DAR 10-K & 10-Q changes, risk factors and insider trading

•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 mosta competitive aspect of our business;

•Seasonal factors and weather, including the physical impacts of climate related changes, can impact the availability, quality and volume of raw materials that we process and negatively affect our operations;

•Our operations are subject to various laws, rulesextensive and regulationsevolving including those relating to the protection of the environment and toenvironmental, health and safety,safety laws and regulations, and we could incur significant costs to comply with these requirements or be subject to sanctions or held liable for damages, including environmental damages;

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

•Pandemics, epidemics or disease outbreaks, such as coronavirus (“COVID-19”), may disrupt our business, including, among other things, our supply chain and production processes, each of which could materially affect our operations, liquidity, financial condition and results of operations;

•Our substantial level of indebtedness could adversely affect our financial condition;

•Despite our existing level of indebtedness, we and our subsidiaries may still be able to incurcould substantially moreincrease our 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 indebtednessdebt and may be forced to take other actions to satisfy our obligationsdebt under our indebtedness,obligations, which may not be successful;

•Our ability to repaymake payments on our indebtednessdebt depends in part on the performance of our subsidiaries, including our non-guarantor subsidiaries, and their ability to transfer funds to members of our group liable to make payments on our debt;

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

•The healthcare reform legislation in the United States,States and its implementing regulations, and subsequent healthcare developmentsregulations 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; and

•We may not be able to achieve our climate, sustainability or other such goals, targets or objectives; andobjectives.

Risks Related to theour CompanyBusiness

The prices of many of our products are subject to significant volatility.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 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, aA 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 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. ThereWe canmay not be no assurance asable to whether we could implement future price increases in response to increases in the market prices of raw materialsmaterials, or howand any such price increases wouldmay affecthave adverse impacts on future sales volumes to our customers.volumes. 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 whichthat would need to be sold to alternative markets and destinations.

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

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

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 biofuel 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 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 and/or 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.drivers, Thewhich U.S.from hastime beento experiencingtime aare growingin shortageshort of truck drivers.supply. Our failure to hire and retain a sufficient number of truck drivers to operate our fleet could negatively impact our ability to collect and transport raw materials in an efficient and cost-effective manner.

In January 2011, Darling,one throughof aour wholly-owned subsidiary,subsidiaries, entered into a limited liability company agreement (as subsequently amended, the “DGD LLC Agreement”) with a wholly-owned subsidiary of Valero to form the DGD Joint Venture, which was formed to design, engineer, construct and operate the DGD St. Charles Plant. Since that time, the DGD Joint Venture has completed several expansion projects and currently operates the DGD St. Charles Plant and the DGD Port Arthur Plant. As of DecemberJanuary 28,3, 2024,2026, under the equity method of accounting, we had an investment in the DGD Joint Venture of approximately $2.2$2.1 billion included on the Consolidated Balance Sheet. There is no assurance thatNonetheless, the DGD Joint Venture willmay not continue to be profitableprofitable, may not continue to make distributions or allow us to continue to make a return on our investment, or could result in a negative return on our investment.

DGD’sThe DGD Joint Venture’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,the DGD Joint Venture, 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’sthe DGD Joint Venture’s business and certain significant decisions concerning DGD,the DGD Joint Venture require certain approvals from our joint venture partner, including, among others, the acquisition or disposition of assets above a certain value threshold, making certain changes to DGD’sthe DGD Joint Venture’s business plan, raising debt or equity capital, DGD’sthe DGD Joint Venture’s distribution policy, and entering into particular transactions, also require certain approvals from our joint venture partner.transactions. Failure by us or our joint venture partner to adequately manage the risks associated with the DGD Joint Venture 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. Furthermore, our equity in net income of DGD,the DGD Joint Venture, which is based on our 50% interest in the unconsolidated earnings of the standalone DGD Joint Venture financial statements, may not always match our joint venture partner’s consolidated results and presentation. In addition, the DGD LLC Agreement limits our ability to freely transfer or sell our interest in the DGD Joint Venture.

The DGD Joint Venture is dependent on governmental energy policies and programs, such as the National Renewable Fuel Standard Program (“RFS”) and low carbon fuel standards (“LCFS”) (such as in the state of California), which positively impact the demand for and price of renewable diesel. Any 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 renewable energy businesses may be affected by energy policies around the world.” Additionally, there may be new entrants into the renewable fuelsbiofuels industry or new technologies developed that could meet demand for lower-carbon transportation fuels and modes of transportation in a more efficient or less costly manner than our technologies and products, which could also have a material adverse effect on the DGD Joint Venture. For instance, several other companies have made, or announced interest in making, investments in renewable dieselbiofuel 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.

DGD’sThe DGD Joint Venture’s production plants are its principal operating assets and are subject to planned and unplanned downtime and interruptions. Its operations could also be subject to significant interruption if one of its plants were to experience a major accident or mechanical failure, be damaged by severe weather or natural disasters (such as hurricanes) or man-made disasters (such as cybersecurity incidents or acts of terrorism), or otherwise be forced to shut down or curtail operations. If any of its plants, or related pipelinepipelines or terminal,terminals, were to experience an interruption in operations, our earnings could be materially and adversely affected (to the extent not recoverable through insurance) because of lost productivity and repair and other costs.

•the inaccuracy of our assumptions about prices or demand for the biofuels (including renewable diesel orand SAF) that the DGD Joint Venture produces;

•the risk that one or more competitive new biofuel (including renewable diesel orand SAF) plants are constructed that use different technologies from the DGD Joint Venture and result in the marketing of products that are more effective as a substitute for carbon-based fuels or less expensive than the products marketed by the DGD Joint Venture;

Markets and/or prices for our biofuels, biogases and green electricity, including those of DGD, may be impacted by government policies around the world relating to renewable energy and greenhouse gas emissions (“GHG”). Programs like RFS and LCFSLCFS, compliance and tax credits for biofuels and mandates for biofuel use, both in the United States and abroadabroad, are subject to revision and change which may impact the demand for our finished products.products Furthermore,and supportmargins. Support from renewablethe identification numbers (“RINs”), LCFS credits,programs and othercredits government programs playplays an important role in the makeup of margins for DGD,the andDGD Joint Venture, and, accordingly, we are exposed to the volatility in the market price of RINs,these credits, including LCFS credits,credits and otherRINs credits.(which act as compliance credits under the RFS). We cannot predict the future prices of RINs, LCFS credits or other credits, nor can we predict changes or continued implementation of policies that support these programs.

The EPA created the RFS program pursuant to the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007. Under the RFS program, the EPA is required by statute to set annual quotas for the volume of renewable fuels that must be blended into petroleum-based transportation fuels consumed in the U.S. 14 months prior to the compliance year. The quotas are set by class of renewable fuel (i.e.,e.g., biomass-based diesel, cellulosic biofuel, advanced biofuel, and total renewable fuel) and are collectively referred to as the renewable volume obligation (“RVO”). The RVO must be met by obligated parties, who are the producers and importers of the petroleum-based transportation fuels consumed in the U.S. Obligated parties demonstrate compliance annually by retiring the appropriate number of renewable identification numbers (“RINs”) associated with each class of renewable fuel to satisfy their RVO. A RIN is effectively a compliance credit that is assigned to each gallon of qualifying renewable fuel produced in, or imported into, the U.S. under the RFS program. RINs are obtained by blending those renewable fuels into petroleum based transportation fuels, and obligated parties can also achieve compliance by purchasing RINs in the open market.

Pursuant to the requirements established by the Energy Independence and Security Act of 2007, the finalized 2010 RFS regulation mandated the domestic use of biomass-based diesel (biodiesel, renewable diesel or renewable jet fuel) of 1.0 billion gallons in 2012 and a minimum of 1.0 billion gallons of biomass-based diesel for 2012 and subsequent years. This amount is subject to increase by the Administrator of the EPA. The volume mandates for 2022 were 2.76 billion gallons for biomass-based diesel, 5.63 billion RINs for advanced biofuel, and 20.63 billion RINs for total renewable fuel.

In June of 2023, the EPA published a final rule that establishesestablished required RFS volumes for 2023, 2024, and 2025. For biomass-based diesel, the EPA set 2.82 billion gallons for 2023, 3.04 billion gallons for 2024, and 3.35 billion gallons for 2025. For the advanced biofuel category, the EPA set 5.94 billion RINs for 2023, 6.54 billion RINs for 2024, and 7.33 billion RINs for 2025. For total renewable fuel, the EPA set 20.94 billion RINs for 2023, 21.54 billion RINs for 2024, and 22.33 billion RINs for 2025.

For RFS compliance purposes, biomass-based diesel credits (RINs) satisfy the biomass-based diesel requirement, the overall advanced biofuel requirement, and the total renewable fuel requirement. In order to generate a RIN, each type of fuel from each type of feedstock is required to reduce greenhouse gas (“GHG”) emissions by levels specified in the regulation. The EPA has determined that biodiesel or renewable diesel produced from waste oils, fats, and greases exceed the 50% threshold established by the regulation to generate advanced biofuel and biomass-based diesel RINs.

In August of 2022, as part of the Inflation Reduction Act of 2022, the blender tax credit was extended at $1.00 per gallon until December 31, 2024. As a blender, the DGD Joint Venture has recorded approximately $1,281.7 million of blender tax credits for fiscal 2024, with Darling's portion equaling 50%. In January 2025, the Clean Fuels Production Credit (“CFPC”) introduced under the IR Act became effective through 2027.2027, and replaced the blender tax credit that was in effect in prior years. Under the CFPC, non-aviation transportation fuel receives a tax credit equal to either $0.20/gallon or $1.00/gallon (adjusted for inflation each calendar year) multiplied by the fuel’s emission reduction percentage. In order to start with the $1.00 per gallon baseline, the fuel must be produced at a qualifying facility that meets the prevailing wage and apprenticeship requirements.requirements Inbefore contrast to the blender tax credit, the CFPC requires that production must take place in the United States and the fuel must bebeing sold in a certain manner. Under the CFPC, sustainable aviation fuelSAF receives a tax credit equal to either $0.35/gallon or $1.75/gallon (adjusted for inflation each calendar year) multiplied by the fuel’s emission reduction percentage. In order to start with the $1.75 per gallon baseline, the neat SAF must be produced in the United States at a qualifying facility that meets the prevailing wage and apprenticeship requirements before being sold for use in an aircraft. In fiscal 2024, the Company’s share of tax credits for biofuels DGD produced was materialcontrast to the Company,blender sotax anycredit, legalthe challengesCFPC orrequires changesthat to,production aof failureeligible tofuels enforce,must reductionstake place in the mandatedUnited volumesStates. under,On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA extended the CFPC for two years through 2029 and, beginning in 2026, reduces the maximum credit rate for SAF to $1.00/gallon (adjusted for inflation each calendar year) and specifies that transportation fuels must be derived from feedstocks produced or discontinuinggrown anyin ofthe theseU.S., programsMexico couldor haveCanada ato negativebe impact on our business and results of operations.eligible.

TheFor example, the transition from the blender tax credit to the CFPC on January 1, 2025 introduced a number of risks that could negatively impact the results of operations of the DGD Joint Venture and cause a material and adverse impact to the Company. These include, but are not limited to: credit eligibility and compliance risks for failure to satisfy qualification, prevailing wage and apprenticeship and other certification and documentation requirements which could reduce credit values or void credits; regulatory risks because the U.S. Treasury has yet to provide final CFPC regulations, and credits earned since January 1, 2025 must be determined based on currently available information from Treasury; legislative risks with a new administration in the U.S., including risks associated with the CFPC being modified, repealed or paused; and credit transfer risks, including the development of markets to sell the credits, the strength of any such markets and the viability of the credits with respect to discounts to credit values on sales, and potential Company indemnities with respect to credit sales which introduce the risk of reimbursing buyers for any later credit adjustments including potential penalties, interest and tax gross-ups which could be material.

Our operations are highly dependent on the use of natural gas, diesel fuel and 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 trucksvehicles 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 conflicts around the world, such as the ongoing Russian-Ukraine war,war and conflicts in the Israeli-PalestinianMiddle conflictEast, and other Middle Eastern conflicts or the inflationary environment,inflation, and therefore, represent an ongoing challenge to our operating results. AlthoughDespite weour continuallyefforts to 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 significant increase in the cost of which could have a material adverse effect on the business and results of operations of the affected facility. Additionally, the availability of natural gas, diesel fuel and electricity can be affected by numerous events such as weather (e.g., hurricanes and periods of considerable heat or cold), pipeline and other logistics interruptions, electric grid outages, cybersecurity incidents, intermittent electricity generation, hostilities, sanctions and supply and demand imbalances.

•imposition of tariffs, quotas, trade barriers and other trade protection measures imposed by the United States againstor foreign countries, or retaliatory trade protection measures, impacting import costs in the U.S. or foreign countries or by foreign countries against others regarding the importation of poultry, beef and pork products, gelatin and collagen products, fats and oils, biofuels, and/or biofuels,any of the Company’s other finished products, and related uncertainty and volatility in additionU.S. toand global financial and economic conditions and commodity markets, declining consumer confidence, significant inflation and diminished expectations for the economy, as well as the imposition of operating, import or export licensing requirements imposed by various foreign countries;

•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 thoseforeign countries;

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

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,difficulties (e.g., bankruptcy) or cease operations.

Seasonal factors and weather, including the physical impacts of climate related changes, can impact the availability, quality and volume of raw materials that we process and negatively affect our operations.

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 any such climate changerelated changes 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. WhileOur werisk assessmanagement process includes assessment of climate related regulatory risksrisks, as part of our risk management process,but we aremay be unable to predict the scope, nature and timing of any new or increasingly stringent environmental laws and regulations and therefore cannot predictor 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 consider actions we may take to potentially mitigate the unfavorable impact, if any, of such laws or regulations.

Furthermore, emergingthere is legislation seeks to regulate corporate environmental, social, (and governanceadditional (“ESG”legislation has been introduced) practices, includingregulating 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,2464, also known as the Corporate Sustainability Reporting Directive (“CSRD”). The new rules,, which applyrequires to all large (EU and non-EU) companies with significant activities in the EU and to EU-listed small and medium-sized enterprises, require companies to reportreporting on howsustainability-related sustainability issues (environmental, social, and governance) affect their business and about their own impact on people and the environment.issues. In addition, in MayJune 2024 the EU adopted Directive (EU) 2024/1760, also known as the Corporate Sustainability Due Diligence Directive (“CSDDD”)., Thewhich CSDDD will become gradually applicable starting in 2027 to large (EU and non-EU) companies and parent companies meeting specific thresholds. The new rules require in-scope companies to conductrequires risk-based supply chain due diligence in order to identify, prevent, mitigate and remediatecertain actual and potential adverse impacts on people and the environment resulting from the operations of the company, its subsidiaries and business partnersactivities in the Company’s supply chain. In-scopeIn addition, there has been increased state-level legislation in the U.S., like California’s SB 261, which mandates certain companies aredoing alsobusiness requiredin California to adoptdisclose climate-related financial risks, and implementSB a253, climatewhich transitionrequires plan,reporting settingof outcorporate agreenhouse strategygas emissions. In both the EU and California the regulations have been delayed pending amendments and legal challenges, which increases the uncertainty around final impacts to reducethe emissionsCompany. The Company continues to monitor proposed changes to these and other proposed legislative and regulatory requirements related to sustainability issues in linestate and national jurisdictions. Compliance with theCSRD, ParisCSDDD, AgreementCalifornia’s targets.SB 261 and SB 253, and other proposed or adopted legislative and regulatory requirements related to sustainability issues may require expenditures that could materially adversely affect our business, results of operations and financial condition. There has also been increased focus from our stakeholders, including consumers, customers, suppliers, employees and investors, on our sustainability and ESG practices. We expect that stakeholder expectations with respect to sustainability and ESG will continue to evolve rapidly,progress, 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, warmWarm weather can also adversely affect the quality of raw materials processed and our yield on production due to more rapidlyrapid degrading raw materials.degradation. In addition to seasonal impacts, depending on the location of our facilities and those of our suppliers, our operations could be subject to weather impacts, including the physical impacts of climate changes, changes in rainfall patterns, water shortages, changing sea levels, changing storm patterns and intensities and changing temperature levels. 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 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 recallsrecalls, we may incur significant and unexpected costs and our business reputation could be adversely affected.

In recent years the EU has adopted new mechanisms to allow (and encourage) claims by consumers, including in collective litigation forms. The civil liability risks in Europe in relation to misleading advertising are material,material and increasing,increasing. and onOn December 8, 2024, Directive (EU) 2024/2853, the EU’s revised Product Liability Directive (“PLD”), entered into force, which must be transposed into national legislation of the EU Member States by December 9, 2026.2026, The revised PLD introducesintroduced a number of significant changes that increase liability risks for companies distributing their products to EU consumers. Direct civil enforcement before EU institutions or courts is not available, but EU law requires the EU Member States to enhance consumer protection at the national level by requiring every EU Member State to allow consumer representative bodies to take civil claims on behalf of consumers for breaches of certain EU consumer laws.

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, cyber-attack 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 andor unscheduled shutdown is restored, there could be no assurance that customers who in the interim choose to use alternative disposal services wouldmay not return to use our services.

Darling and the DGD Joint Venture have used and may continue to use commodity derivative instruments in the future to hedge their exposures to various types of financial risk. If these instruments are not effective or increase Darling’s or DGD’sthe DGD Joint Venture’s exposure to unexpected events or risks, Darling or the DGD Joint Venture may incur losses. In addition, both Darling or the DGD Joint Venture may be required to incur additional costs in connection with any future regulation of derivative instruments applicable to either or both.

As of DecemberJanuary 28,3, 2024,2026, the Company had approximately $2.3$2.5 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 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 and assumptions 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.

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 and fiscal 2023, the Company completed several acquisitions including two significant rendering operations, Valley Proteins in North America (the “Valley Acquisition”) and the FASA Group in South America (the “FASA Acquisition”), and a significant collagen operation, Gelnex, with processing located in South America and North America (the “Gelnex Acquisition”). 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, greenagriculture-based energy,biofuels, 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 through a global network 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 South America into non-food grade oils and protein meals, (ii) the collection and processing of bakery residuals in North America into Cookie Meal®, which is predominantly used in poultry and swine rations, (iii) the collection and processing of used cooking oil in North America and South America into non-food grade fats, (iv) the collection and processing of porcine and bovine blood in China, Europe, North America and Australia into blood plasma powder and hemoglobin, (v) the processing of selected portions of slaughtered animals into a variety of meat products for use in pet food in Europe, North America and South America, (vi) the processing of cattle hides and hog skins in North America, (vii) the production of organic fertilizers using protein produced from the Company’s animal by-products processing activities in North America and Europe, (viii) the rearing and processing of black soldier fly larvae into specialty proteins and fats for use in animal feed and pet food in North America, and (ix) the provision of grease trap services to food service establishments in North America. 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 agriculture-based biofuels (such as renewable diesel and SAF), or to the oleo-chemical industry to be used as an ingredient in a wide variety of industrial applications. 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 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 Diamondthe GreenDGD DieselJoint Holdings LLC, a joint ventureVenture with Valero Energy Corporation (“Valero”) to convert animal fats, recycled greases, used cooking oil, inedible corn oil, soybean oil, or other feedstocks that become economically and commercially viable into renewable fuels/products, such as renewable diesel and SAF (“DGD” or the “DGD Joint Venture”) as described in Note 1 and Note 2 to the Company’s Consolidated Financial Statements for the period ended DecemberJanuary 28,3, 20242026 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.

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 policiespolicies, including tariff policies, and foreign exchange fluctuations. Global economic conditions continue to be highly volatile due to, among other things, the conflicts in Ukraine and the Middle East and their impacts 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 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 DecemberJanuary 28,3, 2024.2026.

Prices for our finished products, including those of DGD, may be impacted by government policies around the world relating to renewable fuels and GHG. Programs like the U.S. National Renewable Fuel Standard Program (“RFS”) and low carbon fuel standards (“LCFS”) (such as those in place in the state of California), and tax credits for biofuels and mandates for biofuel use both in the United States and abroadabroad, such as IR Acts’s 45Z and European Union’s renewable energy directive (RED III), are subject to revision and change which may impact the demand for and/or price of our finished products. Legal challenges,challenges or changes to, a failure to enforce, reductions in the mandated volumes under, or discontinuation,discontinuing, amendment,amending, modification,modifying, or suspensionsuspending 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.

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, emergingthere is legislation seeks to regulateregulating 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. These and emerging 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 sustainability and ESG practices. We expect that stakeholder expectations with respect to sustainability and ESG expectations will continue to evolve rapidly,evolve, which may necessitate additional resources to monitor, report on, and adjust our operations.

For additional information on risk factors that could impact our results, please refer to “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K for the fiscal year ended DecemberJanuary 28,3, 2024.2026.

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 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 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.casings, as well as ag-based alternative ingredients. 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.

Fiscal Year Ended DecemberJanuary 28,3, 20242026 Compared to Fiscal Year Ended December 30,28, 20232024

Segment operating income for the fiscal year ended DecemberJanuary 28,3, 20242026 was $468.2$273.4 million, which reflects a decrease of $(481.5194.8) million or (50.741.6)% as compared to the fiscal year ended December 30,28, 2023.2024.

Raw material volume. In fiscal year 2024,2025, the raw material processed by the Company’s Feed Ingredients segment totaled 12.5012.68 million metric tons. Compared to fiscal year 2023,2024, overall raw material volume processed in the Feed Ingredients segment decreasedincreased approximately (0.2)%.1.7%.

Sales. The decreaseincrease in total net sales for the Feed Ingredients segment was $(797.0)$314.5 million for the fiscal year ended DecemberJanuary 28,3, 2024,2026, as compared to the fiscal year ended December 30,28, 2023.2024.

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

Margins. In the Feed Ingredients segment for fiscal year 2024,2025, the gross margin percentage was 21.5%23.2% as compared to 24.3%21.5% for fiscal year 2023.2024. The decreaseincrease in margin was primarily due to lowerhigher overall finished product prices as compared to fiscal 2023.2024.

Segment operating income. The Company’s Feed Ingredients segment operating income for fiscal year 20242025 was $204.0$215.2 million, aan decreaseincrease of $(215.2)$11.2 million or (51.3)%5.5% as compared to fiscal year 2023.2024. The decreaseincrease was primarily due to lower overallhigher finished productgood pricesfat prices, higher sales volumes and operational improvements that more than offset aan decreaseincrease in selling, general and administrative expensesexpenses, an increase in restructuring and aimpairment gaincharges fromprimarily related to the reductionstrategic realignment of theour recordedEnviroflight FASAoperations of approximately $29.2 million and an increase in contingent consideration liability as compared to fiscal year 2023.2024.

Sales. Total net sales decreasedincreased in the Food Ingredients segment primarily due to ahigher decreasefinished in collagen prices that more than offset an increase inproduct sales volumes from the Gelnex Acquisition.volumes.

Margins. In the Food Ingredients segment for fiscal year 2024,2025, the gross margin percentage decreased slightlyincreased to 25.1%27.7% as compared to 25.2%25.1% for fiscal year 2023.2024. The increase in margin was primarily due to the impact of an out of period inventory expense adjustment of approximately $25.1 million to the prior year’s cost of sales and operating expenses.

Segment operating income. The Company’s Food Ingredients segment operating income was $144.7$151.8 million for fiscal year 2024,2025, aan decreaseincrease of $(66.9)$7.1 million or (31.6)%4.9% as compared to fiscal year 2023.2024. The decreaseincrease in operating income was primarily due to lowerincreased pricessales forvolumes collagen,and the impact of anthe out-of-periodout of period inventory expense adjustment to prior year’s cost of sales and operating expenses that more than offset the increase in restructuring and impairment charges primarily related to our natural casings business of approximately $25.1$25.6 million and an increase in depreciation and amortization as compared to fiscal 2023.million.

Raw material volume. In fiscal year 2024,2025, the raw material processed by the Company’s Fuel Ingredients segment, excluding the DGD Joint Venture, totaled 1.501.45 million metric tons. Compared to fiscal year 2023,2024, overall raw material volume processed in the Fuel Ingredients segment increaseddecreased approximately 6.4%.(3.3)%.

Sales. Total net sales decreasedincreased in the Fuel Ingredients segment primarily due to lowerhigher finished product prices and sales prices.volumes.

Margins. In the Fuel Ingredients segment (exclusive of the equity contribution from the DGD Joint Venture) for fiscal year 2024,2025, the gross margin percentage increaseddecreased slightly to 20.8%20.2% as compared to 20.7%20.8% for fiscal year 2023.2024.

During fiscal year 2024,2025, the euro strengthened and the Brazilian real and the Canadian dollar weakened against the U.S. dollar and the euro remained the same as compared to fiscal year 2023.2024. Using actual results for fiscal year 20242025 with the average foreign currency rates for fiscal year 20232024 would result in ana increasedecrease in operating income of approximately $1.3$20.4 million for fiscal year 2024.2025. The average rates used in this calculation were the average rates for fiscal year 2025 of €1.00:$1.13, R$1.00:$0.18 and C$1.00:$0.72 as compared to the average rates for fiscal year 2024 of €1.00:$1.08, R$1.00:$0.19 and C$1.00:$0.73 as compared to the average rates for fiscal year 2023 of €1.00:$1.08, R$1.00:$0.20 and C$1.00:$0.74,$0.73, respectively.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $74.6 million during fiscal year 2025, a $13.6 million increase from $61.0 million during fiscal year 2024, a $19.2 million decrease from $80.2 million during fiscal year 2023.2024. The decreaseincrease is primarily due to aan decreaseincrease in the Company’s incentive based compensation and a decrease in consulting expense and other expensespayroll related benefits as compared to fiscal year 2023.2024.

Depreciation and Amortization. Depreciation and amortization charges were approximately $8.7$6.3 million for thefiscal year ended December 28, 20242025 as compared to $12.3$8.7 million for thefiscal year ended December 30, 2023.2024. The decrease was due to certain assets becoming fully depreciated.

Interest Expense. Interest expense was $222.3 million for fiscal year 2025, compared to $253.9 million for fiscal year 2024, compared to $259.2 million for fiscal year 2023, a decrease of approximately $5.3$31.6 million. The decrease in interest expense is primarily due to less interest on term loan A facilities and other notes due to reductions in amounts outstanding from payments made that were partially offset by an increase in revolverlower interest paid on term loan debt as a result of higherthe reduction of the term loan balances outstanding which slightly lowered our average revolver borrowingsdebt outstanding during fiscal year 20242025 as compared to fiscal year 2023.2024.

Foreign Currency Gain/(Loss).Loss. Foreign currency losses were $(1.20.4) million during fiscal year 2024,2025, as compared to gainslosses of approximately $8.1$(1.2) million for fiscal year 2023.2024. The change from ain foreign currency gain to a losslosses was due primarily to a decrease in gainslosses on the revaluation of an intercompany note and non-functional currency assets and liabilities that more than offset losses as compared to fiscal year 2023.2024.

Other Income, net. Other income was $22.3$0.5 million for fiscal year 2024,2025, compared to other income of $16.3$22.3 million in fiscal year 2023.2024. The increasedecrease in other income was primarily due to a decrease in casualty loss insurance proceedsgains receivedand forthe firesimpact whichof occurredcurrent inyear latesettlement 2022losses atfrom the termination of two of the Company’s Tacoma,domestic Washingtondefined andbenefit Ward,pension South Carolina facilities, as well as current year flooding in Brazilplans that was partially offset by a decreasegain in interest income, an increase infrom the non-service componentsale of pensiona expenseportion andof ana increaseminor ininternational other miscellaneous non-operating expensessubsidiary as compared to fiscal year 2023.2024.

Income Taxes. The Company recorded an income tax benefit of $38.3$9.4 million for fiscal year 2024,2025, compared to $59.6$38.3 million of income tax expensebenefit recorded in fiscal year 2023,2024, a decrease of $97.9$28.9 million, which was primarily due to a decrease in pre-taxthe income.benefit from biofuel tax incentives. The effective tax rate for fiscal year 2025 was (15.3)%. The effective tax rate for fiscal year 2025 differs from the statutory rate of 21% due primarily to biofuel tax incentives, losses that provided no tax benefit, change in tax law and recording a tax benefit in respect to a deductible outside basis difference that will reverse in the foreseeable future. The effective tax rate for fiscal year 2024 was (15.5)%. The effective tax rate for fiscal year 2024 differs from the statutory rate of 21% due primarily to biofuel tax incentives, the relative mix of earnings among jurisdictions with different tax rates, state income taxes, nontaxable change in FASA contingent consideration and losses that provided no tax benefit. The effective tax rate for fiscal year 2023 was 8.3%. The effective tax rate for fiscal year 2023 differs from the statutory rate of 21% due primarily to biofuel tax incentives, the relative mix of earnings among jurisdictions with different tax rates, state income taxes, certain taxable income inclusion items in the U.S. based on foreign earnings and losses that provided no tax benefit. The Company’s effective tax rate excluding the federal and state impact of the biofuel tax incentives is 43.9% for fiscal year 2024 compared to 28.4% for fiscal year 2023.

Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income,income/(loss), 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'sCompany’s operating performance. Since EBITDA (generally, net income plus interest expense, taxes, depreciation and amortization) is not calculated identically by all 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, restructuring and asset impairment charges, acquisition and integration costs, change in fair value of contingent consideration, foreign currency loss/(gain), net income/(loss) attributable to non-controlling interests, interest expense, income tax provision, other income/(expense), loss on early retirement of debt 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, non-cash and certain other items that may vary for different companies for reasons unrelated to overall operating performance and also believes this information is useful to investors.

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%4.5% Notes that were outstanding at DecemberJanuary 28,3, 2024.2026. 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%4.5% Notes, as those definitions permit further adjustments to reflect certain other nonrecurring costs, non-cash charges and cash dividends from the DGD Joint Venture. Additionally, the Company evaluates the impact of foreign exchange on operating cash flow, which is defined as segment operating income (loss) plus depreciation and amortization.

DGD Adjusted EBITDA is not reflected in the Adjusted EBITDA or the Pro forma Adjusted EBITDA to Foreign Currency. DGD Adjusted EBITDA is not a recognized accounting measure under GAAP; it should not be considered as an alternative to net income or equity in net income of Diamond Green Diesel, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity and is not intended to be a presentation in accordance with GAAP. The Company calculates DGD Adjusted EBITDA by taking DGD’s operating income plus DGD’s depreciation, amortization and accretion expense. Management believes that DGD Adjusted EBITDA is useful in evaluating the Company’s operating performance because the calculation of DGD Adjusted EBITDA generally eliminates non-cash and certain other items at DGD unrelated to overall operating performance and also believes this information is useful to investors. The Company calculates Darling’s Share of DGD Adjusted EBITDA by taking DGD Adjusted EBITDAEBITDA, net of discount and broker fees, and then multiplying by 50% to get Darling’s Share of DGD’s Adjusted EBITDA.

(1) The average rates used in this calculation were the average rates for the fiscal year ended DecemberJanuary 28,3, 20242026 of €1.00:$1.08,$1.13, R$1.00:$0.19$0.18 and C$1.00:$0.73$0.72 as compared to the average rates for the fiscal year ended December 30,28, 20232024 of €1.00:USD$1.08, R$1.00:$0.20$0.19 and C$1.00:$0.74,$0.73, respectively.

Certain Debt Outstanding at DecemberJanuary 28,3, 2024.2026. On DecemberJanuary 28,3, 2024,2026, debt outstanding under the Amended Credit Agreement, the Company’s 6% notes, the Company’s 5.25% Notes and the Company’s 3.625%4.5% Notes consists of the following (in thousands):

At DecemberJanuary 28,3, 2024,2026, the U.S. dollar strengthenedweakened as compared to the euro at December 30,28, 2023.2024. Using the euro based debt outstanding at DecemberJanuary 28,3, 20242026 and comparing the closing balance sheet rates at DecemberJanuary 28,3, 20242026 to those at December 30,28, 2023,2024, the U.S. dollar debt balances of euro based debt decreasedincreased by $32.1$117.4 million, at DecemberJanuary 28,3, 2024.2026. The closing balance sheet rate used in this calculation was the actual fiscal closing balance sheet rate at DecemberJanuary 28,3, 20242026 of €1.00:USD$1.042200USD$1.1750 as compared to the closing balance sheet rate at December 30,28, 20232024 of €1.00:USD$1.105000.USD$1.0422.

Senior Secured Credit Facilities. On JanuaryJune 6,25, 2014,2025, Darling, Darling International Canada Inc. (“Darling Canada”) and Darling International NL Holdings B.V. (“Darling NL”) and Darling Ingredients International Holding B.V. (“Darling Holding”) entered into a Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”), which amended and restated the Company’s then existing Second Amended and Restated Credit Agreement dated January 6, 2014 (as subsequentlyamended amended,from time to time, the “AmendedPrevious 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. The Amended Credit Agreement refinanced the loans and commitments outstanding under the Previous Credit Agreement and provides for senior secured credit facilities in the aggregate principal amount of $3.725$2.9 billion, which matures on December 9, 2026 and isbillion comprised of (i) the Company’s $525.0$900.0 million six-year term A facility (partially comprised of $395.0 million term loanA-1 Bfacility facility,and $296.3 million term A-3 facility which, in each case, were cashlessly rolled from the Previous Credit Agreement) and (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$2.0 billion five-year revolving credit facility (up to $50.0 million (as such amount may be increased to an amount not exceeding $150.0 million to the extent consented to by the applicable issuing banks) of which will be available for a letter of credit sub-limitsubfacility and up to $50.0 million of which will be available for a swingline sub-limitsub-facility) (collectively, the “Senior Secured Credit Facilities”). The Amended Credit Agreement also permits Darling and the other borrowers thereunder to incur ancillary facilities provided by any revolving lender party to the Senior Secured Credit Facilities (with certain restrictions). Up to $1.46 billion of the revolving credit facility is available to be borrowed by Darling, Darling Canada, Darling NL, Darling Ingredients International Holding B.V. (“Darling BV”), Darling GmbH, and Darling Belgium in U.S. dollars, Canadian dollars, euros, Sterling and other currencies to be agreed and available to each applicable lender. The remaining $40.0 million must be borrowed in U.S. dollars only by Darling. The revolving credit facility will mature on December 9, 2026. The revolving credit facility will be used for working capital needs, general corporate purposes and other purposes not prohibited by the Amended Credit Agreement. For more information regarding the Amended Credit Agreement see Note 1011 of Notes to Consolidated Financial Statements included herein.

•As of DecemberJanuary 28,3, 2024,2026, the Company had availability of $1,159.6$1,324.5 million under the revolving credit facility, taking into account an aggregate of $267.0$601.2 million in outstanding borrowings, $72.7$73.6 million of ancillary facilities and letters of credit issued of $0.7$0.8 million.

•As of DecemberJanuary 28,3, 2024,2026, the Company has borrowed all $400.0$900.0 million under the terms of the term A-1A facility and has repaid $3.0$4.5 million, which when repaid by the Company cannot be reborrowed. The term A-1A facility borrowings are repayable in quarterly installments of 0.25% of the aggregate principle amount of the relevant term A-1A 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 June 25, 2025, the secondeffective anniversarydate of Decemberthe 9,initial 2021borrowing, and continuing until the last day of such quarterly period ending immediately prior to the term A-1A facility maturity date of DecemberJune 9,25, 20262031 and one final installment in the amount of the term A-1A facility then outstanding, due and payable on DecemberJune 9,25, 2026.2031.

•The interest rate applicable to any borrowings under the revolving credit facility will equal (i) the Canadian Overnight Repo Rate Average (CORRA) for borrowings denominated in Canadian dollars or the adjusted term secured overnight financing rate (SOFR) for U.S. dollar borrowings or the adjusted euro interbank rate (EURIBOR) for euro borrowings or the adjusted daily simple Sterling overnight index average (SONIA) for British pound borrowings, in each case plus 1.75%1.50% per annum or (ii) the alternative base rate or the adjusted term SOFR for a one-month interest period(ABR) for U.S. dollar borrowings or the Canadian prime rate for Canadian dollar borrowings or the adjusted daily simple European short term rate (ESTR) for euro borrowings or the adjusted daily SONIA rate for British pound borrowings, in each case plus 0.75%0.50% per annum, and in each case of clauses (i) and (ii), subject to certain step-ups and step-downs based on the Company’s total leverage ratio. The interest rate applicable to any borrowing under the term A-1A facility and term A-3 facility will equalequals the adjusted term SOFR plus 1.875%1.75% per annum or ABR plus 0.75% subject to certain step-ups and step-downs based on the Company’s total leverage ratio with a minimum of 1.50%.1.50% The interest rate applicable to any borrowing under the term A-2 facility and term A-4 facility will equal the adjusted termfor SOFR plus 1.75% per annum subject to certain step-upsborrowings and step-downs based on the Company’s total leverage ratio with a minimum of0.50% 1.00%.for ABR borrowings.

3.625%4.5% Senior Notes due 2026.2032. On MayJune 2,24, 2018,2025, Darling Global Finance B.V. (the “4.5% Issuer”), an indirect, wholly owned subsidiary of Darling, issued and sold €515.0750.0 million aggregate principal amount of 3.625%4.5% Senior Notes due 20262032 (the “3.625%4.5% Notes”). The 3.625%4.5% Notes, which were offered in a private offering, were issued pursuant to a Senior Notes Indenture, dated as of MayJune 2,24, 20182025 (the “3.625%4.5% Indenture”), among Darling Global Finance B.V., Darling, the subsidiary guarantors party thereto from time to time, Citibank,GLAS N.A.,Trust LondonCompany Branch,LLC, as trustee andtrustee, principal paying agent,agent and Citigroup Global Markets Deutschland AG, as principal registrar. The gross proceeds of the offering, together with borrowings under the Company’s revolving credit facility, were used to (i) redeem the Company’s previous 3.625% senior notes and repay or otherwise refinance the Company’s Previous Credit Agreement, and (ii) pay costs, fees and expenses related to the refinancing. The 4.5% 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 are borrowers under or guarantee the Senior Secured CreditFacilities Facilities.(collectively the “4.5% Guarantors”). For a description of the terms of the 3.625%4.5% Notes see Note 1011 of Notes to Consolidated Financial Statements included herein.

Other debt consists of U.S., European, CanadianU.S. and ChineseEuropean overdraft ancillary facilities, U.S., EuropeanU.S. and BrazilianEuropean finance lease obligations and note arrangements in the U.S., Brazil, ChinaBrazil and Europe that are not part of the Amended Credit Agreement, 6% Notes, 5.25% Notes or 3.625%4.5% Notes.

The classification of long-term debt in the Company’s DecemberJanuary 28,3, 20242026 Consolidatedconsolidated Balancebalance Sheetsheet is based on the contractual repayment terms of the 6% Notes, the 5.25% Notes, the 3.625%4.5% Notes and debt issued under the Amended Credit Agreement.

As a result of the Company’s borrowings under its Amended Credit Agreement, the 6% Indenture, the 5.25% Indenture and the 3.625%4.5% 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%4.5% 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 AgreementAgreement, the 6% Indenture, the 5.25% Indenture and the 4.5% 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 structurestructured 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%4.5% 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 affect our ability to comply with our financial covenants” and “- Our ability to repaymake payments on our indebtednessdebt depends in part on the performance of our subsidiaries, including our non-guarantor subsidiaries, and their ability to transfer funds to members of our group liable to make payments on our debt” in Item 1A of this Annual Report on Form 10-K for the fiscal year ended DecemberJanuary 28,3, 2024.2026.

As of DecemberJanuary 28,3, 2024,2026, the Company is in compliance with all financial covenants under the Amended Credit Agreement, and believes it is in compliance with all of the other covenants contained in the Amended Credit Agreement, the 6% Indenture, the 5.25% Indenture and the 3.625%4.5% Indenture.

On DecemberJanuary 28,3, 2024,2026, the Company had working capital of $395.9$518.7 million and its working capital ratio was 1.381.50 to 1 compared to working capital of $857.5$395.9 million and a working capital ratio of 1.861.38 to 1 on December 30,28, 2023.2024. At DecemberJanuary 28,3, 2024,2026, the Company had unrestricted cash of $88.7 million and funds available under the revolving credit facility of $1.32 billion, compared to unrestricted cash of $76.0 million and funds available under the revolving credit facility of $1.16 billion, compared to unrestricted cash of $126.5 million and funds available under the revolving credit facility of $832.5 millionbillion at December 30,28, 2023.2024. The Company diversifies its cash investments by limiting the amounts deposited with any one financial institution.

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, (“DGD” or the “DGD Joint Venture”), a joint venture with Valero Energy Corporation (“Valero”) to convert animal fats, recycled greases, used cooking oil, inedible corn oil, soybean oil, or other feedstocks that become economically and commercially viable into renewable fuels/products, such as renewable diesel and SAF as described in Note 3 (Investment in Unconsolidated Subsidiaries) to the Company’s Consolidated Financial Statements for the period ended AprilJuly 4, 2026 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.

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, including tariff policies, and foreign exchange fluctuations. Global economic conditions continue to be highly volatile due to, among other things, the conflicts in Ukraine and the Middle East and their impacts 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 Company’s results of operations. Any such disturbances or disruptions may also magnify the impact of other risks described in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended January 3, 2026, as filed with the SEC on March 3, 2026.

We expect tariffs on products imported into the U.S. from Brazil, Canada, China, the European Union and Mexico, and other countries upon which tariffs may be imposed, to continue to be met with retaliatory tariffs or other measures from those countries, both of which (U.S. and foreign tariffs) could impact our consolidated results of operations as we export certain of our finished products to and from the U.S. While to date these tariffs have not had a material impact on our results of operations, the extent and duration of tariffs and the resulting impact on macroeconomic conditions and on our business are uncertain and may depend on various factors, including negotiations between the U.S. and affected countries, retaliation imposed by other countries, tariff exemptions, negative sentiment toward U.S. companies and products, and availability of lower cost inputs to our customers. In addition, onfollowing the February 20, 2026,2026 theU.S. Supreme Court ofdecision the United Statesthat declared some of the existing U.S. tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) on certain countries unlawful.unlawful, Itnew remains uncertain how this decision will affect the existingU.S. tariffs orhave whether additional tariffs will bebeen imposed under other laws.laws Meanwhile,which could impact our results of operations. Also, following the U.S. Supreme Court decision, the U.S. Court of International Trade ordered U.S. Customs and Border Protection (“CBP”) to refund IEEPA tariffs. The CBP then established the Consolidated Administration & Processing of Entries (“CAPE”) system to process refunds. The Company and the Company’sits DGD Joint Venture have opportunitiessince applied for meaningfuland made certain tariff recoveriesrecoveries. For further information about the Company’s recoveries, recorded using the loss recovery model, see our Food Segment discussions in excessresults of tariff reimbursements to customers.operations. We will continue to evaluate the nature and extent of the impact from tariffs on our business and consolidated results of operations and actions we can take to minimize their impact.

There is 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, there is legislation regulating 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. These and emerging new rules, with applicability to the Company, require reporting on how sustainability issues (environmental, social, and governance) affect businesses and about the impact of business operations on people and the environment. There has also been increased focus from our stakeholders, including consumers, employees and investors, on our sustainability and ESG practices. We expect that stakeholder expectations with respect to sustainability and ESG expectationsmatters will continue to evolve, which may necessitate additional resources to monitor, report on, and adjust our operations.

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 fluctuations 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 Part I, “Risk Factors” included in the Company’s Form 10-K for the fiscal year ended January 3, 2026.

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, as well as ag-basedagriculture-based alternative ingredients. 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.

Three Months Ended AprilJuly 4, 2026 Compared to Three Months Ended MarchJune 29,28, 2025

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 the firstsecond quarter of fiscal 2026, 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 the firstsecond quarter of fiscal 2026, compared to average Jacobsen and Reuters prices for the firstsecond quarter of fiscal 2025 are as follows:

The following table shows the average Jacobsen and Reuters prices for the firstsecond quarter of fiscal 2026, compared to average Jacobsen and Reuters prices for the fourthfirst quarter of fiscal 20252026:

Segment operating income for the three months ended AprilJuly 4, 2026 was $226.8$555.2 million, which reflects an increase of $198.4$479.3 million or 698.6%631.5% as compared to the three months ended MarchJune 29,28, 2025.

Raw material volume. In the three months ended AprilJuly 4, 2026, the raw material processed by the Company’s Feed Ingredients segment totaled approximately 3.113.08 million metric tons. Compared to the three months ended MarchJune 29,28, 2025, the raw material volume processed in the Feed Ingredients segment increasedremained approximately 0.7%.consistent.

Margins. In the Feed Ingredients segment for the three months ended AprilJuly 4, 2026, the gross margin percentage increased to 25.3%27.8% as compared to 20.3%22.9% for the comparable period of fiscal 2025. The increase was primarily due to an increaseincreases in fat pricesand andprotein prices, improved quality consistencyand consistency, and sellingincreased sales into higher payinghigher-margin end markets.

Segment operating income. Feed Ingredients operating income for the three months ended AprilJuly 4, 2026 was $77.8$150.7 million, an increase of $56.8$110.8 million or 270.5%277.7% as compared to the three months ended MarchJune 29,28, 2025. The increase was primarily due to increases in fat prices,and higherprotein salesprices volumesleading andto an increased gross margin, favorable currency exchange rates and the absence of a contingent consideration expense that was recorded in the same period of fiscal 2025 that more than offset an increase in selling, general and administrative expenses and higher depreciation and amortization expense as compared to the same period of fiscal 2025.

Raw material volume. In the three months ended AprilJuly 4, 2026, the raw material processed by the Company’s Food Ingredients segment totaled approximately 332,000331,000 metric tons. Compared to the three months ended MarchJune 29,28, 2025, the raw material volume processed in the Food Ingredients segment increased approximately 0.9%.2.2%.

Sales. Total net sales increased in the Food Ingredients segment primarily due to increases in collagen demand leading to increases in sales volumes.

Margins. In the Food Ingredients segment for the three months ended AprilJuly 4, 2026, the gross margin percentage decreasedincreased to 28.9%36.3% as compared to 29.3%26.9% for the comparable period of fiscal 2025. The increase was primarily due to the recognition of $18.5 million of net tariff recoveries recorded during the three months ended July 4, 2026.

Segment operating income. Food Ingredients operating income was $50.8$74.9 million for the three months ended AprilJuly 4, 2026, an increase of $9.4$32.3 million or 22.7%75.8% as compared to the three months ended MarchJune 29,28, 2025. The increase in operating income was primarily due to the recognition of approximately $18.5 million of net tariff recoveries recorded and an increase in sales volumes due to increased market demand during the three months ended July 4, 2026 that more than offset an increase in selling, general and administrative expenses as compared to the same period of fiscal 2025.

Raw material volume. In the three months ended AprilJuly 4, 2026, the raw material processed by the Company’s Fuel Ingredients segment totaled approximately 371,000368,000 metric tons. Compared to the three months ended MarchJune 29,28, 2025, the raw material volume processed in the Fuel Ingredients segment decreasedincreased approximately 0.8%.8.9%.

Sales. Total net sales increased in the Fuel Ingredients segment primarily due to higher finished product salesenergy prices.

Margins. In the Fuel Ingredients segment for the three months ended AprilJuly 4, 2026, the gross margin percentage increased to 24.1%21.1% as compared to 19.7%17.3% for the comparable period of fiscal 2025. The increase was primarily due to higher finished product sales prices.

Segment operating income. Fuel Ingredients operating income/(loss) (inclusive of the equity contribution from the DGD Joint Venture) for the three months ended AprilJuly 4, 2026 was $127.2$366.8 million, an increase of $148.1$350.9 million or 708.6%2,206.9% as compared to the same period in fiscal 2025. The increase in earningsoperating isincome was due to a combination of factors, including an increase in production volumes and production tax credits recognized at the DGD Joint Venture, increases in Renewable Identification Numbers (RINs) values in connection with the EPA finalizing the rulemaking process for renewable volume obligations for 2026-27 and an increase in diesel prices which resulted in higher sales prices and margins for the DGD Joint Venture as compared to the same period in fiscal 2025.

During the firstsecond quarter of fiscal 2026, the euro,euro and the Brazilian real strengthened against the U.S. dollar and the Canadian dollar strengthenedwas unchanged against the U.S. dollar as compared to the same period in fiscal 2025. Using actual results for the three months ended AprilJuly 4, 2026 and using the prior year's average currency rate for the three months ended MarchJune 29,28, 2025, foreign currency translation would resulthave resulted in a decrease in operating income of approximately $14.4$4.0 million. The average rates for the three months ended AprilJuly 4, 2026 were €1.00:$1.17,$1.16, R$1.00:$0.19$0.20 and C$1.00:$0.73$0.72 as compared to the average rates for the three months ended MarchJune 29,28, 2025 of €1.00:$1.05,$1.13, R$1.00:$0.17$0.18 and C$1.00:$0.70,$0.72, respectively.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were approximately $22.6$22.4 million during the three months ended AprilJuly 4, 2026, compared to approximately $10.0$17.6 million during the three months ended MarchJune 29,28, 2025, an increase of $12.6$4.8 million. The increase was primarily due to an increase in the Company's incentive based compensation.compensation expense.

Acquisition and Integration Costs. Acquisition and integration costs were approximately $5.0$13.2 million during the three months ended AprilJuly 4, 2026 as compared to $1.5$3.4 million for the same period in fiscal 2025. The increased costs in the firstsecond quarter of fiscal 2026 primarily relate to the Company’s proposed joint venture with Tessenderlo Group NV and the announced acquisition of UPI Bovinos NewCo.NewCo (the “Bovinos Acquisition”).

Depreciation and Amortization. Depreciation and amortization charges were approximately $1.5 million for the three months ended AprilJuly 4, 2026 asand comparedJune to28, $1.62025, million for the three months ended March 29, 2025.respectively.

OtherInterest Income/(expense),Expense. net. OtherInterest expense was $(3.0)$55.5 million induring the three months ended AprilJuly 4, 2026, compared to other income of $3.3$51.9 million forduring the three months ended MarchJune 29,28, 2025.2025, an increase of $3.6 million. The changeincrease fromin income tointerest expense was primarily due to a decrease in interest incomeassociated with the 4.5% Notes as compared to interest expense in the same period in fiscal 2025.

Income Taxes. The Company recorded income tax expense of $38.6$110.6 million for the three months ended AprilJuly 4, 2026, compared to an income tax benefitexpense of $1.2$4.1 million recorded in the three months ended MarchJune 29,28, 2025, an increase in tax expense of $39.8$106.5 million, which was primarily due to an increase in pre-tax income. The effective tax rates for the three months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025 was 22.0%22.1% and 4.6%,22.2%, respectively. The effective tax rate for the three months ended AprilJuly 4, 2026 differed slightly from the federal statutory rate of 21% due primarily to biofuel tax incentives, the relative mix of earnings among jurisdictions with different tax rates (including foreign withholding taxes and state income taxes), a tax deductible foreign exchange loss related to an internal restructuring, Pillar 2 tax related to U.S. operations, and certain losses that provided no tax benefit. The effective tax rate for the three months ended MarchJune 29,28, 2025 differed from the federal statutory rate of 21% due primarily to biofuel tax incentives, the relative mix of earnings among jurisdictions with different tax rates (including foreign withholding taxes and state income taxes), certain taxable income inclusion items in the U.S. based on foreign earnings,and certain losses that provided no tax benefit and discrete items including settlement of stock-based compensation awards.benefit. The Company’s effective tax rate excluding the impact of the biofuel tax incentives and discrete items was 32.0%26.9% for the three months ended AprilJuly 4, 2026, compared to 21.7%30.4% for the three months ended MarchJune 29,28, 2025.

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 expense, taxes, depreciation and amortization) is not calculated identically by all 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, restructuring and asset impairment charges, acquisition and integration costs, change in fair value of contingent consideration, foreign currency loss/(gain), net income attributable to non-controlling interests, interest expense, income tax provision,expense, loss on early retirement of debt, 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, non-cash and certain other items that may vary for different companies for reasons unrelated to overall operating performance and also believes this information is useful to investors.

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 4.5% Notes that were outstanding at AprilJuly 4, 2026. 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 4.5% Notes, as those definitions permit further adjustments to reflect certain other nonrecurring costs, non-cash charges and cash dividends from the DGD Joint Venture.

FirstSecond Quarter 2026 as compared to FirstSecond Quarter 2025

(1) The average rates for the three months ended AprilJuly 4, 2026 were €1.00:$1.17,$1.16 R$1.00:$0.19$0.20 and C$1.00:$0.73$0.72 as compared to the average rates for the three months ended MarchJune 29,28, 2025 of €1.00:$1.05,$1.13, R$1.00:$0.17$0.18 and C$1.00:$0.70,$0.72, respectively.