•~~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. Feed businesses need to be approved or registered with their local authority trading standards office.

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.

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China

•The General Administration of Quality Supervision, Inspection and Quarantine, which supervises the import and export of food and feed.

•The Ministry of Health of the People’s Republic of China, which establishes standards for food and pharmaceutical products.

•The Chinese Pharmacopeia, which establishes standards for pharmaceutical products.

•Ministry of Environmental Protection of the People's Republic of China, which regulates the environmental protection standards.

•Ministry of Labor and Social Security of the People's Republic of China, which establishes the regulations of labor, welfare and health insurance.

•State Administration of Work Safety, which establishes the work safety standards and regulations.

Brazil

•The Ministry of Agriculture, Cattle and Supply (Ministério da Agricultura, Pecuária e Abastecimento), which regulates the production of collagen.

•Ministry of Labor (Ministério do Trabalho), which regulates labor health and safety.

•National Water Agency (ANA), which regulates waste water discharge permits.

•State Government Agency CETESB, responsible for the control, supervision, monitoring and licensing process for pollution generating activities.

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.

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•Worksafe Victoria, which is the regulator responsible for administering and enforcing occupational health and safety laws and regulations in the State of Victoria.

•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.

Rules and regulations promulgated by these and other agencies may influence our operating results at one or more facilities.

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.

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The Company's website is http://www.darlingii.com and the address for the Company's investor relations web site is http://ir.darlingii.com. Information contained on these websites is not and should not be deemed to be a part of this report or any filing filed with, or furnished to, the SEC by us. Alternatively, these reports may be accessed at the SEC’s web site at http://www.sec.gov.

ITEM 1A. RISK FACTORS

An investment in Darling involves substantial risks. In consultation with your financial, tax and legal advisors, you should carefully consider, among other matters, the following risks described in, as well as the other information contained in or incorporated by reference into, this report. If any of the events described in the following risk factors actually occur, our business, financial condition, prospects or results of operations could be materially adversely affected, the market price of our common stock could decline and you may lose all or part of your investment in the common stock. The risks and uncertainties described below are not the only risks we face. Additional risks and uncertainties that are not currently known or that are currently deemed to be immaterial may also materially and adversely affect our business operations and financial condition or the market price of our common stock. The risks described below also include forward-looking statements and our actual results may differ substantially from those discussed in these forward-looking statements. See the section entitled “Forward-Looking Statements” in this report.

Summary of Risk Factors

The following is a summary of some of the risks and uncertainties that could materially and adversely affect our business, operating results, financial condition and the actual outcome of matters as to which forward-looking statements are made in this report. In addition to the summary below, you should carefully review the detailed risk factors discussed later in this section.

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;

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•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;

•Pandemics, 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;

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•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 ~~incur~~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;

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•
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 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 ~~vote by the~~ United ~~Kingdom mandating its~~Kingdom's withdrawal from the EU could have an adverse effect on our business, investments and future operations in Europe.

Risks Related to the Company

The prices of many of our products are subject to significant volatility associated with commodities markets.

Our principal finished products in our Feed Ingredients segment include MBM, PM, BFT, YG, PG, BBP and hides, which are commodities. We also manufacture and sell a number of other products that are derived from animal by-products and

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many of which are commodities or compete with commodities. The prices of these commodities are quoted on, or derived from prices quoted on, established commodity markets. Accordingly, our results of operations will be affected by fluctuations in the prevailing market prices of these finished products or of other commodities that may be substituted for our products by our customers. Historically, market prices for commodity grains, fats and food stocks have fluctuated in response to a number of factors, including global changes in supply and demand resulting from changes in local and global economic conditions, global government agriculture programs, energy policies of U.S. and foreign governments, and international agricultural trading policies, the impact of disease outbreaks on protein sources and the potential effect on supply and demand, as well as weather conditions during the growing and harvesting seasons. While we seek to mitigate the risks associated with price declines, a significant decrease in the market price of any of our products or of other commodities that may be substituted for our products would have a material adverse effect on our results of operations and cash flow. Furthermore, rapid and material changes in finished goods prices, including competing agricultural-based alternative ingredients, generally have an immediate and, often times, material impact on the Company’s gross margin and profitability resulting from the brief lapse of time between the procurement of the raw materials and the sale of the finished goods. Increases in the market prices of raw materials would require us to raise prices for our premium, value-added and branded products to avoid margin deterioration. There can be no assurance as to whether we could implement future price increases in response to increases in the market prices of raw materials or how any such price increases would affect future sales volumes to our customers. Our results of operations could be materially and adversely affected in the future by this volatility. Furthermore, an increased preference by meat processors for alternative feed ingredients, such as all vegetable diets in the case of poultry producers, could negatively impact the prices of certain of our finished products which would need to be sold to alternative markets and destinations.

The prices available for the Company’s Food Ingredients segment’s collagen, edible fats and natural casings products are influenced by other competing ingredients, including plant-based and synthetic hydrocolloids and artificial casings. In the collagen operation, in particular, the cost of the Company's animal-based raw material moves in relationship to the selling price of the finished goods. The processing time for the Food Ingredients segment's collagen and casings is generally 30 to 60 days, which is substantially longer than the Company's Feed Ingredients segment's animal by-products operations. Consequently, the Company’s gross margin and profitability in this segment can be influenced by the movement of finished goods prices during the period from when the raw materials were procured until the finished goods are sold.

The Company’s Fuel Ingredients segment, which converts fats and oils into renewable diesel, organic sludge and food waste into biogas, and fallen stock into low-grade energy sources, is impacted by world energy prices for oil, electricity and natural gas, as well as potential competition from the adoption of non-rendered feedstock in biodiesel markets.

Our business is dependent on the procurement of raw materials, which is the most competitive aspect of our business.

Our management believes that the most competitive aspect of our business is the procurement of raw materials rather than the sale of finished products. Many of our raw materials are derived directly or indirectly from animal by-products, which results in the following challenges:

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•In North America, consolidation within the meat processing industry has resulted in bigger and more efficient slaughtering operations, the majority of which utilize “captive” ~~renderers~~rendering (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)~~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. A significant decrease in available raw materials or a closure of a significant number of raw material suppliers could materially and

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adversely affect our business, results of operations and financial condition, including the carrying value of certain of our assets.

The rendering industry is highly fragmented and both the rendering and bakery residual industries are very competitive. We compete with other rendering businesses and alternative methods of disposal of animal by-products, bakery residue and used cooking oil provided by trash haulers, waste management companies and biodiesel companies, as well as the alternative of illegal disposal. See Item 1. “Competition.” In addition, U.S. restaurants experience theft of used cooking oil, the frequency and magnitude of which increases with the rise in value of used cooking oil. Depending on market conditions, we either charge a collection fee to offset a portion of the cost incurred in collecting raw material, collect on a no pay/no charge basis or will pay for the raw material. To the extent suppliers of raw materials look to alternate methods of disposal, whether as a result of our collection fees being deemed too expensive, the payments we offer being deemed too low or otherwise, our raw material supply will decrease and our collection fee revenues will decrease, which could materially and adversely affect our business, results of operations and financial condition. In addition, the amount of raw material acquired, which has a direct impact on the amount of finished goods produced, can also have a material effect on our gross margin reported, as the Company has a substantial amount of fixed operating costs. In addition, we utilize an extensive vehicle fleet to collect and transport raw material, for which we compete with other industries for qualified drivers. The U.S. has been experiencing a growing shortage of truck drivers. Our failure to hire and retain a sufficient number of truck drivers to operate our fleet could negatively impact our ability to collect and transport raw material in an efficient and cost-effective manner.

A majority of the Company's U.S. volume of animal by-product raw materials, including all of its significant U.S. poultry accounts, and substantially all of the Company's U.S. bakery feed raw materials, are acquired on a “formula basis,” which allow us to adjust our costs of materials based on changes in the price of our finished products, and are in most cases set forth in contracts with our suppliers, generally with multi-year terms. The formulas provided in these contracts are reviewed and modified during the term and at renewal of the contracts to maintain acceptable risk allocations between us and our suppliers related to movements in commodity prices. Changes to these formulas or the inability to renew such contracts could have a material adverse effect on our business, results of operations and financial condition. A majority of ~~Rothsay’s~~the Company's Canadian volume of animal by-product raw materials are acquired based on prices fixed on a ~~quarterly~~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.

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.~~St. Charles Plant. Since that time, the DGD Joint Venture has completed several expansion projects, and it currently operates the DGD St. Charles Plant and the DGD Port Arthur Plant. As of ~~January 2, 2021,~~December 31, 2022, under the equity method of accounting, we had an investment in the DGD Joint Venture of approximately ~~$772.8 million~~$1.9 billion included on the consolidated balance sheet. There is no assurance that the DGD Joint Venture will continue to be profitable or allow us to continue to make a return on our investment.

The DGD Joint Venture began an expansion of the DGD Norco Facility in 2019. The DGD Joint Venture estimates completion and startup of the expanded portion of the facility in the fourth quarter of 2021, and the total cost of the expansion project, including the naphtha production and improved logistics capability, is estimated to be approximately $1.1 billion. Based on forecasted margins as of the date of this report, the expansion project is expected to be substantially funded by DGD Joint Venture cash flow; however, the DGD LLC Agreement provides that until such time as the expansion of the DGD Norco Facility is complete and operational, the joint venture partners shall be required to make capital contributions or, if they agree, loans, to the DGD Joint Venture should the excess available cash in the DGD Joint Venture, as determined and in accordance with the DGD LLC Agreement, fall below $50.0 million. Additionally, in January 2021, the joint venture partners 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. The new plant is anticipated to commence operations in the second half of 2023 and the total cost of the expansion project is estimated to be approximately $1.45 billion. Based on forecasted margins as of the date of this report, the Port Arthur expansion project is expected to be substantially funded by DGD Joint Venture cash flow; however, if the DGD Joint Venture cash flow is not sufficient to fully fund the project, the DGD Joint Venture may need to borrow funds or the joint venture partners may be required to contribute additional funds to complete the project. While construction on these expansion projects is underway, there is no guarantee that unforeseen issues will not arise in connection with the completion or startup of either of the expansion projects, and any unexpected significant changes to the scope of the projects related thereto could require investment of additional financial resources by the DGD Joint Venture and/or the joint venture partners, including the Company, which could be significant.

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DGD’s operations are conducted through a joint venture with Valero.Accordingly, we share control with our joint venture partner over certain economic, legal and business interests of DGD, who may have economic, business, or legal interests, opportunities, or goals that are inconsistent with or different from our opportunities, goals, and interests, or may have different liquidity needs or financial condition characteristics than our own, be subject to different legal or contractual obligations than we are, or be unable to meet their obligations. For instance, while we share certain management rights with our joint venture partner under the DGD LLC Agreement, we do not have full control of every aspect of DGD’s business and certain significant decisions concerning DGD, including, among others, the acquisition or disposition of assets above a certain value threshold, making certain changes to DGD’s business plan, raising debt or equity capital, DGD’s distribution policy, and entering into particular transactions, which also require certain approvals from our joint venture partner. Failure by us or our joint venture partner to adequately manage the risks associated with DGD, and any differences in views among us and our joint venture partner could prevent or delay actions that are in the best interests of us or the DGD Joint Venture and could have a material adverse effect on our, or the DGD Joint Venture’s, financial condition, results of operations and liquidity.

The DGD Joint Venture is dependent on governmental energy policies and programs, such as the National Renewable Fuel Standard Program (“~~RFS2”~~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 changes to, a failure to enforce or a discontinuation of any of these programs could 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.” ~~Similarly,~~Additionally, there may be new entrants into the ~~DGD Joint Venture is subject to the risk that~~renewable fuels industry or new ~~or changing~~ technologies ~~may be~~ developed that could meet demand for ~~renewable diesel under governmental mandates~~lower-carbon transportation fuels and modes of transportation in a more efficient or less costly manner than ~~the~~our technologies ~~used by the DGD Joint Venture,~~and products, which could ~~negatively affect the price of renewable diesel and~~also have a material adverse effect on the DGD Joint Venture. For instance, several other companies have made, or announced interest in making, investments in renewable diesel projects. Should these projects develop, the DGD Joint Venture would face competition from them for feedstocks and customers, which could strain margins on the products it sells and limit the growth and profitability of the DGD Joint Venture. It is not possible at this time to predict the ultimate form, timing, or extent of any such developments; however, a reduction in the demand for the DGD Joint Venture’s products as a result of any of the foregoing events could materially and adversely affect our business, financial condition, results of operations, and liquidity.

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~~Facilities or completion and startup of any ~~expansion projects, including the Norco and Port Arthur~~ 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 ~~Norco Facility~~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;

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•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.

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.

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Our biofuels business may be affected by energy policies of U.S. and foreign governments.

Prices for our finished products may be impacted by worldwide government policies relating to renewable fuels and greenhouse gas emissions (“GHG”). Programs like ~~RFS2~~RFS and LCFS and tax credits for biofuels both in the United States and abroad are subject to revision and change which may ~~positively~~ impact the demand for our finished products.

Pursuant to the requirements established by the Energy Independence and Security Act of 2007, the finalized 2010 ~~RFS2~~RFS regulation mandated the domestic use of biomass-based diesel (biodiesel, renewable diesel or renewable ~~diesel)~~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~~and subsequent years. This amount is subject to increase by the Administrator of the EPA. The volume mandates for ~~2020 and 2021~~2022 were ~~2.43~~2.76 billion gallons for ~~biomass based~~biomass-based diesel, ~~and for 2020, 5.09~~5.63 billion ~~gallons~~Renewable Identification Numbers (“RINs”) for advanced biofuel, and ~~20.09~~20.63 billion RINs for total renewable fuel.

In December of 2022, the EPA published a proposed rule that, if finalized, would establish required RFS volumes for 2023, 2024, and 2025. For biomass-based diesel, the EPA proposed 2.82 billion gallons for 2023, 2.89 billion gallons for 2024, and 2.95 billion gallons for 2025. For the advanced biofuel category, the EPA proposed 5.82 billion RINs for 2023, 6.62 billion RINs for 2024, and 7.43 billion RINs for 2025. For total renewable ~~fuel.~~fuel, the EPA proposed 20.82 billion RINs for 2023, 21.87 billion RINs for 2024, and 22.68 billion RINs for 2025. The deadline for comments to the proposed rule was February 10, 2023. The EPA ~~has not yet established final volume mandates for 2021 for either advanced biofuel or renewable fuel or~~is expected to finalize the ~~2022 mandate for biomass based diesel. Biomass-based~~regulation no later than June 14, 2023, as required pursuant to the consent decree in Growth Energy vs. EPA, No. 1:22-cv-01191 (D.D.C.).

For RFS compliance purposes, biomass-based diesel ~~qualifies to fulfill~~credits (RINs) satisfy the ~~biomass based~~biomass-based diesel requirement, the ~~non-specified portion of the~~overall advanced biofuel requirement, and the total renewable fuel requirement. In order to ~~qualify as~~generate a ~~“renewable fuel”~~RIN, each type of fuel from each type of feedstock is required to ~~lower~~reduce GHG emissions by levels specified in the regulation. The EPA has determined that ~~biofuels (either~~ biodiesel or renewable ~~diesel)~~diesel produced from waste oils, fats, and greases ~~result in an 86% reduction in GHG emissions, exceeding~~exceed the 50% ~~requirement~~threshold established by the ~~regulation.~~regulation to generate advanced biofuel and biomass-based diesel RINs.

In December of 2019, the ~~blenders~~blender tax credit was ~~retroactively reinstated for calendar years 2018 and 2019 and~~ extended for calendar years 2020, 2021, and 2022 at $1.00 per gallon. In August of 2022, as part of the Inflation Reduction Act of 2022, the blender tax credit was extended as is until December 31, 2024. After 2024, the Clean Fuels Production Credit (CFPC) becomes effective from 2025 through 2027. Under the CFPC, on-road transportation fuel receives a credit equal to either $0.20/gallon or $1.00/gallon multiplied by the fuel’s emission reduction percentage. In order to receive the $1.00 per gallon baseline, the fuel must be produced at a qualifying facility that must meet prevailing wage and apprenticeship requirements. In contrast to the BTC, the CFPC requires that production must take place in the United States. As a blender, the DGD Joint Venture has recorded approximately ~~$287.9~~$761.1 million of ~~blenders~~blender tax credits for fiscal ~~2020,~~2022, with Darling's portion equaling 50%. ~~For its~~Under the CFPC, SAF receives a credit equal to either $0.35/gallon or $1.75/gallon multiplied by the fuel’s emission reduction percentage. In order to receive the $1.75 per gallon baseline, the fuel must be produced at a qualifying facility that must meet prevailing wage and apprenticeship requirements, and production must take place in the United ~~States and Canada biodiesel operations, the Company recorded approximately $8.2 million of blenders tax credits for fiscal 2020.~~ States. While in fiscal ~~2020,~~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.

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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.~~electricity and a disruption in any of them could have a material adverse effect on the business and results of operations of the affected facility. We consume significant volumes of natural gas to operate boilers in our plants, which generate steam to heat raw materials, and natural gas prices represent a significant cost of facility operations included in cost of sales. 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, partially due to the ongoing war between the Russian Federation and Ukraine and the inflationary environment, and therefore represent an ongoing challenge to our operating results. Although we continually manage these costs and hedge our exposure to changes in fuel prices through our formula pricing, and from time to time, derivatives, a material increase in prices for natural gas and/or diesel fuel over a sustained period of time could materially adversely affect our business, results of operations and financial condition. 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.

In fiscal year ~~2020,~~2022, the Company's top ten customers for finished products accounted for approximately ~~27%~~40% of product sales. In addition, the Company's top ten raw material suppliers accounted for approximately ~~24%~~26% of its raw material supply in the same period. Disruptions or modifications to, or termination of, our relationship with any of our significant suppliers or customers, or financial difficulties experienced by any of our suppliers or customers that lead to curtailment or termination of their operations, could cause our businesses to suffer significant financial losses and could have a material adverse effect on our business, earnings, financial condition and/or cash flows.

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. Should any of these suppliers choose alternate methods of disposal, cease their operations, have their operations interrupted by casualty, curtail their operations or otherwise cease using our collection services, these operating facilities may be materially and adversely affected, which could materially and adversely affect our business, results of operations and financial condition.

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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.

We conduct foreign operations in Europe, Canada, Asia, South America and Australia. 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~~United States-Mexico-Canada Agreement (“~~NAFTA”~~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

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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. Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act 2010, the Brazilian corporate anti-corruption law and similar anti-corruption legislation in many jurisdictions in which we or our joint venture partners operate, as well as economic and trade sanctions enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the European Union (“EU”) and other governmental entities; and

•distribution costs, disruptions in shipping or reduced availability or increased costs of freight transportation.

These risks and uncertainties could jeopardize or limit our ability to transact business in one or more of our international markets or in other developing markets and may have a material adverse effect on our business, results of operations, cash flows and financial condition. In addition, from time to time certain of our international operations make contractual prepayments to raw material suppliers in the ordinary course of business, which may subject the Company to financial risk should any such supplier experience financial difficulties or cease operations.

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.

Furthermore, emerging legislation seeks to regulate corporate environmental, social, and governance (“ESG”) practices, including practices related to the causes and impacts of climate change as well as supply chain control and compliance with human rights. For example, in December 2022 the EU adopted Directive (EU) 2022/2464 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, also known as the Corporate Sustainability Reporting Directive (“CSRD”). The new rules, which apply to all large companies and to listed small and medium-sized enterprises, require companies to report on how sustainability issues (environmental, social, and governance) affect their business and about their own impact on people and the environment. There has also been increased focus from our stakeholders, including consumers, employees and investors, on our ESG practices. We expect that stakeholder expectations with respect to ESG will continue to evolve rapidly, which may necessitate additional resources to monitor, report on, and adjust our operations.

The quantity of raw materials available to us is impacted by seasonal factors, including holidays, when raw material volumes decline, and cold weather, which can impact the collection of raw materials. In addition, warm weather can adversely affect the quality of raw materials processed and our yield on production due to more rapidly degrading raw materials. In addition to seasonal impacts, depending upon the location of our facilities and those of our suppliers, our operations could be subject to weather impacts, including the physical impacts of climate changes, changes in rainfall patterns, water shortages,

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changing sea levels, changing storm patterns and intensities and changing temperature levels. Physical damage, flooding, excessive snowfall or drought resulting from changing climate patterns could adversely impact our costs and business operations, the availability and costs of our raw materials, and the supply and demand for our end products. These effects could be material to our results of operations, liquidity or capital resources. The quality and volume of the finished products that we

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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. In addition, severe weather events may also impact our ability to collect or process raw materials or to transport finished products.

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.

We and our customers for whom we manufacture products may be exposed to product liability or other claims, product recalls and adverse public relations if consumption or use of our products is alleged to cause injury or illness to humans or animals. In addition, we and our customers may be subject to product liability or other claims, product recalls, and adverse public relations resulting from developments relating to the discovery of unauthorized adulterations to food additives or other products or from allegations that our food ingredients or other products were mislabeled, were not produced in accordance with the customer’s specifications and/or have not performed adequately in the end product, even where food safety or other product safety is not a concern. In some cases, we indemnify our customers for product liability and other claims related to our products. Product recalls in one jurisdiction may result in product recalls in other jurisdictions, as is the case in the EU, where the European Commission and the EU Member States exchange information about recalls. 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. A judgment against us or against one of our customers for whom we manufacture or provide products on a product liability or other claim, or our or their agreement to settle a product liability or other claim, or a product recall, could also result in substantial and unexpected expenditures, which would reduce operating income and cash flow. In addition, even if product liability or other claims against us or our customers for whom we manufacture products are not successful or are not fully pursued, defending these claims would likely be costly and time-consuming and may require significant management attention.

Product liability or other claims, product recalls or any other events that cause consumers to no longer associate our brands or those of our customers for whom we manufacture products with high quality and safety may result in adverse publicity and negatively impact our reputation and the value of our and their brands and lead to decreased demand for our products. In addition, as a result of any such claims against us or product recalls, we may be exposed to claims by our customers for damage to their reputations and brands. Product liability or other claims and product recalls may also lead to increased scrutiny or investigations by federal, state and foreign regulatory agencies of our operations and could have a material adverse effect on our brands, business, results of operations and financial condition.

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.

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. Applications for an extension or renewal of various permits may be subject to challenge by community and environmental groups and others. In the event of a casualty, condemnation, work stoppage, permitting withdrawal or delay, severe weather event, or other unscheduled shutdown involving one of our facilities, in a majority of our markets we would utilize a nearby operating facility to continue to serve our customers in the affected market; however, in certain markets we do not have alternate operating facilities. If any of these events occur in such markets, we may experience an interruption in our ability to service our customers and to procure raw materials, and potentially an impairment of the value of that facility. Any of these circumstances may materially and adversely affect our business and results of operations in those markets. 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.

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.~~Company. Such practices could cause damage to the reputations of our ~~company~~Company and/or the feed and food ingredient production industries or fuel production industry in general. This damage could adversely affect our financial results.

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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 2, 2021,~~December 31, 2022, the Company had approximately ~~$1.3~~$2.0 billion of goodwill. We are required to annually test goodwill to determine if impairment has occurred, as well as whenever events or changes in circumstances indicate that impairment may have occurred. 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 ~~implied~~ fair value of the reporting unit, including goodwill, in the period the determination is made. The testing of goodwill for impairment requires us to make significant estimates about our future performance and cash flows, as well as other assumptions. These estimates can be affected by numerous factors, including changes in economic, industry or market conditions, changes in business operations or regulation, or changes in competition. Changes in these factors, or changes in actual performance compared with estimates of our future performance, may affect the fair value of goodwill, which may result in an impairment charge. We cannot accurately predict the amount and timing of any impairment of assets. Should the value of goodwill become impaired, there may be a material adverse effect on our results of operations.

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.

Our operations subject us to various and increasingly stringent environmental, health and safety requirements in the various jurisdictions where we operate, including those governing air emissions, wastewater discharges, the management, storage and disposal of materials in connection with our facilities, occupational health and safety, product packaging and labeling and our handling of hazardous materials and wastes, such as gasoline and diesel fuel used by our trucking fleet and operations. Failure to comply with these requirements could have significant consequences, including recalls, penalties, injunctive relief, claims for personal injury and property and natural resource damages, other claims and negative publicity. Our operations require the control of air emissions and odor and the treatment and discharge of wastewater to municipal sewer systems and the environment. We operate boilers at many of our facilities and store wastewater in lagoons or, as permitted, discharge it to publicly owned wastewater treatment systems or surface waters, or through land application. We have incurred significant capital and operating expenditures to comply with environmental requirements, including for the upgrade of wastewater treatment facilities, and will continue to incur such costs in the future.

We could be responsible for the remediation of environmental contamination and may be subject to associated liabilities and claims for personal injury and property and natural resource damages. We own or operate numerous properties, have been in business for many years and have acquired and disposed of properties and businesses over that time. During that time, we or other owners or operators may have generated or disposed of wastes or stored or handled other materials that are or may be considered hazardous or may have polluted the soil, surface water or groundwater at or around our facilities. Under some environmental laws, such as the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 in the United States, also known as the Superfund law, responsibility for the cost of cleanup of a contaminated site can be imposed upon current or former site owners and operators, or upon any party that sent waste to the site, regardless of the lawfulness of the activities that led to the contamination. Similar laws outside the United States impose liability for environmental cleanup, often under the polluter pays theory of liability but also based upon ownership in some circumstances. There can be no assurance that we will not face extensive costs or penalties that would have a material adverse effect on our financial condition and results of operations. For example, we have received notice from the EPA relating to alleged river sediment contamination in the Lower Passaic River area of New ~~Jersey.~~Jersey and are party to a lawsuit filed by Occidental Chemical Corporation in which it seeks contribution for various investigative and cleanup costs it has incurred in connection therewith. See Item 3. “Legal Proceedings.” In addition, future developments, such as more aggressive enforcement policies, new laws or discoveries of currently unknown contamination conditions, may also require expenditures that may have a material adverse effect on our business and financial condition.

In addition, increasing efforts to control emissions of GHG are likely to impact our operations. We operate in certain jurisdictions subject to the Paris Agreement, which mandates reduced GHG emissions in certain participating ~~countries, and the~~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. The EPA has also ~~announced~~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. Future GHG emissions limits may require us to incur additional capital and operational expenditures. EPA regulations limiting exhaust emissions also have become more restrictive, and the National Highway Traffic Safety Administration and the EPA have adopted regulations that govern fuel efficiency and GHG emissions. Compliance with these and similar regulations could

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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.

We have approximately ~~10,000~~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. We can be subject to potential fines and civil and, in egregious cases, criminal actions if we are found to be in violation of worker health and safety laws in any of these jurisdictions. Further, as such laws and regulations change, we may sometimes be required to commit to unplanned capital expenditures in order to continue to comply with workplace safety requirements at our facilities. In addition, we operate and maintain an extensive vehicle fleet to transport products to and from customer locations in all jurisdictions where we have facilities. Our fleets and drivers are subject to federal, state, local and foreign laws and licensing requirements applicable to commercial fleets, their cargo and their hours and methods of operation. Failure to comply with these laws and regulations in any location could materially adversely affect our business, results of operations, financial condition and reputation.

Risks Relating to Global Disease Outbreaks or Pandemics

Our business may be negatively impacted by the occurrence of any disease correctly or incorrectly linked to animals.

The emergence of diseases such as swine influenza viruses (collectively known as “Swine Flu”) and highly pathogenic strains of avian influenza (collectively known as “Bird Flu”) and severe acute respiratory syndrome (“SARS”), including SARS-coronavirus 2 (“CoV-2”), that are in or associated with animals and have the potential to also threaten humans has created concern that such diseases could spread and cause a global pandemic. As of the date of this report, various strains of Bird Flu have been and continue to be reported in wild fowl and commercial poultry in Europe, North America, the Middle East and parts of Asia.

Other diseases that are highly contagious within a species, but do not affect other animals and are not transmissible to humans, such as porcine epidemic diarrhea (“PED”) virus, may significantly impact production of the susceptible livestock or poultry species in a country or region. African Swine Fever (“ASF”) is a viral and highly contagious disease of pigs and wild boar, for which no cures or approved vaccines are available as of the date of this report. In the past few years, ASF has become widespread in multiple Chinese, Vietnamese and ~~Vietnamese~~Philippine provinces and has been reported in Cambodia, Laos, Myanmar, ~~The Philippines,~~ Timor-Leste, Indonesia, Malaysia, and ~~Indonesia~~Thailand in South East Asia and the People's Democratic Republic of Korea, the Republic of Korea, Mongolia, Bhutan and ~~Mongolia.~~India. In ~~2019,~~April 2021, the Chinese Ministry of Agriculture and Rural Affairs (“MARA”) ~~addressed measures~~issued the “Work plan for Regional Prevention and Control of African Swine Fever and Other Major Animal Diseases (Trial)”, which divided the entire country into five regions (South-Central, Eastern, Northern, South-West, and North-west). Pig movement is restricted and ASF-free zones were created within a region. Only pigs from ASF-free zones, breeding pigs and piglets are allowed to ~~control ASF in China in~~move beyond their respective region. Such restrictions on the ~~“ASF Epidemic Emergency Implementation Plan”. The resulting restrictions in transportation have created serious dislocations in pork supplies and resulted in strong reduction~~movement of pigs from one region to another may affect slaughter numbers within certain regions and thereby reduce volumes of raw material supplied to our locations ~~in China~~ that, within the same region, process blood and ~~make~~makes collagen from pork skins. Additionally, the perception, real or implied, that blood meal and dried plasma powder may contribute to the spread of ASF, resulted in a temporary ban on the use of porcine plasma in pork feed which negatively affected demand for our products as ingredients in porcine animal feed in China. This ban has now been lifted and porcine plasma is once again allowed to be used in pork feed provided that certain newly established guidelines are met. ASF has also been reported in Eastern Europe since 2007. 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~~has taken measures to address the “unprecedented spread” of ASF. In particular, based on the epidemiological situation of ASF, the areas affected by ASF in relevant Member States have been listed as restricted zones I, II and III in Annex I to the Commission Implementing Regulation (EU) 2021/605 – as last amended by Commission Implementing Regulation (EU) 2022/2568 – which provides special control measures for ASF based on the new legal framework of Regulation (EU) 2016/429 (“Animal Health Law”). On July 28, 2021, ASF was confirmed in the Dominican Republic and subsequently in Haiti on September 30, 2021. As a result of the occurrence of ASF in North America, the Animal and Plant Health Inspection Service (“APHIS”), on September 24, 2021, submitted plans to the World Organization for Animal Health (OIE) for the declaration of a new ASF protection zone in Puerto Rico and the U.S. Virgin Islands. Although ASF has not been detected in Puerto Rico or the U.S. Virgin Islands, establishing such an ASF protection zone will add to existing efforts to prevent ASF from spreading into the United States and protect exports of pork related products. Because Puerto Rico and the U.S. Virgin Islands are territories of the U.S., export markets will close to all live pigs, pork meat and pork byproducts produced in the U.S. if ASF finds its way into Puerto Rico or the U.S. Virgin islands. 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 ~~North~~the United States, Canada or South America. ~~In the United States, the Animal and Plant Health Inspection Service (“APHIS”) has implemented a surveillance plan to strengthen ASF detection capabilities and enhance outbreak preparedness.~~ ASF does not infect humans and is not considered a food safety hazard. Any reports, proven or perceived, that implicate animal feed or feed ingredients, including but not limited to animal by-products, as contributing to the spread of a contagious disease could negatively affect demand for our products as ingredients in animal feeds in the affected country or region.

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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. If any disease is correctly or incorrectly linked to animals and has a negative impact on meat or poultry consumption or animal production in any jurisdiction in which we operate, such occurrence could have a material negative impact on the volume of raw materials available to us or the demand for our finished products.

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Our business may be affected by the impact of animal related disease, such as BSE and other food safety issues.

The FDA has put in place restrictions to prevent the spread of BSE, and certain foreign governments have also restricted exports of beef and beef products from the United States following the detection of BSE in the United States in December 2003. 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”)~~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”. On December 17, 2021 the Canadian Food Inspection Agency confirmed a case of atypical BSE in an 8.5 year old cow in Alberta. However, the Canadian Food Inspection Agency reported zero cases of BSE in 2022. While ~~this~~these latest ~~case~~cases in the United States and ~~the~~Canada and previous ~~four~~ cases were the atypical or sporadic form of BSE, which is not spread via feed and, therefore, did not affect the “negligible BSE risk” status of ~~the United States,~~either country, continued concern about BSE in ~~the United States, and other~~ countries in which we operate now or in the future, may result in additional regulatory and market related challenges that may affect our operations or increase our operating costs.

With respect to human food, pet food and animal feed safety in the United States, the FDA Food Safety Modernization Act (“FSMA”) gives the FDA various authorities and directs the FDA to promulgate new regulations pursuant to the FSMA, as described in the section entitled “Business—Regulations” included in this report.

As a producer of meat-centric food products, we are subject to risks associated with the outbreak of disease in pork, beef livestock, and poultry flocks, including Foot-and-Mouth Disease (FMD), Avian Influenza and BSE. The outbreak of disease could adversely affect our supply of raw materials, increase the cost of production, and reduce operating margins. Additionally, the outbreak of disease may hinder our ability to market and sell products. We have developed business continuity plans for various disease scenarios; however no assurance given that these plans will be effective in eliminating the negative effects of any such diseases on our operating results.

We have followed regulations enacted under the FSMA throughout the rulemaking process and have implemented Current Good Manufacturing Practices, food safety plans and other procedures at our domestic facilities, which we believe comply with the applicable final rules for preventive controls for human food and animal feed. Similar procedures have been implemented at our foreign facilities for compliance with the Foreign Supplier Verification Programs rule. Such rulemaking and implementation of compliant procedures could, among other things, limit our ability to import necessary raw materials or finished products or require us to amend certain of our other operational policies and procedures. Unforeseen issues and requirements may arise as the FDA implements and enforces these and other final rules or promulgates other new regulations provided for by the FSMA.

The FDA has also established a Reportable Food Registry (“RFR”) pursuant to the Food and Drug Administration Amendments Act of 2007 (the “FDAAA”), and has defined a reportable food, which the manufacturer or distributor would be required to report in the RFR, to include materials used as ingredients in animal feeds and pet foods if there is a reasonable probability that the use of, or exposure to, such materials will cause serious adverse health consequences or death to humans or animals. Finalization of the RFR guidance documents and potential additional requirements relating to the RFR may impose additional requirements on us.

According to the “Compliance Policy Guide Sec. 690.800, Salmonella in Food for Animals” (the “CPG”), any finished pet food contaminated with any species of Salmonella will be considered adulterated, and the FDA believes regulatory action is warranted in cases involving such pet foods because of the heightened risk to humans given the high likelihood of direct human contact with pet food. Finished animal feeds intended for pigs, poultry and other farmed animals, however, will be considered to be adulterated only if the feed is contaminated with a species of Salmonella that is considered to be pathogenic for the animal species for which the feed is intended. 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.

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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. For example, an enforceable ban on the feeding of restricted animal material to ruminant animals is in place in Australia as part of a comprehensive national program to prevent the entry and establishment of the BSE agent in Australia and inspections and audits are undertaken to ensure compliance. In addition, in the EU, harmonized rules have been adopted for prevention, control and eradication of transmissible spongiform encephalopathies (“TSEs”), which includes BSE, in Regulation (EC) No 999/2001, as amended (“TSE Regulation”) and in other instruments such as Regulation (EC) No 1069/2009 on animal by-products, as amended (“Animal By-Products Regulation”) and other food and feed hygiene regulations. The TSE Regulation establishes a “feed ban” consisting of a ban on the use of processed animal protein (“PAP”), in feed for ruminants. Only certain animal proteins considered to be safe (such as fishmeal) can be used, but under very strict conditions. A ban on feeding MBM to ruminants has been in place in the EU since 1994. The ban was expanded in 2001 with the prohibition of feeding all PAP to all farmed animals, subject to certain limited exceptions. In 2009, the BSE-related feed ban was supplemented with provisions prohibiting intra-species recycling applicable to all food-producing animals. Other animal-derived products besides PAP, such as collagen derived from non-ruminants and hydrolyzed protein derived from parts of non-ruminants or from ruminant hides and skins, are not subject to the “feed ban.” The “feed ban” has been lifted for pig and poultry PAP in the feed of aquaculture animals, and insect PAP (a new source of animal protein) in the feed of aquaculture animals. ~~The~~In September 2021, the European Commission ~~aims~~relaxed the “feed ban” to ~~present proposals to authorize~~allow the feeding of non-ruminant farmed animals with insect PAP, ~~and to~~ reauthorize the feeding of poultry with pig PAP, ~~and~~ the feeding of pigs with poultry ~~PAP.~~PAP and allow the use of ruminant derived gelatin in feeds for non-ruminant farmed animals.

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Although Darling Ingredients International may profit from the possible lifting of the ban for pigs and poultry, changes to the “feed ban” may also adversely affect Darling Ingredients International, possibly restricting the allowed use of some of their products. The TSE Regulation applies to the production and placing on the market of live animals and products of animal origin on the EU market. For that purpose, the BSE status of EU Member States, non-EU members of the European Economic Area and other countries or regions (“Third Countries”) is to be determined by classification into one of three categories depending on the BSE risk involved: a negligible risk, a controlled risk or an undetermined risk. This classification is made by the OIE. 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, according to the ~~following~~Commission Decision of June 29, 2007, as amended, Greece is the only EU Member ~~States are~~State classified as having a controlled BSE ~~risk: France, Greece and Ireland.~~risk. The other EU Member States are classified as having a negligible BSE risk. However, the United Kingdom (with the exception of Northern Ireland), formerly a member of the EU, continues to be classified as controlled BSE risk. Classical BSE is the form that can be transmitted by feeding contaminated feed or food. A change in the BSE status of one or more EU Member States may have a negative impact on Darling Ingredients International. Under EU legislation, imported products from outside the EU must meet the same safety standards as products produced in EU Member States. Therefore, the TSE Regulation imposes strict import requirements related to TSEs for live animals and animal by-products, such as full traceability of imported animals and animal by-products, a ban on the use of MBM in feed for ruminants and the prohibition of the import of specified risk material or mechanically recovered meat. The detailed import requirements depend on the BSE status of Third Countries. The Animal By-Products Regulation establishes rules intended to prevent the outbreak of certain diseases such as BSE. It imposes, for example, rules for the use and disposal of specified risk material and other high risk material. A BSE outbreak or other event viewed as hazardous to animal or human health could lead to the adoption of more stringent rules on the use and disposal of animal by-products, which could require Darling Ingredients International to change its production processes and could have a material adverse effect on our business, results of operations or financial condition.

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”) ~~will apply from~~has applied since March 27, 2021. The Food Transparency Regulation strengthens transparency requirements in EU food law. Among other things, the European Food Safety Authority (“EFSA”) ~~will be required to~~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. EFSA is tasked with establishing and managing a publicly accessible database of studies commissioned or carried out by business operators to support an application or notification in relation to which EU law contains provisions for EFSA to provide a scientific output, including a scientific opinion. Business operators ~~will need to~~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. Any potential disclosure of unfavorable studies and data as well as EFSA’s ultimate decision-making power to determine what constitutes confidential information (and therefore subject or not to transparency obligations) may result in adverse publicity, negatively impact our reputation and/or require us to disclose commercially sensitive information and data. Related, Regulation (EC) No 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. 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

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reporting of non-compliance. More stringent and higher financial penalties may potentially result in significant and unexpected costs and enhanced provisions regarding whistle-blowers may result in more regulatory investigations and enforcement actions, both of which could have a material adverse effect on our business.

Pandemics, 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.

The actual or perceived effects of a disease outbreak, epidemic, pandemic or similar widespread public health concern, such as COVID-19, could negatively affect our operations, liquidity, financial condition and results of operations. While to date we have experienced no material negative effects on our business and results of operations as a result of the current COVID-19 outbreak, the situation remains dynamic and subject to rapid and possibly material change, including but not limited to changes that may materially affect the operations of our supply chain partners and finished product customers, which ultimately could result in material negative effects on our business and results of operations.

The spread of pandemics, epidemics or disease outbreaks such as COVID-19 may disrupt our third-party business partners’ ability to meet their obligations to us, which may negatively affect our operations. These third parties include those who supply our raw materials and other necessary operating materials and logistics and transportation services providers. Ports and other channels of entry may be closed or operate at only a portion of capacity, as workers may be prohibited or otherwise

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unable to report to work, and means of transporting products within regions or countries may be limited for the same reason. As a result of the current COVID-19 outbreak, transport restrictions related to quarantines or travel bans have been put in place and global supply may become constrained, each of which may cause the price of certain raw materials used in our products to increase and/or we may experience disruptions to our operations. In addition, COVID-19 and similar outbreaks may affect the prices and demand for our finished products.

Workforce limitations and travel restrictions resulting from pandemics, epidemics or disease outbreaks such as COVID-19 and related government actions may affect many aspects of our business. If a significant percentage of our workforce is unable to work, including because of illness or travel or government restrictions in connection with pandemics or disease outbreaks, our operations and financial reporting capabilities may be negatively affected. In addition, pandemics or disease outbreaks could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect our raw material supply and our customers’ demand for our finished products.

Our efforts to manage and mitigate these factors may be unsuccessful, and the effectiveness of these efforts depends on factors beyond our control, including the duration and severity of any pandemic, epidemic or disease outbreak, as well as third party actions taken to contain its spread and mitigate public health effects.

The risks described above also apply to the DGD Joint Venture and its business and operations.

Risks Related to our Labor Force

We may be subject to work stoppages at our operating facilities, which could cause interruptions in the manufacturing or distribution of our products.

While we currently have no international, national or multi-plant union contracts, as of ~~January 2, 2021~~December 31, 2022 approximately ~~19%~~13% of Darling’s U.S. employees, ~~26%~~48% of ~~Rothsay’s~~Canadian employees and ~~44%~~30% of Darling Ingredients International’s employees were covered by various collective bargaining agreements. Furthermore, local laws and regulations in certain jurisdictions in which we operate provide for worker groups with prescribed powers and rights with regard to working conditions, wages and similar matters. In jurisdictions where such groups do not exist, labor organizing activities could result in additional employees becoming unionized and higher ongoing labor costs. Darling’s collective bargaining agreements expire at varying times over the next five years. In contrast, Darling Ingredients International’s collective bargaining agreements generally have one to two year terms, while ~~Rothsay~~Canadian agreements generally have terms up to three years. Some of our collective bargaining agreements have already expired and are in the process of being renegotiated. There can be no assurance that we will be able to negotiate the terms of any expiring or expired agreement in a manner acceptable to us. If our workers were to engage in a strike, work stoppage, slowdown or other collective action in the future in any of our locations, we could experience a significant disruption of our operations, which could have a material adverse effect on our business, results of operations and 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.

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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. These plans are not administered by us and contributions are determined in accordance with provisions of negotiated labor contracts to meet their pension benefit obligations to their participants. Based upon the most currently available information, certain of these multiemployer plans are underfunded due partially to a decline in the value of the assets supporting these plans, a reduction in the number of actively participating members for whom employer contributions are required and the level of benefits provided by the plans. In addition, the U.S. Pension Protection Act, which went into effect in January 2008, requires underfunded pension plans to improve their funding ratios within prescribed intervals based on the level of their underfunding. As a result, our required contributions to these plans may increase in the future. 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.~~liabilities, which could be significant and have an adverse effect on our financial condition. Also, if a multiemployer defined benefit plan fails to satisfy certain minimum funding requirements, the Internal Revenue Service (“IRS”) may impose a nondeductible excise tax of 5% on the amount of the accumulated funding deficiency for those employers not contributing their allocable share of the minimum funding to the plan. Requirements to pay increased contributions, withdrawal liability and excise taxes could negatively impact our liquidity and results of operations.

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Risks Related to our Indebtedness

Our substantial level of indebtedness could adversely affect our financial condition.

As of ~~January 2, 2021,~~December 31, 2022, our total indebtedness, including trade debt, was approximately ~~$1.5~~$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 ~~$893.9~~$1.3 billion and under delayed draw term A loans of $800.0 million (after giving effect to approximately ~~$55.0~~$135.0 million of revolver borrowing, $3.9 million of outstanding letters of credit and ~~$47.2~~$48.1 million of ancillary facilities). Our high level of indebtedness could have important consequences, including the following:

•making it more difficult to satisfy our obligations to our financial lenders and our contractual and commercial commitments; limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements on commercially reasonable terms or at all;

•requiring us to use a substantial portion of our cash flows from operations to pay principal and interest on our indebtedness instead of for other purposes, thereby reducing the amount of our cash flows from operations available for working capital, capital expenditures, acquisitions and other general corporate purposes;

•increasing our vulnerability to adverse economic, industry and business conditions;

•exposing us to the risk of increased interest rates as certain of our borrowings are at variable rates of interest;

•increasing our exposure to changes in foreign exchange rate conversion to functional currency;

•limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

•placing us at a competitive disadvantage compared to other, less leveraged competitors; and

•increasing our cost of borrowing.

In addition, the indentures that govern our senior notes and the credit agreement governing our senior secured credit facilities contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all our funded indebtedness. See Item 7. “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.”

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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.

Although the indentures that govern the senior notes and the credit agreement governing the senior secured credit facilities contain restrictions on our incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and the additional indebtedness that we and our subsidiaries could incur in compliance with these restrictions could be substantial. To the extent that we or our subsidiaries incur additional indebtedness, the risks associated with our indebtedness, including our possible inability to service our indebtedness, could intensify. See Item 7. “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.

Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations and to meet our other cash needs, we could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to effect any such

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alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, such alternative actions may not allow us to meet our scheduled debt service obligations and our other cash needs. The credit agreement governing our senior secured credit facilities and the indentures governing our senior notes restrict our ability to use the proceeds from the disposition of assets, debt incurrence or sales of equity to repay other indebtedness. We may not be able to consummate any such dispositions or to obtain debt or equity proceeds in amounts sufficient to meet any debt service obligations, and we may be restricted under such credit agreement or indentures from using any such amounts to service other debt obligations.

If we cannot make scheduled payments under any of the agreements governing our debt, we would be in default under such agreements, which could allow lenders under any credit facilities to terminate their commitments to loan money and could allow the applicable lenders or other debt holders to declare all outstanding principal and interest of such debt to be immediately due and payable, and, in the case of secured debt, to foreclose against the assets securing such debt and apply the proceeds from such foreclosure to repay amounts owed to them. Any of these events would likely in turn trigger cross-acceleration or cross-default provisions in our other debt instruments, which would allow the creditors under those instruments to exercise similar rights. If any of these actions are taken, we could be forced into restructuring, bankruptcy or liquidation.

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.

We conduct a significant portion of our operations through our subsidiaries, a number of which operate outside the United States. Accordingly, repayment of our indebtedness is dependent, to a significant extent, on the generation of cash flow by our subsidiaries and their ability to make such cash available to us. Unless they are guarantors of the indebtedness, our subsidiaries do not have any obligation to pay amounts due on the indebtedness or to make funds available for that purpose. Under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries. For example, our subsidiaries that are organized under the laws of, and operate in, China currently have substantial regulatory restrictions on their ability to make cash available to us. While the credit agreement governing the senior secured credit facilities, the indentures governing our senior notes and the agreements governing certain of our other indebtedness will limit the ability of certain of our subsidiaries to incur consensual restrictions on their ability to make other intercompany payments to us, these limitations are subject to certain significant qualifications and exceptions.

Risks Related to our Common Stock

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.

The market price of our common stock has been subject to volatility and, in the future, the market price of our common stock could fluctuate widely in response to numerous factors, many of which are beyond our control. Numerous factors, including many over which we have no control, may have a significant impact on the market price of our common stock. In addition to the risk factors discussed in this report, the price and volume volatility of our common stock may be affected by:

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•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;

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•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.

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.

We have not paid any dividends on our common stock since January 3, 1989 and we have no current plans to do so. 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. For example, our senior secured credit facility restricts our ability to make payments of dividends in cash if certain coverage ratios are not met. Even if such coverage ratios are met in the future, any determination to pay cash dividends on our common stock will be at the discretion of our board of directors and will be based upon our financial condition, operating results, capital requirements, plans for expansion, business opportunities, restrictions imposed by any of our financing arrangements, provisions of applicable law and any other factors that our board of directors determines are relevant at that point in time.

Future sales of our common stock or the issuance of other equity may adversely affect the market price of our common stock.

We are not restricted from issuing additional common stock, including securities that are convertible into or exchangeable for, or that represent the right to receive, common stock. The issuance of additional shares of our common stock or convertible securities, including our outstanding options, or otherwise, will dilute the ownership interest of our common stockholders.

Sales of a substantial number of shares of our common stock or other equity-related securities in the public market could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our common stock or other equity-related securities would have on the market price of our common stock.

Our common stock is an equity security and is subordinate to our existing and future indebtedness.

Shares of our common stock are equity interests and do not constitute indebtedness. As such, the shares of common stock will rank junior to all of our indebtedness, including our trade debt, and to other non-equity claims on us and our assets available to satisfy claims on us, including claims in a bankruptcy, liquidation or similar proceedings. Our existing indebtedness restricts, and future indebtedness may restrict, payment of dividends on the common stock.

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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. Further, under our certificate of incorporation, there are no restrictions on our business or operations or on our ability to incur indebtedness or engage in any transactions arising as to our common stock, subject only to the voting rights available to stockholders generally.

In addition, our rights to participate in the assets of any of our subsidiaries upon any liquidation or reorganization of any subsidiary will be subject to the prior claims of that subsidiary’s creditors (except to the extent we may ourselves be a creditor of that subsidiary), including that subsidiary’s trade creditors and our creditors who have obtained or may obtain guarantees from the subsidiaries. As a result, our common stock will be subordinated to our and our subsidiaries’ obligations and liabilities, which currently include borrowings and guarantees. See Item 7. “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.”

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The issuance of shares of preferred stock could adversely affect holders of common stock, which may negatively impact your investment.

Our board of directors is authorized to cause us to issue classes or series of preferred stock without any action on the part of our stockholders. The board of directors also has the power, without stockholder approval, to set the terms of any such classes or series of preferred shares that may be issued, including the designations, preferences, limitations and relative rights senior to the rights of our common stock with respect to dividends or upon the liquidation, dissolution or winding up of our business and other terms. If we issue preferred shares in the future that have a preference over the common stock with respect to the payment of dividends or upon liquidation, dissolution or winding up, or if we issue preferred shares with voting rights that dilute the voting power of the common stock, the rights of holders of the common stock or the market price of the common stock could be adversely affected. As of the date of this report, we have no outstanding shares of preferred stock but we have available for issuance 1,000,000 authorized but unissued shares of preferred stock.

General Risks Related to our Business

We may incur material costs and liabilities in complying with government regulations.

We are subject to the rules and regulations of various governmental agencies in the United States, the EU, Canada, China and the other countries in which Darling Ingredients International operates. These include rules and regulations administered by governmental agencies at the supranational, federal, state, provincial or local level. See Item 1. "Business - Regulations" for a listing of certain governmental agencies to which we are subject.

The applicable rules, regulations and guidance promulgated by these and other agencies, which are likely to change over time, affect our operations and may influence our operating results at one or more facilities. Furthermore, the loss of or failure to obtain necessary federal, state, provincial or local permits and registrations at one or more of our facilities could halt or curtail operations at impacted facilities, which could result in impairment charges related to the affected facility and otherwise adversely affect our operating results. In addition, our failure to comply with applicable rules, regulations and guidance, including obtaining or maintaining required operating certificates or permits, could subject us to: (i) administrative penalties and injunctive relief; (ii) civil remedies, including fines, injunctions and product recalls; and/or (iii) adverse publicity. There can be no assurance that we will not incur material costs and liabilities in connection with these rules, regulations and guidance.

Because of our international operations throughout much of the world, we could be adversely affected by violations of the FCPA and similar anti-bribery laws, as well as laws and regulations governing international transactions (such as the regulations administered by OFAC). Recent years have seen a substantial increase in the global enforcement of anti-corruption laws and economic sanctions laws and regulations. Our operations outside the United States, including in developing countries, could increase the risk of such violations. In addition, we may enter into joint ventures with joint venture partners who are domiciled in areas of the world with anti-bribery laws, regulations and business practices that differ from those in the United States. There is risk that our joint venture partners will violate the FCPA and other anti-bribery laws and regulations, as well as OFAC and economic sanctions. While our policies mandate compliance with the FCPA and other anti-bribery laws, as well as OFAC and economic sanctions, we cannot provide assurance that our internal control policies and procedures will always protect us from violations committed by our employees, joint venture partners or agents. 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.

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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. While our policies mandate compliance with these laws, we cannot provide assurance that our internal control policies and procedures will always protect us from violations or reckless or criminal acts committed by our employees, joint venture partners or agents.

Downturns and volatility in global economies and commodity and credit markets could materially adversely affect our business, results of operations and financial condition.

Our results of operations are materially affected by the conditions of the global economies and the credit, commodities and stock markets. Among other things, we may be adversely impacted if our domestic and international customers and suppliers are not able to access sufficient capital to continue to operate their businesses or to operate them at prior levels. A

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High inflation, adverse changes in interest rates, a decline in consumer confidence or changing patterns in the availability and use of disposable income by consumers can negatively affect both our suppliers and customers. Declining discretionary consumer spending or the loss or impairment of a meaningful number of our suppliers or customers could lead to declines in either raw material availability or customer demand. Any tightening in credit supply could negatively affect our customers’ ability to pay for our products on a timely basis or at all and could result in a requirement for additional bad debt reserves. Although many of our customer contracts are formula-based, continued volatility in the commodities markets could negatively impact our revenues and overall profits. Counterparty risk on finished product sales can also impact revenue and operating profits when customers either are unable to obtain credit or refuse to take delivery of finished products due to market price declines.

We may not successfully identify and complete acquisitions on favorable terms or achieve anticipated synergies relating to any acquisitions, and such acquisitions could result in unknown liabilities, unforeseen operating difficulties and expenditures and require significant management resources.

We regularly review potential acquisitions of complementary businesses, services or products. However, we may be unable to identify suitable acquisition candidates in the future. Even if we identify appropriate acquisition candidates, we may be unable to complete or finance such acquisitions on favorable terms, if at all. In addition, the process of integrating an acquired business, service or product into our existing business and operations may result in unforeseen operating difficulties and expenditures. Integration of an acquired company also may require significant management resources that otherwise would be available for ongoing development of our business. Moreover, we may not realize the anticipated benefits of any acquisition or strategic alliance and such transactions may not generate anticipated financial results. Future acquisitions could also require us to incur debt, assume contingent liabilities or amortize expenses related to intangible assets, any of which could harm our business. Finally, acquisitions may be structured in such a manner that would result in the assumption of unknown liabilities not disclosed by the seller or uncovered during pre-acquisition due diligence.

Our business may be adversely impacted by fluctuations in foreign currency exchange rates, which could affect our ability to comply with our financial covenants.

We carry out transactions in a number of foreign currencies, principally the euro, the Canadian dollar, the Chinese renminbi, the Brazilian real, the British pound, the Japanese yen, the Australian dollar and the Polish zloty. To the extent possible, we attempt to match revenues and expenses in each of the currencies in which we operate. However, we will still be exposed to currency fluctuations when we translate the results of our overseas operations into U.S. dollars, our reporting currency, in the preparation of our consolidated financial statements, which may affect our U.S. dollar-denominated results of operations and financial condition even if our underlying operations and financial condition, in local currency terms, remain unchanged. While we from time to time utilize currency hedging instruments to protect us from adverse fluctuations in currency exchange rates, there can be no assurance that such instruments will successfully protect us from more pronounced swings in such exchange rates. Further, by utilizing these instruments we potentially forego any benefits that result from favorable fluctuations in exchange rates.

We also face risks arising from the possible future imposition of exchange controls and currency devaluations. Exchange controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our foreign subsidiaries located in, or business conducted within, a country imposing such controls. Currency devaluations would result in a diminished value of funds denominated in the currency of the country instituting the devaluation.

Any fluctuations in exchange rates or the imposition of exchange controls or currency devaluation may adversely impact our ability to comply with the financial and other covenants under the documents governing our indebtedness, which could affect our ability to incur indebtedness, pay dividends, make investments or take other actions that might be in our best interest. 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.

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Large capital projects can take many years to complete, and market conditions could deteriorate over time, negatively impacting project returns.

We may engage in capital projects, such as the DGD Joint Venture expansion ~~projects,~~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. 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. Trends within the food and pet food industries change often, and failure to identify and react to changes in these trends could lead to, among other things, reduced demand and price reductions for our products or those of our customers for whom we manufacture products, and could have an adverse effect on our financial results.

If we experience difficulties or a significant disruption in our information systems or if we fail to implement new systems and software successfully, our business could be materially adversely affected.

We depend on information systems throughout our business to collect and process data that is critical to our operations and accurate financial reporting. Among other things, these information systems process incoming customer orders and outgoing supplier orders, manage inventory, and allow us to efficiently collect raw materials and distribute products, process and bill shipments to and collect cash from our customers, respond to customer and supplier inquiries, contribute to our overall internal control processes, maintain records of our property, plant and equipment, record and pay amounts due vendors and other creditors and manage our human resource function.

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If we were to experience a disruption in our information systems that involve interactions with suppliers and customers, it could result in a loss of raw material supplies, sales and customers and/or increased costs, which could have a material adverse effect on our business, financial condition and results of operations. In addition, any such disruption could adversely affect our ability to meet our financial reporting obligations. We may also encounter difficulties in developing and implementing new systems or maintaining and upgrading existing systems and software. Such difficulties may lead to significant expenses or losses due to unexpected additional costs required to implement or maintain systems, disruption in business operations, loss of sales or profits, or cause us to incur significant costs to reimburse third parties for damages, and, as a result, may have a material adverse effect on our results of operations and financial condition. We could also experience impairment of our reputation if any of these events were to occur.

Increased information technology security threats and more sophisticated computer crime pose a risk to our systems, networks, products and services.

We rely upon our information systems and networks in connection with a variety of business activities, and we collect and store sensitive data. Increased security threats to information systems and more sophisticated computer crime pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. We are the subject of cyber attacks from time to time, and must invest resources to protect our systems and defend against and respond to incidents. A failure of or breach in technology security could expose us and our customers and suppliers to risks of misuse of information or systems, the compromising of confidential information, manipulation and destruction of data, defective products, production downtimes and operating disruptions, which in turn could adversely affect our reputation, competitive position, business and results of operations. In addition, such breaches in security could result in litigation, regulatory action and potential liability and the costs and operational consequences of implementing further data protection measures.

Furthermore, we are subject to complex and evolving laws and regulations regarding privacy, know-your-customer requirements, data protection, cross-border data movement and other matters. Principles concerning the appropriate scope of consumer and commercial privacy vary considerably in different jurisdictions, and regulatory and public expectations regarding the definition and scope of consumer and commercial privacy may remain fluid. It is possible that these laws may be interpreted and applied by various jurisdictions in a manner inconsistent with our current or future practices or inconsistent with one another. If personal, confidential or proprietary information of customers or employees in our possession is mishandled or misused, we may face regulatory, reputational and operational risks which could have an adverse effect on our financial condition and results of operations. For example, ~~European legislators adopted~~ the General Data Protection Regulation (“GDPR”) ~~that became effective in May 2018, and supersedes EU data protection legislation,~~which imposes ~~more~~ stringent data protection requirements, and provides for ~~greater~~significant penalties for noncompliance. ~~There are significant outstanding questions relating to the scope and applicability of GDPR for companies such as ours.~~ We may face difficulty in fully complying with these regulations and any failure to do so could subject us to significant monetary penalties, liabilities, and adverse publicity. ~~Further,~~In the United States, the California ~~recently enacted~~Consumer Privacy Act (“CCPA”) is a far-reaching data privacy law, ~~(the “California Consumer~~which has been significantly amended by the California Privacy ~~Act” or “CCPA”~~Rights Act (“CPRA”)~~, which may limit how we may collect~~. The impact of the CPRA on us and ~~use personal data, and which came into effect~~

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others in ~~January 2020. As draft~~our industry is uncertain because regulations have not ~~yet~~ been ~~finalized~~finalized. Virginia’s data privacy law is now in effect and ~~additional state~~will be followed in the second half of 2023 by similar data privacy laws ~~may be enacted,~~in Colorado, Connecticut and Utah. Additionally, other states are considering enacting laws regulating data privacy and cybersecurity, and similar topics are being considered by legislators and regulators in the U.S. and other countries. The impact of these ~~state privacy~~ laws on us and others in our industry is uncertain. We also may be required to expend significant resources to prepare for and comply with the evolving standards. We could be adversely affected if the CCPA, ~~and~~including as amended by CPRA, or other ~~states’ legislation~~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.

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. We believe that our future success will depend in part on our ability to attract, motivate and retain skilled technical, managerial, marketing and sales personnel. Competition for these types of skilled personnel is intense and there can be no assurance that we will be successful in attracting, motivating and retaining key personnel. Furthermore, our ability to do so has been and may continue to be impacted by challenges in the labor market, which has experienced and may continue to experience wage inflation, labor shortages, increased employee turnover, changes in availability of our workforce and a shift toward remote work. The failure to hire and retain such personnel could materially adversely affect our business, results of operations and financial condition.

We could ~~incur~~have a material weakness in our internal control over financial reporting that would require remediation.

Any future failures to maintain the effectiveness of our disclosure controls and procedures, including our internal control over financial reporting, could subject us to a loss of public confidence in our internal control over financial reporting and in the integrity of our financial statements and our public filings with the SEC and other governmental agencies and could harm our operating results or cause us to fail to meet our regulatory reporting obligations in a timely manner.

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Changes in our tax rates or exposure to additional income tax liabilities could impact our profitability.

We are subject to income taxes in the United States and in numerous other foreign jurisdictions. Significant judgment is required in determining our worldwide income tax provision, tax assets, and accruals for other taxes, and there are many transactions and calculations where the ultimate tax determination is uncertain. Our future effective tax rates could be adversely affected by changes in the mix of earnings by jurisdictions with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws or tax rates. Furthermore, we are regularly subject to audit by tax authorities with respect to both income and other non-income taxes. Unfavorable audit results or tax rulings, or other changes resulting in significant additional tax liabilities, could have material adverse effects upon our earnings, cash flows, and financial condition.

Litigation or regulatory proceedings may materially adversely affect our business, results of operations and financial condition.

We are a party to various lawsuits, claims and loss contingencies arising in the ordinary course of business, including insured worker's compensation, auto, and general liability claims, assertions by certain regulatory and governmental agencies related to permitting requirements and/or air, wastewater and storm water discharges from the Company’s processing facilities, litigation involving tort, contract, statutory, labor, employment, and other claims, and tax matters. The outcome of litigation, particularly class action lawsuits, and regulatory proceedings is difficult to assess or quantify. Plaintiffs (including governmental agencies) in these types of lawsuits and proceedings may seek recovery of very large or indeterminate amounts, and the magnitude of the potential loss relating to such lawsuits or proceedings may remain unknown for substantial periods of time. The costs of responding to or defending future litigation or regulatory proceedings may be significant and any future litigation or regulatory proceedings may divert the attention of management away from our strategic objectives. There may also be adverse publicity associated with litigation or regulatory proceedings that may decrease customer confidence in our business, regardless of whether the allegations are valid or whether we are ultimately found liable. As a result, litigation or regulatory proceedings may have a material adverse effect on our business, results of operations and financial condition. For more information related to our litigation and regulatory proceedings, see Item 3. “Legal Proceedings.”

Our European pension funds may require minimum funding contributions.

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

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IORP Directive provides for certain general solvency requirements but allows EU Member States discretion to impose specific national requirements. As a result, the solvency of EU pension funds are mostly regulated on a national level. On December 23, 2016, the new IORP Directive (“IORP Directive II”) was published on the Official Journal of the European Union and entered into force on January 12, 2017, though this did not make substantive changes to the solvency requirements under the original IORP Directive. The ~~new~~ IORP Directive II recognizes in one of its recitals that changes in this area could potentially decrease the willingness of employers to provide occupational pension schemes. EU Member States were required to implement IORP Directive II into national legislation by January 13, 2019. Article 62.2., letters (a) and (c), of the IORP Directive II states that the Commission should review and report on the application of the directive by January 13, 2023 looking at the adequacy of the directive “from a prudential and governance point of view” and the impact of the directive on the stability of IORPs. However, during the course of 2021, members of the Commission have commented that the planned review is likely to be postponed until 2024 given that many EU Member States were late in fully transposing the directive. The UK introduced ~~new~~ legislation with effect from January 13, ~~January~~ 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, ~~October~~ 2019, their policy on ‘financially material considerations’. The UK government considered that the other aspects of IORP Directive II were already adequately covered by the existing UK law. Given that IORP Directive II ~~has~~had already been implemented in UK law, the European Union (Withdrawal) Act 2018 ~~has~~had preserved any legislation made in the UK to implement the obligations under IORP Directive II (including those carried over from the original IORP Directive). That legislation has not changed immediately following Brexit, ~~although~~and there ~~will be scope later on for~~is not yet indication that the UK legislation and regulation towill diverge from that of the EU. The UK Pensions Regulator (“TPR”) has published a consultation on its new code of practice, and a draft of the single code (the “Code”), which will cover additional governance requirements to implement IORP Directive II in the UK. The Code will consolidate TPR’s existing codes of practice and introduce new modules to cover the requirements of IORP Directive II (and the underlying UK regulations which implemented the directive). These include the requirement for trustees to have in place remuneration policies and “own risk assessments”, and guidance on topics such as continuity planning.

The insurance coverage that we maintain may not cover, or fully cover, all operational risks, and if the number or severity of claims for which we are self-insured increases, if we are required to accrue or pay additional amounts because the claims prove to be more severe than our recorded liabilities, if our insurance premiums increase or if we are unable to obtain insurance at acceptable rates or at all, our financial condition and results of operations may be materially adversely affected.

We maintain property, business interruption and casualty insurance but such insurance may not cover all of the risks associated with the hazards of our business and is subject to limitations, including deductibles and maximum liabilities covered.

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We may incur losses beyond the limits, or outside the coverage, of our insurance policies, including liabilities for environmental remediation. Additionally, our worker’s compensation, auto and general liability policies contain significant deductibles or self-insured retentions. We develop bi-yearly and record quarterly an estimate of our projected insurance-related liabilities. We estimate the liabilities associated with the risks retained by us, in part, by considering historical claims experience, demographic and severity factors and other actuarial assumptions. Any actuarial projection of losses is subject to a degree of variability. If the number or severity of claims for which we are self-insured increases, or we are required to accrue or pay additional amounts because the claims prove to be more severe than our original assessments, our financial condition and results of operations may be materially adversely affected. In addition, in the future, the types of insurance we obtain and the level of coverage we maintain may be inadequate or we may be unable to continue to maintain our existing insurance or obtain comparable insurance at a reasonable cost. 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.

We evaluate our business regularly and, from time to time, we may decide to divest ourselves of brands or businesses that do not meet our strategic objectives or do not meet our growth or profitability targets. No assurance can be given that we will be able to divest of a brand or business on favorable terms or without significant costs or that we will be able to achieve the anticipated benefits or cost savings from the divestitures. Any such divestitures may adversely affect our results of operations if we are unable to offset the dilutive impacts from the loss of revenue associated with the divested brands or businesses, or otherwise achieve the anticipated benefits or cost savings from the divestitures. Moreover, we may incur asset impairment charges related to divestitures that reduce our profitability.

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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.

Terrorist attacks, such as those that occurred on September 11, 2001, have contributed to economic instability in the United States and in certain other countries, and further acts of terrorism, bioterrorism, cyberterrorism, violence or war could affect the markets in which we operate, our business operations, our expectations and other forward-looking statements contained in this report. 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. Events such as those referred to above could cause or contribute to a general decline in investment valuations. In addition, terrorist attacks, particularly acts of bioterrorism, that directly impact our facilities or those of our suppliers or customers could have an impact on our sales, supply chain, production capability and costs and our ability to deliver our finished products.

We may be unable to protect our intellectual property rights.

We maintain valuable patents, trademarks, service marks, copyrights, trade names, trade secrets, proprietary technologies and similar intellectual property, and consider our intellectual property to be of material value. Our efforts to protect our intellectual property and proprietary rights may not be sufficient. Patents may not be issued for any pending or future patent applications owned by or licensed to us, and the claims allowed under any issued patents may not be sufficiently broad to protect our technology. Any issued patents owned by or licensed to us may be challenged, invalidated or circumvented, and the rights under these patents may not provide us with competitive advantages. In addition, competitors may design around our technology or develop competing technologies. Intellectual property rights may also be unavailable or limited in some foreign countries, which could make it easier for competitors to capture market position in such countries by utilizing

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technologies that are similar to those developed or licensed by us. If we do not obtain sufficient protection for our intellectual property, or if we are unable to effectively protect our intellectual property rights, our competitiveness could be impaired, which would limit our growth and future revenue. Any litigation to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of the proprietary rights of others could result in substantial costs and diversion of resources, with no assurance of success.

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.

We have in the past and may in the future be subject to legal proceedings and claims in the ordinary course of our business, including claims of alleged infringement of patents, trademarks and other intellectual property rights of third parties by us or our customers. Any such claims, whether or not meritorious, could result in costly litigation and divert the efforts of our management. Moreover, should we be found liable for infringement, we may be required to enter into licensing agreements (which may not be available on acceptable terms or at all) or to pay damages and cease making or selling certain products. Any of the foregoing could cause us to incur significant costs and prevent us from manufacturing or selling our products and thereby materially adversely affect our business, results of operations and financial condition.

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.

In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (the “ACA”), was signed into law in the United States. 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. In particular, the requirement that we either offer our full-time employees healthcare coverage that satisfies the ACA's affordability and minimum value standards or potentially be subject to ~~an excise tax~~a penalty became effective in calendar year 2015. In addition, beginning in 2016, we had to file information returns with the IRS regarding the health insurance coverage offered to our full-time employees in the prior calendar year and furnish to employees a statement that includes the same information provided to the IRS. While we have timely filed such returns and provided our employees with the required statements to date, failure to do so in the future could expose us to reporting penalties under applicable sections of the Internal Revenue Code. These provisions could reduce our net income and adversely affect our cash flows.

~~Legislative~~Several legislative changes to, or regulatory changes under, all or certain portions of the ACA have been ~~made under the Trump administration and more may be likely. On~~made. 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~~high-cost employer-sponsored insurance plans and the annual fee imposed on certain health insurance providers based on market share. Former President Trump also signed two executive orders and other

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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. ~~Concurrently, members of the U.S. Congress have proposed other legislation that would repeal or repeal and replace all or part of the ACA.~~ While Congress has not passed comprehensive repeal legislation, ~~in addition to Public Law 116-94,~~ bills affecting the implementation of ~~certain taxes under~~ the ACA have been signed into law. ~~The~~For example, the Tax Cuts and Jobs Act, passed in December 2017, includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate” (although a few states have adopted individual mandate requirements that assess penalties against individuals based on their uninsured status). 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 ~~with respect to the impact~~regarding any future healthcare reform that the ~~reform proposals from the President’s~~ administration ~~and U.S.~~or Congress may ~~have,~~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 have also been various litigation challenges to the ACA, some of which are ongoing. The 2020 U.S. Presidential and Congressional elections may also result in unknown changes to healthcare laws.~~ Any changes may likely take time to unfold, and we cannot predict the ultimate content, timing, or effect of any healthcare reform legislation or the impact of potential legislation or related proposals and policies on us. We cannot assure that ~~the ACA,~~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.

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. Based on our assessments, we may make capital improvements to modernize certain units, move manufacturing or distribution capabilities from one plant or facility to another plant or facility, discontinue manufacturing or distributing certain products or close or divest all or part of a manufacturing plant or facility. The closure or divestiture of all or

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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 developed and publicized, and expect to continue to establish, goals, targets, and other objectives related to sustainability matters. Such statements reflect our current plans at the time they are made, and do not constitute a guarantee that they will be achieved. Our efforts to research, establish, accomplish, and accurately report on these goals, targets, and objectives could expose us to operational, reputational, financial, legal, and other risks. Our ability to achieve any stated goal, target, or objective is and will be subject to numerous factors and conditions, many of which are outside of our control, such as evolving regulatory or quasi-regulatory sustainability standards, differing requirements and the pace of changes in technology.

We may face increased scrutiny from the investment community, other stakeholders, regulators, and the media related to our sustainability activities, including the goals, targets, and objectives that we announce, and our methodologies and timelines for pursuing them. If our sustainability practices do not meet investor or other stakeholder expectations and standards, which continue to evolve, our reputation, ability to attract or retain employees, and attractiveness as an investment or business partner could be negatively impacted. Similarly, our failure or perceived failure to pursue or fulfill our goals, targets, and objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines that we announce, or at all, could have the same negative impacts, as well as expose us to government enforcement actions and private litigation. 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~~Kingdom's withdrawal from the EU could have an adverse effect on our business, investments and future operations in Europe.

The ~~vote on June 23, 2016 by the United Kingdom (the “UK”)~~UK ceased to ~~exit~~be a member of the EU on January 31, 2020 (“Brexit”), ~~created~~creating uncertainty in the global financial markets. InOn December 24, 2020, the EU and the UK reached an agreement in principle on certain agreements and declarations governing the ~~future~~ongoing relationship between the ~~two markets~~EU and the UK (the “EU-UK Trade and Cooperation Agreement”). The EU-UK Trade and Cooperation Agreement, ~~will affect~~which applied since January 1, 2021,affects Darling Ingredients International’s business in Europe with respect to goods and ~~employees.~~employees, among other things. The EU-UK Trade and Cooperation Agreement ~~applied since January 1, 2021 and~~ entails, inter alia, that customs checks and controls apply to all UK exports entering the EU, as well as EU exports entering the ~~UK. Based on the EU-UK Trade and Cooperation Agreement,~~UK, as it treats the UK ~~is considered~~as a third ~~country when it comes to imports in the EU.~~country. As a result, ~~imports~~UK exports of products that are derived from animal by-products ~~into~~entering the EU ~~from the UK~~ must follow third country rules, including being accompanied by an export health certificate or model declaration form, and ~~may~~can be ~~subject~~subjected to veterinary checks ~~and~~or having to enter through designated board inspection posts. ~~This~~Under the UK Border Operating Model, certain additional controls on imports into the UK are being introduced in a phased manner

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under transitional measures. In comparison, under the terms of the Northern Ireland Protocol (the “NI Protocol”), contained within the EU (Withdrawal Agreement) Act 2020, Northern Ireland is treated for the same purposes as if it were still an EU member state, and must remain aligned to the EU single market and customs rules. The UK government has attempted to renegotiate fundamental aspects of the NI Protocol so this is an unpredictable area for companies in the near future. Failed attempts to renegotiate the NI Protocol have led to reports of the UK potentially triggering Article 16 of the NI Protocol, a safeguarding measure, that may ~~delay imports/exports~~be engaged unilaterally if the application of the NI Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade. Currently, the UK government has introduced a bill ‘Northern Ireland Protocol Bill’ which if enacted into law would enable the government to unilaterally disapply parts of the NI Protocol which may lead to changes to the regulatory environment in Northern Ireland, and may trigger retaliatory measures against the UK by the EU. The EU-UK Trade and Cooperation Agreement allows for future deviation from the current regulatory framework and it is not known if and/or when any deviations may occur, which may have an impact on Darling Ingredient’s business. These developments and the impact of the terms of the Protocol can cause import/export delays between the EU and the UK, and ~~may~~can entail additional ~~costs. The~~costs within the UK itself, where imports/exports are with Northern Ireland. Additionally, the EU-UK Trade and Cooperation Agreement ~~may also~~can potentially impair the ability of Darling Ingredients International to transact business in the ~~future in the~~ UK, including by restricting the free travel of ~~employees as~~employees. Freedom of movement between the UK and EU has ended, meaning neither UK nor EU citizens ~~will no longer have the freedom~~are able to live ~~in the EU,~~ and ~~will need visas to~~ work in the EU ~~other~~without certain visas (other than short-term visits for specific purposes (e.g., attending meetings, conducting training) in accordance with local immigration ~~laws. The same restrictions will apply to~~laws).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, ~~citizens in~~and the ~~UK. Moreover, there will continue to be some legal uncertainty for a while and the~~divergence of laws applicable in the EU and UK ~~will start to diverge~~ as the UK adopts its own ~~legislation.~~legislation will continue to present legal uncertainty. For example, the Retained EU Law (Revocation and Reform) Bill (the “Bill”) was introduced to the UK Parliament on September 22, 2022, which, among other things, purports to revoke, change the interpretation and implementation of, and modify powers of certain EU laws retained by the EU (Withdrawal Agreement) Act 2020. Under the Bill, all retained EU law contained in domestic secondary legislation and retained direct EU legislation will expire on 31 December, 2023 (or at a later date prior to 23 June, 2026), unless positive action is taken by the UK Government to implement it into UK law. The Bill progressed to committee stage in the House of Commons on 8 November, 2022, with dates of the report stage to be announced. Furthermore, ~~Brexit is likely to~~these developments may continue to adversely affect European and worldwide economic conditions, as uncertainties remain relating to certain aspects of the UK’s future economic, trading and ~~could contribute to greater instability in~~legal relationships with the ~~global financial markets for a while to come.~~EU and with other countries. These effects could have an adverse effect on our business, investments and future operations in Europe.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

As of ~~January 2, 2021,~~December 31, 2022, the Company's corporate headquarters is located at 5601 N MacArthur Boulevard, Irving, Texas, 75038.

As of ~~January 2, 2021,~~December 31, 2022, the Company operates a global network of over ~~200~~260 locations, including ~~147~~185 production facilities, across five continents. All of the processing facilities are owned except for 10 leased facilities and the Company owns and leases a network of transfer stations. The following is a listing of a majority of the Company's operating plants as of ~~January 2, 2021~~December 31, 2022 by operating segment with a description of the plants principal process.


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
~~Bryan, Texas, United States~~			~~Bakery Residuals~~
Burgum, Netherlands			Animal By-Products
Butler, Kentucky, United States			Animal By-Products
Butler, Kentucky, United States			Bakery Residuals
Cacoal, Brazil			Animal By-Products

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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

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Dourados, Brazil		Animal By-Products
East Dublin, Georgia, United States	Animal By-Products
E. St. Louis, 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
~~Maysville, Kentucky, United States~~	~~Bakery Residuals~~
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

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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

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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 ~~$17.0~~$16.6 million in the aggregate in fiscal ~~2020.~~2022. We believe our current properties are suitable and adequate for their intended purpose.

ITEM 3. LEGAL PROCEEDINGS

The Company is a party to various lawsuits, claims and loss contingencies arising in the ordinary course of its business, including insured worker's compensation, auto, and general liability claims, assertions by certain regulatory and governmental agencies related to permitting requirements and environmental matters, including air, wastewater and storm water discharges from the Company's processing facilities, litigation involving tort, contract, statutory, labor, employment, and other claims, and tax matters.

The Company’s workers compensation, auto and general liability policies contain significant deductibles or self-insured retentions. The Company estimates and accrues its expected ultimate claim costs related to accidents occurring during each fiscal year under these insurance policies and carries this accrual as a reserve until these claims are paid by the Company.

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 ~~2, 2021 and December 28, 2019,~~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 ~~$66.2~~$92.1 million and ~~$70.5~~$78.4 million, respectively. The Company has insurance recovery receivables of approximately ~~$27.0~~$36.0 million and ~~$26.2~~$31.8 million as of December 31, 2022 and January ~~2, 2021 and December 28, 2019,~~1, 2022, related to insurance contingencies. The Company’s management believes these reserves for contingencies are reasonable and sufficient based upon present governmental regulations and information currently available to management; however, there can be no assurance that final costs related to these contingencies will not exceed current estimates. The Company believes that the likelihood is remote that any additional liability from the lawsuits and claims that may not be covered by insurance would have a material effect on the Company's financial position, results of operations or cash flows.

Lower Passaic River Area. 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

~~Page 42~~

the lower 17-mile ~~area~~stretch of the Passaic River (the “Lower Passaic River”) which is part of the Diamond Alkali Superfund Site located in Newark, New Jersey. The Company’s designation as a PRP is based upon the operation of a former plant sites located in Newark and Kearny, New Jersey by The Standard Tallow Corporation, an entity that the Company acquired in 1996. In the letter, EPA requested that the Company join a group of other parties in funding a remedial investigation and feasibility study at the site. As of the date of this report, the Company has not agreed to participate in the funding group. In March 2016, the Company received another letter from EPA notifying the Company that it had issued a Record of Decision (the “ROD”) selecting a remedy for the lower 8.3 miles of the ~~lower~~Lower Passaic River area at an estimated cost of $1.38 billion. The EPA letter makes no demand on the Company and ~~lays~~laid out a framework for remedial design/remedial action implementation in which the EPA will first seek funding from major PRPs. The letter indicates that the EPA has sent the letter to over 100 parties, which include large chemical and refining companies, manufacturing companies, foundries, plastic companies, pharmaceutical companies and food and consumer product companies. The EPA has already offered early cash out settlements to 20 of the other PRPs and has stated that other parties who did not discharge any of the eight contaminants of concern identified in the ROD (the “COCs”) may also be eligible for cash out settlements and conducted a settlement analysis using a third-party allocator. The Company ~~participated in this allocation process as it~~ asserts that it is not responsible for any liabilities of its former subsidiary The Standard Tallow Corporation, which was legally dissolved in 2000, and that, in any event, The Standard Tallow Corporation did not discharge any of the ~~COCs.~~ Ineight contaminants of concern identified in the ROD (the “COCs”). 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. The Company participated in this allocation process, and in November 2019, ~~the Company~~ received a cash out settlement offer from the EPA in the amount of $0.6 million ($0.3 million for each of the former plant sites in question) for liabilities relating to the lower 8.3 miles of the ~~lower~~Lower Passaic River area. The Company ~~has~~ 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. 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. The Company paid this amount into escrow, as the settlement is ~~now~~ subject to the EPA’s administrative approval process, which includes publication, ~~and~~ a public comment ~~period.~~period and court approval. 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. 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. 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 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 Lower Passaic River. Furthermore, in the ~~event the~~Company's settlement with the EPA described above ~~is consummated, it~~ could preclude certain of the claims alleged by OCC against the Company. The Company's ultimate liability, if any, for investigatory costs, remedial costs and/or natural resource damages in connection with the ~~lower~~Lower Passaic River area cannot be determined at this time; however, as of the date of this report, the Company has found no definitive evidence that the former Standard Tallow Corporation plant sites contributed any of the COCs to the Passaic River and, therefore, there is nothing that leads the Company to believe that this matter will have a material effect on the Company's financial position, results of operations or cash flows.

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. 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.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

The Company’s common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “DAR”.

Holders

The Company has been notified by its stock transfer agent that as of February ~~24, 2021,~~23, 2023, there were ~~128~~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 ~~2021.~~2023. The agreements underlying the Company's senior secured credit facilities and senior notes permit the Company to pay cash dividends on its common stock within limitations defined in such agreements. Any future determination to pay cash dividends on the Company’s common stock will be at the discretion of the Company’s board of directors and will be based upon the Company’s financial condition, operating results, capital requirements, plans for expansion, restrictions imposed by any existing or future financing arrangements, and any other factors that the board of directors determines are relevant.

Issuer Purchases of Equity Securities

On ~~August 3, 2020,~~December 9, 2021, the Company's Board of Directors approved the extension for an additional two years ending August 13, 2024 of its previously announced share repurchase program and refreshed and increased the amount of the program ~~back~~ up to ~~its original~~an aggregate amount of ~~an aggregate of $200.0~~$500.0 million of the Company's Common Stock depending on market conditions. Under this program, we repurchased ~~2,187,685~~1,916,785 shares for approximately ~~$55.0~~$125.5 million including commissions in fiscal ~~2020.~~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 ~~$200.0~~$371.1 million remaining in its share repurchase program initially approved in August 2017 and subsequently extended to August 13, 2024.

The following table is a summary of equity securities purchased by the Company during the fourth quarter of fiscal 2022.


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.
October 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

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(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).

(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.

(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.

Separate from this share repurchase program, a total of ~~646,961~~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 ~~2020~~2022 pursuant to the terms of our 2017 Omnibus Incentive Plan and 2012 Omnibus plan, as amended.

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 ~~January 2, 2016~~December 30, 2017 to ~~January 2, 2021,~~December 31, 2022, assuming the investment of $100 on ~~January 2, 2016~~December 30, 2017 and the reinvestment of dividends.

Page 4448

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.

~~Page 45~~

ITEM 6. ~~SELECTED FINANCIAL DATA~~RESERVED

~~SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA~~

The following table presents selected consolidated historical financial data for the periods indicated. The selected historical consolidated financial data set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements of the Company for the three years ended January 2, 2021, December 28, 2019, and December 29, 2018, and the related notes thereto.

Fiscal 2020 Fiscal 2019 Fiscal 2018 Fiscal 2017 Fiscal 2016
Fifty-three Fifty-two Fifty-two Fifty-two Fifty-two
Weeks Ended Weeks Ended Weeks Ended Weeks Ended Weeks Ended
January 2, December 28, December 29, December 30, December 31,
2021 (f) 2019 2018 (f) 2017 2016
(dollars in thousands, except per share data)
Statement of Operations Data:
Net sales $ 3,571,923 $ 3,363,905 $ 3,387,726 $ 3,662,251 $ 3,391,928
Cost of sales and operating expenses 2,688,815 2,589,085 2,646,374 2,875,680 2,635,333
Loss (gain) on sale of assets 426 (20,582) 709 (237) —
Selling, general and administrative expenses (b) 378,496 358,523 309,264 343,502 311,552
Restructuring and asset impairment charges 38,167 — 14,965 — —
Depreciation and amortization 350,178 325,510 321,192 302,100 289,908
Acquisition and integration costs — — — — 401
Equity in net income of Diamond Green Diesel (e) 315,095 364,452 159,779 28,239 69,912
Operating income 430,936 475,821 255,001 169,445 224,646
Interest expense (a) 72,686 78,674 86,429 88,926 94,187
Debt extinguishment costs — 12,126 23,509 — —
Foreign currency loss 2,290 1,311 6,431 6,898 1,854
Loss (gain) on disposal of subsidiaries — (2,967) 12,545 885 —
Other expense, net 5,534 6,671 7,562 8,801 6,533
Equity in net loss/(income) of other unconsolidated subsidiaries and unconsolidated subsidiaries (3,193) (428) 550 (265) (467)
Income from continuing operations before income taxes 353,619 380,434 117,975 64,200 122,539
Income tax (benefit)/expense 53,289 59,467 12,031 (69,154) 15,315
Net Income $ 300,330 $ 320,967 $ 105,944 $ 133,354 $ 107,224
Net Income attributable to noncontrolling interests (3,511) (8,367) (4,448) (4,886) (4,911)
Net Income attributable to Darling $ 296,819 $ 312,600 $ 101,496 $ 128,468 $ 102,313
Basic earnings per common share $ 1.83 $ 1.90 $ 0.62 $ 0.78 $ 0.62
Diluted earnings per common share $ 1.78 $ 1.86 $ 0.60 $ 0.77 $ 0.62
Weighted average shares outstanding 162,572 164,633 164,789 164,752 164,600
Diluted weighted average shares outstanding 167,208 168,378 167,910 166,730 165,212
Other Financial Data:
Adjusted EBITDA (c) $ 504,186 $ 436,879 $ 431,379 $ 443,306 $ 444,642
Depreciation 276,132 251,880 246,002 224,125 212,217
Amortization 74,046 73,630 75,190 77,975 77,691
Capital expenditures (d) 280,115 359,498 321,896 274,168 243,523
Balance Sheet Data:
Working capital $ 311,689 $ 228,949 $ 357,444 $ 396,962 $ 441,451
Total assets 5,613,331 5,345,258 4,889,354 4,958,225 4,698,017
Current portion of long-term debt 27,538 90,996 7,492 16,143 23,247
Total long-term debt less current portion 1,480,531 1,558,429 1,666,940 1,698,050 1,727,696
Stockholders’ equity attributable to Darling 2,891,909 2,565,819 2,273,048 2,244,933 1,972,994

~~(a)Included in interest expense for fiscal 2020 is the write-off of deferred loan costs of approximately $3.1 million.~~

~~(b)~~Included in selling, general and administrative expense for fiscal 2019 is a gain of approximately $4.4 million and for fiscal 2016 there is a gain of approximately $3.1 million from business interruption insurance proceeds.

~~(c)~~Adjusted EBITDA is presented here not as an alternative to net income, but rather as a measure of the Company’s operating performance and is not intended to be a presentation in accordance with U.S. generally accepted accounting principles

~~Page 46~~

~~(“GAAP~~”). Adjusted EBITDA is calculated below and represents, for any relevant period, net income/(loss) plus depreciation and amortization, goodwill and long-lived asset impairment and restructuring charges, interest expense, (income)/loss from discontinued operations, net of tax, income tax provision, other income/(expense) and equity in net loss (gain) of unconsolidated subsidiaries. The Company believes adjusted EBITDA is a useful measure for investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company's industry. In addition, management believes that adjusted EBITDA is useful in evaluating the Company's operating performance compared to that of other companies in the food ingredients and agriculture industries because the calculation of adjusted EBITDA generally eliminates the effects of financing, income taxes and certain non-cash and other items that may vary for different companies for reasons unrelated to overall operating performance. As a result, the Company’s management uses adjusted EBITDA as a measure to evaluate performance and for other discretionary purposes. However, adjusted EBITDA is not a recognized measurement under GAAP, should not be considered as an alternative to net income as a measure of operating results or to cash flow as a measure of liquidity, and is not intended to be a presentation in accordance with GAAP. Also, since adjusted EBITDA is not calculated identically by all companies, the presentation in this report may not be comparable to those disclosed by other companies. In addition to the foregoing, management also uses or will use adjusted EBITDA to measure compliance with certain financial covenants under the Company’s senior secured credit facilities and senior notes that were outstanding at January 2, 2021. The amounts shown below for adjusted EBITDA differ from the amounts calculated under similarly titled definitions in the Company’s Senior Secured Credit Facilities and Senior Unsecured Notes, as those definitions permit further adjustments to reflect certain other non-cash charges.

~~Reconciliation of Net Income to Adjusted EBITDA~~

(dollars in thousands) January 2,
2021 December 28,
2019 December 29,
2018 December 30,
2017 December 31,
2016
Net income attributable to Darling $ 296,819 $ 312,600 $ 101,496 $ 128,468 $ 102,313
Depreciation and amortization 350,178 325,510 321,192 302,100 289,908
Interest expense 72,686 78,674 86,429 88,926 94,187
Income tax (benefit)/expense 53,289 59,467 12,031 (69,154) 15,315
Restructuring and asset impairment charges 38,167 — 14,965 — —
Other, net 7,824 7,982 13,993 15,699 8,387
Debt extinguishment costs — 12,126 23,509 — —
Loss (gain) on disposal of subsidiaries — (2,967) 12,545 885 —
Equity in net income of unconsolidated subsidiaries (318,288) (364,880) (159,229) (28,504) (70,379)
Net income attributable to noncontrolling interests 3,511 8,367 4,448 4,886 4,911
Adjusted EBITDA $ 504,186 $ 436,879 $ 431,379 $ 443,306 $ 444,642

~~(d)~~Fiscal 2020 excludes capital assets acquired in the Belgium group and the Marengo Fabricated Steel Ltd acquisitions of approximately $18.4 million and Fiscal 2018 excludes the capital assets acquired in the Kruger Commodities, Inc., Triple - T Foods - Arkansas, Inc., and Sonac Lubien, Poland acquisitions of approximately $31.6 million. Fiscal 2019, fiscal 2017 and fiscal 2016 excludes the capital assets acquired in immaterial acquisitions.

~~(e)~~In fiscal 2019, the $364.5 million equity in net income of Diamond Green Diesel (DGD) includes approximately $78 million of Darling's share of DGD's blenders tax credits (BTC) from fiscal 2018. In fiscal 2018, the $159.8 million equity in net income of DGD included approximately $80 million of Darling's share of DGD's BTC from fiscal 2017. In fiscal 2017, the $28.2 million of equity in net income of DGD excludes approximately $80 million of Darling's share of DGD's BTC from fiscal 2017 that was recognized in fiscal 2018. See Note 2 to the Company's Consolidated Financial Statements included herein.

~~(f)~~Subsequent to the date of acquisition, Fiscal 2020 includes nine weeks of contribution from the Belgium group acquisition and two weeks of contribution from the Marengo Fabricated Steel acquisition. Fiscal 2018 includes 32 weeks of contribution from the acquisition of Kruger Commodities, Inc., 12 weeks from the acquisition of Triple-T Foods - Arkansas, Inc. and eight weeks from the acquisition of Sonac Lubien.

Page 4749

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. 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 ~~2020~~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. In fiscal 2022, the Company completed several acquisitions including two material rendering operations, Valley Proteins in North America (the “Valley Acquisition”) and the FASA Group in South America (the “FASA Acquisition”). With operations on five continents, the Company collects and transforms all aspects of animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstocks, green energy, natural casings and hides. 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 sells its products domestically and internationally and operates within three industry segments: Feed Ingredients, Food Ingredients and Fuel Ingredients.

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 ~~Europe~~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 ~~North~~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, ~~and~~ (viii) the rearing and processing of black soldier fly larvae into specialty proteins for use in animal feed and pet food in North ~~America;~~America, and (ix) the provision of grease trap services to food service establishments in North America. Non-food grade oils and fats produced and marketed by the Company are principally sold to third parties to be used as ingredients in animal feed and pet food, as an ingredient for the production of ~~biodiesel~~renewable diesel and ~~renewable diesel,~~biodiesel, or to the oleo-chemical industry to be used as an ingredient in a wide variety of industrial applications. Protein meals, blood plasma powder and hemoglobin produced and marketed by the Company are sold to third parties to be used as ingredients in animal feed, pet food and aquaculture.

The Food Ingredients operating segment includes the Company's global activities related to (i) the purchase and processing of beef and pork bone chips, beef hides, pig skins, and fish skins into collagen in Europe, China, South America and North America, (ii) the collection and processing of porcine and bovine intestines into natural casings in Europe, China and North America, (iii) the extraction and processing of porcine mucosa into crude heparin in Europe, (iv) the collection and refining of animal fat into food grade fat in Europe, and (v) the processing of bones to bone chips for the collagen industry and bone ash in Europe. Collagens produced and marketed by the Company are sold to third parties to be used as ingredients in the pharmaceutical, nutraceutical, food, pet food and technical (e.g., photographic) industries. Natural casings produced and marketed by the Company are sold to third parties to be used as an ingredient in the production of sausages and other similar food products.

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 ~~(the~~(“DGD” or the “DGD Joint Venture”) as described in Note 2 to the Company's Consolidated Financial Statements for the period ended ~~January 2, 2021~~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.

Page 50

Corporate Activities principally includes unallocated corporate overhead expenses, acquisition-related expenses, interest expense net of interest income, and other non-operating income and expenses.

~~Page 48~~Economic Conditions and Uncertainties

Global Economic Conditions

~~Observations~~

We operate globally and have operations in numerous countries. As such, we are exposed to, and impacted by global macroeconomic factors, U.S. and foreign government policies and foreign exchange fluctuations. Global economic conditions continue to be highly volatile due to, among other things, the conflict in Ukraine and its impact on volatility in energy and other commodity prices, inflation, cost and supply chain pressures and availability, and disruption in banking systems and capital markets. Disturbances in world financial, credit, commodities and stock markets, including inflationary, deflationary and recessionary conditions, could have a negative impact on the ~~Effects~~Company’s results of operations. Any such disturbances or disruptions may also magnify the impact of other risks described in this Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Energy Policies of U.S. and Foreign Governments

Prices for our finished products, including those of DGD, may be impacted by worldwide government policies relating to renewable fuels and greenhouse gas emissions (“GHG”). Programs like the National Renewable Fuel Standard Program (“RFS”) and low carbon fuel standards (“LCFS”) (such as in the state of California) and tax credits for biofuels both in the United States and abroad are subject to revision and change which may impact the demand for our finished products. Legal challenges or changes to, a failure to enforce, reductions in the mandated volumes under, or discontinuing or suspension of any of these programs could have a negative impact on our business and results of operations. However, such rules and the regulatory environment are continuing to evolve and change, and we cannot predict the ultimate effect that such changes may have on our business.

Climate Change

There is a growing global concern that carbon dioxide and other GHG 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 legal, regulatory and market responses to climate change. Certain jurisdictions in which we operate have either imposed, or are considering imposing, new or increasingly stringent legal and regulatory requirements to reduce or mitigate the potential effects of climate change, including regulation and reduction of GHG and potential carbon pricing programs. These new or increasingly stringent legal or regulatory requirements could result in significantly increased costs of compliance and additional investments in facilities and equipment, and reduced raw material supplies in areas where these requirements limit or eliminate livestock operations. While we assess climate related regulatory risks as part of our risk management process, we are unable to predict the scope, nature and timing of any new or increasingly stringent environmental laws and regulations and therefore cannot predict the ultimate impact of such laws and regulations on our business or financial results. We continue to monitor existing and proposed laws and regulations in the jurisdictions in which we operate and to consider actions we may take to potentially mitigate the unfavorable impact, if any, of such laws or regulations. Furthermore, emerging legislation seeks to regulate corporate ESG practices, including practices related to the causes and impacts of climate change as well as supply chain control and compliance with human rights. These new rules, which apply to all large companies and to listed small and medium-sized enterprises, require companies to report on how sustainability issues (environmental, social, and governance) affect their business and about their own impact on people and the environment. There has also been increased focus from our stakeholders, including consumers, employees and investors, on our ESG practices. We expect that stakeholder expectations with respect to ESG expectations will continue to evolve rapidly, which may necessitate additional resources to monitor, report on, and adjust our operations.

COVID-19

In January 2020, the World Health Organization (“WHO”) declared the coronavirus disease (“COVID-19”) a Public Health Emergency of International Concern. On February 28, 2020, the WHO raised its assessment ofOur global operations continue to expose us to risks associated with the COVID-19 ~~threat from high to very high at a global level due~~pandemic as the potential impacts of COVID-19 resurgences and variants have resulted in continued uncertainty as to the ~~continued increase in the number of cases~~pandemic’s further duration and ~~affected countries, and on March 11, 2020, the WHO characterized COVID-19 as a pandemic. Since then, various federal, state and local government-imposed movement restrictions and initiatives~~scope. Various measures have been implemented ~~worldwide~~at various times around the world to try to reduce the ~~global transmission~~spread of ~~COVID-19,~~the virus, including ~~reduced or eliminated food services, the promotion~~travel bans and restrictions, quarantines, curfews, stay-at-home restrictions and other public health and safety measures. The health and well-being of ~~social distancing~~our employees continues to be a priority for us, and ~~the adoption of remote working policies.~~

~~To date, these restrictions have not had a material impact on the Company’s operations,~~we will continue, as the Company operates in industries that are deemed “critical” and “essential” under the rules imposing these restrictions; however, the Company did incur approximately $7.5 million of COVID-19 related charges globally in fiscal year 2020. The Company has implementedappropriate, to implement operational guidelines ~~throughout the Company's~~in our organization consistent with the applicable governmental and regulatory policies in the geographies ~~the Company operates~~we operate intended to protect ~~the Company's~~our employees and prevent the spread of the virus in the Company's workplace, and to date, all of the Company's facilities are operational. The Company believes the severity and duration of the COVID-19 pandemic is uncertain and such uncertainty will likely continue. Among the items that could have a significant impact on the Company's future results is a reduction in the Company's raw material supply due to disruptions in the operations of the Company's third-party suppliers. Accordingly, while to date the Company has experienced no material negative effects on the Company's business and results of operations as a result of the current COVID-19 outbreak, the situation remains dynamic and subject to rapid and possibly material change, including but not limited to changes that may materially affect the operations of the Company's supply chain partners and finished product customers, which ultimately could result in material negative effects on the Company's business and results of operations. Additionally, the Company’s raw material supplies are globally diverse. During the second quarter of 2020, the Company experienced various disruptions in raw material supplies and sales of its specialty collagens and gelatins, both of which returned to more normalized levels during the third quarter of 2020. However, it is possible that COVID-19 might cause similar disruptions to the Company's business and operations in the future.

DGD has also implemented operational guidelines in its organization, and to date, COVID-19 has not had a material impact on DGD’s operations. We expect that biofuel regulations and mandates will continue supporting renewable diesel demand; however, a prolonged or significant decline in overall fuel demand could negatively impact the sales and profitability of DGD’s business.

virus. 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 ~~information which may emerge concerning the severity~~variants of ~~COVID-19 and any actions to contain~~ the virus, ~~or treat its impact, among others. For additional information regarding the risks associated with COVID-19, see the important information in Item 1A. Risk Factors, under the caption “Pandemics, epidemics or disease outbreaks,~~ such as the ~~novel coronavirus (“COVID-19”),~~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 ~~disrupt our business, including,~~be taken in the future in response to the pandemic, among ~~other things, our supply chain and production processes, each of which could materially affect our operations, liquidity, financial condition and results of operations~~.”others.

Operating Performance Indicators

The Company monitors the performance of its business segments using key financial metrics such as results of operations, non-GAAP measurements (Adjusted EBITDA), segment operating income, raw material processed, gross margin percentage, foreign currency translation, and corporate activities. 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. Due to these unpredictable factors that are beyond the control of the Company, forward-looking financial or operational estimates are not provided. The Company is exposed to certain risks associated with a business that is influenced by agricultural-based commodities. These risks are further described in Item 1A of this report under the heading “Risk Factors.”

The Company’s Feed Ingredients segment animal by-products, bakery residuals, used cooking oil recovery, and blood operations are each influenced by prices for agricultural-based alternative ingredients such as corn oil, soybean oil, soybean meal, and palm oil. In these operations, the costs of the Company's raw materials change with, or in certain cases are indexed to, the selling price or the anticipated selling price of the finished goods produced from the acquired raw materials and/or in some cases, the price spread between various types of finished products. The Company believes that this methodology of procuring raw materials generally establishes a relatively stable gross margin upon the acquisition of the raw material. 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. In addition, the volume of raw material ~~volume~~ acquired, which has a direct impact on the amount of finished goods produced, can also have a material effect on the gross margin reported, as the Company has a substantial amount of fixed operating costs.

The Company’s Food Ingredients segment collagen and natural casings products are influenced by other competing ingredients including plant-based and synthetic hydrocolloids and artificial casings. In the collagen operation, the cost of the Company's animal-based raw material moves in relationship to the selling price of the finished goods. The processing time for the Food Ingredients segment collagen and casings is generally 30 to 60 days, which is substantially longer than the Company's Feed Ingredients segment animal by-products operations. Consequently, the Company’s gross margin and profitability in this segment can be influenced by the movement of finished goods prices from the time the raw materials were procured until the finished goods are sold.

The Company's Fuel Ingredients segment converts fats into renewable diesel, organic sludge and food waste into biogas, and fallen stock into low-grade energy sources. The Company's gross margin and profitability in this segment are impacted by world energy prices for oil, electricity, natural gas and governmental subsidies.

The reporting currency for the Company's financial statements is the U.S. dollar. The Company operates in over 15 countries and therefore, certain of the Company's assets, liabilities, revenues and expenses are denominated in functional currencies other than the U.S. dollar, primarily in the Euro, Brazilian real, Chinese renminbi, Canadian dollar and Polish zloty. To prepare the Company's consolidated financial statements, assets, liabilities, revenues, and expenses must be translated into U.S. dollars at the applicable exchange rate. As a result, increases or decreases in the value of the U.S. dollar against these other currencies will affect the amount of these items recorded in the Company's consolidated financial statements, even if their value has not changed in the functional currency. 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 continued to evaluate operational developments and the impact of anticipated significant expansion of the DGD Joint Venture. This evaluation was impactful to the consideration of how the Company most appropriately reflects its share of equity income from the DGD Joint Venture. Based on the Company's analysis, it was determined that the DGD Joint Venture has evolved into an integral and integrated part of the Company's ongoing operations. The Company determined this justifies a more meaningful and transparent presentation of equity in net income of the DGD Joint Venture as a component of the Company's operating income.

Page 52

Results of Operations

Fiscal Year Ended ~~January 2, 2021~~December 31, 2022 Compared to Fiscal Year Ended ~~December 28, 2019~~

Fiscal 2020 includes an additional week of operations which occurs every five to six years. In Fiscal 2020 the additional week occurred in the fourth quarter and increased net sales and operating income by approximately $73 million and $8 million, respectively.January 1, 2022

Operating Performance Metrics

Other operating performance metrics indicators which management routinely monitors as an indicator of operating performance include:

•Finished product commodity prices

•Segment results

•Foreign currency exchange

•Corporate activities

•Non-U.S. 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

~~Page 50~~

Jacobsen reports industry sales from the prior day's activity by product. Included on the Jacobsen are reported prices for finished products such as MBM, PM and feather meal (“FM”), hides, BFT and YG and corn, which is a substitute commodity for the Company's BBP as well as a range of other branded and value-added products, which are products of the Company's Feed Ingredients segment. In the ~~U.S.~~United States and South America the Company regularly monitors the Jacobsen for MBM, PM, FM, BFT, YG and corn because it provides a daily indication of the Company's U.S. and Brazilian revenue performance against business plan benchmarks. In Europe and South America, the Company regularly monitors Thomson Reuters (“Reuters”) to track the competing commodities palm oil and soy meal.

Although the Jacobsen and Reuters provide useful metrics of performance, the Company's finished products are commodities that compete with other commodities such as corn, soybean oil, palm oil complex, soybean meal and heating oil on nutritional and functional values. Therefore, actual pricing for the Company's finished products, as well as competing products, can be quite volatile. In addition, neither the Jacobsen nor Reuters provides forward or future period pricing for the Company's commodities. The Jacobsen and Reuters prices quoted below are for delivery of the finished product at a specified location. Although the Company's prices generally move in concert with reported Jacobsen and Reuters prices, the Company's actual sales prices for its finished products may vary significantly from the Jacobsen and Reuters because of production and delivery timing differences and because the Company's finished products are delivered to multiple locations in different geographic regions which utilize alternative price indexes. 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 ~~2020,~~2022, the Company's actual sales prices by product trended with the disclosed Jacobsen and Reuters prices.

Average Jacobsen and Reuters prices (at the specified delivery point) for fiscal year ~~2020,~~2022, compared to average Jacobsen and Reuters prices for fiscal year ~~2019~~2021 are:

Avg. Price
Fiscal Year ~~2020~~2022

Avg. Price
Fiscal Year ~~2019~~2021

Increase/(Decrease)

%
Increase/(Decrease)

Jacobsen:

MBM (Illinois)

$ ~~261.43/~~370.16/ton

$ ~~230.85/~~360.73/ton

$ ~~30.58/~~9.43/ton

~~13.2~~2.6

Feed Grade PM (Mid-South)

$ ~~251.13/~~383.02/ton

$ ~~241.37/~~342.33/ton

$ ~~9.76/~~40.69/ton

~~4.0~~11.9

Pet Food PM (Mid-South)

$ ~~633.61/~~759.09/ton

$ ~~522.39/~~749.82/ton

$ ~~111.22/~~9.27/ton

~~21.3~~1.2

FM (Mid-South)

$ ~~314.20/~~562.73/ton

$ ~~352.87/~~482.98/ton

$ ~~(38.67)/~~79.75/ton

~~(11.0)~~16.5

BFT (Chicago)

$ ~~31.48/~~75.82/cwt

$ ~~28.08/~~58.98/cwt

$ ~~3.40/~~16.84/cwt

~~12.1~~28.6

YG (Illinois)

$ ~~21.95/~~59.28/cwt

$ ~~22.01/~~41.48/cwt

$ ~~(0.06)/~~17.80/cwt

~~(0.3)~~42.9

Corn (Illinois)

$ ~~3.75/~~7.24/bushel

$ ~~3.95/~~6.11/bushel

$ ~~(0.20)/~~1.13/bushel

~~(5.1)~~18.5

Reuters:

Palm Oil (CIF Rotterdam)

$ ~~707.00/ton~~1,347.00/MT

$ ~~568.00/ton~~1,204.00/MT

$ ~~139.00/ton~~143.00/MT

~~24.5~~11.9

Soy meal (CIF Rotterdam)

$ ~~394.00/ton~~552.00/MT

$ ~~347.00/ton~~485.00/MT

$ ~~47.00/ton~~67.00/MT

~~13.5~~13.8

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The following table shows the average Jacobsen and Reuters prices for the fourth quarter of fiscal year ~~2020,~~2022, compared to the average Jacobsen and Reuters prices for the third quarter of fiscal year ~~2020.~~2022.

Avg. Price
4th Quarter
~~2020~~2022

Avg. Price
3rd Quarter
~~2020~~2022

Increase/(Decrease)

%
Increase/(Decrease)

Jacobsen:

MBM (Illinois)

$ ~~305.29/~~392.39/ton

$ ~~212.91/~~404.41/ton

$ ~~92.38/~~(12.02)/ton

~~43.4~~ (3.0)

Feed Grade PM (Mid-South)

$ ~~283.65/~~390.37/ton

$ ~~226.07/~~388.85/ton

$ ~~57.58/~~1.52/ton

~~25.5~~0.4

Pet Food PM (Mid-South)

$ ~~733.12/~~711.00/ton

$ ~~581.80/~~762.30/ton

$ ~~151.32/~~(51.30)/ton

~~26.0~~ (6.7)

FM (Mid-South)

$ ~~405.49/~~579.95/ton

$ ~~267.91/~~574.07/ton

$ ~~137.58/~~5.88/ton

~~51.4~~1.0

BFT (Chicago)

$ ~~34.24/~~72.34/cwt

$ ~~29.04/~~80.04/cwt

$ ~~5.20/~~(7.70)/cwt

~~17.9~~ (9.6)

YG (Illinois)

$ ~~25.22/~~62.01/cwt

$ ~~19.48/~~61.09/cwt

$ ~~5.74/~~0.92/cwt

~~29.5~~1.5

Corn (Illinois)

$ ~~4.29/~~6.85/bushel

$ ~~3.55/~~7.01/bushel

$ ~~0.74/~~(0.16)/bushel

~~20.8~~ (2.3)

Reuters:

Palm Oil (CIF Rotterdam)

$ ~~850.00/ton~~1,043.00/MT

$ ~~690.00/ton~~1,130.00/MT

$ ~~160.00/ton~~(87.00)/MT

~~23.2~~ (7.7)

Soy meal (CIF Rotterdam)

$ ~~485.00/ton~~547.00/MT

$ ~~379.00/ton~~535.00/MT

$ ~~106.00/ton~~12.00/MT

~~28.0~~2.2

~~Page 51~~

Segment Results

Segment operating income for the fiscal year ended ~~January 2, 2021~~December 31, 2022 was ~~$430.9~~$1,029.1 million, which reflects ~~a decrease~~an increase of ~~$44.9~~$144.6 million or ~~(9.4)%~~16.3% as compared to the fiscal year ended ~~December 28, 2019.~~

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 unconsolidated subsidiaries 3,193 — — — 3,193
Segment income/(loss) 99,819 83,379 317,280 (66,349) 434,129
January 1, 2022.


		Feed Ingredients			Food Ingredients			Fuel Ingredients			Corporate			Total
Fiscal Year Ended December 28, 2019
In thousands, except for percentages																	In thousands, except for percentages	Feed Ingredients			Food Ingredients			Fuel Ingredients			Corporate			Total
Fiscal Year Ended December 31, 2022																	Fiscal Year Ended December 31, 2022
Net Sales	Net Sales	$	1,970,561		$	1,119,085		$	274,259		$	—		$	3,363,905		Net Sales	$	4,539,000		$	1,459,630		$	533,574		$	—		$	6,532,204
Cost of sales and operating expenses	Cost of sales and operating expenses	1,519,596			864,618			204,871			—			2,589,085			Cost of sales and operating expenses	3,473,506			1,102,250			426,853			—			5,002,609
Gross Margin	Gross Margin	450,965			254,467			69,388			—			774,820			Gross Margin	1,065,494			357,380			106,721			—			1,529,595

Gross Margin %	Gross Margin %	22.9		%	22.7		%	25.3		%	—		%	23.0		%	Gross Margin %	23.5		%	24.5		%	20.0		%	—		%	23.4		%

Loss/ (gain) on sale of assets		(7,720)			(13,175)			313			—			(20,582)
Selling, general and administrative expense		200,487			97,363			2,762			57,911			358,523
Gain on sale of assets																	Gain on sale of assets	(3,426)			(1,008)			(60)			—			(4,494)
Selling, general and administrative expenses																	Selling, general and administrative expenses	258,781			101,681			13,690			62,456			436,608
Restructuring and asset impairment charges																	Restructuring and asset impairment charges	8,557			21,109			—			—			29,666
Depreciation and amortization																	Depreciation and amortization	295,249			59,029			29,500			10,943			394,721
Acquisition and integration costs																	Acquisition and integration costs	—			—			—			16,372			16,372
Equity in net income of Diamond Green Diesel																	Equity in net income of Diamond Green Diesel	—			—			372,346			—			372,346
Segment operating income/ (loss)																	Segment operating income/ (loss)	506,333			176,569			435,937			(89,771)			1,029,068

Depreciation and amortization		203,456			79,671			31,946			10,437			325,510
Equity in net income of Diamond Green Diesel		—			—			364,452			—			364,452
Segment operating income/(loss)		54,742			90,608			398,819			(68,348)			475,821

Equity in net income of unconsolidated subsidiaries		428			—			—			—			428
Equity in net income of other unconsolidated subsidiaries																	Equity in net income of other unconsolidated subsidiaries	5,102			—			—			—			5,102
Segment income/(loss)	Segment income/(loss)	55,170			90,608			398,819			(68,348)			476,249			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. In fiscal year ~~2020,~~2022, the raw material processed by the Company's Feed Ingredients segment totaled ~~8.95~~11.35 million metric tons. Compared to fiscal year ~~2019,~~2021, overall raw material volume processed in the Feed Ingredients segment increased approximately ~~2.4%.~~27.2% primarily due to the Valley Acquisition and the FASA Acquisition.

Sales. ~~During the year ended January 2, 2021,~~The increase in net sales for ~~the~~ Feed Ingredients ~~segment were $2,072.1 million as compared to $1,970.6~~was $1,499.5 million for the year ended December 28, 2019, an increase of approximately $101.5 million. Net sales for fats were approximately $661.7 million and $584.3 million for the years ended January 2, 2021 and December 28, 2019, respectively. Protein net sales were approximately $830.2 million and $791.3 million for the years ended January 2, 2021 and December 28, 2019, respectively. Other rendering net sales, which include hides, pet food, and service charges, were approximately $178.6 million and $167.9 million for the years ended January 2, 2021 and December 28, 2019, respectively. Total rendering net sales were approximately $1,670.5 million and $1,543.5 million for the years ended January 2, 2021 and December 28, 2019, respectively. Used cooking oil net sales were approximately $176.7 million and $185.7 million for the31, 2022.

~~Page 52~~

years ended January 2, 2021 and December 28, 2019, respectively. Bakery net sales were approximately $183.8 million and $191.6 million for the years ended January 2, 2021 and December 28, 2019, respectively, and other net sales, which includes trap services, were approximately $41.1 million and $49.8 million for the years ended January 2, 2021 and December 28, 2019, respectively.

The increase in net sales for the Feed Ingredients segment was primarily due to the following (in millions of dollars):

Fats Proteins Other Rendering Total Rendering Used Cooking Oil Bakery Other Total
Net sales year ended December 28, 2019 $ 584.3 $ 791.3 $ 167.9 $ 1,543.5 $ 185.7 $ 191.6 $ 49.8 $ 1,970.6
Increase/(decrease) in sales volumes 66.6 20.2 — 86.8 (11.7) (0.6) — 74.5
Increase/(decrease) in finished product prices 10.5 16.1 — 26.6 2.8 (7.2) — 22.2
Increase/(decrease) due to currency exchange rates 0.3 2.6 0.1 3.0 (0.1) — — 2.9
Other change — — 10.6 10.6 — — (8.7) 1.9
Total change 77.4 38.9 10.7 127.0 (9.0) (7.8) (8.7) 101.5
Net sales year ended January 2, 2021 $ 661.7 $ 830.2 $ 178.6 $ 1,670.5 $ 176.7 $ 183.8 $ 41.1 $ 2,072.1


	Fats		Proteins		Other Rendering		Total Rendering		Used Cooking Oil		Bakery		Other		Total
Net sales year ended January 1, 2022	$	1,198.1	$	1,022.7	$	173.4	$	2,394.2	$	319.1	$	287.4	$	38.8	$	3,039.5
Increase in sales volumes	289.4		275.1		—		564.5		55.8		5.1		—		625.4
Increase in finished product prices	500.9		237.1		—		738.0		147.6		41.5		—		927.1
Decrease due to currency exchange rates	(37.2)		(58.3)		(1.3)		(96.8)		(3.4)		(0.6)		—		(100.8)
Other change	—		—		28.8		28.8		—		—		19.0		47.8
Total change	753.1		453.9		27.5		1,234.5		200.0		46.0		19.0		1,499.5
Net sales year ended December 31, 2022	$	1,951.2	$	1,476.6	$	200.9	$	3,628.7	$	519.1	$	333.4	$	57.8	$	4,539.0

Margins. In the Feed Ingredients segment for fiscal year ~~2020,~~2022, the gross margin percentage was ~~25.5%~~23.5% as compared to ~~22.9%~~27.4% for fiscal year ~~2019.~~2021. The ~~increase~~decrease in ~~fiscal year 2020 was~~margin is primarily due to lower overall ~~increasing protein~~margins from the Valley Acquisition and ~~fat finished product sales~~the FASA Acquisition and higher overall energy prices ~~and increased sales volumes.~~as compared to fiscal 2021.

Segment operating income. The Company's Feed ~~Ingredients'~~Ingredients segment operating income for fiscal year ~~2020~~2022 was ~~$96.6~~$506.3 million, an increase of ~~$41.9~~$111.6 million or ~~76.6%~~28.3% as compared to fiscal year ~~2019. This~~2021. The increase ~~was primarily~~is due to ~~increasing~~higher overall ~~protein and~~ fat finished product ~~sales~~ prices ~~that more than~~and higher raw material volumes, offset ~~higher~~by an asset impairment charge and an increase in selling, general and administrative expenses and depreciation and amortization from the Valley Acquisition and ~~a lower gain on sale of assets.~~the FASA Acquisition as compared to fiscal year 2021.

Food Ingredients Segment

Raw material volume. In fiscal year ~~2020,~~2022, the raw material processed by the Company's Food Ingredients segment totaled ~~1.08~~1.10 million metric tons. Compared to fiscal year ~~2019,~~2021, overall raw material volume processed in the Food Ingredients segment ~~increased~~decreased approximately ~~0.4%~~0.6%.

Page 55

Sales. Overall sales increased in the Food Ingredients segment ~~primarily~~ 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 ~~2020,~~2022, the gross margin percentage was ~~22.4%~~24.5% as compared to ~~22.7%~~23.0% for fiscal year ~~2019.~~2021. The ~~slight decrease~~increase is primarily due to increased sales of higher margin hydrolyzed collagen and a ~~result~~slight reduction of ~~the sales mix in collagen business~~raw material prices that more than offset higher ~~fat prices.~~energy prices as compared to fiscal 2021.

Segment operating income. The Company's Food ~~Ingredients'~~Ingredients segment operating income was ~~$83.4~~$176.6 million for fiscal year ~~2020, a decrease~~2022, an increase of ~~$7.2~~$42.6 million or ~~(7.9)%~~31.8% as compared to fiscal year ~~2019.~~2021. The ~~decrease~~increase is primarily due to ~~the gain on the sale~~increased sales of ~~assets~~higher margin hydrolyzed collagen and a slight reduction of raw material prices that more than offset higher energy prices, restructuring and asset impairment charges and an increase in ~~China reported last year~~selling, general and ~~the impact of a weak Brazilian real~~administrative expenses as ~~well as lower sales volumes in Europe as a result of the COVID-19 outbreak in~~compared to fiscal ~~year 2020.~~2021.

Fuel Ingredients Segment

Raw material volume. In fiscal year ~~2020,~~2022, the raw material processed by the Company's Fuel Ingredients segment, excluding the DGD Joint Venture, totaled ~~1.31~~1.42 million metric tons. Compared to fiscal year ~~2019,~~2021, overall raw material volume processed in the Fuel Ingredients segment increased approximately ~~3.4%~~11.2%. The increase is primarily due to the acquisition of Group Op de Beeck.

Sales. Overall sales increased in the Fuel Ingredients segment primarily due to higher sales volumes and sales prices in Europe.

Margins. In the Fuel Ingredients segment (exclusive of the equity contribution from the DGD Joint Venture) for fiscal year ~~2020,~~2022, the gross margin percentage was ~~28.8%~~20.0% as compared to ~~25.3%~~27.0% for fiscal year ~~2019.~~2021. The ~~increase~~decrease is primarily due to the recognition of alternative fuel mixture credits in the prior year and higher ~~sales volumes from improved demand and finished prices in Europe.~~energy prices.

~~Page 53~~

Segment operating income. The Company's Fuel Ingredients segment operating income (inclusive of the equity contribution from the DGD Joint Venture) for fiscal year ~~2020~~2022 was ~~$317.3~~$435.9 million, ~~a decrease~~an increase of ~~$81.5~~$10.9 million or ~~(20.4)%~~2.6% as compared to fiscal year ~~2019.~~2021. The ~~decrease~~increase in earnings ~~was~~is primarily due to the ~~reinstated~~expansion of the DGD St. Charles Plant and the addition of the DGD Port Arthur Plant effective October 2021 and November 2022, respectively, as well as higher sales prices and volumes from acquisitions in our European market, an increase in the renewable identification number (RIN) prices and renewable diesel fuel prices in fiscal year ~~2018~~2022 that more than offset an unfavorable impact from commodity derivative instruments at the DGD Joint Venture associated with its price risk management activities, lower values for LCFS credits and ~~fiscal year 2019 blenders tax~~alternative fuel mixture credits ~~recorded in the fourth quarter of fiscal 2019 as compared to one year of blenders tax credits recorded~~ in fiscal ~~2020 and $38.2 million restructuring and asset impairment charges due to the shut down of processing operations at the Company's biodiesel facilities located in the United States and Canada.~~2021.

Foreign Currency

During fiscal year ~~2020,~~2022, the ~~Euro strengthened~~euro and Canadian dollar weakened against the U.S. dollar as compared to fiscal year ~~2019.~~2021. Using actual results for fiscal year ~~2020~~2022 and the prior year's average foreign currency rates for fiscal year ~~2019~~2022 would result in ~~a decrease~~an increase in operating income of approximately ~~$6.4~~$59.7 million. The average rates assumption used in this calculation was the actual average rate for fiscal year ~~2020~~2022 of €1.00:USD$~~1.14~~1.05 and CAD$1.00:USD$~~0.75~~0.77 as compared to the average rate for fiscal year ~~2019~~2021 of €1.00:USD$~~1.12~~1.18 and CAD$1.00:USD$~~0.75,~~0.80, respectively.

Corporate Activities

Selling, General and Administrative Expenses. Selling, general and administrative expenses were ~~$55.3~~$62.5 million during fiscal year ~~2020,~~2022, a ~~$2.6~~$5.6 million ~~decrease~~increase from ~~$57.9~~$56.9 million during fiscal year ~~2019.~~2021. The ~~decrease was~~increase is primarily due to ~~lower legal fees, and lower travel related costs that more than offset~~ an increase in ~~insurance costs.~~corporate related benefits, travel related expense, IT related expense and tax and license costs that were partially offset by a decrease in repairs and maintenance expense, rent and lease expense and overall decrease in other miscellaneous expenses.

Depreciation and Amortization. Depreciation and amortization charges ~~increased $0.6~~decreased slightly by $0.2 million to ~~$11.0~~$10.9 million during fiscal year ~~2020~~2022 as compared to ~~$10.4~~$11.1 million during fiscal year ~~2019. The increase was primarily due~~2021.

Acquisition and Integration Costs. Acquisition and integration costs were approximately $16.4 million during fiscal year 2022 as compared to $1.4 million for fiscal 2021. These include costs related to the ~~increased leasehold improvement~~Company's acquisition of Valley

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Proteins, Group Op de Beeck, the FASA Group and ~~office equipment depreciation expense at~~ the ~~Company's corporate office in fiscal year 2020.~~recently announced Gelnex and Miropasz acquisitions as well as other immaterial acquisitions.

Interest Expense. Interest expense was ~~$72.7~~$125.6 million for fiscal year ~~2020,~~2022, compared to ~~$78.7~~$62.1 million for fiscal year ~~2019, a decrease~~2021, an increase of ~~$6.0~~approximately $63.5 million. The ~~decrease was~~increase in interest expense is primarily due to ~~lower term loan B debt outstanding and lower interest rates that were partially offset by~~ an increase in ~~deferred loan costs~~debt outstanding including increased interest expense from the ~~pay down~~issuance of the 6% Senior Notes due 2030, the borrowing of all amounts under the term ~~loan B~~A-1 and ~~a decrease in capitalized interest.~~

~~Debt Extinguishment costs.~~ ~~There were no debt extinguishment costs in fiscal year 2020~~term A-2 facilities, higher borrowings under the revolving credit facility and higher overall interest rates as compared to ~~$12.1 million for~~ fiscal year ~~2019, which were related to the termination of the 5.375% Senior Notes.~~2021.

Foreign Currency Losses. Foreign currency losses were ~~$2.3~~$11.3 million during fiscal year ~~2020,~~2022, as compared to ~~a loss~~losses of approximately ~~$1.3~~$2.2 million for fiscal year ~~2019.~~2021. The increase in foreign currency losses is primarily due ~~primarily~~ to ~~higher~~an increase in losses on the revaluation of non-functional currency assets and liabilities, primarily in Brazil, as compared to ~~the same period in fiscal 2019.~~

~~Gain (loss) on Disposal of Subsidiaries.~~ ~~There were no gains or losses on disposal of subsidiaries in~~ fiscal year ~~2020 as compared to a $3.0 million gain incurred in fiscal year 2019.~~2021.

Other Expense, net. Other expense was ~~$5.5~~$3.6 million for fiscal year ~~2020,~~2022, compared to ~~$6.7~~$4.6 million in fiscal year ~~2019.~~2021. The decrease in other expense was primarily due to a decrease in pension ~~expense, a decrease~~expense. Although, we had an increase in ~~insurance proceeds on~~ fire and casualty losses ~~and a decrease~~from fires at two of our U.S. feed segment plants, that increase was offset by an increase in interest income.

Equity in Net Income ~~in Investment~~ of Other Unconsolidated Subsidiaries. The change in this line item is not significant and primarily represents the Company's pro rata share of the net income from its foreign unconsolidated subsidiaries.

Income Taxes. The Company recorded income tax expense of ~~$53.3~~$146.6 million for fiscal year ~~2020,~~2022, compared to ~~$59.5~~$164.1 million of income tax expense recorded in fiscal year ~~2019,~~2021, a decrease of ~~$6.2~~$17.5 million, which was primarily due to ~~a decrease~~an increase in ~~income~~the benefit from ~~operations before income taxes.~~biofuel tax incentives. The effective tax rate for fiscal year ~~2020~~2022 and fiscal year ~~2019~~2021 was ~~15.1%~~16.4% and ~~15.6%~~20.0%, respectively. The effective tax rate for both fiscal years ~~2020~~2022 and ~~2019~~2021 differs from the statutory rate of 21% due primarily to ~~the~~ biofuel tax incentives, ~~and~~ the relative mix of earnings among jurisdictions with different tax ~~rates.~~rates, state income taxes and excess tax benefits from stock-based compensation.

Non-U.S. GAAP Measures

Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity. It is presented here not as an alternative to net income, but rather as a measure of the Company's operating performance. Since EBITDA (generally, net income plus interest expenses, taxes, depreciation and amortization) is not calculated identically by all

~~Page 54~~

companies, the presentation in this report may not be comparable to EBITDA or adjusted EBITDA presentations disclosed by other companies. 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. Management believes that Adjusted EBITDA is useful in evaluating the Company's operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of financing, income taxes and certain non-cash and other items that may vary for different companies for reasons unrelated to overall operating performance.

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, 6% Notes, 5.25% Notes and 3.625% Notes that were outstanding at ~~January 2, 2021.~~December 31, 2022. 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. Additionally, the Company evaluates the impact of foreign currency exchange on operating cash flow, which is defined as segment operating income (loss) plus depreciation and amortization.

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Reconciliation of Net Income to (Non-GAAP) Adjusted EBITDA and (Non-GAAP) Pro Forma Adjusted EBITDA

Fiscal Year ~~2020~~2022 As Compared to Fiscal Year ~~2019~~2021

Fiscal Year Ended
(dollars in thousands) January 2,
2021 December 28,
2019
Net income attributable to Darling $ 296,819 $ 312,600
Depreciation and amortization 350,178 325,510
Interest expense 72,686 78,674
Income tax expense 53,289 59,467
Restructuring and asset impairment charges 38,167 —
Foreign currency losses 2,290 1,311
Other expense, net 5,534 6,671
Debt extinguishment costs — 12,126
Gain on disposal of subsidiaries — (2,967)
Equity in net income of Diamond Green Diesel (315,095) (364,452)
Equity in net income of other unconsolidated subsidiaries (3,193) (428)
Net income attributable to noncontrolling interests 3,511 8,367
Adjusted EBITDA (Non-GAAP) $ 504,186 $ 436,879
Foreign currency exchange impact (1) (6,419) —
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP) $ 497,767 $ 436,879
DGD Joint Venture Adjusted EBITDA (Darling's Share) $ 337,348 $ 389,416
Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA $ 841,534 $ 826,295


	Fiscal Year Ended
(dollars in thousands)	December 31, 2022		January 1, 2022
Net income attributable to Darling	$	737,690	$	650,914
Depreciation and amortization	394,721		316,387
Interest expense	125,566		62,077
Income tax expense	146,626		164,106
Restructuring and asset impairment charges	29,666		778
Acquisition and integration costs	16,372		1,396
Foreign currency losses	11,277		2,199
Other expense, net	3,609		4,551


Equity in net income of Diamond Green Diesel	(372,346)		(351,627)
Equity in net income of other unconsolidated subsidiaries	(5,102)		(5,753)
Net income attributable to noncontrolling interests	9,402		6,376
Adjusted EBITDA (Non-GAAP)	$	1,097,481	$	851,404

Foreign currency exchange impact (1)	59,715		—
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP)	$	1,157,196	$	851,404

DGD Joint Venture Adjusted EBITDA (Darling's Share)	$	443,487	$	383,419

Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA	$	1,540,968	$	1,234,823

(1) The average rate assumption used in this calculation was the actual ~~fiscal~~ average rate for the fiscal year ended ~~January 2, 2021~~December 31, 2022 of €1.00:USD$~~1.14~~1.05 and CAD$1.00:USD$~~0.75~~0.77 as compared to the average rate for the fiscal year ended ~~December 28, 2019~~January 1, 2022 of €1.00:USD$~~1.12~~1.18 and CAD$1.00:USD$~~0.75,~~0.80, respectively.

For the fiscal year ended January 2, 2021, the Company generated Adjusted EBITDA (Non-GAAP) of $504.2 million, as compared to $436.9 million for the year ended December 28, 2019. The increase is primarily due to overall increasing protein and fat finished product sales prices and increased sales volumes in the Feed Ingredients segment.

On a Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP) basis, the Company would have generated $497.8 million for the fiscal year ended January 2, 2021, as compared to $436.9 million for the year ended December 28, 2019.

DGD Joint Venture Adjusted EBITDA (Darling's Share) is not reflected in the Adjusted EBITDA or the Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP). In fiscal 2019, the $364.5 million equity in net income of Diamond Green Diesel includes approximately $78 million of blenders tax credits from fiscal 2018. See Note 2 to Notes to Consolidated Financial Statements included herein for financial information regarding the DGD Joint Venture.

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The discussion and analysis of our financial condition and results of operations for the year ended ~~December 29, 2018 and for the year ended December 28, 2019~~January 1, 2022 compared to the year ended ~~December 29, 2018~~January 2, 2021 are included in Item 7. Management's Discussion and Analysis of Financial Condition and Results in our ~~2019~~2021 Form 10-K and is incorporated herein by reference.

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FINANCING, LIQUIDITY, AND CAPITAL RESOURCES

Indebtedness

Certain Debt Outstanding at ~~January 2, 2021.~~December 31, 2022. On ~~January 2, 2021,~~December 31, 2022, debt outstanding under the Company's Amended Credit Agreement, the Company's 6% notes, the Company's 5.25% Notes and the Company's 3.625% Notes consists of the following (in thousands):


Senior Notes:
6 % Notes due 2030	$	1,000,000
Less unamortized deferred loan costs net of bond premiums	(7,228)
Carrying value of 6% Notes due 2030	$	992,772

5.25 % Notes due 2027	$	500,000
Less unamortized deferred loan costs	~~(5,747)~~(4,127)
Carrying value of 5.25% Notes due 2027	$	~~494,253~~495,873

3.625 % Notes due 2026 - Denominated in euros	$	~~632,163~~549,814
Less unamortized deferred loan costs	~~(6,586)~~(3,728)
Carrying value of 3.625% Notes due 2026	$	~~625,577~~546,086

Amended Credit Agreement:
Term ~~Loan B~~A-1 facility	$	~~300,000~~400,000
Less unamortized deferred loan costs	~~(3,798)~~(722)
Carrying value of Term A-1 facility	$	399,278

Term A-2 facility	$	493,750
Less unamortized deferred loan costs	(1,034)
Carrying value of Term A-2 facility	$	492,716

Term Loan B	200,000
Less unamortized deferred loan costs	(1,302)
Carrying value of Term Loan B	$	~~296,202~~198,698

Revolving Credit Facility:
Maximum availability	$	~~1,000,000~~1,500,000
Ancillary Facilities	~~47,188~~48,066
Borrowings outstanding	~~55,000~~135,028
Letters of credit issued	~~3,891~~3,871
Availability	$	~~893,921~~1,313,035

Other Debt	$	~~37,037~~124,364

At ~~January 2, 2021,~~December 31, 2022, the U.S. dollar ~~was weaker~~strengthened as compared to the euro at ~~December 28, 2019.~~January 1, 2022. Using the euro based debt outstanding at December ~~28, 2019~~31, 2022 and comparing the closing balance sheet rates at ~~January 2, 2021~~December 31, 2022 to those at ~~December 28, 2019,~~January 1, 2022, the U.S. dollar debt balances of euro based debt ~~increased~~decreased by ~~$57.8~~$35.4 million, at ~~January 2, 2021.~~December 31, 2022. The closing balance sheet rate assumptions used in this calculation were the actual fiscal closing balance sheet rate at ~~January 2, 2021~~December 31, 2022 of €1.00:USD$~~1.227500~~1.067600 as compared to the closing balance sheet rate at ~~December 28, 2019~~January 1, 2022 of €1.00:USD$~~1.114750.~~1.132000.

Senior Secured Credit Facilities. On January 6, 2014, Darling, Darling International Canada Inc. (“Darling Canada”) and Darling International NL Holdings B.V. (“Darling NL”) entered into a Second Amended and Restated Credit Agreement (as subsequently amended, the “Amended Credit Agreement”), restating its then existing Amended and Restated Credit Agreement dated September 27, 2013, with the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents from time to time party thereto. ~~Effective September 18, 2020, the Company, and certain of its subsidiaries entered into an amendment (the “Sixth Amendment”) with its lenders to the~~The Amended Credit ~~Agreement. Among other things,~~Agreement provides for senior secured credit facilities in the ~~Sixth Amendment~~aggregate principal amount of $3.725 billion comprised of (i) ~~extended~~ the ~~maturity date of~~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 ~~under~~(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 Agreement from December 16, 2021 to September 18, 2025, (ii) increased the leverage ratio applicable to achieving the lowest applicable margin on borrowings under the revolving credit facility from 1.0 to 1.5, (iii) eliminated or modified certain of the negative covenants to increase the allowances for certain actions, including the incurrence of debt and investments, (iv) limited guarantees from, and security with respect to, entities organized outside of the United States and Canada to a limited group of foreign subsidiary holding companies, (v) included a collateral release mechanism, subject to the consent of the term loan B lenders, upon the Company achieving certain investment grade credit ratings, and (vi) made other market updates and changes.Facilities”). For

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more information regarding the Amended Credit Agreement see Note 10 of Notes to Consolidated Financial Statements included herein.

~~Page 56~~

•As of ~~January 2, 2021,~~December 31, 2022, the Company had availability of ~~$893.9 million~~$1.313 billion under the revolving loan facility, taking into account an aggregate of ~~$55.0~~$135.0 million in outstanding borrowings, ~~$47.2~~$48.1 million of ancillary facilities and letters of credit issued of $3.9 million. The Company currently expects that it will use a portion of its availability under the revolving credit facility, together with the term A-3 and term A-4 facilities, to pay for the Gelnex and Miropasz acquisitions upon closing of such transactions.

•As of ~~January 2, 2021,~~December 31, 2022, the Company has borrowed all ~~$525.0~~$400.0 million under the terms of the term ~~loan B~~A-1 facility and has made no repayments. Amounts borrowed under the term A-1 facility that are repaid ~~approximately $225.0 million, which when repaid,~~by the Company cannot be reborrowed. The term ~~loan B~~A-1 facility isborrowings are repayable in quarterly installments of 0.25% of the aggregate ~~principal~~principle amount of the relevant term ~~loan B~~A-1 facility on the last day of each March, June, September and December of each year commencing on the last day of ~~each~~such month falling on or after the last day of the first full fiscal quarter following the second anniversary of December ~~18, 2017,~~9, 2021 and continuing until the last day of ~~each quarter~~such quarterly period ending immediately prior to the term A-1 facility maturity date of December ~~18, 2024;~~9, 2026 and one final installment in the amount of the term A-1 facility then outstanding, due and payable on December 9, 2026.

•As of December 31, 2022, the Company has borrowed all $500.0 million under the terms of the term A-2 facility and has repaid $6.3 million, which when repaid by the Company cannot be reborrowed. The term A-2 facility borrowings are repayable in quarterly installments of 0.625% of the aggregate principle amount of the relevant term A-2 facility on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter following the borrowings or September 30, 2022 and continuing until the last day of such quarterly period ending March 31, 2025, and quarterly installments of 1.25% of the aggregate principle amount of the relevant term A-2 facility due and payable on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter ending June 30, 2025 and continuing until the last day of such quarterly period ending immediately prior to the term A-2 facility maturity date of December 9, 2026 and one final installment in the amount of the term A-2 facility then outstanding, due and payable on December 9, 2026.

•As of December 31, 2022, the Company had full availability under its delayed draw term A-3 facility commitment of $300.0 million. 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. The term A-3 facility borrowings are repayable in quarterly installments of 0.25% of the aggregate principle amount of the relevant term A-3 facility on the last day of each March, June, September and December of each year commencing on the last day of such month falling on or after the last day of the first full fiscal quarter following the second anniversary of December 9, 2021 and continuing until the last day of such quarterly period ending immediately prior to the term A-3 facility maturity date of December 9, 2026 and one final installment in the amount of the term A-3 facility then outstanding, due and payable on December 9, 2026.

•As of December 31, 2022, the Company had full availability under its delayed draw term A-4 facility commitment of $500.0 million. Under the terms of the delayed draw term A-4 facility, the Company can take up to twelve months or until September 6, 2023 to borrow under the term A-4 facility commitment in U.S dollars. Amounts borrowed under the term A-4 facility that are repaid by the Company 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 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.

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•The interest rate applicable to any borrowings under the revolving ~~credit~~loan facility will equal ~~either LIBOR/~~the adjusted term secured overnight financing rate (SOFR) for U.S. dollar borrowings or the adjusted euro interbank ~~offered rate/~~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 ~~1.50%~~1.25% per annum or base ~~rate/~~rate or the adjusted term SOFR for U.S. dollar borrowings or Canadian prime rate for Canadian dollar borrowings or the adjusted daily simple European short term rate (ESTR) for euro borrowings or the adjusted daily SONIA rate for British pound borrowings plus ~~0.50%~~0.25% per annum subject to certain step-ups or step-downs orbased 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. The interest rate applicable to any borrowing under the delayed draw term A-2 facility and term A-4 facility will equal the adjusted term SOFR plus 1.25% per annum subject to certain step-ups or step-downs based on the Company's total leverage ratio.The interest rate applicable to any borrowings under the term loan B facility will equal the base rate plus 1.00% or LIBOR plus 2.00%.

6% Senior Notes due 2030. On June 9, 2022, Darling issued and sold $750.0 million aggregate principal amount of 6% Senior Notes due 2030 (the “6% Initial Notes”). The 6% Initial Notes, which were offered in a private offering, were issued pursuant to a Senior Notes Indenture, dated as of June 9, 2022 (the “6% Base Indenture”), among Darling, the subsidiary guarantors party thereto from time to time, and Truist Bank, as trustee. The gross proceeds from the offering, together with cash on hand, were used to repay the Company's outstanding revolver borrowings and for general corporate purposes, including to pay the discount of the initial purchasers and to pay the other fees and expenses related to the offering. On August 17, 2022, Darling issued an additional $250.0 million in aggregate principal amount of its 6% Senior Notes due 2030 (the “add-on notes” and, together with the 6% Initial Notes, the “6% Notes”). The add-on notes and related guarantees, which were offered in a private offering, were issued as additional notes under the 6% Base Indenture, as supplemented by a supplemental indenture, dated as of August 17, 2022 (the “supplemental indenture” and, together with the 6% Base Indenture, the “6% Indenture”). The add-on notes have the same terms as the 6% Initial Notes (other than issue date and issue price) and, together with the 6% Initial Notes, constitute a single class of securities under the 6% Indenture. The add-on notes were issued at a premium resulting in the Company receiving $255.0 million upon issuance. The premium of approximately $5.0 million will be amortized over the term of the now $1.0 billion of 6% Notes. The 6% 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 6% Notes see Note 10 of Notes to Consolidated Financial Statements included herein.

5.25% Senior Notes due 2027. On April 3, 2019, Darling issued and sold $500.0 million aggregate principal amount of 5.25% Senior Notes due 2027 (the “5.25% Notes”). The 5.25% Notes, which were offered in a private offering, were issued pursuant to a Senior Notes Indenture, dated as of April 3, 2019 (the “5.25% Indenture”), among Darling, the subsidiary guarantors party thereto from time to time, and Regions Bank, as trustee. 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 %~~3.625% Senior Notes due 2026. On May 2, 2018, Darling Global Finance B.V. issued and sold €515.0 million aggregate principal amount of 3.625% Senior Notes due 2026 (the “3.625% Notes”). The 3.625% Notes, which were offered in a private offering, were issued pursuant to a Senior Notes Indenture, dated as of May 2, 2018 (the “3.625% Indenture”), among Darling Global Finance B.V., Darling, the subsidiary guarantors party thereto from time to time, Citibank, N.A., London Branch, as trustee and principal paying agent, and Citigroup Global Markets Deutschland AG, as principal registrar. The 3.625% Notes are guaranteed on a senior unsecured basis by Darling and all of Darling's restricted subsidiaries (other than any foreign subsidiary or any receivable entity) that guarantee the Senior Secured Credit Facilities. For a description of the terms of the 3.625% Notes see Note 10 of Notes to Consolidated Financial Statements included herein.

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, 6% Notes, 5.25% Notes or 3.625% Notes.

The classification of long-term debt in the Company’s ~~January 2, 2021~~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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As a result of the Company's borrowings under its Amended Credit Agreement, the 6% Indenture, the 5.25% Indenture and the 3.625% Indenture, the Company is highly leveraged. 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 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 has also attempted to structure the Company's consolidated indebtedness in such a way as to maximize the Company's ability to move cash from the Company's subsidiaries to Darling or another subsidiary that will have fewer limitations on the ability to make upstream payments, whether to Darling or directly to the Company's lenders as a Guarantor. Nevertheless, applicable laws under which the Company's direct and indirect subsidiaries are formed may provide limitations on such dividends, distributions and other payments. 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. In addition, fluctuations in foreign exchange values may have a negative impact on the Company's ability to repay indebtedness denominated in U.S. or Canadian dollars or euros. See “Risk Factors - Our business may be adversely impacted by fluctuations in foreign currency exchange rates, which could

~~Page 57~~

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 2, 2021.~~December 31, 2022.

As of ~~January 2, 2021,~~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.

Working Capital and Capital Expenditures

On ~~January 2, 2021,~~December 31, 2022, the Company had working capital of ~~$311.7~~$569.7 million and its working capital ratio was ~~1.46~~1.53 to 1 compared to working capital of ~~$228.9~~$336.3 million and a working capital ratio of ~~1.33~~1.45 to 1 on January 1, 2022. At December ~~28, 2019. At January 2, 2021,~~31, 2022, the Company had unrestricted cash of ~~$81.6~~$127.0 million and funds available under the revolving credit facility of ~~$893.9 million,~~$1.313 billion, compared to unrestricted cash of ~~$72.9~~$68.9 million and funds available under the revolving credit facility of ~~$911.9 million~~$1.286 billion at ~~December 28, 2019.~~January 1, 2022. The Company diversifies its cash investments by limiting the amounts deposited with any one financial institution and invests primarily in government-backed securities.

Net cash provided by operating activities was ~~$624.7~~$813.7 million and ~~$362.6~~$704.4 million for the fiscal years ended December 31, 2022 and January ~~2, 2021 and December 28, 2019,~~1, 2022, respectively, an increase of ~~$262.1~~$109.3 million due primarily to ~~a decrease~~an increase in net income ~~that was more than offset by the effect of sale of assets, the effect of asset impairments, a positive impact from equity in net income of the DGD Joint Venture~~ as well as an increase in distributions of earnings from Diamond Green Diesel and other unconsolidated subsidiaries of approximately $138.1 million and to changes in operating assets and liabilities that include an increase in cash provided by accounts receivable of approximately $48.5 million, an increase in prepaid expenses and inventory of $20.4 million, a decrease in income taxes refundable/payable of approximately $5.3 million and a decrease in accounts payable and accrued expense of approximately $21.2$90.9 million. Cash used by investing activities was ~~$310.6~~$2,416.5 million during fiscal year ~~2020,~~2022, compared to ~~$338.1~~$490.3 million in fiscal year 2019, a decrease in cash used of $27.5 million, primarily due to a decrease in capital expenditures that more than offset an increase in acquisition costs and a decrease in proceeds from the sale of assets, a decrease in proceeds from the sale of subsidiaries and a decrease in insurance proceeds. Net cash used by financing activities was $307.0 million during fiscal year 2020, compared to $54.9 million in fiscal year 2019,2021, an increase in cash used of ~~$252.1~~$1,926.2 million, primarily due to acquisitions and capital expenditures. Net cash provided by financing activities was $1,678.6 million during fiscal year 2022, compared to $221.4 million used in fiscal year 2021, an increase in cash provided of $1,900.0 million, primarily due to an increase in debt ~~payments, an increase from~~borrowings, utilized to fund the ~~repurchase of common stock and an increase from the acquisition of noncontrolling interest as compared to fiscal~~current year ~~2019.~~acquisitions.

Capital expenditures of ~~$280.1~~$391.3 million were made during fiscal year ~~2020~~2022 as compared to ~~$359.5~~$274.1 million in fiscal year ~~2019, a decrease~~2021, an increase of ~~$(79.4)~~$117.2 million, or ~~(22.1)%~~42.8%. The Company had originally planned to spend approximately $306.0 million in capital expenditures for fiscal year 2020; however, due to the COVID-19 outbreak and the government-imposed movement and work restrictions, the Company initiated a temporary reduction in non-essential capital expenditures until the uncertainty surrounding the COVID-19 outbreak improved. The Company returned to regular capital expenditures in the fourth quarter of fiscal 2020. In fiscal year 2021, the Company expects to incur capital expenditures of approximately ~~$230~~$565 million in ~~maintenance~~fiscal year 2023, including compliance, replacement and ~~compliance type capital expenditures and approximately $82 million primarily for~~ expansion ~~projects for a total of approximately $312 million. These~~projects. The Company intends to finance these costs ~~are expected to be financed~~ using cash flows from operations. Capital expenditures related to compliance with environmental regulations were $54.7 million in fiscal year 2022, $40.6 million in fiscal year 2021 and $38.7 million in fiscal year ~~2020, $37.4 million in fiscal year 2019 and $32.1 million in fiscal year 2018.~~2020.

Accrued Insurance and Pension Plan Obligations

Based upon the annual actuarial estimate, current accruals and claims paid during fiscal year ~~2020,~~2022, the Company has accrued approximately ~~$10.4~~$13.2 million as of ~~January 2, 2021~~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~~self-insurance reserves and accrued insurance obligations, which are included in current accrued expenses at ~~January 2, 2021.~~December 31, 2022. The ~~self insurance~~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~~self-insurance reserve liability is determined annually, based upon a third party actuarial estimate. The actuarial estimate may vary from year to year, due to

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changes in costs of health care, the pending number of claims and other factors beyond the control of management of the Company.

Based upon current actuarial estimates, the Company expects to make payments of approximately ~~$0.3~~$0.2 million in order to meet minimum pension funding requirements to its domestic plans in fiscal year ~~2021.~~2023. In addition, the Company expects to make payments of approximately ~~$3.5~~$3.4 million under its foreign pension plans in fiscal year ~~2021.~~2023. The minimum pension funding requirements are determined annually, based upon a third party actuarial estimate. The actuarial estimate may vary from year to year, due to fluctuations in return on investments or other factors beyond the control of management of the

~~Page 58~~

Company or the administrator of the Company’s pension funds. 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 ~~2020~~2022 and fiscal year ~~2019~~2021 of approximately ~~$7.5~~$2.0 million and ~~$0.9~~$0.2 million, respectively. Additionally, the Company has made required and tax deductible discretionary contributions to its foreign pension plans in fiscal year ~~2020~~2022 of approximately ~~$4.0~~$3.6 million, as compared to ~~$3.4~~$3.7 million in contributions in fiscal year ~~2019.~~2021.

The U.S. Pension Protection Act of 2006 (“PPA”) went into effect in January 2008. The stated goal of the PPA is to improve the funding of U.S. pension plans. U.S. plans in an under-funded status are required to increase employer contributions to improve the funding level within PPA timelines. Volatility in the world equity and other financial markets could have a material negative impact on U.S. pension plan assets and the status of required funding under the PPA. The Company participates in various U.S. multiemployer pension plans which provide defined benefits to certain employees covered by labor contracts. These plans are not administered by the Company and contributions are determined in accordance with provisions of negotiated labor contracts to meet their pension benefit obligations to their participants. The Company's contributions to each individual U.S. multiemployer plan represent less than 5% of the total contributions to each such plan. Based on the most currently available information, the Company has determined that, if a withdrawal were to occur, withdrawal liabilities on two of the U.S. plans in which the Company currently participates could be material to the Company, with one of these material plans certified as critical or red zone. 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~~one plan has certified as endangered or yellow zone, as defined by the PPA. The Company has ~~received notices of~~ withdrawal ~~liability from five~~liabilities recorded on three U.S. multiemployer ~~pension~~ plans in which it participated. ~~During fiscal year 2020, the Company settled one~~As of ~~the withdrawal liabilities for approximately $2.5 million. As a result,~~December 31, 2022, the Company has an ~~accrued~~ aggregate ~~current~~accrued liability of approximately ~~$2.7~~$3.9 million representing the present value of scheduled withdrawal liability payments ~~under these~~on the remaining multiemployer ~~plans.~~plans that have given notices of withdrawals. While the Company has no ability to calculate a possible current liability for under-funded multiemployer plans that could terminate or could requireadditional funding under the ~~PPA,~~Pension Protection Act of 2006, the amounts could be material.

DGD Joint Venture

In January 2011, Darling, through a wholly-owned subsidiary, entered into a limited liability company agreement (as subsequently amended, the “DGD LLC Agreement”) with Valero to form the DGD Joint Venture. The DGD Joint Venture ~~is owned 50% / 50%~~currently operates two renewable diesel plants, one located adjacent to Valero’s St. 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 ~~Valero and~~the DGD St. Charles Plant, the “DGD Facilities”). The DGD Joint Venture was formed in January 2011 to design, engineer, construct and operate the DGD ~~Norco Facility located adjacent to Valero's refinery in Norco, Louisiana. The DGD Norco Facility~~St. Charles Plant, which reached mechanical completion and began ~~the~~ production of renewable diesel and certain other co-products in late June ~~2013 and is currently capable~~2013. In October 2021, the DGD Joint Venture completed an expansion of ~~producing 290~~the DGD St. Charles Plant that increased its renewable diesel production capability to up to 750 million gallons per year of renewable diesel, ~~per year~~as well as separating renewable naphtha (approximately 30 million gallons) and ~~certain~~ other ~~co-products. Effective May 1, 2019, the DGD LLC Agreement was amended~~light end renewable hydrocarbons for sale into low carbon fuel markets, at a total cost, including naphtha production and ~~restated for the purpose~~improved logistics capability, of ~~updating the agreement~~approximately $1.1 billion. Additionally, in ~~certain respects, including to remove certain provisions that were no longer relevant and to add new provisions relating to~~November 2022 the DGD Joint ~~Venture’s ongoing expansion~~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. The DGD Port Arthur Plant was completed at a total cost of approximately $1.43 billion. The DGD Facilities have a combined renewable diesel production capacity of approximately 1.2 billion gallons per year. Furthermore, in January 2023, the DGD Joint Venture partners approved a capital project at the DGD Port Arthur Plant to ~~construct~~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). Work on the project is underway, with completion expected in 2025 at a ~~new, parallel facility located next to the current facility, as further described below.~~total estimated cost of approximately $315 million.

On May 1, 2019, Darling through its wholly owned subsidiary Darling Green Energy LLC, (“Darling Green”), and a third party 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. The DGD Lenders have committed to make loans available to the DGD Joint Venture in the total amount of $50.0 million with each lender committed to $25.0 million of the total commitment. 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

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plus (b) 2.50%. The DGD Loan Agreement matures on April 29, ~~2021,~~2023, unless extended by agreement of the parties. ~~The DGD Loan Agreement replaced a similar agreement with lower commitment levels that expired on~~During the fourth quarter of fiscal 2021, in September 2022 and again in December ~~31, 2018. As of January 2, 2021, no amounts are owed to~~2022, the DGD ~~Lenders~~Joint Venture borrowed all $50.0 million available under the DGD Loan Agreement, including the Company's full $25.0 million commitment and paid interest to the Company for the year ended December 31, 2022 and January 1, 2022 of approximately $0.6 million and $0.1 million, respectively. As of December 31, 2022 and January 1, 2022, $25.0 million was owed to Darling Green under the DGD Loan Agreement. This note receivable amount is included in other current assets on the balance sheet and is included in investing activities on the cash flow statement.

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. As of December 31, 2022, the DGD Joint Venture had borrowings outstanding of $100.0 million under this unsecured revolving credit facility.

Based on the sponsor support agreements executed in connection with the initial construction of the DGD ~~Norco Facility,~~St. Charles Plant, the Company contributed a total of approximately $111.7 million for completion of the DGD ~~Norco Facility including~~St. Charles Plant, and each partner has subsequently made $453.8 million in additional capital contributions to the ~~Company's portion~~DGD Joint Venture. Subsequent to December 31, 2022, each joint venture partner made a capital contribution of ~~cost overruns and working capital funding.~~approximately $75.0 million. As of ~~January 2, 2021,~~December 31, 2022, under the equity method of accounting the Company has an investment in the DGD Joint Venture of approximately ~~$772.8 million~~$1.9 billion included on the consolidated balance sheet.

The DGD Joint Venture began work on an expansion of the DGD Norco Facility in 2019, which is expected to increase its renewable diesel production by 400 million gallons per year and provide the capability to separate renewable naphtha (approximately 30 million gallons) and other light end renewable hydrocarbons for sale into low carbon fuel markets. In addition, the expansion project includes expanded inbound and outbound logistics, thereby improving feedstock sourcing flexibility as well as finished product marketing flexibility. The DGD Joint Venture estimates completion and startup of the expanded portion of the facility in the fourth quarter of 2021, and the total cost of the expansion project, including the naphtha

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production and improved logistics capability, is estimated to be approximately $1.1 billion. Based on forecasted margins as of the date of this report, the expansion project is expected to be substantially funded by DGD Joint Venture cash flow; however, the DGD LLC Agreement provides that until such time as the expansion of the DGD Norco Facility is complete and operational, the joint venture partners shall be required to make capital contributions or, if they agree, loans, to the DGD Joint Venture should the excess available cash in the DGD Joint Venture, as determined and in accordance with the DGD LLC Agreement, fall below $50 million. Additionally, in January 2021, the joint venture partners 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. The new plant is anticipated to commence operations in the second half of 2023 and the total cost of the expansion project is estimated to be approximately $1.45 billion. Once operational, the new plant is expected to increase the DGD Joint Venture’s total renewable diesel production capacity to almost 1.2 billion gallons per year. Based on forecasted margins as of the date of this report, the Port Arthur expansion project is expected to be substantially funded by DGD Joint Venture cash flow; however, if the DGD Joint Venture cash flow is not sufficient to fully fund the project, the DGD Joint Venture may need to borrow funds or the joint venture partners may be required to contribute additional funds to complete the project.

In April 2019, the joint venture partners adopted a distribution policy that, unless earlier terminated by the partners, will remain in place through the construction and completion of the expansion of the DGD Norco Facility. Pursuant to the distribution policy, the DGD Joint Venture will make quarterly distributions to the partners to the extent that distributable cash (as determined in accordance with the policy) exceeds $50 million and as allowed by the DGD Joint Venture’s forward looking cash forecast. During the year ended January 2, 2021, the DGD Joint Venture made approximately $205.2 million in distributions to each of the partners.

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 Company traditionally collected and converted used cooking oil and animal fats into feed ingredients which were sold on a caloric value to feed animals as well as for industrial technical uses. Over the past decade, the world’s increasing focus on climate change and greenhouse gas has provided a new finished market for the Company’s finished fats ingredients. With the Company’s significant fats ownership, this has and continues to transform how the Company operates. In ~~2020,~~2021, a large portion of Darling’s total U.S. finished fats products were sold to the DGD ~~Norco Facility~~St. Charles Plant and beginning in fiscal 2022 to the DGD Port Arthur Plant as feedstock for renewable diesel. In ~~2020, 2019~~2022, 2021 and ~~2018,~~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 ~~$264.1 million, $208.7~~$1.1 billion, $521.7 million and ~~$131.8~~$264.1 million, respectively.

From a procurement, production and distribution standpoint, DGD has become integral to the Company’s base business. 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~~St. Charles Plant as feedstock. The Company supply chain has become more efficient and sustainable with transparency for verification to obtain full value to low carbon intensity markets. The development of the low carbon markets in North America and Europe has influenced how the Company operates its core business and has also been a driver for the recent DGD expansions, which are making DGD much more relevant to the Company’s earnings. Since 2011 when construction began on DGD, Darling has invested substantially to increase its U.S. railcar fleet to efficiently manage nationwide transportation of Darling fats to DGD. Additionally, the Company acquired an Iowa location on the Mississippi River that further enhances the ability of the Company's Midwest network of facilities to collect and deliver feedstocks to DGD via water, rail or truck from a centralized location. The Company has also stepped up collection efforts by providing indoor used cooking oil collection units in exchange for extended collection contracts at eating establishments and has moved to more of a centralized digital marketing effort with restaurant chains and franchise groups and invested in internet search engine key words to improve visibility with restaurants. The Company also includes DGD in marketing efforts to emphasize environmental sustainability that restaurants participate in when their used cooking oil is collected by the Company. From a production standpoint, the Company now isolates used cooking oil from other fats to preserve identification to qualify for a higher carbon intensity value. As a result, the Company includes its equity in net income of the DGD Joint Venture as operating income.

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

~~Page 60~~

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.

Cash Flows and Liquidity Risks

Management believes that the Company’s cash flows from operating activities consistent with the level generated in fiscal year ~~2020,~~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. 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 the Russia-Ukraine war and those other factors discussed below under the heading “Forward Looking Statements”. 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 ~~2021~~2023 and thereafter. The Company reviews the appropriate use of unrestricted cash periodically. 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 ~~expansion projects~~SAF project or potential investments in additional renewable ~~diesel;~~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. The Company's Board of Directors approved a share repurchase program of up to an aggregate of ~~$200.0~~$500.0 million of the Company's Common Stock depending on market conditions. The repurchases may be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market. The program runs through August 13, ~~2022,~~2024, unless further extended or shortened by the Board of Directors. During fiscal year ~~2020,~~2022, the Company repurchased approximately ~~$55.0~~$125.5 million, including commissions, of its common stock in the open market. As of ~~January 2, 2021,~~December 31, 2022, the Company had approximately ~~$200.0~~$374.5 million remaining in its share repurchase program.

Each of the factors described above has the potential to adversely impact the Company's liquidity in a variety of ways, including through reduced raw materials availability, reduced finished product prices, reduced sales, potential inventory buildup, increased bad debt reserves, potential impairment charges and/or higher operating costs.

Sales prices for the principal products that the Company sells are typically influenced by sales prices for agricultural-based ingredients, the prices of which are based on established commodity markets and are subject to volatile changes. Any decline in these prices has the potential to adversely impact the Company's liquidity. Any of a decline in raw material availability, a decline in agricultural-based alternative ingredients prices, increases in energy prices or the impact of U.S. and foreign regulation (including, without limitation, China), changes in foreign exchange rates, imposition of currency controls and currency devaluations has the potential to adversely impact the Company's liquidity. 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.

~~Supplemental Guarantor Financial Information~~

~~The following is a description of the terms and conditions of the guarantees with respect to senior notes for which Darling is an issuer or provides full and unconditional guarantee.~~

~~Note Guarantees~~

The Company's 5.25% Notes and 3.625% Notes (see Note 10 of Notes to Consolidated Financial Statements included herein) are guaranteed on a senior unsecured basis by the following Notes Guarantors, each of which is a 100% directly or indirectly owned subsidiary of Darling and which constitute all of Darling's existing restricted subsidiaries that are Credit Agreement Guarantors (other than Darling's foreign subsidiaries, Darling Global Finance B.V., which issued the 3.625% Notes and is discussed further below, or any receivables entity): Darling National, Griffin and its subsidiary Craig Protein, DarPro Storage Solutions LLC, Darling Global Holdings Inc., EV Acquisition LLC, Rousselot Inc., Rousselot Dubuque Inc., Sonac USA LLC and Rousselot Peabody Inc. (collectively, the Notes Guarantors). In addition, the 3.625% Notes, which were issued

~~Page 61~~

by Darling Global Finance B.V., a wholly-owned indirect subsidiary of Darling, are guaranteed on a senior unsecured basis by Darling. The Notes Guarantors, and Darling in the case of the 3.625% Notes, fully and unconditionally guaranteed the 5.25% Notes and 3.625% Notes on a joint and several basis. The following financial tables present summarized financial information for (i) Darling, (ii) the combined Notes Guarantors, (iii) the combined other subsidiaries of the Company that did not guarantee the 5.25% Notes or the 3.625% Notes (the “Non-guarantors”), and (iv) eliminations necessary to arrive at the Company's consolidated summarized financial information, which include summarized condensed consolidated balance sheets as of January 2, 2021 and December 28, 2019, and the summarized condensed consolidating statements of operations for the years ended January 2, 2021, December 28, 2019 and December 29, 2018. Separate financial information is not presented for Darling Global Finance B.V. since it was formed as a special purpose finance subsidiary for the purpose of issuing euro-denominated notes such as the 3.625% Notes and therefore does not have any substantial operations or assets.

~~Summarized Financial Information~~

~~Condensed Balance Sheet Information~~

~~(in thousands)~~

January 2, 2021 Parent Notes Guarantors Non-guarantors Eliminations Consolidated
Current assets $ 103,728 $ 881,669 $ 1,177,869 $ (1,176,272) $ 986,994
Noncurrent assets 6,476,886 2,465,785 3,753,644 (8,069,978) 4,626,337
Current liabilities 1,345,233 77,573 428,771 (1,176,272) 675,305
Noncurrent liabilities 1,254,518 19,755 826,157 (116,613) 1,983,817
Stockholders' equity 3,980,863 3,250,126 3,676,585 (7,953,365) 2,954,209
December 28, 2019
Current assets $ 106,037 $ 789,495 $ 906,987 $ (885,231) 917,288
Noncurrent assets 6,003,960 2,583,918 3,466,890 (7,626,798) 4,427,970
Current liabilities 1,071,608 72,916 429,046 (885,231) 688,339
Noncurrent liabilities 1,302,462 20,311 740,960 (50,164) 2,013,569
Stockholders' equity 3,735,927 3,280,186 3,203,871 (7,576,634) 2,643,350

~~Condensed Statements of Operations Information~~

~~(in thousands)~~

For the year ended January 2, 2021 Parent Notes Guarantors Non-guarantors Eliminations Consolidated
Net sales $ 740,912 $ 1,301,933 $ 1,740,001 $ (210,923) $ 3,571,923
Total costs and expenses 827,070 1,197,946 1,641,989 (210,923) 3,456,082
Equity in net income of Diamond Green Diesel — — 315,095 — 315,095
Operating income (86,158) 103,987 413,107 — 430,936
Net income allocable to Darling 296,819 87,587 330,321 (417,908) 296,819
For the year ended December 28, 2019
Net sales $ 652,708 $ 1,305,464 $ 1,637,861 $ (232,128) $ 3,363,905
Total costs and expenses 764,511 1,218,993 1,501,160 (232,128) 3,252,536
Equity in net income of Diamond Green Diesel — — 364,452 — 364,452
Operating income (111,803) 86,471 501,153 — 475,821
Net income allocable to Darling 312,600 72,074 399,753 (471,827) 312,600
For the year ended December 29, 2018
Net sales $ 541,499 $ 1,338,376 $ 1,738,427 $ (230,576) $ 3,387,726
Total costs and expenses 620,598 1,234,016 1,668,466 (230,576) 3,292,504
Equity in net income of Diamond Green Diesel — — 159,779 — 159,779
Operating income (79,099) 104,360 229,740 — 255,001
Net income allocable to Darling 101,496 99,353 171,590 (270,943) 101,496

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~~CONTRACTUAL~~OFF BALANCE SHEET OBLIGATIONS AND OTHER COMMERCIAL COMMITMENTS

~~The following table summarizes~~Based upon the ~~Company’s expected~~underlying purchase agreements, the Company has commitments to purchase $401.1 million of commodity products, consisting of approximately $138.0 million of finished and raw material ~~contractual payment obligations, including both on-~~products and ~~off-balance sheet arrangements at January 2, 2021 (in thousands):~~

Total Less than
1 Year 1 – 3
Years 3 – 5
Years More than
5 Years
Contractual obligations(a):
Long-term debt obligations (b) $ 1,487,163 $ — $ — $ 355,000 $ 1,132,163
Operating lease obligations (c) 167,681 44,723 61,327 34,463 27,168
Finance lease obligations (c) 3,876 952 1,495 831 598
Operating lease obligations not yet effective (c) 1,214 321 505 388 —
Estimated interest payable (d) 329,808 60,593 119,063 107,950 42,202
Purchase commitments (e) 192,782 133,789 58,993 — —
Pension funding obligation (f) 3,840 3,840 — — —
Other obligations (b) 33,301 26,633 6,336 88 244
Total $ 2,219,665 $ 270,851 $ 247,719 $ 498,720 $ 1,202,375

~~(a) The above table does not reflect uncertain tax positions at January 2, 2021. The Company's uncertain tax position is~~ approximately ~~$5.0 million.~~

~~(b) Represents debt obligations outstanding as~~$243.3 million of ~~January 2, 2021. See Note 10 to Notes to Consolidated Financial Statements included herein.~~

~~(c) See Note 9 to Notes to Consolidated Financial Statements included herein.~~

~~(d) Interest payable was calculated using the current rate for the debt that was outstanding as of January 2, 2021.~~

~~(e) Purchase commitments were determined based on specified contracts for~~ natural gas and diesel fuel and ~~finished product purchases.~~

~~(f) Pension funding requirements are determined annually based upon a third party actuarial estimate. The Company expects to make~~ approximately ~~$3.8~~$19.8 million ~~in required contributions to domestic and foreign pension plans in fiscal year 2021. The Company is not able to estimate pension funding requirements beyond~~of other commitments during the next twelve months. The accrued pension benefit liability was approximately $57.0 million at the end of fiscal year 2020. The Company knows certain of the multiemployer pension plans that have not terminated to which it contributes andfive years, which are not ~~administered by~~included in liabilities on the Company’s balance sheet at December 31, 2022. These purchase agreements are entered into in the normal course of the Company’s business and are not subject to derivative accounting. The commitments will be recorded on the balance sheet of the Company ~~were under-funded as~~when delivery of ~~the latest available information,~~these commodities occurs and ~~while~~ownership passes to the Company ~~has no ability to calculate a possible current liability for~~during the ~~under-funded multiemployer plan to which the Company contributes, the amounts could be material.~~next five years, in accordance with U.S. GAAP.

The Company's off-balance sheet contractual obligations and commercial commitments as of ~~January 2, 2021~~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.

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 ~~January 2, 2021~~December 31, 2022 (in thousands):


Other commercial commitments:
Standby letters of credit	$	~~3,891~~3,871
Standby letters of credit (ancillary facility)	~~24,334~~25,672
Foreign bank guarantees	~~12,529~~23,856
Total other commercial commitments:	$	~~40,754~~53,399

~~OFF BALANCE SHEET OBLIGATIONS~~

Based upon the underlying purchase agreements, the Company has commitments to purchase $192.8 million of commodity products, consisting of approximately $77.4 million of finished and raw material products and approximately $84.7 million of natural gas and diesel fuel and approximately $30.7 million of other commitments during the next three years, which are not included in liabilities on the Company’s balance sheet at January 2, 2021. These purchase agreements are entered into in

~~Page 63~~

the normal course of the Company’s business and are not subject to derivative accounting. The commitments will be recorded on the balance sheet of the Company when delivery of these commodities occurs and ownership passes to the Company during the next three years, in accordance with U.S. GAAP.

CRITICAL ACCOUNTING POLICIES

The Company follows certain significant accounting policies when preparing its consolidated financial statements. A complete summary of these policies is included in Note 1 of Notes to Consolidated Financial Statements included herein.

Certain of the policies require management to make significant and subjective estimates or assumptions ~~that~~regarding uncertainties, including the business and economic uncertainty resulting from the Russia-Ukraine war and the high interest rate and inflationary cost environment, and as a result, such estimates may deviate from actual results and significantly impact our financial results. 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.

Business Combinations

The Company accounts for its business combinations using the acquisition method of accounting when the activities acquired have been determined to be a business. The consideration transferred in a business combination is measured at fair value, which is determined as the sum of the acquisition-date fair values of the assets transferred, liabilities incurred by the Company and any equity interests issued by the Company. The consideration transferred is allocated to the tangible and intangible assets acquired and liabilities assumed at their estimated fair value on the acquisition date. The excess of fair value is recorded as goodwill. The results of businesses acquired in a business combination are included in our consolidated financial statements from the date of acquisition. Acquisition costs are expensed as incurred.

Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates. Depending on the acquisition size, the Company determines the fair values using the assistance of a valuation expert who assists the Company primarily using the cost, market and income approaches and using estimates of future revenue and cash flows, discount rates and the selection of comparable companies. The Company's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of the acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. 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. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of the asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the ~~asset.~~asset or asset group. In December 2022, the Company's management reviewed our global network of collagen plants for optimization opportunities and decided to close our Peabody, Massachusetts, plant in 2023. As a result, the Company incurred long-lived asset impairment charges in the food segment of approximately $18.4 million. In addition, in the second quarter of fiscal 2022, the Company lost a large raw material customer at a plant location in Canada that resulted in a long-lived asset impairment charge in the feed segment of approximately $8.6 million. In fiscal year 2021, no triggering event occurred requiring that the Company perform testing of its long-lived assets for impairment. 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. ~~The~~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. In fiscal year 2018, the Company shut down operations at its Hurlingham, Argentina plant and recorded asset impairment charges related to its long-lived assets of approximately $2.4 million. In fiscal year 2019, no triggering event occurred requiring that the Company perform testing of its long-lived assets for impairment.million, respectively.

Goodwill and Indefinite Lived Intangible Assets Valuation

~~The Company performed the annual goodwill~~Goodwill and indefinite-lived intangible assets impairment assessments at October 24, 2020, and prior to finalizing the impairment testing a triggering event occurred, where due to unfavorable economics in the biodiesel industry, the Company made the decision to shut down the processing operations at its biodiesel facilities located in the United States and Canada, both of which represent a separate reporting unit. Goodwill and indefinite lived assets are tested annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. When assessing the recoverability of goodwill and other indefinite lived intangible assets, the Company may first assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit, including goodwill, or an other indefinite lived intangible asset is less than its carrying amount. The qualitative evaluation is an assessment of multiple factors, including the current operating environment, financial performance and market considerations. The Company ~~uses~~may elect to bypass this qualitative assessment for some or all of its reporting units or other indefinite lived intangible assets and perform a quantitative test, based on management's judgment. If the Company chooses to bypass the qualitative assessment, it performs the quantitative approach to impairment testing by comparing the fair value of the Company's reporting units to their respective carrying amounts and records an impairment charge for the amount by which the carrying amounts exceeds the fair value; however, the loss recognized if any will not exceed the total amount of goodwill allocated to that reporting unit.

In fiscal 2022 and fiscal 2021, the Company performed a qualitative impairment analysis for its annual goodwill and indefinite-lived intangible assets at October 29, 2022 and October 30, 2021, respectively. Based on the ~~Company’s~~Company's annual impairment testing at October ~~26, 2019~~29, 2022 and October ~~27, 2018,~~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. In December 2022, the Company's management reviewed our global network of collagen plants for optimization opportunities and decided to close our Peabody, Massachusetts, plant in 2023. As a result of the restructuring, the Company incurred a goodwill impairment charge in the food segment of approximately $2.7 million.

In fiscal 2020, the Company performed its annual goodwill and indefinite-lived intangible asset impairment testing using a quantitative impairment assessment. During the annual impairment testing at October 24, 2020 and prior to finalizing the impairment testing a triggering event occurred resulting in the Company making the decision to shut down the Company's biodiesel facilities as described above, and recording goodwill impairment charges of approximately $31.6 million. Based on the Company's annual impairment testing at October 24, 2020, the fair value of the remaining six reporting units was greater than ~~30% in excess of~~ its carrying value. The Company determined the fair value of reporting units with the assistance of a valuation expert who assisted the Company primarily using the Income Approach to determine the fair value of the Company's reporting units. Key assumptions that impacted the discounted cash flow model were raw material volumes, gross margins, terminal growth rates and discount rates.

It is possible, depending upon a number of factors that are not determinable at this time or within the control of the Company, that the fair value of these six reporting units could decrease in the future and result in an impairment to goodwill. The Company's management believes the biggest risk to these reporting units is decreasing finished product prices impacting gross margins and an economic slowdown that would impact raw material suppliers. Goodwill was approximately ~~$1,260.2 million~~$2.0 billion and ~~$1,223.3 million~~$1.2 billion at December 31, 2022 and January ~~2, 2021 and December 28, 2019,~~1, 2022, respectively.

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

~~Page 64~~

assets, rate of increase in employee compensation levels, mortality rates and trends in health care costs. The actuarial assumptions used may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of participants. These differences may result in a significant impact to the amount of net periodic benefit cost recorded in future periods.

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 ~~2.10%~~4.82% at December 31, 2022 and 2.40% at January ~~2, 2021 and 2.77% at December 28, 2019,~~1, 2022, respectively. The net periodic benefit cost for fiscal year ~~2021~~2023 would increase by approximately ~~$1.3~~$0.7 million if the discount rate was 0.5% lower at a weighted average of ~~1.60%~~4.32%. The net periodic benefit cost for fiscal year ~~2021~~2023 would decrease by approximately ~~$1.1~~$0.7 million if the discount rate was 0.5% higher at a weighted average of ~~2.60%~~5.32%.

~~NEW ACCOUNTING PRONOUNCEMENTS~~

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform Topic 848, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The update provides optional guidance for a limited period of time to ease the potential burden in accounting for (or reorganizing the effects of) contract modifications on financial reporting, caused by reference rate reform. This ASU is effective for all entities as of March 12, 2020 through December 31, 2022. The adoption of this ASU in the first quarter of fiscal 2020 did not have a material impact on the Company's consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes. This ASU amends Topic 740 Income Taxes, which eliminates certain exceptions in accounting for income taxes, improves consistency in application and clarifies existing guidance. The standard is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard.

In August 2018, the FASB issued ASU No. 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU amends Subtopic 715-20, Compensation - Retirement Benefits - Defined Benefit Plans - General, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing and adding certain disclosures for these plans. The standard is effective for fiscal years ending after December 15, 2020, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Changes to the Disclosure Requirements for Fair Value Measurements. This ASU amends Topic 820, Fair Value Measurement, which changes the disclosure requirements for fair value measurements by removing, adding and modifying certain disclosures. The standard is effective for fiscal years beginning after December 15, 2019 and for interim periods therein, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04 Simplifying the Test for Goodwill Impairment. This ASU amends Topic 350, Intangibles-Goodwill and Other, which will simplify the goodwill impairment calculation by eliminating Step 2 from the current goodwill impairment test. Under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of the assets and liabilities as if that reporting unit had been acquired in a business combination. This ASU is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Under ASU 2016-13, existing guidance on reporting credit losses for trade and other receivables and available for sale debt securities will be replaced with a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. This ASU is effective for fiscal years beginning after December 15, 2019 and interim periods therein. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.

Page 6567

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 ~~involve~~are subject to risks and ~~uncertainties. The words~~uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. Statements that are not statements of historical facts are forward looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “estimate,” “project,” “planned,” “contemplate,” “potential,” “possible,” “proposed,” “intend,” “believe,” “anticipate,” “expect,” “may,” “will,” “would,” “should,” “could,” and similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts included in this report are forward looking statements, including, without limitation, the statements under the sections entitled “Business,” “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Legal Proceedings” and located elsewhere herein regarding industry prospects, the Company's financial position and the Company's use of cash. Forward-looking statements are based on the Company's current expectations and assumptions regarding its business, the economy and other future conditions. The Company cautions readers that any such forward-looking statements it makes are not guarantees of future performance and that actual results may differ materially from anticipated results or expectations expressed in its forward-looking statements as a result of a variety of factors, including many that are beyond the Company's control.

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 ~~expansion~~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 ~~writeoffs;~~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;~~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. 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. Among other things, future profitability may be affected by the Company’s ability to grow its business, which faces competition from companies that may have substantially greater resources than the Company. 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. The Company cautions readers that all forward-looking statements speak only as of the date made, and the Company undertakes no obligation to update any forward looking statements, whether as a result of changes in circumstances, new events or otherwise.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risks affecting the Company include exposures to changes in prices of the finished products the Company sells, interest rates on debt, availability of raw material supplies and the price of natural gas and diesel fuel used in the Company's plants. Raw materials available to the Company are impacted by seasonal factors, including holidays, when raw

~~Page 66~~

material volume declines; warm weather, which can adversely affect the quality of raw material processed and finished products produced; and cold weather, which can impact the collection of raw material. Predominantly all of the Company’s finished products are commodities that are generally sold at prices prevailing at the time of sale. Additionally, with acquisition of foreign entities we are exposed to foreign currency exchange risks, imposition of currency controls and the possibility of currency devaluation.

The Company makes limited use of derivative instruments to manage cash flow risks related to natural gas usage, diesel fuel usage, inventory, forecasted sales and foreign currency exchange rates. The Company does not use derivative instruments for trading purposes. Natural gas swaps and options are entered into with the intent of managing the overall cost of natural gas usage by reducing the potential impact of seasonal weather demands on natural gas that increases natural gas prices. Heating oil swaps and options are entered into with the intent of managing the overall cost of diesel fuel usage by reducing the potential impact of seasonal weather demands on diesel fuel that increases diesel fuel prices. Soybean meal forward contracts and options are entered into with the intent of managing the impact of changing prices for poultry meal sales. 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. ~~The interest rate swaps and the natural gas swaps are subject to the requirements of FASB authoritative guidance.~~ Some of the Company's ~~natural gas and diesel fuel instruments are not subject to the requirements of FASB authoritative guidance because some of the~~ natural gas and diesel fuel instruments qualify as normal purchases as defined in ~~FASB~~Financial Accounting Standards Board (“FASB”) authoritative ~~guidance.~~guidance and therefore are not subject to fair value derivative accounting. At ~~January 2, 2021,~~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.

In fiscal ~~2020,~~2022, fiscal ~~2019~~2021 and fiscal ~~2018,~~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 ~~2022.~~2024. At ~~January 2, 2021,~~December 31, 2022, the aggregate fair value of these foreign exchange contracts was approximately ~~$11.6~~$13.8 million. The ~~January 2, 2021~~amounts are included in other current assets, other noncurrent assets, ~~and~~ accrued expenses and noncurrent liabilities on the balance sheet, with an offset recorded in accumulated other comprehensive loss.

In fiscal ~~2020~~2022, fiscal 2021 and fiscal ~~2019,~~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 ~~fourth~~second quarter of fiscal ~~2021.~~2023. At ~~January 2, 2021,~~December 31, 2022, the aggregate fair value of the corn contracts was ~~$6.8~~$0.9 million. The amounts are included in ~~accrued expenses~~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 ~~second~~third quarter of fiscal ~~2021. As of January 2, 2021,~~2023. At December 31, 2022, the aggregate fair value of the soybean meal contracts was ~~$0.4~~$0.6 million and was recorded in other current assets on the balance sheet.

~~As of January 2, 2021,~~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 6769


Functional Currency	Functional Currency		Contract Currency		Range of	U.S.		Functional Currency		Contract Currency		Range of	U.S.
Type	Type	Amount	Type	Amount	Hedge rates	Equivalent		Type	Amount	Type	Amount	Hedge rates	Equivalent
Brazilian real	Brazilian real	64,919	Euro	9,645	6.31 - 6.98	$	12,499	Brazilian real	627	Euro	110	5.7	$	120
Brazilian real	Brazilian real	1,189,357	U.S. dollar	257,300	3.35 - 6.25	257,300		Brazilian real	3,458,502	U.S. dollar	807,739	3.35 - 6.63	807,739
Euro	Euro	33,671	U.S. dollar	40,514	1.17 - 1.24	40,514		Euro	33,631	U.S. dollar	35,505	1.01 - 1.08	35,505
Euro	Euro	22,229	Polish zloty	100,000	4.48 - 4.53	27,286		Euro	26,798	Polish zloty	126,500	4.69 - 4.74	28,609
Euro	Euro	4,838	Japanese yen	605,514	123.14 - 126.43	5,939		Euro	12,982	Japanese yen	1,859,840	140.03 - 146.23	13,860
Euro	Euro	15,360	Chinese renminbi	122,801	7.87 - 8.03	18,855		Euro	18,827	Chinese renminbi	138,363	7.09 - 7.44	20,100
Euro	Euro	13,349	Australian dollar	21,850	1.64	16,386		Euro	17,221	Australian dollar	26,800	1.55 - 1.59	18,386
Euro	Euro	2,488	British pound	2,269	0.91 - 0.92	3,054		Euro	3,398	British pound	2,972	0.87 - 0.89	3,628
Euro	Euro	32	Canadian dollar	50	1.56	39		Euro	34	Canadian dollar	50	1.45	37
Polish zloty	Polish zloty	24,824	Euro	5,506	4.50 - 4.51	6,603		Polish zloty	38,373	Euro	8,155	4.70 - 4.72	8,735
Polish zloty	Polish zloty	2,253	U.S. dollar	608	3.71	608		Polish zloty	1,212	U.S. dollar	274	4.42	274
British pound	British pound	232	Euro	253	0.92	317		British pound	284	Euro	325	0.87	342
British pound	British pound	150	U.S. dollar	200	1.33	200		British pound	446	U.S. dollar	544	1.22	544
Japanese yen	Japanese yen	258,547	U.S. dollar	2,505	102.77 - 106.62	2,505		Japanese yen	360,425	U.S. dollar	2,753	129.40 - 135.36	2,753
U.S. dollar	U.S. dollar	531	Japanese yen	55,000	103.58	531		U.S. dollar	746	Japanese yen	101,000	135.36	746
U.S. dollar	U.S. dollar	114,078	Euro	95,000	1.20 - 1.22	114,078		U.S. dollar	352	Euro	330	1.07	352
Canadian dollar		10,205	U.S. dollar	8,000	1.28	8,000

Australian dollar								Australian dollar	159	Euro	100	1.59	108
						$	514,714						$	941,838


	(Mark One)
☒	ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
	For the fiscal year ended	~~January 2, 2021~~December 31, 2022
	OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
	For the transition period from _______ to _______


Title of Each Class	Trading Symbol(s)	Name of Exchange on Which Registered
Common Stock $0.01 par value per share	DAR	New York Stock Exchange	(“NYSE”)


		Page No.
	PART I

Item 1.	BUSINESS	4
Item 1A.	RISK FACTORS	18
Item 1B.	UNRESOLVED STAFF COMMENTS	4042
Item 2.	PROPERTIES	4042
Item 3.	LEGAL PROCEEDINGS	4245
Item 4.	MINE SAFETY DISCLOSURES	4346

	PART II

Item 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	4447
Item 6.	~~SELECTED FINANCIAL DATA~~RESERVED	4549
Item 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4850
Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	6669
Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	6971
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	~~123~~128
Item 9A.	CONTROLS AND PROCEDURES	~~123~~128
Item 9B.	OTHER INFORMATION	~~124~~129
Item 9C.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	129

	PART III

Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	~~125~~130
Item 11.	EXECUTIVE COMPENSATION	~~125~~130
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	~~125~~130
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	~~126~~131
Item 14.	PRINCIPAL ~~ACCOUNTING~~ACCOUNTANT FEES AND SERVICES	~~126~~131

	PART IV

Item 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	~~127~~132
Item 16.	FORM 10-K SUMMARY	136

	SIGNATURES	~~132~~137


			Page

Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements			7072
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting			7275

Consolidated Balance Sheets -
December 31, 2022 and January ~~2, 2021 and December 28, 2019~~1, 2022			7477

Consolidated Statements of Operations -
Three years ended ~~January 2, 2021~~December 31, 2022			7578

Consolidated Statements of Comprehensive Income/(Loss) -
Three years ended ~~January 2, 2021~~December 31, 2022			7679

Consolidated Statements of Stockholders’ Equity -
Three years ended ~~January 2, 2021~~December 31, 2022			7780

Consolidated Statements of Cash Flows -
Three years ended ~~January 2, 2021~~December 31, 2022			7881

Notes to Consolidated Financial Statements			7982


ASSETS	ASSETS	January 2, 2021		December 28, 2019		ASSETS	December 31, 2022		January 1, 2022
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	81,617	$	72,935	Cash and cash equivalents	$	127,016	$	68,906
Restricted cash	Restricted cash	103		110		Restricted cash	315		166
Accounts receivable, less allowance for bad debts of $10,815 at January 2, 2021 and $8,802 at December 28, 2019		405,387		406,338
Accounts receivable, less allowance for bad debts of $11,889 at December 31, 2022 and $8,196 at January 1, 2022						Accounts receivable, less allowance for bad debts of $11,889 at December 31, 2022 and $8,196 at January 1, 2022	676,573		469,092
Inventories	Inventories	405,922		362,957		Inventories	673,621		457,465
Prepaid expenses	Prepaid expenses	47,793		46,599		Prepaid expenses	85,665		53,711
Income taxes refundable	Income taxes refundable	3,883		3,317		Income taxes refundable	18,583		1,075
Other current assets	Other current assets	42,289		25,032		Other current assets	56,324		38,599
Total current assets	Total current assets	986,994		917,288		Total current assets	1,638,097		1,089,014

Property, plant and equipment, net	Property, plant and equipment, net	1,863,814		1,802,411		Property, plant and equipment, net	2,462,082		1,840,080
Intangible assets, net	Intangible assets, net	473,680		526,394		Intangible assets, net	865,122		397,801
Goodwill	Goodwill	1,260,240		1,223,291		Goodwill	1,970,377		1,219,116
Investment in unconsolidated subsidiaries	Investment in unconsolidated subsidiaries	804,682		689,354		Investment in unconsolidated subsidiaries	1,926,395		1,349,247
Operating lease right-of-use assets	Operating lease right-of-use assets	146,563		124,726		Operating lease right-of-use assets	186,141		155,464
Other assets	Other assets	60,682		47,400		Other assets	136,268		66,795
Deferred income taxes	Deferred income taxes	16,676		14,394		Deferred income taxes	17,888		16,211
		$	5,613,331	$	5,345,258		$	9,202,370	$	6,133,728
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of long-term debt	Current portion of long-term debt	$	27,538	$	90,996	Current portion of long-term debt	$	69,846	$	24,407
Accounts payable, principally trade	Accounts payable, principally trade	255,340		239,252		Accounts payable, principally trade	472,491		307,118
Income taxes payable	Income taxes payable	17,497		8,895		Income taxes payable	44,851		32,310
Current operating lease liabilities	Current operating lease liabilities	39,459		37,805		Current operating lease liabilities	49,232		38,168
Accrued expenses	Accrued expenses	335,471		311,391		Accrued expenses	432,023		350,681
Total current liabilities	Total current liabilities	675,305		688,339		Total current liabilities	1,068,443		752,684

Long-term debt, net of current portion	Long-term debt, net of current portion	1,480,531		1,558,429		Long-term debt, net of current portion	3,314,969		1,438,974
Long-term operating lease liabilities	Long-term operating lease liabilities	109,707		91,424		Long-term operating lease liabilities	141,703		120,314
Other noncurrent liabilities	Other noncurrent liabilities	117,371		115,785		Other noncurrent liabilities	298,933		111,029
Deferred income taxes	Deferred income taxes	276,208		247,931		Deferred income taxes	481,832		362,942
Total liabilities	Total liabilities	2,659,122		2,701,908		Total liabilities	5,305,880		2,785,943

Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies

Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock, $0.01 par value; 250,000,000 shares authorized, 169,880,238 and 168,620,314 shares issued at January 2, 2021 and December 28, 2019, respectively		1,699		1,686
Common stock, $0.01 par value; 250,000,000 shares authorized, 173,593,099 and 171,734,603 shares issued at December 31, 2022 and January 1, 2022, respectively						Common stock, $0.01 par value; 250,000,000 shares authorized, 173,593,099 and 171,734,603 shares issued at December 31, 2022 and January 1, 2022, respectively	1,736		1,717
Additional paid-in capital	Additional paid-in capital	1,597,429		1,560,897		Additional paid-in capital	1,660,084		1,627,816
Treasury stock, at cost; 7,679,849 and 4,845,203 shares at January 2, 2021 and December 28, 2019, respectively		(151,710)		(75,022)
Treasury stock, at cost; 13,623,503 and 10,942,599 shares at December 31, 2022 and January 1, 2022, respectively						Treasury stock, at cost; 13,623,503 and 10,942,599 shares at December 31, 2022 and January 1, 2022, respectively	(554,451)		(374,721)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(252,433)		(321,847)		Accumulated other comprehensive loss	(383,874)		(321,690)
Retained earnings	Retained earnings	1,696,924		1,400,105		Retained earnings	3,085,528		2,347,838
Total Darling's stockholders’ equity	Total Darling's stockholders’ equity	2,891,909		2,565,819		Total Darling's stockholders’ equity	3,809,023		3,280,960
Noncontrolling interests	Noncontrolling interests	62,300		77,531		Noncontrolling interests	87,467		66,825
Total stockholders’ equity	Total stockholders’ equity	2,954,209		2,643,350		Total stockholders’ equity	3,896,490		3,347,785
		$	5,613,331	$	5,345,258		$	9,202,370	$	6,133,728


		Fiscal Year 2020				Fiscal Year 2019				Fiscal Year 2018					Fiscal Year 2022				Fiscal Year 2021				Fiscal Year 2020
Net sales:	Net sales:													Net sales:
Feed Ingredients	Feed Ingredients	$	2,072,104	58.0	%	$	1,970,561	58.6	%	$	1,952,555	57.7	%	Feed Ingredients	$	4,539,000	69.5	%	$	3,039,500	64.1	%	$	2,072,104	58.0	%
Food Ingredients	Food Ingredients	1,185,701		33.2		1,119,085		33.3		1,139,126		33.6		Food Ingredients	1,459,630		22.3		1,271,629		26.8		1,185,701		33.2
Fuel Ingredients	Fuel Ingredients	314,118		8.8		274,259		8.1		296,045		8.7		Fuel Ingredients	533,574		8.2		430,240		9.1		314,118		8.8
Total	Total	$	3,571,923	100.0	%	$	3,363,905	100.0	%	$	3,387,726	100.0	%	Total	$	6,532,204	100.0	%	$	4,741,369	100.0	%	$	3,571,923	100.0	%


	Fiscal 2020		Fiscal 2019		Fiscal 2018		Fiscal 2017		Fiscal 2016
	Fifty-three		Fifty-two		Fifty-two		Fifty-two		Fifty-two
	Weeks Ended		Weeks Ended		Weeks Ended		Weeks Ended		Weeks Ended
	January 2,		December 28,		December 29,		December 30,		December 31,
	2021 (f)		2019		2018 (f)		2017		2016
	(dollars in thousands, except per share data)
Statement of Operations Data:
Net sales	$	3,571,923	$	3,363,905	$	3,387,726	$	3,662,251	$	3,391,928
Cost of sales and operating expenses	2,688,815		2,589,085		2,646,374		2,875,680		2,635,333
Loss (gain) on sale of assets	426		(20,582)		709		(237)		—
Selling, general and administrative expenses (b)	378,496		358,523		309,264		343,502		311,552
Restructuring and asset impairment charges	38,167		—		14,965		—		—
Depreciation and amortization	350,178		325,510		321,192		302,100		289,908
Acquisition and integration costs	—		—		—		—		401

Equity in net income of Diamond Green Diesel (e)	315,095		364,452		159,779		28,239		69,912
Operating income	430,936		475,821		255,001		169,445		224,646
Interest expense (a)	72,686		78,674		86,429		88,926		94,187
Debt extinguishment costs	—		12,126		23,509		—		—
Foreign currency loss	2,290		1,311		6,431		6,898		1,854
Loss (gain) on disposal of subsidiaries	—		(2,967)		12,545		885		—
Other expense, net	5,534		6,671		7,562		8,801		6,533
Equity in net loss/(income) of other unconsolidated subsidiaries and unconsolidated subsidiaries	(3,193)		(428)		550		(265)		(467)
Income from continuing operations before income taxes	353,619		380,434		117,975		64,200		122,539
Income tax (benefit)/expense	53,289		59,467		12,031		(69,154)		15,315
Net Income	$	300,330	$	320,967	$	105,944	$	133,354	$	107,224
Net Income attributable to noncontrolling interests	(3,511)		(8,367)		(4,448)		(4,886)		(4,911)
Net Income attributable to Darling	$	296,819	$	312,600	$	101,496	$	128,468	$	102,313
Basic earnings per common share	$	1.83	$	1.90	$	0.62	$	0.78	$	0.62
Diluted earnings per common share	$	1.78	$	1.86	$	0.60	$	0.77	$	0.62
Weighted average shares outstanding	162,572		164,633		164,789		164,752		164,600
Diluted weighted average shares outstanding	167,208		168,378		167,910		166,730		165,212
Other Financial Data:
Adjusted EBITDA (c)	$	504,186	$	436,879	$	431,379	$	443,306	$	444,642
Depreciation	276,132		251,880		246,002		224,125		212,217
Amortization	74,046		73,630		75,190		77,975		77,691
Capital expenditures (d)	280,115		359,498		321,896		274,168		243,523
Balance Sheet Data:
Working capital	$	311,689	$	228,949	$	357,444	$	396,962	$	441,451
Total assets	5,613,331		5,345,258		4,889,354		4,958,225		4,698,017
Current portion of long-term debt	27,538		90,996		7,492		16,143		23,247
Total long-term debt less current portion	1,480,531		1,558,429		1,666,940		1,698,050		1,727,696
Stockholders’ equity attributable to Darling	2,891,909		2,565,819		2,273,048		2,244,933		1,972,994


January 2, 2021	Parent		Notes Guarantors		Non-guarantors		Eliminations		Consolidated

Current assets	$	103,728	$	881,669	$	1,177,869	$	(1,176,272)	$	986,994
Noncurrent assets	6,476,886		2,465,785		3,753,644		(8,069,978)		4,626,337
Current liabilities	1,345,233		77,573		428,771		(1,176,272)		675,305
Noncurrent liabilities	1,254,518		19,755		826,157		(116,613)		1,983,817
Stockholders' equity	3,980,863		3,250,126		3,676,585		(7,953,365)		2,954,209

December 28, 2019

Current assets	$	106,037	$	789,495	$	906,987	$	(885,231)	917,288
Noncurrent assets	6,003,960		2,583,918		3,466,890		(7,626,798)		4,427,970
Current liabilities	1,071,608		72,916		429,046		(885,231)		688,339
Noncurrent liabilities	1,302,462		20,311		740,960		(50,164)		2,013,569
Stockholders' equity	3,735,927		3,280,186		3,203,871		(7,576,634)		2,643,350


For the year ended January 2, 2021	Parent		Notes Guarantors		Non-guarantors		Eliminations		Consolidated
Net sales	$	740,912	$	1,301,933	$	1,740,001	$	(210,923)	$	3,571,923
Total costs and expenses	827,070		1,197,946		1,641,989		(210,923)		3,456,082
Equity in net income of Diamond Green Diesel	—		—		315,095		—		315,095
Operating income	(86,158)		103,987		413,107		—		430,936
Net income allocable to Darling	296,819		87,587		330,321		(417,908)		296,819

For the year ended December 28, 2019
Net sales	$	652,708	$	1,305,464	$	1,637,861	$	(232,128)	$	3,363,905
Total costs and expenses	764,511		1,218,993		1,501,160		(232,128)		3,252,536
Equity in net income of Diamond Green Diesel	—		—		364,452		—		364,452
Operating income	(111,803)		86,471		501,153		—		475,821
Net income allocable to Darling	312,600		72,074		399,753		(471,827)		312,600

For the year ended December 29, 2018
Net sales	$	541,499	$	1,338,376	$	1,738,427	$	(230,576)	$	3,387,726
Total costs and expenses	620,598		1,234,016		1,668,466		(230,576)		3,292,504
Equity in net income of Diamond Green Diesel	—		—		159,779		—		159,779
Operating income	(79,099)		104,360		229,740		—		255,001
Net income allocable to Darling	101,496		99,353		171,590		(270,943)		101,496


	Total		Less than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years
Contractual obligations(a):
Long-term debt obligations (b)	$	1,487,163	$	—	$	—	$	355,000	$	1,132,163
Operating lease obligations (c)	167,681		44,723		61,327		34,463		27,168
Finance lease obligations (c)	3,876		952		1,495		831		598
Operating lease obligations not yet effective (c)	1,214		321		505		388		—
Estimated interest payable (d)	329,808		60,593		119,063		107,950		42,202
Purchase commitments (e)	192,782		133,789		58,993		—		—
Pension funding obligation (f)	3,840		3,840		—		—		—
Other obligations (b)	33,301		26,633		6,336		88		244
Total	$	2,219,665	$	270,851	$	247,719	$	498,720	$	1,202,375


		January 2, 2021		December 28, 2019		December 29, 2018			December 31, 2022		January 1, 2022		January 2, 2021
Net sales	Net sales	$	3,571,923	$	3,363,905	$	3,387,726	Net sales	$	6,532,204	$	4,741,369	$	3,571,923
Costs and expenses:	Costs and expenses:							Costs and expenses:
Cost of sales and operating expenses	Cost of sales and operating expenses	2,688,815		2,589,085		2,646,374		Cost of sales and operating expenses	5,002,609		3,499,385		2,688,815
Loss (gain) on sale of assets	Loss (gain) on sale of assets	426		(20,582)		709		Loss (gain) on sale of assets	(4,494)		(958)		426
Selling, general and administrative expenses	Selling, general and administrative expenses	378,496		358,523		309,264		Selling, general and administrative expenses	436,608		391,538		378,496
Restructuring and asset impairment charges	Restructuring and asset impairment charges	38,167		0		14,965		Restructuring and asset impairment charges	29,666		778		38,167
Depreciation and amortization	Depreciation and amortization	350,178		325,510		321,192		Depreciation and amortization	394,721		316,387		350,178

Acquisition and integration costs								Acquisition and integration costs	16,372		1,396		—
Total costs and expenses	Total costs and expenses	3,456,082		3,252,536		3,292,504		Total costs and expenses	5,875,482		4,208,526		3,456,082
Equity in net income of Diamond Green Diesel	Equity in net income of Diamond Green Diesel	315,095		364,452		159,779		Equity in net income of Diamond Green Diesel	372,346		351,627		315,095
Operating income	Operating income	430,936		475,821		255,001		Operating income	1,029,068		884,470		430,936

Other expense:	Other expense:							Other expense:
Interest expense	Interest expense	(72,686)		(78,674)		(86,429)		Interest expense	(125,566)		(62,077)		(72,686)
Debt extinguishment costs		0		(12,126)		(23,509)

Foreign currency losses	Foreign currency losses	(2,290)		(1,311)		(6,431)		Foreign currency losses	(11,277)		(2,199)		(2,290)
Gain (loss) on disposal of subsidiaries		0		2,967		(12,545)

Other expense, net	Other expense, net	(5,534)		(6,671)		(7,562)		Other expense, net	(3,609)		(4,551)		(5,534)
Total other expense	Total other expense	(80,510)		(95,815)		(136,476)		Total other expense	(140,452)		(68,827)		(80,510)

Equity in net income/(loss) of other unconsolidated subsidiaries		3,193		428		(550)
Income from operations before income taxes		353,619		380,434		117,975
Equity in net income of other unconsolidated subsidiaries								Equity in net income of other unconsolidated subsidiaries	5,102		5,753		3,193
Income before income taxes								Income before income taxes	893,718		821,396		353,619

Income tax expense	Income tax expense	53,289		59,467		12,031		Income tax expense	146,626		164,106		53,289

Net income	Net income	300,330		320,967		105,944		Net income	747,092		657,290		300,330

Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(3,511)		(8,367)		(4,448)		Net income attributable to noncontrolling interests	(9,402)		(6,376)		(3,511)

Net income attributable to Darling	Net income attributable to Darling	$	296,819	$	312,600	$	101,496	Net income attributable to Darling	$	737,690	$	650,914	$	296,819

Net income per share:	Net income per share:							Net income per share:
Basic	Basic	$	1.83	$	1.90	$	0.62	Basic	$	4.58	$	4.01	$	1.83
Diluted	Diluted	$	1.78	$	1.86	$	0.60	Diluted	$	4.49	$	3.90	$	1.78


		January 2, 2021		December 28, 2019		December 29, 2018			December 31, 2022		January 1, 2022		January 2, 2021
Net income	Net income	$	300,330	$	320,967	$	105,944	Net income	$	747,092	$	657,290	$	300,330
Other comprehensive income/(loss), net of tax:	Other comprehensive income/(loss), net of tax:							Other comprehensive income/(loss), net of tax:
Foreign currency translation	Foreign currency translation	70,320		(11,934)		(87,474)		Foreign currency translation	(87,856)		(74,219)		70,320
Pension adjustments	Pension adjustments	(4,313)		1,535		(2,730)		Pension adjustments	8,966		12,669		(4,313)
Natural gas swap derivative adjustments		0		0		23

Corn option derivative adjustments	Corn option derivative adjustments	(5,731)		278		(1,687)		Corn option derivative adjustments	3,547		1,838		(5,731)
Soybean meal derivative adjustments	Soybean meal derivative adjustments	297		0		0		Soybean meal derivative adjustments	339		(141)		297
Heating oil derivative adjustments	Heating oil derivative adjustments	1,104		(3,141)		0		Heating oil derivative adjustments	(2,458)		894		1,104
Foreign exchange derivative adjustments	Foreign exchange derivative adjustments	6,621		(3,723)		1,081		Foreign exchange derivative adjustments	12,204		(5,833)		6,621

Total other comprehensive income/(loss), net of tax	Total other comprehensive income/(loss), net of tax	68,298		(16,985)		(90,787)		Total other comprehensive income/(loss), net of tax	(65,258)		(64,792)		68,298
Total comprehensive income	Total comprehensive income	368,628		303,982		15,157		Total comprehensive income	681,834		592,498		368,628
Comprehensive income attributable to noncontrolling interests	Comprehensive income attributable to noncontrolling interests	2,395		8,690		3,894		Comprehensive income attributable to noncontrolling interests	6,328		10,841		2,395
Comprehensive income attributable to Darling	Comprehensive income attributable to Darling	$	366,233	$	295,292	$	11,263	Comprehensive income attributable to Darling	$	675,506	$	581,657	$	366,233


		Common Stock																		Common Stock
		Number of Outstanding Shares	$0.01 par Value		Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Stockholders' equity attributable to Darling		Non-controlling Interests		Total Stockholders' Equity			Number of Outstanding Shares	$0.01 par Value		Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Stockholders' equity attributable to Darling		Non-controlling Interests		Total Stockholders' Equity
Balances at December 30, 2017		164,653,437	$	1,679	$	1,515,614	$	(44,063)	$	(209,524)	$	981,227	$	2,244,933	$	82,764	$	2,327,697
Adjustment to initially apply FASB ASC No. 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income		—	—		—		—		(4,782)		4,782		0		—		0
Net income		—	—		—		—		—		101,496		101,496		4,448		105,944
Distribution of noncontrolling interest earnings		—	—		—		—		—		—		—		(9,710)		(9,710)
Deductions to noncontrolling interests		—	—		—		—		—		—		—		(14,175)		(14,175)
Pension liability adjustments, net of tax		—	—		—		—		(2,730)		—		(2,730)		—		(2,730)
Natural gas swap derivative adjustment, net of tax		—	—		—		—		23		—		23		—		23
Corn option derivative adjustment, net of tax		—	—		—		—		(1,687)		—		(1,687)		—		(1,687)
Foreign exchange derivative adjustment, net of tax		—	—		—		—		1,081		—		1,081		—		1,081
Foreign currency translation adjustments		—	—		—		—		(86,920)		—		(86,920)		(554)		(87,474)

Stock-based compensation		—	—		18,260		—		—		—		18,260		—		18,260

Treasury stock		(198,516)	—		—		(3,693)		—		—		(3,693)		—		(3,693)
Issuance of common stock		205,677	2		2,283		—		—		—		2,285		—		2,285
Balances at December 29, 2018		164,660,598	$	1,681	$	1,536,157	$	(47,756)	$	(304,539)	$	1,087,505	$	2,273,048	$	62,773	$	2,335,821
Balances at December 28, 2019																			Balances at December 28, 2019	163,775,111	$	1,686	$	1,560,897	$	(75,022)	$	(321,847)	$	1,400,105	$	2,565,819	$	77,531	$	2,643,350

Net income	Net income	—	—		—		—		—		312,600		312,600		8,367		320,967		Net income	—	—		—		—		—		296,819		296,819		3,511		300,330
Distribution of noncontrolling interest earnings	Distribution of noncontrolling interest earnings	—	—		—		—		—		—		—		(5,964)		(5,964)		Distribution of noncontrolling interest earnings	—	—		—		—		—		—		—		(4,480)		(4,480)
Additions to noncontrolling interests	Additions to noncontrolling interests	—	—		—		—		—		—		—		12,032		12,032		Additions to noncontrolling interests	—	—		3,258		—		—		—		3,258		(13,146)		(9,888)
Pension liability adjustments, net of tax	Pension liability adjustments, net of tax	—	—		—		—		1,535		—		1,535		—		1,535		Pension liability adjustments, net of tax	—	—		—		—		(4,313)		—		(4,313)		—		(4,313)

Heating oil derivative adjustment, net of tax		—	—		—		—		(3,141)		—		(3,141)		—		(3,141)
Corn option derivative adjustment, net of tax		—	—		—		—		278		—		278		—		278
Foreign exchange derivative adjustment, net of tax		—	—		—		—		(3,723)		—		(3,723)		—		(3,723)
Foreign currency translation adjustments		—	—		—		—		(12,257)		—		(12,257)		323		(11,934)

Stock-based compensation		—	—		21,007		—		—		—		21,007		—		21,007

Treasury stock		(1,407,624)	—		—		(27,266)		—		—		(27,266)		—		(27,266)
Issuance of common stock		522,137	5		3,733		—		—		—		3,738		—		3,738
Balances at December 28, 2019		163,775,111	$	1,686	$	1,560,897	$	(75,022)	$	(321,847)	$	1,400,105	$	2,565,819	$	77,531	$	2,643,350

Net income		—	—		—		—		—		296,819		296,819		3,511		300,330
Distribution of noncontrolling interest earnings		—	—		—		—		—		—		—		(4,480)		(4,480)
Deductions to noncontrolling interests		—	—		3,258		—		—		—		3,258		(13,146)		(9,888)
Pension liability adjustments, net of tax		—	—		—		—		(4,313)		—		(4,313)		—		(4,313)

Heating oil derivative adjustment, net of tax		—	—		—		—		1,104		—		1,104		—		1,104
Corn option derivative adjustment, net of tax		—	—		—		—		(5,731)		—		(5,731)		—		(5,731)
Soybean meal derivative adjustment, net of tax		—	—		—		—		297		—		297		—		297
Foreign exchange derivative adjustment, net of tax		—	—		—		—		6,621		—		6,621		—		6,621
Heating oil derivative adjustments, net of tax																			Heating oil derivative adjustments, net of tax	—	—		—		—		1,104				1,104		—		1,104
Corn option derivative adjustments, net of tax																			Corn option derivative adjustments, net of tax	—	—		—		—		(5,731)		—		(5,731)		—		(5,731)
Soybean meal derivative adjustments, net of tax																			Soybean meal derivative adjustments, net of tax	—	—		—		—		297		—		297		—		297
Foreign exchange derivative adjustments, net of tax																			Foreign exchange derivative adjustments, net of tax	—	—		—		—		6,621		—		6,621		—		6,621
Foreign currency translation adjustments	Foreign currency translation adjustments	—	—		—		—		71,436		—		71,436		(1,116)		70,320		Foreign currency translation adjustments	—	—		—		—		71,436		—		71,436		(1,116)		70,320
Issuance of non-vested stock	Issuance of non-vested stock	11,000	—		221		—		—		—		221		—		221		Issuance of non-vested stock	11,000	—		221		—		—		—		221		—		221
Stock-based compensation	Stock-based compensation	—	—		23,001		—		—		—		23,001		—		23,001		Stock-based compensation	—	—		23,001		—		—		—		23,001		—		23,001

Treasury stock	Treasury stock	(2,834,646)	—		—		(76,688)		—		—		(76,688)		—		(76,688)		Treasury stock	(2,834,646)	—		—		(76,688)		—		—		(76,688)		—		(76,688)
Issuance of common stock	Issuance of common stock	1,248,924	13		10,052		—		—		—		10,065		—		10,065		Issuance of common stock	1,248,924	13		10,052		—		—		—		10,065		—		10,065
Balances at January 2, 2021	Balances at January 2, 2021	162,200,389	$	1,699	$	1,597,429	$	(151,710)	$	(252,433)	$	1,696,924	$	2,891,909	$	62,300	$	2,954,209	Balances at January 2, 2021	162,200,389	$	1,699	$	1,597,429	$	(151,710)	$	(252,433)	$	1,696,924	$	2,891,909	$	62,300	$	2,954,209

Net income																			Net income	—	—		—		—		—		650,914		650,914		6,376		657,290
Distribution of noncontrolling interest earnings																			Distribution of noncontrolling interest earnings	—	—		—		—		—		—		—		(6,316)		(6,316)

Pension liability adjustments, net of tax																			Pension liability adjustments, net of tax	—	—		—		—		12,669		—		12,669		—		12,669

Heating oil derivative adjustments, net of tax																			Heating oil derivative adjustments, net of tax	—	—		—		—		894		—		894		—		894
Corn option derivative adjustments, net of tax																			Corn option derivative adjustments, net of tax	—	—		—		—		1,838		—		1,838		—		1,838
Soybean meal derivative adjustments, net of tax																			Soybean meal derivative adjustments, net of tax	—	—		—		—		(141)		—		(141)		—		(141)
Foreign exchange derivative adjustments, net of tax																			Foreign exchange derivative adjustments, net of tax	—	—		—		—		(5,833)		—		(5,833)		—		(5,833)
Foreign currency translation adjustments																			Foreign currency translation adjustments	—	—		—		—		(78,684)		—		(78,684)		4,465		(74,219)
Issuance of non-vested stock																			Issuance of non-vested stock	—	—		171		—		—		—		171		—		171
Stock-based compensation																			Stock-based compensation	—	—		21,666		—		—		—		21,666		—		21,666

Treasury stock																			Treasury stock	(3,262,750)	—		—		(223,011)		—		—		(223,011)		—		(223,011)
Issuance of common stock																			Issuance of common stock	1,854,365	18		8,550		—		—		—		8,568		—		8,568
Balances at January 1, 2022																			Balances at January 1, 2022	160,792,004	$	1,717	$	1,627,816	$	(374,721)	$	(321,690)	$	2,347,838	$	3,280,960	$	66,825	$	3,347,785
Acquisition of noncontrolling interests																			Acquisition of noncontrolling interests	—	—		—		—		—		—		—		18,058		18,058
Net income																			Net income	—	—		—		—		—		737,690		737,690		9,402		747,092
Distribution of noncontrolling interest earnings																			Distribution of noncontrolling interest earnings	—	—		—		—		—		—		—		(3,744)		(3,744)

Pension liability adjustments, net of tax																			Pension liability adjustments, net of tax	—	—		—		—		8,966		—		8,966		—		8,966

Heating oil derivative adjustments, net of tax																			Heating oil derivative adjustments, net of tax	—	—		—		—		(2,458)		—		(2,458)		—		(2,458)
Corn option derivative adjustments, net of tax																			Corn option derivative adjustments, net of tax	—	—		—		—		3,547		—		3,547		—		3,547
Soybean meal derivative adjustments, net of tax																			Soybean meal derivative adjustments, net of tax	—	—		—		—		339		—		339		—		339
Foreign exchange derivative adjustments, net of tax																			Foreign exchange derivative adjustments, net of tax	—	—		—		—		12,204		—		12,204		—		12,204
Foreign currency translation adjustments																			Foreign currency translation adjustments	—	—		—		—		(84,782)		—		(84,782)		(3,074)		(87,856)
Issuance of non-vested stock																			Issuance of non-vested stock	8,000	—		155		—		—		—		155		—		155
Stock-based compensation																			Stock-based compensation	—	—		24,850		—		—		—		24,850		—		24,850

Treasury stock																			Treasury stock	(2,680,904)	—		—		(179,730)		—		—		(179,730)		—		(179,730)
Issuance of common stock																			Issuance of common stock	1,850,496	19		7,263		—		—		—		7,282		—		7,282
Balances at December 31, 2022																			Balances at December 31, 2022	159,969,596	$	1,736	$	1,660,084	$	(554,451)	$	(383,874)	$	3,085,528	$	3,809,023	$	87,467	$	3,896,490


		Net Income per Common Share (in thousands, except per share data)																Net Income per Common Share (in thousands, except per share data)
				January 2,					December 28,					December 29,						December 31,					January 1,					January 2,
				2021					2019					2018						2022					2022					2021
		Income		Shares	Per-Share		Income		Shares	Per-Share		Income		Shares	Per-Share			Income		Shares	Per-Share		Income		Shares	Per-Share		Income		Shares	Per-Share
Basic:	Basic:																Basic:
Net income attributable to Darling	Net income attributable to Darling	$	296,819	162,572	$	1.83	$	312,600	164,633	$	1.90	$	101,496	164,789	$	0.62	Net income attributable to Darling	$	737,690	161,000	$	4.58	$	650,914	162,454	$	4.01	$	296,819	162,572	$	1.83

Diluted:	Diluted:																Diluted:
Effect of dilutive securities	Effect of dilutive securities																Effect of dilutive securities
Add: Option shares in the money and dilutive effect of nonvested stock	Add: Option shares in the money and dilutive effect of nonvested stock	—		6,526	—		—		5,983	—		—		5,234	—		Add: Option shares in the money and dilutive effect of nonvested stock	—		3,831	—		—		5,468	—		—		6,526	—
Less: Pro-forma treasury shares	Less: Pro-forma treasury shares	—		(1,890)	—		—		(2,238)	—		—		(2,113)	—		Less: Pro-forma treasury shares	—		(710)	—		—		(826)	—		—		(1,890)	—
Diluted:	Diluted:																Diluted:
Net income attributable to Darling	Net income attributable to Darling	$	296,819	167,208	$	1.78	$	312,600	168,378	$	1.86	$	101,496	167,910	$	0.60	Net income attributable to Darling	$	737,690	164,121	$	4.49	$	650,914	167,096	$	3.90	$	296,819	167,208	$	1.78


(in thousands)	(in thousands)	December 31, 2020		December 31, 2019		(in thousands)	December 31, 2022		December 31, 2021
Assets:	Assets:					Assets:
Total current assets	Total current assets	$	383,557	$	668,026	Total current assets	$	1,304,805	$	686,294
Property, plant and equipment, net	Property, plant and equipment, net	1,238,726		713,489		Property, plant and equipment, net	3,866,854		2,710,747
Other assets	Other assets	36,082		30,710		Other assets	61,665		51,514
Total assets	Total assets	$	1,658,365	$	1,412,225	Total assets	$	5,233,324	$	3,448,555
Liabilities and members' equity:	Liabilities and members' equity:					Liabilities and members' equity:
Total current portion of long term debt	Total current portion of long term debt	$	517	$	341	Total current portion of long term debt	$	217,066	$	165,092
Total other current liabilities	Total other current liabilities	99,787		75,802		Total other current liabilities	515,023		295,860
Total long term debt	Total long term debt	8,705		8,742		Total long term debt	774,783		344,309
Total other long term liabilities	Total other long term liabilities	3,758		4,422		Total other long term liabilities	17,249		17,531
Total members' equity	Total members' equity	1,545,598		1,322,918		Total members' equity	3,709,203		2,625,763
Total liabilities and member's equity	Total liabilities and member's equity	$	1,658,365	$	1,412,225	Total liabilities and member's equity	$	5,233,324	$	3,448,555


		Year Ended December 31,							Year Ended December 31,
(in thousands)	(in thousands)	2020		2019		2018		(in thousands)	2022		2021		2020
Revenues:	Revenues:							Revenues:
Operating revenues	Operating revenues	$	1,267,477	$	1,217,504	$	677,663	Operating revenues	$	5,501,166	$	2,342,332	$	1,267,477
Expenses:	Expenses:							Expenses:
Total costs and expenses less depreciation, amortization and accretion expense	Total costs and expenses less depreciation, amortization and accretion expense	592,781		438,672		329,636		Total costs and expenses less depreciation, amortization and accretion expense	4,614,192		1,575,494		592,781
Depreciation, amortization and accretion expense	Depreciation, amortization and accretion expense	44,882		50,767		29,434		Depreciation, amortization and accretion expense	125,656		58,326		44,882
Operating income	Operating income	629,814		728,065		318,593		Operating income	761,318		708,512		629,814
Other income	Other income	1,636		2,121		1,919		Other income	3,170		678		1,636
Interest and debt expense, net	Interest and debt expense, net	(1,260)		(1,282)		(955)		Interest and debt expense, net	(19,796)		(5,936)		(1,260)
Net income	Net income	$	630,190	$	728,904	$	319,557	Net income	$	744,692	$	703,254	$	630,190


Accounts receivable	$	76,640
Inventories	43,058
Other current assets	33,327
Property, plant and equipment	142,931
Identifiable intangible assets	161,182
Goodwill	408,589
Operating lease right-of-use assets	583
Other assets	55,191
Deferred tax asset	8,144
Accounts payable	(15,920)
Current portion of long-term debt	(18,680)
Accrued expenses	(38,708)
Long-term debt, net of current portion	(41,926)
Long-term operating lease liabilities	(583)
Deferred tax liability	(79,691)
Other noncurrent liabilities	(503)
Non-controlling interests	(18,058)
Purchase price, net of cash acquired	$	715,576
Less hold-back	21,705
Less contingent consideration	168,128
Cash paid for acquisition, net of cash acquired	$	525,743


Accounts receivable	$	68,558
Inventories	58,246
Other current assets	13,825
Property, plant and equipment	409,405
Identifiable intangible assets	389,200
Goodwill	358,298
Operating lease right-of-use assets	16,380
Other assets	14,164
Deferred tax asset	1,075
Accounts payable	(47,615)
Current portion of long-term debt	(2,043)
Current operating lease liabilities	(4,779)
Accrued expenses	(66,034)
Long-term debt, net of current portion	(5,995)
Long-term operating lease liabilities	(11,601)
Other noncurrent liabilities	(19,436)
Purchase price, net of cash acquired	$	1,171,648


	Twelve Months Ended
	December 31, 2022		January 1, 2022
Net sales	$	7,059,871	$	5,826,297
Net income	724,064		625,834


	January 2, 2021		December 28, 2019
Finished product	$	233,044	$	199,799
Work in process	87,223		81,841
Raw material	36,746		41,964
Supplies and other	48,909		39,353
	$	405,922	$	362,957


	December 31, 2022		January 1, 2022
Compensation and benefits	$	145,048	$	123,180




Accrued operating expenses	97,128		81,200



Other accrued expense	189,847		146,301
	$	432,023	$	350,681


	Year Ended
	December 31, 2022		January 1, 2022		January 2, 2021
Operating lease expense	$	49,377	$	48,049	$	45,362
Short-term lease costs	31,133		25,141		25,868
Total lease cost	$	80,510	$	73,190	$	71,230


Period Ending Fiscal	Operating Leases		Finance Leases
2021	$	44,723	$	952
2022	33,145		858
2023	28,182		637
2024	21,551		486
2025	12,912		345
Thereafter	27,168		598
	167,681		3,876
Less amounts representing interest	(18,515)		(140)
Lease obligations included in current and long-term liabilities	149,166		3,736


		Contractual Debt Payment			Contractual Debt Payment
2021		$	27,538
2022		4,697
2023	2023	3,075		2023	$	70,108
2024	2024	300,514		2024	242,613
2025	2025	55,378		2025	52,021
2026				2026	1,527,179
2027				2027	503,038
thereafter	thereafter	1,132,998		thereafter	1,007,997
		$	1,524,200		$	3,402,956


	December 31, 2022		January 1, 2022
Deferred tax assets:
Loss contingency reserves	$	11,775	$	11,169
Employee benefits	14,480		13,059
Pension liability	3,505		8,208

Interest expense carryforwards	28,769		46
Tax loss carryforwards	275,675		123,194
Tax credit carryforwards	2,432		4,267
Operating lease liabilities	53,765		41,949
Inventory	15,002		8,533
Accrued liabilities and other	18,408		16,271
Total gross deferred tax assets	423,811		226,696
Less valuation allowance	(12,788)		(17,685)
Net deferred tax assets	411,023		209,011

Deferred tax liabilities:
Intangible assets amortization, including taxable goodwill	(238,347)		(172,575)
Property, plant and equipment depreciation	(218,316)		(140,158)
Investment in DGD Joint Venture	(344,633)		(188,154)
Operating lease assets	(52,330)		(40,965)
Tax on unremitted foreign earnings	(12,890)		(10,379)
Other	(8,451)		(3,511)
Total gross deferred tax liabilities	(874,967)		(555,742)
Net deferred tax liability	$	(463,944)	$	(346,731)

Amounts reported on Consolidated Balance Sheets:
Non-current deferred tax asset	$	17,888	$	16,211
Non-current deferred tax liability	(481,832)		(362,942)
Net deferred tax liability	$	(463,944)	$	(346,731)


	January 2, 2021		December 28, 2019
Balance at beginning of Year	$	7,810	$	5,777
Change in tax positions related to current year	9		3,887
Change in tax positions related to prior years	(2,780)		(233)
Change in tax positions due to settlement with tax authorities	0		(1,354)
Expiration of the Statute of Limitations	0		(267)
Balance at end of year	$	5,039	$	7,810


	Number of shares	Weighted-avg. exercise price per share		Weighted-avg. remaining contractual life
Options outstanding at December 30, 2017	3,290,757	$	11.86	7.3 years
Granted	637,115	18.82
Exercised	(153,717)	11.49
Forfeited	(19,953)	9.99
Expired	0	0
Options outstanding at December 29, 2018	3,754,202	13.07		6.9 years
Granted	610,953	21.00
Exercised	(380,206)	9.83
Forfeited	(6,464)	18.11
Expired	0	0
Options outstanding at December 28, 2019	3,978,485	14.59		6.5 years
Granted	550,941	28.89
Exercised	(837,911)	12.01
Forfeited	0	0
Expired	0	0
Options outstanding at January 2, 2021	3,691,515	$	17.31	6.2 years
Options exercisable at January 2, 2021	2,527,003	$	14.07	5.3 years


Weighted Average	2020	2019	2018
Expected dividend yield	0.0%	0.0%	0.0%
Risk-free interest rate	1.65%	2.61%	2.54%
Expected term	5.94 years	6.00 years	5.82 years
Expected volatility	27.4%	29.6%	29.3%
Fair value of options granted	$8.64	$7.16	$6.37


	Non-Vested, and RSU Shares	Weighted Average Grant Date Fair Value
Stock awards outstanding December 28, 2019	750	$	15.50
Shares granted	11,000	35.66
Shares vested	(375)	15.50
Shares forfeited	—	—
Stock awards outstanding January 2, 2021	11,375	35.00
Shares granted	90,689	56.93
Shares vested	(11,545)	35.32
Shares forfeited	(2,585)	56.93
Stock awards outstanding January 1, 2022	87,934	56.93
Shares granted	124,416	70.67
Shares vested	(35,337)	58.23
Shares forfeited	(6,764)	66.67
Stock awards outstanding December 31, 2022	170,249	$	66.31


	Non-Vested, RSU and PSU Shares	Weighted Average Grant Date Fair Value
Stock awards outstanding December 30, 2017	360,344	$	13.18
Shares granted	0	0
Shares vested	(228,991)	13.11
Shares forfeited	(2,779)	12.11
Stock awards outstanding December 29, 2018	128,574	13.32
Shares granted	0	0
Shares vested	(126,511)	12.13
Shares forfeited	(1,313)	14.92
Stock awards outstanding December 28, 2019	750	15.50
Shares granted	11,000	35.66
Shares vested	(375)	15.50
Shares forfeited	0	0
Stock awards outstanding January 2, 2021	11,375	$	35.00


		LTIP PSU Shares	Weighted Average Grant Date Fair Value			LTIP PSU Shares	Weighted Average Grant Date Fair Value
LTIP PSU awards outstanding December 30, 2017		1,141,016	$	8.91
Granted		295,514	20.60
Additional PSU awards vested from performance		88,151	6.95
Stock issued for PSUs		(26,212)	6.95
Forfeited		(16,493)	9.39
LTIP PSU awards outstanding December 29, 2018		1,481,976	$	11.15
Granted		305,195	21.50
Additional PSU awards vested from performance		235,126	7.23
Stock issued for PSUs		(125,067)	7.84
Forfeited		(3,757)	19.09
LTIP PSU awards outstanding December 28, 2019	LTIP PSU awards outstanding December 28, 2019	1,893,473	$	12.54	LTIP PSU awards outstanding December 28, 2019	1,893,473	$	12.54
Granted	Granted	224,481	31.80		Granted	224,481	31.80
Additional PSU awards vested from performance	Additional PSU awards vested from performance	434,666	11.14		Additional PSU awards vested from performance	434,666	11.14
Stock issued for PSUs	Stock issued for PSUs	(349,210)	8.91		Stock issued for PSUs	(349,210)	8.91
Forfeited	Forfeited	(332)	26.88		Forfeited	(332)	26.88
LTIP PSU awards outstanding January 2, 2021	LTIP PSU awards outstanding January 2, 2021	2,203,078	$	14.80	LTIP PSU awards outstanding January 2, 2021	2,203,078	$	14.80
Granted					Granted	126,711	61.12
Additional PSU awards vested from performance					Additional PSU awards vested from performance	367,109	20.60
Stock issued for PSUs					Stock issued for PSUs	(1,276,120)	14.17
Forfeited					Forfeited	(21,600)	32.45
LTIP PSU awards outstanding January 1, 2022					LTIP PSU awards outstanding January 1, 2022	1,399,178	$	20.82
Granted					Granted	115,615	75.13
Additional PSU awards vested from performance					Additional PSU awards vested from performance	367,746	21.50
Stock issued for PSUs					Stock issued for PSUs	(1,429,198)	15.87
Forfeited					Forfeited	(14,035)	57.54
LTIP PSU awards outstanding December 31, 2022					LTIP PSU awards outstanding December 31, 2022	439,306	$	50.58


	Restricted stock and Restricted Stock Unit Shares	Weighted Average Grant Date Fair Value
Stock awards outstanding December 30, 2017	154,809	$	14.91
Restricted shares granted	61,806	16.92
Restricted shares where the restriction lapsed	(1,438)	13.90
Restricted shares forfeited	0	0
Stock awards outstanding December 29, 2018	215,177	15.49
Restricted shares granted	52,990	20.76
Restricted shares where the restriction lapsed	(6,803)	2.94
Restricted shares forfeited	0	0
Stock awards outstanding December 28, 2019	261,364	16.89
Restricted shares granted	48,267	20.51
Restricted shares where the restriction lapsed	(73,354)	16.33
Restricted shares forfeited	0	0
Stock awards outstanding January 2, 2021	236,277	$	17.79


	Restricted stock and Director RSUs and Director DSUs Shares	Weighted Average Grant Date Fair Value
Stock awards outstanding December 28, 2019	261,364	$	16.89
Shares granted	48,267	20.51
Shares where the restriction lapsed	(73,354)	16.33
Shares forfeited	—	—
Stock awards outstanding January 2, 2021	236,277	17.79
Shares granted	18,098	70.86
Shares where the restriction lapsed	(68,200)	19.21
Shares forfeited	—	—
Stock awards outstanding January 1, 2022	186,175	22.43
Shares granted	22,759	73.03
Shares where the restriction lapsed	—	—
Shares forfeited	—	—
Stock awards outstanding December 31, 2022	208,934	$	27.94


		Before-Tax		Tax (Expense)		Net-of-Tax			Before-Tax		Tax (Expense)		Net-of-Tax
		Amount		or Benefit		Amount			Amount		or Benefit		Amount
Year Ended December 29, 2018
Year Ended January 2, 2021								Year Ended January 2, 2021
Defined Benefit Pension Plans	Defined Benefit Pension Plans							Defined Benefit Pension Plans
Actuarial (loss)/gain recognized	Actuarial (loss)/gain recognized	$	(7,901)	$	2,015	$	(5,886)	Actuarial (loss)/gain recognized	$	(9,470)	$	2,547	$	(6,923)
Amortization of actuarial loss		3,543		(910)		2,633
Actuarial prior service cost recognized		(11)		3		(8)
Amortization of actuarial gain/(loss)								Amortization of actuarial gain/(loss)	3,405		(862)		2,543

Amortization of prior service costs	Amortization of prior service costs	35		(9)		26		Amortization of prior service costs	33		(8)		25
Amortization of curtailment	Amortization of curtailment	498		0		498		Amortization of curtailment	69		(15)		54
Amortization of settlement	Amortization of settlement	(3)		1		(2)		Amortization of settlement	(30)		7		(23)
Other	Other	9		0		9		Other	11		—		11
Total defined benefit pension plans	Total defined benefit pension plans	(3,830)		1,100		(2,730)		Total defined benefit pension plans	(5,982)		1,669		(4,313)
Natural gas swap derivatives
Gain/(loss) reclassified to net income		14		(3)		11
Gain/(loss) recognized in other comprehensive income (loss)		16		(4)		12
Total natural gas derivatives		30		(7)		23

Soybean meal option derivatives	Soybean meal option derivatives							Soybean meal option derivatives
Gain/(loss) reclassified to net income		(8)		2		(6)
Reclassified to earnings								Reclassified to earnings	49		(12)		37
Activity recognized in other comprehensive income (loss)								Activity recognized in other comprehensive income (loss)	349		(89)		260
Total soybean meal derivatives								Total soybean meal derivatives	398		(101)		297
Heating oil swap derivatives								Heating oil swap derivatives
Activity recognized in other comprehensive income (loss)								Activity recognized in other comprehensive income (loss)	1,457		(353)		1,104
Total heating oil derivatives								Total heating oil derivatives	1,457		(353)		1,104
Corn option derivatives								Corn option derivatives
Reclassified to earnings								Reclassified to earnings	123		(31)		92
Activity recognized in other comprehensive income (loss)								Activity recognized in other comprehensive income (loss)	(7,803)		1,980		(5,823)
Total corn options								Total corn options	(7,680)		1,949		(5,731)
Foreign exchange derivatives								Foreign exchange derivatives
Reclassified to earnings								Reclassified to earnings	(13,809)		5,114		(8,695)
Activity recognized in other comprehensive income (loss)								Activity recognized in other comprehensive income (loss)	24,325		(9,009)		15,316
Total foreign exchange derivatives								Total foreign exchange derivatives	10,516		(3,895)		6,621


	Fiscal Year Ended January 2, 2021
	Foreign Currency		Derivative		Defined Benefit
	Translation		Instruments		Pension Plans		Total
Accumulated Other Comprehensive loss December 28, 2019, attributable to Darling, net of tax	$	(282,338)	$	(5,505)	$	(34,004)	$	(321,847)
Other comprehensive loss before reclassifications	70,320		10,857		(6,912)		74,265
Amounts reclassified from accumulated other comprehensive income	0		(8,566)		2,599		(5,967)

Net current-period other comprehensive income/(loss)	70,320		2,291		(4,313)		68,298
Noncontrolling interest	(1,116)		0		0		(1,116)
Accumulated Other Comprehensive loss January 2, 2021, attributable to Darling, net of tax	$	(210,902)	$	(3,214)	$	(38,317)	$	(252,433)