proceedings described above and such other proceedings can be complex and take many months, or even years, to reach resolution, with the final outcome being dependent upon a number of variables, some of which are not within the control of the Company.
Added
The Company accepted this settlement offer, and the settlement became effective on April 16, 2021 following the completion of the EPA's administrative approval process. In September 2021, the EPA released a ROD selecting an interim remedy for the upper nine miles of the Lower Passaic River at an expected additional cost of $441 million.
Removed
Therefore, although the Company will vigorously defend itself in each of the described actions, the ultimate resolution and potential financial impact on the Company is uncertain. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. Page 44 PART II
Added
In October 2022, the Company, along with other settling defendants, entered into a Consent Decree with the EPA pursuant to which the Company paid $0.3 million to settle liabilities for both of the former plant sites in question related to the upper nine miles of the Lower Passaic River.
Added
The Company paid this amount into escrow, as the settlement is subject to the EPA’s administrative approval process, which includes publication, a public comment period and court approval.
Added
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. Page 46 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+1 added−2 removed4 unchanged
Biggest change(4) October 2021: October 3, 2021 through October 30, 2021 28,090 79.41 — $ 102,105,660 November 2021: October 31, 2021 through November 27, 2021 479 70.17 — 102,105,660 December 2021: November 28, 2021 through January 1, 2022 1,027,325 (3) 67.98 1,019,885 500,000,000 Total 1,055,894 71.27 1,019,885 $ 500,000,000 Page 45 (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).
Biggest changeOctober 2022: October 2, 2022 through October 29, 2022 2,316 $ 76.90 — $ 396,970,892 November 2022: October 30, 2022 through November 26, 2022 37,621 $ 71.78 34,665 $ 394,548,677 December 2022: November 27, 2022 through December 31, 2022 328,063 $ 63.53 301,328 $ 374,507,112 Total 368,000 (3) $ 70.39 335,993 $ 374,507,112 Page 47 (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).
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 Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased Under the Plan or Programs at End of Period.
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.
Page 46 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 48 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.
Holders The Company has been notified by its stock transfer agent that as of February 23, 2022, there were 162 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 2022.
Holders The Company has been notified by its stock transfer agent that as of February 23, 2023, there were 161 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 2023.
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 31, 2016 to January 1, 2022, assuming the investment of $100 on December 31, 2016 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 30, 2017 to December 31, 2022, assuming the investment of $100 on December 30, 2017 and the reinvestment of dividends.
The following table is a summary of equity securities purchased by the Company during the fourth quarter of fiscal 2021.
The following table is a summary of equity securities purchased by the Company during the fourth quarter of fiscal 2022.
Separate from this share repurchase program, a total of 782,291 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 2021 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 764,119 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 2022 pursuant to the terms of our 2017 Omnibus Incentive Plan and 2012 Omnibus plan, as amended.
(2) The average price paid per share is calculated on a trade date basis and excludes commissions. (3) Includes 7,440 shares withheld for taxes on restricted stock and options.
(2) The average price paid per share is calculated on a trade date basis and excludes commissions. (3) Includes 32,007 shares withheld for taxes on restricted stock and options.
Under this program, we repurchased 2,480,459 shares for approximately $167.7 million including commissions in fiscal 2021 and repurchased 184,672 shares in early 2022 for approximately $11.2 million including commissions. As of the date of this report, the Company had approximately $488.8 million remaining in its share repurchase program initially approved in August 2017 and subsequently extended to August 13, 2024.
Under this program, we repurchased 1,916,785 shares for approximately $125.5 million including commissions in fiscal 2022 and repurchased 57,431 shares in early 2023 for approximately $3.4 million including commissions. As of the date of this report, the Company had approximately $371.1 million remaining in its share repurchase program initially approved in August 2017 and subsequently extended to August 13, 2024.
Removed
(4) On December 9, 2021, the Company’s Board of Directors approved the extension for an additional two years (through 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.
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, 2024, unless extended or shortened by the Board of Directors.
Removed
All purchases in December 2021 were done under the previous announced $200.0 million share repurchase program.

Item 7. Management's Discussion & Analysis

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

118 edited+63 added−38 removed72 unchanged
Biggest changeIn thousands, except for percentages Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Fiscal Year Ended January 1, 2022 Net Sales $ 3,039,500 $ 1,271,629 $ 430,240 $ — $ 4,741,369 Cost of sales and operating expenses 2,206,248 979,232 313,905 — 3,499,385 Gross Margin 833,252 292,397 116,335 — 1,241,984 Gross Margin % 27.4 % 23.0 % 27.0 % — % 26.2 % Gain on sale of assets (550) (88) (320) — (958) Selling, general and administrative expense 220,078 97,555 16,999 56,906 391,538 Restructuring and asset impairment charges — — 778 — 778 Depreciation and amortization 218,942 60,929 25,436 11,080 316,387 Acquisition and integration costs — — — 1,396 1,396 Equity in net income of Diamond Green Diesel — — 351,627 — 351,627 Segment operating income/ (loss) 394,782 134,001 425,069 (69,382) 884,470 Equity in net income of other unconsolidated subsidiaries 5,753 — — — 5,753 Segment income/(loss) 400,535 134,001 425,069 (69,382) 890,223 In thousands, except for percentages Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Fiscal Year Ended January 2, 2021 Net Sales $ 2,072,104 $ 1,185,701 $ 314,118 $ — $ 3,571,923 Cost of sales and operating expenses 1,544,524 920,682 223,609 — 2,688,815 Gross Margin 527,580 265,019 90,509 — 883,108 Gross Margin % 25.5 % 22.4 % 28.8 % — % 24.7 % Loss/ (gain) on sale of assets 19 482 (75) — 426 Selling, general and administrative expense 209,748 97,406 16,014 55,328 378,496 Restructuring and asset impairment charges — — 38,167 — 38,167 Depreciation and amortization 221,187 83,752 34,218 11,021 350,178 Equity in net income of Diamond Green Diesel — — 315,095 — 315,095 Segment operating income/(loss) 96,626 83,379 317,280 (66,349) 430,936 Equity in net income of other unconsolidated subsidiaries 3,193 — — — 3,193 Segment income/(loss) 99,819 83,379 317,280 (66,349) 434,129 Feed Ingredients Segment Raw material volume .
Biggest changeIn 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 Page 54 In thousands, except for percentages Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Fiscal Year Ended January 1, 2022 Net Sales $ 3,039,500 $ 1,271,629 $ 430,240 $ — $ 4,741,369 Cost of sales and operating expenses 2,206,248 979,232 313,905 — 3,499,385 Gross Margin 833,252 292,397 116,335 — 1,241,984 Gross Margin % 27.4 % 23.0 % 27.0 % — % 26.2 % Gain on sale of assets (550) (88) (320) — (958) Selling, general and administrative expenses 220,078 97,555 16,999 56,906 391,538 Restructuring and asset impairment charges — — 778 — 778 Depreciation and amortization 218,942 60,929 25,436 11,080 316,387 Acquisition and integration costs — — — 1,396 1,396 Equity in net income of Diamond Green Diesel — — 351,627 — 351,627 Segment operating income/(loss) 394,782 134,001 425,069 (69,382) 884,470 Equity in net income of other unconsolidated subsidiaries 5,753 — — — 5,753 Segment income/(loss) 400,535 134,001 425,069 (69,382) 890,223 Feed Ingredients Segment Raw material volume .
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 renewable diesel and biodiesel, or to the oleo-chemical industry to be used as an ingredient in a wide variety of industrial applications.
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 and Europe 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 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 and North 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 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.
In addition, regulatory authorities in various countries where the Company operates or where the Company imports or exports products may from time to time impose import/export limitations, foreign exchange controls or currency devaluations that may limit the Company's access to profits from the Company's subsidiaries or otherwise negatively impact the Company's financial condition and therefore reduce the Company's ability to make required payments under the Amended Credit Agreement, the 5.25% Notes and the 3.625% Notes, or otherwise.
In addition, regulatory authorities in various countries where the Company operates or where the Company imports or exports products may from time to time impose import/export limitations, foreign exchange controls or currency devaluations that may limit the Company's access to profits from the Company's subsidiaries or otherwise negatively impact the Company's financial condition and therefore reduce the Company's ability to make required payments under the Amended Credit Agreement, the 6% Notes, the 5.25% Notes and the 3.625% Notes, or otherwise.
Financial Impact of Significant Debt Outstanding The Company has a substantial amount of indebtedness, which could make it more difficult for us to satisfy our obligations to our financial lenders and our contractual and commercial commitments, limit our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements on Page 60 commercially reasonable terms or at all, require us to use a substantial portion of our cash flows from operations to pay principal and interest on our indebtedness instead of other purposes, thereby reducing the amount of our cash flows from operations available for working capital, capital expenditures, acquisitions and other general corporate purposes, increase our vulnerability to adverse economic, industry and business conditions, expose us to the risk of increased interest rates as certain of our borrowings are at variable rates of interest, limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, place us at a competitive disadvantage compared to other, less leveraged competitors, and/or increase our cost of borrowing.
Financial Impact of Significant Debt Outstanding The Company has a substantial amount of indebtedness, which could make it more difficult for us to satisfy our obligations to our financial lenders and our contractual and commercial commitments, limit our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements on commercially reasonable terms or at all, require us to use a substantial portion of our cash flows from operations to pay principal and interest on our indebtedness instead of other purposes, thereby reducing the amount of our cash flows from operations available for working capital, capital expenditures, acquisitions and other general corporate purposes, increase our vulnerability to adverse economic, industry and business conditions, expose us to the risk of increased interest rates as certain of our borrowings are at variable rates of interest, limit our flexibility in planning for, or reacting to, changes in our business Page 64 and the industry in which we operate, place us at a competitive disadvantage compared to other, less leveraged competitors, and/or increase our cost of borrowing.
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; global demands for bio-fuels and 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 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 and used cooking oil finished product prices; changes to worldwide government policies relating to renewable fuels and GHG emissions that adversely affect 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; possible product recall resulting from developments relating to the discovery of unauthorized adulterations to food or food additives; 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 current 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 issues relating to the announced expansion 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; difficulties or a significant disruption in the Company's information systems 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; 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; global demands for bio-fuels and 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 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 and used cooking oil finished product prices; changes to worldwide government policies relating to renewable fuels and GHG emissions that adversely affect 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; possible product recall resulting from developments relating to the discovery of unauthorized adulterations to food or food additives; 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 current 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; difficulties or a significant disruption in the Company's information systems 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; uncertainty regarding the exit of the U.K. from the European Union; and/or unfavorable export or import markets.
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, 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 non-recurring costs, non-cash charges and cash dividends from the DGD Joint Venture.
The Company also recovers and converts recycled oils (used cooking oil and animal fats) into valuable feed and collects and processes residual bakery products into feed ingredients. In addition, the Company provides environmental services, such as grease trap collection and disposal services to food service establishments.
The Company also recovers and converts recycled oils (used cooking oil and animal fats) into valuable fuel and feed ingredients and collects and processes residual bakery products into feed ingredients. In addition, the Company provides environmental services, such as grease trap collection and disposal services to food service establishments.
The Company’s operating results can vary significantly due to changes in factors such as the fluctuation in energy prices, weather conditions, crop harvests, 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, government policies and programs, changes in global demand, changes in standards of living, protein consumption, and global production of competing ingredients.
The Company is prohibited under the Amended Credit Agreement, 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, 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'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 2021 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 2022 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.
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 2022 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 2023 and thereafter.
Cash Flows and Liquidity Risks Management believes that the Company’s cash flows from operating activities consistent with the level generated in fiscal year 2021, 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.
Cash Flows and Liquidity Risks Management believes that the Company’s cash flows from operating activities consistent with the level generated in fiscal year 2022, 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.
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 2 to the Company's Consolidated Financial Statements for the period ended January 1, 2022 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 diesel (“DGD” or the “DGD Joint Venture”) as described in Note 2 to the Company's Consolidated Financial Statements for the period ended December 31, 2022 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.
Although the costs of raw materials for the Feed Ingredients segment are generally based upon actual or anticipated finished goods selling Page 49 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 brief lapse of time between the procurement of the raw materials and the sale of the finished goods.
In fiscal 2021 and 2020, the Company recorded asset impairment charges related to its biodiesel long-lived assets of approximately $0.1 million and $6.2 million, respectively. Goodwill and Indefinite Lived Intangible Assets Valuation Goodwill and indefinite-lived intangible assets are tested annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.
In fiscal 2021 and 2020, the Company recorded asset impairment charges related to its fuel segment biodiesel long-lived assets of approximately $0.1 million and $6.2 million, respectively. Goodwill and Indefinite Lived Intangible Assets Valuation Goodwill and indefinite-lived intangible assets are tested annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.
In fiscal 2020 and fiscal 2019, the Company performed its annual goodwill and indefinite-lived intangible asset impairment testing using a quantitative impairment assessment.
In fiscal 2020, the Company performed its annual goodwill and indefinite-lived intangible asset impairment testing using a quantitative impairment assessment.
In particular, management makes estimates regarding fair value of the Company’s reporting units Page 63 and future cash flows with respect to assessing potential impairment of both long-lived assets and goodwill and pension liability. Each of these estimates is discussed in greater detail in the following discussion.
In particular, management makes estimates regarding fair value of the Company’s reporting units and future cash flows with respect to assessing potential impairment of both long-lived assets and goodwill and pension liability. Each of these estimates is discussed in greater detail in the following discussion.
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 2021, 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 2022, the Company's actual sales prices by product trended with the disclosed Jacobsen and Reuters prices.
Other debt consists of U.S., Canadian and European ancillary and overdraft facilities and capital lease obligations and note arrangements in Brazil, China and Europe that are not part of the Company's Amended Credit Agreement, 5.25% Notes or 3.625% Notes.
Other debt consists of U.S. and European ancillary and overdraft facilities and capital lease obligations and note arrangements in Brazil, China and Europe that are not part of the Company's Amended Credit Agreement, 6% Notes, 5.25% Notes or 3.625% Notes.
In December 2020, due to unfavorable economics in the biodiesel industry, the Company made the decision to shut down processing operations at its biodiesel facilities located in the United States and Canada, and there are no current plans to resume biodiesel production at these facilities in the future.
In December 2020, due to unfavorable economics in the biodiesel industry, the Company made the decision to shut down processing operations at its biodiesel facilities located in the United States and Canada, and there are no current plans to Page 66 resume biodiesel production at these facilities in the future.
These factors, coupled with volatile prices for natural gas and diesel fuel, climate conditions, 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 and discretionary spending, including the inability of consumers and companies to obtain credit Page 65 due to lack of liquidity in the financial markets, among others, could cause actual results to vary materially from the forward-looking statements included in this report or negatively impact the Company's results of operations.
These factors, coupled with volatile prices for natural gas and diesel fuel, inflation rates, climate conditions, 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 and discretionary spending, including the inability of consumers and companies to obtain credit due to lack of liquidity in the financial markets, among others, could cause actual results to vary materially from the forward-looking statements included in this report or negatively impact the Company's results of operations.
Investors should note that, in order to make scheduled payments on the indebtedness outstanding under the Amended Credit Agreement, the 5.25% Notes and the 3.625% Notes, and otherwise, the Company will rely in part on a combination of dividends, distributions and intercompany loan repayments from the Company's Page 57 direct and indirect U.S. and foreign subsidiaries.
Investors should note that, in order to make scheduled payments on the indebtedness outstanding under the Amended Credit Agreement, the 6% Notes, the 5.25% Notes and the 3.625% Notes, and otherwise, the Company will rely in part on a combination of dividends, distributions and intercompany loan repayments from the Company's direct and indirect U.S. and foreign subsidiaries.
The Company's announced share repurchase program may be suspended or discontinued at any time and purchases of shares under the program are subject to market conditions and other factors, which are likely to change from time to time.
The Company's announced share repurchase program may be suspended or discontinued at any time and purchases of shares under the program are subject to Page 68 market conditions and other factors, which are likely to change from time to time.
As a result of early payments made by the Company under the term loan B facility only one final installment of the relevant term loan B facility then outstanding is due on December 18, 2024.
As a result of early payments made by the Company under the term loan B facility only one final installment of the relevant term loan B facility then outstanding is due on December 18, 2024. The term loan B facility will mature on December 18, 2024.
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 January 1, 2022.
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 31, 2022.
Any borrowings by the DGD Joint Venture under the DGD Loan Agreement are at the applicable annum rate equal to the sum of (a) the LIBO Rate (meaning Reuters BBA Libor Rates Page 3750) on such day plus (b) 2.50%. The DGD Loan Agreement matures on April 29, 2022, unless extended by agreement of the parties.
Any borrowings by the DGD Joint Venture under the DGD Loan Agreement are at the applicable annum rate equal to the sum of (a) the LIBO Rate (meaning Reuters BBA Libor Rates Page 3750) on such day Page 63 plus (b) 2.50%. The DGD Loan Agreement matures on April 29, 2023, unless extended by agreement of the parties.
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 Page 58 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 and for auto liability and general liability claims. The self-insurance reserve liability is determined annually, based upon a third party actuarial estimate.
The extent to which COVID-19 impacts the Company’s and DGD's results will depend on future developments, which are highly uncertain and cannot be predicted and may vary by jurisdiction and market, including the duration and scope of the pandemic, the emergence and spread of new variants of the virus, such as the delta variant, the likelihood of a resurgence of positive cases, the development, availability and acceptance of effective treatments and vaccines, the speed at which such vaccines are administered, the efficacy of current vaccines against evolving strains or variants of the virus, global economic conditions during and after the pandemic and governmental actions that have been taken or may be taken in the future in response to the pandemic, among others.
The extent to which COVID-19 Page 51 impacts the Company’s and DGD's business and financial results will depend on future developments, which are highly uncertain and cannot be predicted and may vary by jurisdiction and market, including the duration and scope of the pandemic, the emergence and spread of new variants of the virus, such as the omicron and delta variants, the likelihood of a resurgence of positive cases, the development, availability and acceptance of effective treatments and vaccines, the speed at which such vaccines are administered, the efficacy of current vaccines against evolving strains or variants of the virus, global economic conditions during and after the pandemic and governmental actions that have been taken or may be taken in the future in response to the pandemic, among others.
The actuarial estimate may vary from year to year, due to changes in costs of health care, the pending number of claims and other factors beyond the control of management of the Company.
The actuarial estimate may vary from year to year, due to Page 62 changes in costs of health care, the pending number of claims and other factors beyond the control of management of the Company.
NEW ACCOUNTING PRONOUNCEMENTS See Note 24, "New Accounting Pronouncements," to the consolidated financial statements for a description of new accounting pronouncements. FORWARD LOOKING STATEMENTS This Annual Report on Form 10-K includes “forward-looking” statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements.
Page 67 NEW ACCOUNTING PRONOUNCEMENTS See Note 25, "New Accounting Pronouncements," to the consolidated financial statements for a description of new accounting pronouncements. FORWARD LOOKING STATEMENTS This Annual Report on Form 10-K includes “forward-looking” statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements.
Adjusted EBITDA is calculated below and represents, for any relevant period, net income/(loss) plus depreciation and amortization, goodwill and long-lived asset impairment, interest expense, (income)/loss from discontinued operations, net of tax, income tax provision, other income/(expense) and equity in net (income)/loss of unconsolidated subsidiaries.
Adjusted EBITDA is calculated below and represents, for any relevant period, net income/(loss) plus depreciation and amortization, goodwill and long-lived asset impairment, interest expense, income tax provision, other income/(expense) and equity in net (income)/loss of unconsolidated subsidiaries.
Average Jacobsen and Reuters prices (at the specified delivery point) for fiscal year 2021, compared to average Jacobsen and Reuters prices for fiscal year 2020 are: Avg. Price Fiscal Year 2021 Avg.
Average Jacobsen and Reuters prices (at the specified delivery point) for fiscal year 2022, compared to average Jacobsen and Reuters prices for fiscal year 2021 are: Avg. Price Fiscal Year 2022 Avg.
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 2021 and fiscal year 2020 of approximately $0.2 million and $7.5 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 2022 and fiscal year 2021 of approximately $2.0 million and $0.2 million, respectively.
In 2021, 2020 and 2019, DGD was the Company’s largest finished product customer in terms of sales, with the Company recording sales to DGD in those years of $521.7 million, $264.1 million and $208.7 million, respectively. From a procurement, production and distribution standpoint, DGD has become integral to the Company’s base business.
In 2022, 2021 and 2020, DGD was the Company’s largest finished product customer in terms of sales, with the Company recording sales to DGD in those years of $1.1 billion, $521.7 million and $264.1 million, respectively. From a procurement, production and distribution standpoint, DGD has become integral to the Company’s base business.
The Company's off-balance sheet contractual obligations and commercial commitments as of January 1, 2022 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 31, 2022 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.
A decline in commodities prices, a rise in energy prices, a slowdown in the U.S. or international economy 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.
The term loan B facility will mature on December 18, 2024. • 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 CDOR for Canadian dollar borrowings plus 1.25% 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 0.25% per annum subject to certain step-ups or step-downs based on the Company's total leverage ratio.
Page 60 • 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 CDOR for Canadian dollar borrowings plus 1.25% 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 0.25% per annum subject to certain step-ups or step-downs based on the Company's total leverage ratio.
The interest rate applicable to any borrowing under the delayed draw term loan A 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 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.
As of January 1, 2022, under the equity method of accounting the Company has an investment in the DGD Joint Venture of approximately $1.3 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 31, 2022, under the equity method of accounting the Company has an investment in the DGD Joint Venture of approximately $1.9 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 effective tax rate for both fiscal years 2021 and 2020 differs slightly 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 and excess tax benefits from stock-based compensation. Page 54 Non-U.S.
The effective tax rate for both fiscal years 2022 and 2021 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 and excess tax benefits from stock-based compensation. Non-U.S.
With respect to the other U.S. multiemployer pension plans in which the Company participates and which are not individually significant, five plans have certified as critical or red zone and two have certified as endangered or yellow zone, as defined by the PPA. The Company has withdrawal liabilities recorded on four U.S. multiemployer plans in which it participated.
With respect to the other U.S. multiemployer pension plans in which the Company participates and which are not individually significant, five plans have certified as critical or red zone and one plan has certified as endangered or yellow zone, as defined by the PPA. The Company has withdrawal liabilities recorded on three U.S. multiemployer plans in which it participated.
Additionally, the Company has made required and tax deductible discretionary contributions to its foreign pension plans in fiscal year 2021 of approximately $3.7 million, as compared to $4.0 million in contributions in fiscal year 2020. The U.S. Pension Protection Act of 2006 (“PPA”) went into effect in January 2008.
Additionally, the Company has made required and tax deductible discretionary contributions to its foreign pension plans in fiscal year 2022 of approximately $3.6 million, as compared to $3.7 million in contributions in fiscal year 2021. The U.S. Pension Protection Act of 2006 (“PPA”) went into effect in January 2008.
The closing balance sheet rate assumptions used in this calculation were the actual fiscal closing balance sheet rate at January 1, 2022 of €1.00:USD$1.132000 as compared to the closing balance sheet rate at January 2, 2021 of €1.00:USD$1.227500. Senior Secured Credit Facilities . On January 6, 2014, Darling, Darling International Canada Inc. (“Darling Canada”) and Darling International NL Holdings B.V.
The closing balance sheet rate assumptions used in this calculation were the actual fiscal closing balance sheet rate at December 31, 2022 of €1.00:USD$1.067600 as compared to the closing balance sheet rate at January 1, 2022 of €1.00:USD$1.132000. Senior Secured Credit Facilities . On January 6, 2014, Darling, Darling International Canada Inc. (“Darling Canada”) and Darling International NL Holdings B.V.
Numerous factors could have adverse consequences to the Company that cannot be estimated at this time, such as negative impacts from the current COVID-19 outbreak and those 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 COVID-19 outbreak and the Russia-Ukraine war and those other factors discussed below under the heading “Forward Looking Statements”.
Based upon current actuarial estimates, the Company expects to make payments of approximately $0.3 million in order to meet minimum pension funding requirements to its domestic plans in fiscal year 2022. In addition, the Company expects to make payments of approximately $3.6 million under its foreign pension plans in fiscal year 2022.
Based upon current actuarial estimates, the Company expects to make payments of approximately $0.2 million in order to meet minimum pension funding requirements to its domestic plans in fiscal year 2023. In addition, the Company expects to make payments of approximately $3.4 million under its foreign pension plans in fiscal year 2023.
Accrued Insurance and Pension Plan Obligations Based upon the annual actuarial estimate, current accruals and claims paid during fiscal year 2021, the Company has accrued approximately $9.9 million as of January 1, 2022 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 January 1, 2022.
Accrued Insurance and Pension Plan Obligations Based upon the annual actuarial estimate, current accruals and claims paid during fiscal year 2022, the Company has accrued approximately $13.2 million as of December 31, 2022 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 31, 2022.
Page 59 On May 1, 2019, Darling, through its wholly owned subsidiary Darling Green Energy LLC, (“Darling Green”), and Diamond Alternative Energy, LLC, a wholly owned subsidiary of Valero (“Diamond Alternative” and together with Darling Green, the “DGD Lenders”) entered into a revolving loan agreement (the “DGD Loan Agreement”) with the DGD Joint Venture.
On May 1, 2019, Darling through its wholly owned subsidiary Darling Green Energy LLC, (“Darling Green”), and a third party Diamond Alternative Energy, LLC (“Diamond Alternative” and together with Darling Green, the “DGD Lenders”) entered into a revolving loan agreement (the “DGD Loan Agreement”) with the DGD Joint Venture.
The average rates assumption used in this calculation was the actual average rate for fiscal year 2021 of €1.00:USD$1.18 and CAD$1.00:USD$0.80 as compared to the average rate for fiscal year 2020 of €1.00:USD$1.14 and CAD$1.00:USD$0.75, respectively. Corporate Activities Selling, General and Administrative Expenses.
The average rates assumption used in this calculation was the actual average rate for fiscal year 2022 of €1.00:USD$1.05 and CAD$1.00:USD$0.77 as compared to the average rate for fiscal year 2021 of €1.00:USD$1.18 and CAD$1.00:USD$0.80, respectively. Corporate Activities Selling, General and Administrative Expenses.
As of January 1, 2022, 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 5.25% Indenture and the 3.625% Indenture.
As of December 31, 2022, 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.
DGD is integrated into the Company’s operations via the combined vertical operating structure from collecting raw fats, to processing collected fats at the Company facilities nationwide to transporting the refined fats to the DGD Norco Facility as feedstock.
DGD is integrated into the Company’s operations via the combined vertical operating structure from collecting raw fats, to processing collected fats at the Company facilities nationwide to transporting the refined fats to the DGD St. Charles Plant as feedstock.
The discussion and analysis of our financial condition and results of operations for the year ended January 2, 2021 compared to the year ended December 28, 2019 are included in Item 7. Management's Discussion and Analysis of Financial Condition and Results in our 2020 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 January 1, 2022 compared to the year ended January 2, 2021 are included in Item 7. Management's Discussion and Analysis of Financial Condition and Results in our 2021 Form 10-K and is incorporated herein by reference.
Overall sales increased in the Food Ingredients segment due to higher sales volumes and higher sales prices in the collagen and edible fat sales markets. Margins . In the Food Ingredients segment for fiscal year 2021, the gross margin percentage was 23.0% as compared to 22.4% for fiscal year 2020.
Overall sales increased in the Food Ingredients segment due to higher sales volumes and higher sales prices in the collagen and edible fat sales markets. Margins . In the Food Ingredients segment for fiscal year 2022, the gross margin percentage was 24.5% as compared to 23.0% for fiscal year 2021.
The 5.25% Notes are guaranteed on a senior unsecured basis by Darling and all of Darling's restricted subsidiaries (other than foreign subsidiaries). For a description of the terms of the 5.25% Notes see Note 10 of Notes to Consolidated Financial Statements included herein. 3.625 % Senior Notes due 2026.
The 5.25% Notes are guaranteed on a senior unsecured basis by Darling and all of Darling's restricted subsidiaries (other than foreign subsidiaries) that are borrowers under or that guarantee the Senior Secured Credit Facilities. For a description of the terms of the 5.25% Notes see Note 10 of Notes to Consolidated Financial Statements included herein. 3.625% Senior Notes due 2026.
As of January 1, 2022, the Company has an aggregate accrued liability of approximately $3.8 million representing the present value of scheduled withdrawal liability payments on the remaining multiemployer plans that have given notices of withdrawals.
As of December 31, 2022, the Company has an aggregate accrued liability of approximately $3.9 million representing the present value of scheduled withdrawal liability payments on the remaining multiemployer plans that have given notices of withdrawals.
The Amended Credit Agreement provides for senior secured credit facilities in the aggregate principal amount of $2.425 billion comprised of (i) the Company's $525.0 million term loan B facility, (ii) the Company's $400.0 million delayed draw term A loan and (iii) the Company's $1.5 billion five-year revolving loan 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 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 term A loan borrowings are repayable in quarterly installments of 0.25% of the aggregate principle amount of the relevant term A loan 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 the Seventh Amendment date and continuing until the last day of such quarterly period ending immediately prior to the term A loan maturity date of December 9, 2026. • As of January 1, 2022, the Company has borrowed all $525.0 million under the terms of the term loan B facility and repaid approximately $325.0 million, which when repaid, cannot be reborrowed.
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 31, 2022, the Company has borrowed all $525.0 million under the terms of the term loan B facility and repaid approximately $325.0 million, which when repaid, cannot be reborrowed.
As of the date of this report, other than the Company's previously announced acquisition of Valley Proteins, Inc.for $1.1 billion, plus or minus various closing adjustments in accordance with the Stock Purchase Agreement, 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 expansion project or potential investments in additional renewable diesel 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 5.25% Notes and the 3.625% Notes, as well as suitable cash conservation to withstand adverse commodity cycles.
As of the date of this report, other than the Company's previously announced acquisition of Gelnex for approximately $1.2 billion and Miropasz for approximately €110.0 million, both of which will be financed through borrowings under the Company's Amended Credit Agreement, 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 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% Notes, the 5.25% Notes and the 3.625% Notes, as well as suitable cash conservation to withstand adverse commodity cycles.
Page 50 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 exchange 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. 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 exchange price publisher. The Jacobsen reports industry sales from the prior day's activity by product.
With the Company’s significant fats ownership, this has and continues to transform how the Company operates. In 2021, a large portion of Darling’s total U.S. finished fats products were sold to the DGD Norco Facility as feedstock for renewable diesel.
With the Company’s significant fats ownership, this has and continues to transform how the Company operates. In 2021, a large portion of Darling’s total U.S. finished fats products were sold to the DGD St. Charles Plant and beginning in fiscal 2022 to the DGD Port Arthur Plant as feedstock for renewable diesel.
Page 64 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 2.40% at January 1, 2022 and 2.10% at January 2, 2021, 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 4.82% at December 31, 2022 and 2.40% at January 1, 2022, respectively.
Using the euro based debt outstanding at January 1, 2022 and comparing the closing balance sheet rates at January 1, 2022 to those at January 2, 2021, the U.S. dollar debt balances of euro based debt decreased by $49.0 million, at January 1, 2022.
Using the euro based debt outstanding at December 31, 2022 and comparing the closing balance sheet rates at December 31, 2022 to those at January 1, 2022, the U.S. dollar debt balances of euro based debt decreased by $35.4 million, at December 31, 2022.
Long-Lived Assets The Company reviews the carrying value of long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of an asset, or related asset group, may not be recoverable from estimated future undiscounted cash flows.
After the measurement period, any subsequent adjustments are reflected in the consolidated statement of operations. Long-Lived Assets The Company reviews the carrying value of long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of an asset, or related asset group, may not be recoverable from estimated future undiscounted cash flows.
The program runs through August 13, 2024, unless further extended or shortened by the Board of Directors. During fiscal year 2021, the Company repurchased approximately $167.7 million, including commissions, of its common stock in the open market. As of January 1, 2022, the Company had approximately $500.0 million remaining in its share repurchase program.
The program runs through August 13, 2024, unless further extended or shortened by the Board of Directors. During fiscal year 2022, the Company repurchased approximately $125.5 million, including commissions, of its common stock in the open market. As of December 31, 2022, the Company had approximately $374.5 million remaining in its share repurchase program.
The net periodic benefit cost for fiscal year 2022 would increase by approximately $1.1 million if the discount rate was 0.5% lower at a weighted average of 1.90%. The net periodic benefit cost for fiscal year 2022 would decrease by approximately $0.9 million if the discount rate was 0.5% higher at a weighted average of 2.90%.
The net periodic benefit cost for fiscal year 2023 would increase by approximately $0.7 million if the discount rate was 0.5% lower at a weighted average of 4.32%. 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 5.32%.
Working Capital and Capital Expenditures On January 1, 2022, the Company had working capital of $336.3 million and its working capital ratio was 1.45 to 1 compared to working capital of $311.7 million and a working capital ratio of 1.46 to 1 on January 2, 2021.
Working Capital and Capital Expenditures On December 31, 2022, the Company had working capital of $569.7 million and its working capital ratio was 1.53 to 1 compared to working capital of $336.3 million and a working capital ratio of 1.45 to 1 on January 1, 2022.
Foreign Currency During fiscal year 2021, the euro and Canadian dollar strengthened against the U.S. dollar as compared to fiscal year 2020. Using actual results for fiscal year 2021 and the prior year's average foreign currency rates for fiscal year 2020 would result in a decrease in operating income of approximately $18.9 million.
Foreign Currency During fiscal year 2022, the euro and Canadian dollar weakened against the U.S. dollar as compared to fiscal year 2021. Using actual results for fiscal year 2022 and the prior year's average foreign currency rates for fiscal year 2022 would result in an increase in operating income of approximately $59.7 million.
As a result, the Company’s management uses Adjusted EBITDA as a measure to evaluate performance and for other discretionary purposes. In addition to the foregoing, management also uses or will use Adjusted EBITDA to measure compliance with certain financial covenants under the Company's Senior Secured Credit Facilities, 5.25% Notes and 3.625% Notes that were outstanding at January 1, 2022.
In addition to the foregoing, management also uses or will use Adjusted EBITDA to measure compliance with certain financial covenants under the Company's Senior Secured Credit Facilities, 6% Notes, 5.25% Notes and 3.625% Notes that were outstanding at December 31, 2022.
The following table summarizes the Company’s other commercial commitments, including both on- and off-balance sheet arrangements that are part of the Company's Amended Credit Agreement and other foreign bank guarantees that are not a part of the Company's Amended Credit Agreement at January 1, 2022 (in thousands): Other commercial commitments: Standby letters of credit $ 3,849 Standby letters of credit (ancillary facility) 27,400 Foreign bank guarantees 11,708 Total other commercial commitments: $ 42,957 CRITICAL ACCOUNTING POLICIES The Company follows certain significant accounting policies when preparing its consolidated financial statements.
Page 65 The following table summarizes the Company’s other commercial commitments, including both on- and off-balance sheet arrangements that are part of the Company's Amended Credit Agreement and other foreign bank guarantees that are not a part of the Company's Amended Credit Agreement at December 31, 2022 (in thousands): Other commercial commitments: Standby letters of credit $ 3,871 Standby letters of credit (ancillary facility) 25,672 Foreign bank guarantees 23,856 Total other commercial commitments: $ 53,399 CRITICAL ACCOUNTING POLICIES The Company follows certain significant accounting policies when preparing its consolidated financial statements.
This could have a significant impact on the Company's results, if such increase or decrease in the value of the U.S. dollar relative to these other currencies is substantial. In 2019, the Company evaluated the operational developments and the impact of anticipated significant expansion of the DGD Joint Venture.
This could have a significant impact on the Company's results, if such increase or decrease in the value of the U.S. dollar relative to these other currencies is substantial.
At January 1, 2022, the Company had unrestricted cash of $68.9 million and funds available under the revolving credit facility of $1.286 billion, compared to unrestricted cash of $81.6 million and funds available under the revolving credit facility of $893.9 million at January 2, 2021.
At December 31, 2022, the Company had unrestricted cash of $127.0 million and funds available under the revolving credit facility of $1.313 billion, compared to unrestricted cash of $68.9 million and funds available under the revolving credit facility of $1.286 billion at January 1, 2022.
As of January 1, 2022, $25.0 million was owed to Darling Green under the DGD Loan Agreement. On March 30, 2021, the DGD Joint Venture entered into 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.
On March 30, 2021, the DGD Joint Venture entered into 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 new revolving credit facility matures March 30, 2024 and is non-recourse to the joint venture partners.
Under the terms of the delayed draw term A loan, the Company can take up to two years to borrow under the term A loan commitment in U.S. dollars. Amounts borrowed under the term A loan that are repaid by the Company cannot be reborrowed.
Under the terms of the delayed draw term A-3 facility, the Company can take up to twelve months or until September 6, 2023 to borrow under the term A-3 facility commitment in U.S. dollars. Amounts borrowed under the term A-3 facility that are repaid by the Company cannot be reborrowed.
Foreign currency losses were $2.2 million during fiscal year 2021, as compared to losses of approximately $2.3 million for fiscal year 2020. The slight decrease is due primarily to reduced losses on the revaluation of non-functional currency liabilities as compared to the same period in fiscal 2020. Other Expense, net.
Foreign Currency Losses. Foreign currency losses were $11.3 million during fiscal year 2022, as compared to losses of approximately $2.2 million for fiscal year 2021. The increase in foreign currency losses is primarily due to an increase in losses on the revaluation of non-functional currency assets and liabilities, primarily in Brazil, as compared to fiscal year 2021. Other Expense, net.
Major assumptions used in the accounting for these employee benefit plans include the discount rate, expected return on plan assets, rate of increase in employee compensation levels, mortality rates and trends in health care costs.
Pension Liability The Company has retirement and pension plans covering a substantial number of its domestic and foreign employees. Major assumptions used in the accounting for these employee benefit plans include the discount rate, expected return on plan assets, rate of increase in employee compensation levels, mortality rates and trends in health care costs.
For more information regarding the Amended Credit Agreement see Note 10 of Notes to Consolidated Financial Statements included herein. • As of January 1, 2022, the Company had availability of $1.286 billion under the revolving loan facility, taking into account an aggregate of $160.0 million in outstanding borrowings, $50.3 million of ancillary facilities and letters of credit issued of $3.8 million. • As of January 1, 2022, the Company had availability under its delayed draw term A loan commitment of $400.0 million.
For Page 59 more information regarding the Amended Credit Agreement see Note 10 of Notes to Consolidated Financial Statements included herein. • As of December 31, 2022, the Company had availability of $1.313 billion under the revolving loan facility, taking into account an aggregate of $135.0 million in outstanding borrowings, $48.1 million of ancillary facilities and letters of credit issued of $3.9 million.
While the Company has no ability to calculate a possible current liability for under-funded multiemployer plans that could terminate or could require additional funding under the Pension Protection Act of 2006, the amounts could be material.
While the Company has no ability to calculate a possible current liability for under-funded multiemployer plans that could terminate or could require additional funding under the Pension Protection Act of 2006, the amounts could be material. DGD Joint Venture The DGD Joint Venture currently operates two renewable diesel plants, one located adjacent to Valero’s St.
The effective tax rate for fiscal year 2021 and fiscal year 2020 was 20.0% and 15.1%, respectively.
The effective tax rate for fiscal year 2022 and fiscal year 2021 was 16.4% and 20.0%, respectively.
In fiscal 2021, the Company performed a qualitative impairment analysis for its annual goodwill and indefinite-lived intangible assets at October 30, 2021. Based on the Company's annual impairment testing at October 30, 2021, we concluded it is more likely than not that the fair values of the Company’s reporting units containing goodwill exceeded the related carrying value.
Based on the Company's annual impairment testing at October 29, 2022 and October 30, 2021, we concluded it is more likely than not that the fair values of the Company’s reporting units containing goodwill exceeded the related carrying value.
The classification of long-term debt in the Company’s January 1, 2022 consolidated balance sheet is based on the contractual repayment terms of the 5.25% Notes, the 3.625% Notes and debt issued under the Amended Credit Agreement. As a result of the Company's borrowings under its Amended Credit Agreement, the 5.25% Indenture and the 3.625% Indenture, the Company is highly leveraged.
The classification of long-term debt in the Company’s December 31, 2022 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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

16 edited+2 added−1 removed4 unchanged
Biggest changeAt January 1, 2022, the Company had forward purchase agreements in place for purchases of approximately $135.1 million of natural gas and diesel fuel and approximately $23.2 million of other commitments during the next three years.
Biggest changeThese contracts have an aggregate fair value of less than $0.1 million and are included in current other assets at December 31, 2022. At December 31, 2022, the Company had forward purchase agreements in place for purchases of approximately $243.3 million of natural gas and diesel fuel and approximately $19.8 million of other commitments during the next three years.
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 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.
Foreign Exchange The Company has significant international operations and is subject to certain opportunities and risks, including currency fluctuations. As a result, the Company is affected by changes in foreign currency exchange rates, particularly with respect to the euro, British pound, Canadian dollar, Australian dollar, Chinese renminbi, Brazilian real and Japanese yen. Page 67
Foreign Exchange The Company has significant international operations and is subject to certain opportunities and risks, including currency fluctuations. 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, British pound and Japanese yen. Page 70
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 options are entered into with the intent of managing the impact of changing prices for poultry meal sales.
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.
Some of the Company's natural gas and diesel fuel instruments qualify as normal purchases as defined in Financial Accounting Standards Board (“FASB”) authoritative guidance because some of the natural gas and diesel fuel instruments qualify as normal purchases as defined in FASB authoritative guidance therefore not subject to fair value derivative accounting.
Some of the Company's natural gas and diesel fuel instruments qualify as normal purchases as defined in Financial Accounting Standards Board (“FASB”) authoritative guidance and therefore are not subject to fair value derivative accounting.
In fiscal 2021, fiscal 2020 and fiscal 2019, the Company entered into foreign exchange option and forward contracts that are considered cash flow hedges. Under the terms of the foreign exchange contracts, the Company hedged a portion of its forecasted collagen sales in currencies other than the functional currency through the fourth quarter of fiscal 2023.
In fiscal 2022, fiscal 2021 and fiscal 2020, the Company entered into foreign exchange option and forward contracts that are considered cash flow hedges. Under the terms of the foreign exchange contracts, the Company hedged a portion of its forecasted collagen sales in currencies other than the functional currency through the fourth quarter of fiscal 2024.
In fiscal 2021, fiscal 2020 and fiscal 2019, the Company entered into corn option contracts that are considered cash flow hedges. Under the terms of the corn option contracts the Company hedged a portion of its forecasted sales of BBP into the fourth quarter of fiscal 2022.
In fiscal 2022, fiscal 2021 and fiscal 2020, the Company entered into corn option contracts that are considered cash flow hedges. 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.
Additionally, the Company had corn forward contracts that are marked to market because they did not qualify for hedge accounting at January 1, 2022. These contracts have an aggregate fair value of approximately $1.3 million and are included in current other assets and accrued expenses at January 1, 2022.
The Company had corn forward contracts that are marked to market because they did not qualify for hedge accounting at December 31, 2022. These contracts have an aggregate fair value of approximately $0.1 million and are included in current other assets and accrued expenses at December 31, 2022.
At January 1, 2022, 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 66 Functional Currency Contract Currency Range of U.S.
At December 31, 2022, 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 69 Functional Currency Contract Currency Range of U.S.
At January 1, 2022, the aggregate fair value of the soybean meal contracts was $0.1 million and was recorded in other current assets on the balance sheet.
At December 31, 2022, the aggregate fair value of the soybean meal contracts was $0.6 million and was recorded in other current assets on the balance sheet.
As of January 1, 2022, the Company has long-term debt of approximately $0.4 billion subject to variable interest rates under the Company's Senior Secured Credit Facilities. This portion of the Company's debt is sensitive to fluctuations in interest rates. The Company estimates that a 1% increase in interest rates will increase the Company's annual interest expense by approximately $3.6 million.
As of December 31, 2022, the Company has long-term debt of approximately $1.2 billion subject to variable interest rates under the Company's Senior Secured Credit Facilities. This portion of the Company's debt is sensitive to fluctuations in interest rates. The Company estimates that a 1% increase in interest rates will increase the Company's annual interest expense by approximately $12.2 million.
At January 1, 2022, the aggregate fair value of these foreign exchange contracts was approximately $0.6 million. The amounts are included in other current assets, other noncurrent assets and accrued expenses on the balance sheet, with an offset recorded in accumulated other comprehensive loss.
At December 31, 2022, the aggregate fair value of these foreign exchange contracts was approximately $13.8 million. The amounts are included in other current assets, other noncurrent assets, accrued expenses and noncurrent liabilities on the balance sheet, with an offset recorded in accumulated other comprehensive loss.
At January 1, 2022, the Company had foreign currency option and forward contracts, soybean meal forward contracts and corn option contracts 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.
At December 31, 2022, the Company had foreign currency option and forward contracts, soybean meal forward contracts and corn option contracts outstanding that qualified and were designated for hedge accounting as well as corn forward contracts, heating oil options, soybean meal forward contracts and foreign currency forward contracts that did not qualify and were not designated for hedge accounting.
Interest Rate Sensitivity At January 1, 2022, the Company's fixed rate debt obligations consist of the 5.25% Notes, the 3.625% Notes and other immaterial debt that accrue interest at an annual weighted average fixed rate of approximately 4.38%.
Interest Rate Sensitivity At December 31, 2022, 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 5.18%.
As of January 1, 2022, the Company had forward purchase agreements in place for purchases of approximately $78.3 million of finished and raw material products during the next five years.
As of December 31, 2022, the Company had forward purchase agreements in place for purchases of approximately $138.0 million of finished and raw material products during the next five years.
At January 1, 2022, the aggregate fair value of the corn contracts was $2.8 million. The amounts are included in accrued expenses on the balance sheet. In fiscal 2021 and fiscal 2020, the Company entered into soybean meal forward contracts to hedge a portion of its forecasted poultry meal sales into the first quarter of fiscal 2022.
At December 31, 2022, the aggregate fair value of the corn contracts was $0.9 million. The amounts are included in other current assets on the balance sheet. In fiscal 2022, fiscal 2021 and fiscal 2020, the Company entered into soybean meal forward contracts to hedge a portion of its forecasted poultry meal sales into the third quarter of fiscal 2023.
Removed
Type Amount Type Amount Hedge rates Equivalent Brazilian real 66,425 Euro 11,548 5.63 - 6.56 $ 11,900 Brazilian real 3,057,673 U.S. dollar 730,000 3.35 - 6.63 730,000 Euro 38,814 U.S. dollar 44,343 1.12 - 1.17 44,343 Euro 24,442 Polish zloty 113,000 4.60 - 4.64 27,669 Euro 5,231 Japanese yen 675,210 127.76 - 132.62 5,921 Euro 15,724 Chinese renminbi 114,134 7.22 - 7.69 17,799 Euro 15,269 Australian dollar 24,436 1.57 - 1.60 17,285 Euro 3,045 British pound 2,600 0.85 3,447 Euro 34 Canadian dollar 50 1.46 39 Polish zloty 27,898 Euro 6,000 4.65 6,866 Polish zloty 1,216 U.S. dollar 295 4.12 295 British pound 233 Euro 273 0.85 314 British pound 200 U.S. dollar 264 1.32 264 Japanese yen 354,206 U.S. dollar 3,127 112.99 - 113.36 3,127 U.S. dollar 476 Japanese yen 54,000 113.39 476 U.S. dollar 282,173 Euro 250,000 1.13 282,173 Australian dollar 1,508 Euro 953 1.58 - 1.59 1,093 $ 1,153,011 The above foreign currency contracts had an aggregate fair value of approximately $1.9 million and are included in other current assets, noncurrent assets and accrued expenses at January 1, 2022.
Added
Type Amount Type Amount Hedge rates Equivalent Brazilian real 627 Euro 110 5.7 $ 120 Brazilian real 3,458,502 U.S. dollar 807,739 3.35 - 6.63 807,739 Euro 33,631 U.S. dollar 35,505 1.01 - 1.08 35,505 Euro 26,798 Polish zloty 126,500 4.69 - 4.74 28,609 Euro 12,982 Japanese yen 1,859,840 140.03 - 146.23 13,860 Euro 18,827 Chinese renminbi 138,363 7.09 - 7.44 20,100 Euro 17,221 Australian dollar 26,800 1.55 - 1.59 18,386 Euro 3,398 British pound 2,972 0.87 - 0.89 3,628 Euro 34 Canadian dollar 50 1.45 37 Polish zloty 38,373 Euro 8,155 4.70 - 4.72 8,735 Polish zloty 1,212 U.S. dollar 274 4.42 274 British pound 284 Euro 325 0.87 342 British pound 446 U.S. dollar 544 1.22 544 Japanese yen 360,425 U.S. dollar 2,753 129.40 - 135.36 2,753 U.S. dollar 746 Japanese yen 101,000 135.36 746 U.S. dollar 352 Euro 330 1.07 352 Australian dollar 159 Euro 100 1.59 108 $ 941,838 The above foreign currency contracts had an aggregate fair value of approximately $11.7 million and are included in other current assets, noncurrent assets, accrued expenses and noncurrent liabilities at December 31, 2022.
Added
The Company had soybean meal forward contracts that are marked to market at December 31, 2022. These contracts have an aggregate fair value of approximately $1.7 million and are included in current other assets at December 31, 2022. Additionally, the Company had heating oil options that are marked to market at December 31, 2022.

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