Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth below under the heading "Forward Looking Statements"
and elsewhere in this report, and under the heading "Risk Factors" in Part I,
Item 1A in the Company's Annual Report on Form 10-K for the fiscal year ended
January 1, 2022, filed with the SEC on March 1, 2022 and in the Company's other
public filings with the SEC.

The following discussion should be read in conjunction with the unaudited consolidated financial statements and related notes thereto contained in this report.



Overview

Darling Ingredients Inc. ("Darling", and together with its subsidiaries, the
"Company" or "we," "us" or "our") 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. With operations on five continents, the Company collects
and transforms all aspects of animal by-product streams into useable and
specialty ingredients, such as collagen, edible fats, feed-grade fats, animal
proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow
grease, fuel feedstocks, green energy, natural casings and hides. The Company
also recovers and converts recycled oils (used cooking oil and animal fats) into
valuable feed and collects and processes residual bakery products into feed
ingredients. In addition, the Company provides environmental services, such as
grease trap collection and disposal services to food service establishments. The
Company sells its products domestically and internationally and operates within
three industry segments: Feed Ingredients, Food Ingredients and Fuel
Ingredients.

The Feed Ingredients operating segment includes the Company's global activities
related to (i) the collection and processing of beef, poultry and pork animal
by-products in North America and Europe into non-food grade oils and protein
meals, (ii) the collection and processing of bakery residuals in North America
into Cookie Meal®, which is predominantly used in poultry and swine rations,
(iii) the collection and processing of used cooking oil in North America into
non-food grade fats, (iv) the collection and processing of porcine and bovine
blood in China, Europe, North America and Australia into blood plasma powder and
hemoglobin, (v) the processing of selected portions of slaughtered animals into
a variety of meat products for use in pet food in Europe and North America, (vi)
the processing of cattle hides and hog skins in North America, (vii) the
production of organic fertilizers using protein produced from the Company's
animal by-products processing activities in North America and Europe, (viii) the
rearing and processing of black soldier fly larvae into specialty proteins for
use in animal feed and pet food in North America, and (ix) the provision of
grease trap services to food service establishments in North America. Non-food
grade oils and fats produced and marketed by the Company are principally sold to
third parties to be used as ingredients in animal feed and pet food, as an
ingredient for the production of renewable diesel and biodiesel, or to the
oleo-chemical industry to be used as an ingredient in a wide variety of
industrial applications. Protein meals, blood plasma powder and hemoglobin
produced and marketed by the Company are sold to third parties to be used as
ingredients in animal feed, pet food and aquaculture.

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

The Fuel Ingredients operating segment includes the Company's global activities
related to (i) the Company's share of the results of its equity investment in
Diamond Green Diesel Holdings LLC, a joint venture with Valero Energy
Corporation ("Valero") to convert animal fats, recycled greases, used cooking
oil, inedible corn oil, soybean oil, or other feedstocks that become
economically and commercially viable into renewable diesel ("DGD" or the "DGD
Joint Venture") as described in Note 3 (Investment in Unconsolidated
Subsidiaries) to the Company's Consolidated Financial Statements for the period
ended April 2, 2022 included herein, (ii) the conversion of organic sludge and
food waste into biogas in
                                       25
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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.

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

Economic Conditions and Uncertainties

Global Economic Conditions



We operate globally and have operations in numerous countries. As such, we are
exposed to, and impacted by global macroeconomic factors, U.S. and foreign
government policies and foreign exchange fluctuations. Global economic
conditions continue to be highly volatile due to, among other things, the
conflict in Ukraine and its impact on volatility in energy and other commodity
prices, 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 1, 2022, as filed with the
SEC on March 1, 2022.

Energy Policies of U.S. and Foreign Governments



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

Climate Change



There is a growing global concern that carbon dioxide and other greenhouse gases
in the atmosphere may have an adverse impact on global temperatures, weather
patterns and the frequency of extreme weather and natural disasters. We are
subject to physical, operational, transitional and financial risks associated
with climate change and global, regional and local weather conditions, as well
as 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. 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 has
been increased focus from our stakeholders, including consumers, employees and
investors, on corporate environmental, social, and governance ("ESG") practices,
including practices related to the causes and impacts of climate change. We
expect that stakeholder expectations with respect to ESG expectations will
continue to evolve rapidly, which may necessitate additional resources to
monitor, report on, and adjust our operations.

COVID-19



Our global operations continue to expose us to risks associated with the
COVID-19 pandemic as the potential impacts of COVID-19 resurgences and variants
have resulted in continued uncertainty as to the pandemic's further duration and
scope. Various measures have been implemented at various times around the world
to try to reduce the spread of the virus, including travel bans and
restrictions, quarantines, curfews, stay-at-home restrictions and other public
health and safety measures. The health and well-being of our employees continues
to be a priority for us, and we will continue, as appropriate, to implement
operational guidelines in our organization consistent with the applicable
governmental and
                                       26
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regulatory policies in the geographies we operate intended to protect our
employees and prevent the spread of the virus. The extent to which COVID-19
impacts the Company's and DGD's business and financial results will depend on
future developments, which are highly uncertain and cannot be predicted and may
vary by jurisdiction and market, including the duration and scope of the
pandemic, the emergence and spread of new variants of the virus, such as the
omicron and delta variants, the likelihood of a resurgence of positive cases,
the development, availability and acceptance of effective treatments and
vaccines, the speed at which such vaccines are administered, the efficacy of
current vaccines against evolving strains or variants of the virus, global
economic conditions during and after the pandemic and governmental actions that
have been taken or may be taken in the future in response to the pandemic, among
others.

For additional information on risk factors that could impact our results, please
refer to "Risk Factors" in Part I, Item 1A of the Company's Form 10-K for the
fiscal year ended January 1, 2022, as filed with the SEC on March 1, 2022.

Operating Performance Indicators



  The Company monitors the performance of its business segments using key
financial metrics such as results of operations, non-GAAP measurements (Adjusted
EBITDA), segment operating income, raw material processed, gross margin
percentage, foreign currency translation, and corporate activities. The
Company's operating results can vary significantly due to changes in factors
such as the fluctuation in commodity prices and energy prices, weather
conditions, crop harvests, government policies and programs, changes in global
demand, changes in standards of living, protein consumption, and global
production of competing ingredients. Due to these unpredictable factors that are
beyond the control of the Company, forward-looking financial or operational
estimates are not provided. The Company is exposed to certain risks associated
with a business that is influenced by agricultural-based commodities. These
risks are further described in Item 1A of Part I, "Risk Factors" included in the
Company's Form 10-K for the fiscal year ended January 1, 2022.

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

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



The reporting currency for the Company's financial statements is the U.S.
dollar. The Company operates in over 15 countries and therefore, certain of the
Company's assets, liabilities, revenues and expenses are denominated in
functional currencies other than the U.S. dollar, primarily in the Euro,
Brazilian real, Chinese renminbi, Canadian dollar and Polish zloty. To prepare
the Company's consolidated financial statements, assets, liabilities, revenues,
and expenses must be translated into U.S. dollars at the applicable exchange
rate. As a result, increases or decreases in the value of the U.S. dollar
against these other currencies will affect the amount of these items recorded in
the Company's consolidated financial statements, even if their value has not
changed in the functional currency. This could have a significant impact on
                                       27
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the Company's results, if such increase or decrease in the value of the U.S. dollar relative to these other currencies is substantial.

Results of Operations

Three Months Ended April 2, 2022 Compared to Three Months Ended April 3, 2021

Operating Performance Metrics

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



•Finished product commodity prices
•Segment results
•Foreign currency exchange
•Corporate activities
•Non-U.S. GAAP measures

These indicators and their importance are discussed below.

Finished Product Commodity Prices



Prices for finished product commodities that the Company produces in the Feed
Ingredients segment are reported each business day on the Jacobsen Index (the
"Jacobsen"), an established North American trading exchange price publisher. The
Jacobsen reports industry sales from the prior day's activity by product.
Included on the Jacobsen are reported prices for finished products such as
protein (primarily meat and bone meal ("MBM"), poultry meal ("PM") and feather
meal ("FM")), hides, fats (primarily bleachable fancy tallow ("BFT") and yellow
grease ("YG")) and corn, which is a substitute commodity for the Company's
bakery by-product ("BBP") as well as a range of other branded and value-added
products, which are products of the Company's Feed Ingredients segment. In the
United States, the Company regularly monitors the Jacobsen for MBM, PM, FM, BFT,
YG and corn because it provides a daily indication of the Company's U.S. revenue
performance against business plan benchmarks. In Europe, the Company regularly
monitors Thomson Reuters ("Reuters") to track the competing commodities palm oil
and soy meal.

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

Average Jacobsen and Reuters prices (at the specified delivery point) for the
first quarter of fiscal 2022, compared to average Jacobsen and Reuters prices
for the first quarter of fiscal 2021 are as follows:

                                       28
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                                              Avg. Price             Avg. Price
                                             1st Quarter             1st Quarter                                                   %
                                                 2022                   2021               Increase/(Decrease)            Increase/(Decrease)
Jacobsen:
MBM (Illinois)                               $ 317.22/ton           $ 386.97/ton              $ (69.75)/ton                                (18.0) %
Feed Grade PM (Mid-South)                    $ 367.03/ton           $ 357.79/ton                $ 9.24/ton                                   2.6  %
Pet Food PM (Mid-South)                      $ 761.69/ton           $ 845.08/ton              $ (83.39)/ton                                 (9.9) %
Feather meal (Mid-South)                     $ 525.32/ton           $ 539.02/ton              $ (13.70)/ton                                 (2.5) %
BFT (Chicago)                                $ 71.39/cwt           $    46.42/cwt              $ 24.97/cwt                                  53.8  %
YG (Illinois)                                $ 53.91/cwt            $  34.45/cwt               $ 19.46/cwt                                  56.5  %
Corn (Illinois)                             $ 6.90/bushel           $ 5.56/bushel             $ 1.34/bushel                                 24.1  %
Reuters:
Palm Oil (CIF Rotterdam)                    $ 1,555.00/MT           $ 1,084.00/MT              $ 471.00/MT                                  43.5  %
Soy meal (CIF Rotterdam)                     $ 576.00/MT             $ 535.00/MT                $ 41.00/MT                                   7.7  %



The following table shows the average Jacobsen and Reuters prices for the first
quarter of fiscal 2022, compared to average Jacobsen and Reuters prices for the
fourth quarter of fiscal 2021.

                                              Avg. Price             Avg. Price
                                             1st Quarter             4th Quarter                                                   %
                                                 2022                   2021               Increase/(Decrease)            Increase/(Decrease)
Jacobsen:
MBM (Illinois)                               $ 317.22/ton           $ 261.79/ton               $ 55.43/ton                                  21.2  %
Feed Grade PM (Mid-South)                    $ 367.03/ton           $ 335.07/ton               $ 31.96/ton                                   9.5  %
Pet Food PM (Mid-South)                      $ 761.69/ton           $ 650.25/ton               $ 111.44/ton                                 17.1  %
Feather meal (Mid-South)                     $ 525.32/ton           $ 444.61/ton               $ 80.71/ton                                  18.2  %
BFT (Chicago)                                $ 71.39/cwt           $    66.15/cwt             $    5.24/cwt                                  7.9  %
YG (Illinois)                                $ 53.91/cwt            $  44.30/cwt               $  9.61/cwt                                  21.7  %
Corn (Illinois)                             $ 6.90/bushel           $ 5.84/bushel             $ 1.06/bushel                                 18.2  %
Reuters:
Palm Oil (CIF Rotterdam)                    $ 1,555.00/MT           $ 1,349.00/MT              $ 206.00/MT                                  15.3  %
Soy meal (CIF Rotterdam)                     $ 576.00/MT             $ 466.00/MT               $ 110.00/MT                                  23.6  %



Segment Results

Segment operating income for the three months ended April 2, 2022 was $232.9
million, which reflects an increase of $33.4 million or 16.7% as compared to the
three months ended April 3, 2021.

(in thousands, except percentages) Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Three Months Ended April 2, 2022 Net Sales

$       879,438    $       

354,814 $ 132,082 $ - $ 1,366,334 Cost of sales and operating expenses

              645,523            270,312            104,742             -      1,020,577
Gross Margin                                      233,915             84,502             27,340             -        345,757

Gross Margin %                                       26.6  %            23.8  %            20.7  %          -  %        25.3  %

Gain on sale of assets                               (341)                (9)               (39)            -           (389)
Selling, general and administrative
expenses                                           56,209             26,844              3,920        15,059        102,032

Acquisition and integration costs                       -                  -                  -         3,773          3,773
Depreciation and amortization                      54,350             15,450              6,674         2,772         79,246
Equity in net income of Diamond Green
Diesel                                                  -                  -             71,804             -         71,804
Segment operating income/(loss)                   123,697             42,217             88,589       (21,604)       232,899

Equity in net income of other
unconsolidated subsidiaries                         1,360                  -                  -             -          1,360
Segment income/(loss)                             125,057             42,217             88,589       (21,604)       234,259



                                       29

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(in thousands, except percentages) Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Three Months Ended April 3, 2021 Net Sales

$       651,444    $       

298,065 $ 97,207 $ - $ 1,046,716 Cost of sales and operating expenses

              474,581            226,413             71,790             -        772,784
Gross Margin                                      176,863             71,652             25,417             -        273,932

Gross Margin %                                       27.1  %            24.0  %            26.1  %          -  %        26.2  %

Loss/(gain) on sale of assets                        (139)                55                 20             -            (64)
Selling, general and administrative
expenses                                           52,620             25,191              4,867        14,720         97,398
Restructuring and impairment charges                    -                  -                778             -            778

Depreciation and amortization                      54,609             14,883              6,155         2,887         78,534
Equity in net income of Diamond Green
Diesel                                                  -                  -            102,225             -        102,225
Segment operating income/(loss)                    69,773             31,523            115,822       (17,607)       199,511

Equity in net income of other
unconsolidated subsidiaries                           612                  -                  -             -            612
Segment income/(loss)                              70,385             31,523            115,822       (17,607)       200,123



Feed Ingredients Segment

Raw material volume. In the three months ended April 2, 2022, the raw material
processed by the Company's Feed Ingredients segment totaled approximately 2.31
million metric tons. Compared to the three months ended April 3, 2021, overall
raw material volume processed in the Feed Ingredients segment increased
approximately 3.6%.

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



                                                                                        Used Cooking
                            Fats     Proteins     Other Rendering     Total Rendering       Oil        Bakery     Other      Total
Net sales three months
ended April 3, 2021      $ 229.0    $  255.5    $           43.0    $          527.5    $    51.0    $  63.1    $   9.8    $ 651.4
Increase in sales
volumes                      3.7         4.1                   -                 7.8          4.4        2.9          -       15.1
Increase in finished
product prices             138.9        17.1                   -               156.0         39.5       12.5          -      208.0
Decrease due to currency
exchange rates              (3.2)       (6.5)               (0.4)              (10.1)           -          -          -      (10.1)
Other change                   -           -                14.9                14.9            -          -        0.1       15.0
Total change               139.4        14.7                14.5               168.6         43.9       15.4        0.1      228.0
Net sales three months
ended April 2, 2022      $ 368.4    $  270.2    $           57.5    $          696.1    $    94.9    $  78.5    $   9.9    $ 879.4



Margins. In the Feed Ingredients segment for the three months ended April 2,
2022, the gross margin percentage decreased to 26.6% as compared to 27.1% for
the comparable period of fiscal 2021. The decrease in margin is primarily due to
higher overall energy prices as compared to fiscal 2021.

Segment operating income. Feed Ingredients operating income for the three months
ended April 2, 2022 was $123.7 million, an increase of $53.9 million or 77.2% as
compared to the three months ended April 3, 2021. The increase is due to higher
overall fat finished product prices and higher raw material volumes as compared
to fiscal 2021.

Food Ingredients Segment

Raw material volume. In the three months ended April 2, 2022, the raw material
processed by the Company's Food Ingredients segment totaled approximately
278,000 metric tons. Compared to the three months ended April 3, 2021, overall
raw material volume processed in the Food Ingredients segment increased
approximately 1.5%.

Sales. Net sales increased in the Food Ingredients segment primarily due to higher sales prices and volumes in the collagen and edible fat sales markets.


                                       30
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Margins. In the Food Ingredients segment for the three months ended April 2,
2022, the gross margin percentage decreased to 23.8% as compared to 24.0% for
the comparable period of fiscal 2021. The decrease in margin is primarily due to
higher overall energy prices as compared to fiscal 2021.

Segment operating income. Food Ingredients operating income was $42.2 million
for the three months ended April 2, 2022, an increase of $10.7 million or 34.0%
as compared to the three months ended April 3, 2021. The increase is primarily
due to higher sales prices and volumes in collagen markets that more than offset
higher energy prices as compared to fiscal 2021.

Fuel Ingredients Segment



Raw material volume. In the three months ended April 2, 2022, the raw material
processed by the Company's Fuel Ingredients segment totaled approximately
340,000 metric tons. Compared to the three months ended April 3, 2021, overall
raw material volume processed in the Fuel Ingredients segment increased
approximately 3.7%.

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



Margins. In the Fuel Ingredients segment (exclusive of the equity contribution
from the DGD Joint Venture) for the three months ended April 2, 2022, the gross
margin percentage decreased to 20.7% as compared to 26.1% for the comparable
period of fiscal 2021. The decrease is primarily due to higher raw material
costs and higher energy prices as compared to fiscal 2021.

Segment operating income. The Company's Fuel Ingredients segment operating
income (inclusive of the equity contribution from the DGD Joint Venture) for the
three months ended April 2, 2022 was $88.6 million, a decrease of $27.2 million
or (23.5)% as compared to the same period in fiscal 2021. The decrease is
primarily attributed to higher raw material costs at DGD, a catalyst turnaround
at DGD during the quarter and also attributed to lower values for LCFS credits
that more than offset higher blenders tax credits and higher fuel and Renewable
Identification Number prices as compared to the same period in fiscal 2021.

Foreign Currency Exchange



  During the first quarter of fiscal 2022, the euro weakened against the U.S.
dollar as compared to the same period in fiscal 2021. Using actual results for
the three months ended April 2, 2022 and using the prior year's average currency
rate for the three months ended April 3, 2021, foreign currency translation
would result in an increase in operating income of approximately $7.2 million.
The average rate assumptions used in this calculation were the actual fiscal
average rates for the three months ended April 2, 2022 of €1.00:$1.12 and
C$1.00:$0.79 as compared to the average rates for the three months ended April
3, 2021 of €1.00:$1.20 and C$1.00:$0.79, respectively.

Corporate Activities



Selling, General and Administrative Expenses. Selling, general and
administrative expenses was approximately $15.1 million during the three months
ended April 2, 2022, compared to approximately $14.7 million during the three
months ended April 3, 2021, an increase of $0.4 million.  The increase is
primarily due to higher costs for information technology, travel, legal and
insurance premiums that more than offset a decrease in corporate related
benefits.

Restructuring and Impairment charges. Restructuring and impairment charges represents additional costs included in the three months ended April 3, 2021 related to the announced closure of the Company's biodiesel activities in December 2020.



Acquisition and Integration costs. Acquisition and integration costs were
approximately $3.8 million during the three months ended April 2, 2022. These
include costs related to the Company's May 2, 2022 acquisition of all the shares
of Valley Proteins, the purchase of all the shares of Op de Beeck in February
2022 and other potential acquisitions.

Depreciation and Amortization. Depreciation and amortization charges were approximately $2.8 million during the three months ended April 2, 2022, as compared to approximately $2.9 million for the same period in fiscal 2021.



Interest Expense. Interest expense was $15.6 million during the three months
ended April 2, 2022, compared to $16.4 million during the three months ended
April 3, 2021, a decrease of $0.8 million. The decrease is primarily due to
lower amortization of deferred loan costs and lower interest on the Term loan B
as a result of partial note pay-downs that more than offset an increase in
revolver interest due to increased revolver borrowings.
                                       31
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Foreign Currency Loss.  Foreign currency losses were $1.1 million for the three
months ended April 2, 2022 as compared to foreign currency losses of $0.4
million for the three months ended April 3, 2021. The increase is due primarily
to increased losses on the revaluation of non-functional currency assets and
liabilities as compared to the same period in fiscal 2021.

Other Expense, net. Other expense was $0.7 million in the three months ended
April 2, 2022, compared to other expense of $1.2 million for the three months
ended April 3, 2021. The decrease in other expense was primarily due to a
decrease in the non-service component of pension expense and an increase in
interest income as compared to the same period in fiscal 2021.

Equity in Net Income in Investment of Other Unconsolidated Subsidiaries. The
change in this line item is not significant and primarily represents the
Company's pro rata share of the net income from foreign unconsolidated
subsidiaries.
Income Taxes. The Company recorded income tax expense of $26.1 million for the
three months ended April 2, 2022, compared to $28.7 million recorded in the
three months ended April 3, 2021, a decrease of $2.6 million, which is primarily
due to an increase in the amount of biofuel tax incentives and discrete tax
benefits from stock-based compensation recognized during the three months ended
April 2, 2022. The effective tax rate for the three months ended April 2, 2022
and April 3, 2021 is 12.0% and 15.8%, respectively. The effective tax rate for
the three months ended April 2, 2022 and April 3, 2021 differs from the federal
statutory rate of 21% due primarily to the relative mix of earnings among
jurisdictions with different tax rates (including foreign withholding taxes and
state income taxes), biofuel tax incentives, and discrete items, including
excess tax benefits from stock-based compensation. The Company's effective tax
rate excluding biofuel tax incentives and discrete items is 25.7% for the three
months ended April 2, 2022, compared to 26.5% for the three months ended April
3, 2021.

Non-U.S. GAAP Measures

Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should
not be considered as an alternative to net income, as a measure of operating
results, or as an alternative to cash flow as a measure of liquidity. It is
presented here not as an alternative to net income, but rather as a measure of
the Company's operating performance. Since EBITDA (generally, net income plus
interest 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,
acquisition and integration costs, goodwill and long-lived asset impairment,
interest expense, (income)/loss from discontinued operations, net of tax, income
tax provision, other income/(expense) and equity in net (income)/loss of
unconsolidated subsidiary. Management believes that Adjusted EBITDA is useful in
evaluating the Company's operating performance compared to that of other
companies in its industry because the calculation of Adjusted EBITDA generally
eliminates the effects of financing, income taxes and certain non-cash and other
items that may vary for different companies for reasons unrelated to overall
operating performance.

The Company's management uses Adjusted EBITDA as a measure to evaluate
performance and for other discretionary purposes. In addition to the foregoing,
management also uses or will use Adjusted EBITDA to measure compliance with
certain financial covenants under the Company's Senior Secured Credit
Facilities, 5.25% Notes and 3.625% Notes that were outstanding at April 2,
2022. However, the amounts shown below for Adjusted EBITDA differ from the
amounts calculated under similarly titled definitions in the Company's Senior
Secured Credit Facilities, 5.25% Notes and 3.625% Notes, as those definitions
permit further adjustments to reflect certain other non-recurring costs,
non-cash charges and cash dividends from the DGD Joint Venture. Additionally,
the Company evaluates the impact of foreign exchange on operating cash flow,
which is defined as segment operating income (loss) plus depreciation and
amortization.

Reconciliation of Net Income to (Non-GAAP) Adjusted EBITDA and (Non-GAAP) Pro
Forma Adjusted EBITDA
First Quarter 2022 As Compared to First Quarter 2021

                                       32
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                                                                        Three Months Ended
                                                                     April 2,         April 3,
(dollars in thousands)                                                 2022             2021
Net income attributable to Darling                               $     188,053    $     151,766
Depreciation and amortization                                           79,246           78,534
Interest expense                                                        15,603           16,428
Income tax expense                                                      26,083           28,708
Restructuring and asset impairment charges                                   -              778
Acquisition and integration costs                                        3,773                -
Foreign currency loss                                                    1,100              410
Other expense, net                                                         742            1,159

Equity in net income of Diamond Green Diesel                           (71,804)        (102,225)
Equity in net income of other unconsolidated subsidiaries               (1,360)            (612)
Net income attributable to non-controlling interests                     2,678            1,652
Darling's Adjusted EBITDA                                        $     

244,114 $ 176,598



Foreign currency exchange impact (1)                                     7,227                -

Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP) $ 251,341 $ 176,598



DGD Joint Venture Adjusted EBITDA (Darling's Share)              $      

86,560 $ 108,200



Darling plus Darling's share of DGD Joint Venture Adjusted
EBITDA                                                           $     330,674    $     284,798



(1) The average rates assumption used in this calculation was the actual fiscal
average rate for the three months ended April 2, 2022 of €1.00:$1.12 and
C$1.00:$0.79 as compared to the average rate for the three months ended April 3,
2021 of €1.00:$1.20 and C$1.00:$0.79, respectively.

FINANCING, LIQUIDITY AND CAPITAL RESOURCES

Credit Facilities

Indebtedness



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


Senior Notes:
5.25 % Notes due 2027                             $   500,000
Less unamortized deferred loan costs                   (4,753)
Carrying value of 5.25% Notes due 2027            $   495,247

3.625 % Notes due 2026 - Denominated in euros $ 568,972 Less unamortized deferred loan costs

                   (4,647)
Carrying value of 3.625% Notes due 2026           $   564,325

Amended Credit Agreement:
Term Loan B                                       $   200,000
Less unamortized deferred loan costs                   (1,774)
Carrying value of Term Loan B                     $   198,226

Revolving Credit Facility:
Maximum availability                              $ 1,500,000
Ancillary Facilities                                   50,407
Borrowings outstanding                                396,007
Letters of credit issued                                3,849
Availability                                      $ 1,049,737

Other Debt                                        $    59,457



                                       33

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During the first three months of fiscal 2022, the U.S. dollar strengthened as
compared to the euro and weakened as compared to the Canadian dollar at January
1, 2022. Using the euro and Canadian based debt outstanding at April 2, 2022 and
comparing the closing balance sheet rate at April 2, 2022 to the balance sheet
rate at January 1, 2022, the U.S. dollar debt balances of euro based debt
decreased by approximately $14.0 million and the U.S. dollar debt balance of
Canadian based debt increased approximately $0.2 million, at April 2, 2022. The
closing balance sheet rate assumption used in this calculation was the actual
fiscal closing balance sheet rate at April 2, 2022 of €1.00:$1.1048 and
C$1.00:$0.800667 as compared to the closing balance sheet rate at January 1,
2022 of €1.00:$1.13200 and C$1.00:$0.785266.

Senior Secured Credit Facilities. On January 6, 2014, Darling, Darling
International Canada Inc. ("Darling Canada") and Darling International NL
Holdings B.V. ("Darling NL") entered into a Second Amended and Restated Credit
Agreement (as subsequently amended, the "Amended Credit Agreement"), restating
its then existing Amended and Restated Credit Agreement dated September 27,
2013, with the lenders from time to time party thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and the other agents from time to time party
thereto. Effective March 2, 2022, the Company, and certain of its subsidiaries
entered into an amendment (the "Eighth Amendment") with its lenders to the
Amended Credit Agreement. Among other things, the Eighth Amendment (a) added a
new delayed draw incremental term facility (the "term A-2 facility") and new
incremental term loans pursuant thereto, in an aggregate principal amount of up
to $500.0 million, which is available to the Company for general corporate
purposes, including acquisitions and capital expenditures, and will mature on
December 9, 2026 and (b) updated and modified certain other terms and provisions
of the Amended Credit Agreement to reflect the addition of the term A-2 facility
to the Amended Credit Agreement. The Amended Credit Agreement provides for
senior secured credit facilities in the aggregate principal amount of $2.925
billion comprised of (i) the Company's $525.0 million term loan B facility, (ii)
the Company's $400.0 million delayed draw term A-1 loan, (iii) the Company's
$500.0 million delayed draw term A-2 loan and (iv) the Company's $1.5 billion
five-year revolving loan facility (up to $150.0 million of which will be
available for a letter of credit subfacility and $50.0 million of which will be
available for a swingline sub-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 loan 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 loan 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.

•As of April 2, 2022, the Company had availability of $1,049.7 million under the
revolving credit facility, taking into account that the Company had $396.0
million in outstanding borrowings, $50.4 million in ancillary facilities and
letters of credit issued of $3.8 million.

•As of April 2, 2022, the Company had full availability under its delayed draw
term A-1 facility commitment of $400.0 million. Under the terms of the delayed
draw term A-1 facility, the Company can take up to two years or until December
9, 2023 to borrow under the term A-1 facility commitment in U.S. dollars.
Amounts borrowed under the term A-1 facility that are repaid by the Company
cannot be reborrowed. The term A-1 facility borrowings are repayable in
quarterly installments of 0.25% of the aggregate principle amount of the
relevant term A-1 facility on the last day of each March, June, September and
December of each year commencing on the last day of such month falling on or
after the last day of the first full fiscal quarter following the second
anniversary of December 9, 2021 and continuing until the last day of such
quarterly period ending immediately prior to the term A-1 facility maturity date
of December 9, 2026 and one final installment in the amount of the term A-1
facility then outstanding, due and payable on December 9, 2026.

•As of April 2, 2022, the Company had full availability under its delayed draw
term A-2 facility commitment of $500.0 million. Under the terms of the delayed
draw term A-2 facility, the Company can take up to one year or until March 2,
2023 to borrow under the term A-2 facility commitment in U.S. dollars. Amounts
borrowed under the term A-2 facility that are repaid by the Company cannot be
reborrowed. The term A-2 facility borrowings are repayable in quarterly
installments of 0.625% of the aggregate principle amount of the relevant term
A-2 facility on the last day of each March, June, September and December of each
year commencing on the last day of such month falling on or after the last day
of the first full fiscal quarter following the earlier of term A-2 Commitment
termination date or the first anniversary of March 2, 2022 and continuing until
the last day of such quarterly period ending March 31, 2025, and quarterly
installments of 1.25% of the aggregate principle amount of the relevant term A-2
facility due and payable on the last day of each March, June, September and
December of each year commencing on the last day of such month falling on or
after the last day of the first full fiscal quarter ending June 30, 2025 and
continuing until the last day of the such quarterly period ending immediately
prior to the term
                                       34
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A-2 facility maturity date of December 9, 2026 and one final installment in the
amount of the term A-2 facility then outstanding, due and payable on December 9,
2026.

•As of April 2, 2022, the Company has borrowed all $525.0 million under the
terms of the term loan B facility and repaid $325.0 million, which when repaid,
cannot be reborrowed. As a result of early payments made by the Company under
the term loan B facility only one final installment of the relevant term loan B
facility then outstanding is due on December 18, 2024. The term loan B facility
will mature on December 18, 2024.

•The interest rate applicable to any borrowings under the revolving loan
facility will equal the adjusted term secured overnight financing rate (SOFR)
for U.S. dollar borrowings or the adjusted euro interbank rate (EURIBOR) for
euro borrowings or the adjusted daily simple Sterling overnight index average
(SONIA) for British pound borrowings or CDOR for Canadian dollar borrowings plus
1.25% per annum or base rate or the adjusted term SOFR for U.S. dollar
borrowings or Canadian prime rate for Canadian dollar borrowings or the adjusted
daily simple European short term rate (ESTR) for euro borrowings or the adjusted
daily SONIA rate for British pound borrowings plus 0.25% per annum subject to
certain step-ups or step-downs based on the Company's total leverage ratio. The
interest rate applicable to any borrowing under the delayed draw term A-1
facility will equal the adjusted term SOFR plus a minimum of 1.50% per annum
subject to certain step-ups based on the Company's total leverage ratio. The
interest rate applicable to any borrowing under the delayed draw term A-2
facility will equal the adjusted term SOFR plus a minimum of 1.00% per annum
subject to certain step-ups based on the Company's total leverage ratio. The
interest rate applicable to any borrowings under the term loan B facility will
equal the base rate plus 1.00% or LIBOR plus 2.00%.

5.25 % Senior Notes due 2027. On April 3, 2019, Darling issued and sold $500.0
million aggregate principal amount of 5.25% Senior Notes due 2027 (the "5.25%
Notes"). The 5.25% Notes, which were offered in a private offering, were issued
pursuant to a Senior Notes Indenture, dated as of April 3, 2019 (the "5.25%
Indenture"), among Darling, the subsidiary guarantors party thereto from time to
time, and Regions Bank, as trustee. The 5.25% Notes are guaranteed on a senior
unsecured basis by Darling and all of Darling's restricted subsidiaries (other
than foreign subsidiaries).

3.625% Senior Notes due 2026. On May 2, 2018, Darling Global Finance B.V. issued
and sold €515.0 million aggregate principal amount of 3.625% Senior Notes due
2026 (the "3.625% Notes"). The 3.625% Notes, which were offered in a private
offering, were issued pursuant to a Senior Notes Indenture, dated as of May 2,
2018 (the "3.625% Indenture"), among Darling Global Finance B.V., Darling, the
subsidiary guarantors party thereto from time to time, Citibank, N.A., London
Branch, as trustee and principal paying agent, and Citigroup Global Markets
Deutschland AG, as principal registrar. The 3.625% Notes are guaranteed on a
senior unsecured basis by Darling and all of Darling's restricted subsidiaries
(other than any foreign subsidiary or any receivable entity) that guarantee the
Senior Secured Credit Facilities.

Other debt consists of U.S and European overdraft ancillary facilities and finance lease obligations, note arrangements in Brazil, China and European notes that are not part of the Company's Amended Credit Agreement, 5.25% Notes or 3.625% Notes.



The classification of long-term debt in the Company's April 2, 2022 consolidated
balance sheet is based on the contractual repayment terms of the 5.25% Notes,
the 3.625% Notes and debt issued under the Amended Credit Agreement.

On May 2, 2022, the Company acquired Valley Proteins for approximately $1.2
billion in cash. The Company financed this transaction by borrowing all of the
Company's delayed draw term A-1 facility of $400.0 million and delayed draw term
A-2 facility of $500.0 million and the remainder through revolver borrowings
under the Company's Amended Credit Agreement.

On May 5, 2022, the Company announced that we entered into a definitive
agreement to acquire all the shares of the FASA Group, the largest independent
rendering company in Brazil, for approximately R$2.8 billion Brazilian Real in
cash ($560.0 million USD at the exchange rate in effect on the signing date),
subject to post closing adjustments and a contingent payment based on future
earnings growth. The Company expects to finance this acquisition with a
combination of operating cash flow, revolver borrowings under the Company's
Amended Credit Agreement and possible other debt financing resources.

As a result of the Company's borrowings under its Amended Credit Agreement, the
5.25% Indenture and the 3.625% Indenture, the Company is highly leveraged.
Investors should note that, in order to make scheduled payments on the
indebtedness outstanding under the Amended Credit Agreement, the 5.25% Notes and
the 3.625% Notes, and otherwise, the Company will rely in part on a combination
of dividends, distributions and intercompany loan repayments
                                       35
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from the Company's direct and indirect U.S. and foreign subsidiaries. The
Company is prohibited under the Amended Credit Agreement, the 5.25% Indenture
and the 3.625% Indenture from entering (or allowing such subsidiaries to enter)
into contractual limitations on the Company's subsidiaries' ability to declare
dividends or make other payments or distributions to the Company. The Company
has also attempted to structure the Company's consolidated indebtedness in such
a way as to maximize the Company's ability to move cash from the Company's
subsidiaries to Darling or another subsidiary that will have fewer limitations
on the ability to make upstream payments, whether to Darling or directly to the
Company's lenders as a Guarantor. Nevertheless, applicable laws under which the
Company's direct and indirect subsidiaries are formed may provide limitations on
such dividends, distributions and other payments. In addition, regulatory
authorities in various countries where the Company operates or where the Company
imports or exports products may from time to time impose import/export
limitations, foreign exchange controls or currency devaluations that may limit
the Company's access to profits from the Company's subsidiaries or otherwise
negatively impact the Company's financial condition and therefore reduce the
Company's ability to make required payments under the Amended Credit Agreement,
the 5.25% Notes and the 3.625% Notes, or otherwise. In addition, fluctuations in
foreign exchange values may have a negative impact on the Company's ability to
repay indebtedness denominated in U.S. or Canadian dollars or euros. See "Risk
Factors - Our business may be adversely impacted by fluctuations in exchange
rates, which could affect our ability to comply with our financial covenants"
and "- Our ability to repay our indebtedness depends in part on the performance
of our subsidiaries, including our non-guarantor subsidiaries, and their ability
to make payments" in the Company's Annual Report on Form 10-K for the fiscal
year ended January 1, 2022 as filed with the SEC on March 1, 2022.

As of April 2, 2022, the Company believes it is in compliance with all of the
financial covenants under the Amended Credit Agreement, as well as all of the
other covenants contained in the Amended Credit Agreement, the 5.25% Indenture
and the 3.625% Indenture.

Working Capital and Capital Expenditures



On April 2, 2022, the Company had working capital of $445.6 million and its
working capital ratio was 1.55 to 1 compared to working capital of $336.3
million and a working capital ratio of 1.45 to 1 on January 1, 2022. As of
April 2, 2022, the Company had unrestricted cash of $99.5 million and funds
available under the revolving credit facility of $1,049.7 million, compared to
unrestricted cash of $68.9 million and funds available under the revolving
credit facility of $1,285.9 million at January 1, 2022. The Company diversifies
its cash investments by limiting the amounts deposited with any one financial
institution.

Net cash provided by operating activities was $152.2 million for the first three
months ended April 2, 2022, as compared to net cash provided by operating
activities of $138.8 million for the first three months ended April 3, 2021, an
increase of $13.4 million due primarily to an increase in net income and the
effect from equity in net income of the DGD Joint Venture. Additionally, changes
in operating assets and liabilities impacted cash provided by operating
activities, which includes an approximately $52.0 million decrease in cash
provided by accounts receivable, an approximately $15.7 million decrease in cash
provided by inventory and prepaid expense, an approximately $72.5 million
increase in cash provided by accounts payable and accrued expenses, an
approximately $30.4 million decrease in income taxes refundable/payable and an
approximately $37.6 million increase in cash provided by other primarily from an
increase in hedging activities.  Cash used in investing activities was $294.5
million for the first three months ended April 2, 2022, compared to $64.3
million for the first three months ended April 3, 2021, an increase in cash used
in investing activities of $230.2 million, primarily due to capital
contributions to the DGD Joint Venture and acquisitions. Net cash provided in
financing activities was $180.9 million for the first three months ended
April 2, 2022, compared to net cash used in financing activities of $81.0
million for the first three months ended April 3, 2021, an increase in net cash
provided in financing activities of $261.9 million, primarily due to an increase
in debt borrowings in the first three months ended April 2, 2022 compared to the
first three months ended April 3, 2021.

Capital expenditures of $71.6 million were made during the first three months of
fiscal 2022, compared to $60.8 million in the first three months of fiscal
2021.  The Company expects to incur additional capital expenditures of
approximately $268 million for the remainder of fiscal 2022 including compliance
and expansion projects. The Company intends to finance these costs using cash
flows from operations. Capital expenditures related to compliance with
environmental regulations were $6.1 million and $5.5 million during the first
three months ended April 2, 2022 and April 3, 2021, respectively.

Accrued Insurance and Pension Plan Obligations

Based upon the annual actuarial estimate, current accruals and claims paid during the first three months of fiscal 2022, the Company has accrued approximately $11.5 million it expects will become due during the next twelve months in


                                       36
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order to meet obligations related to the Company's self insurance reserves and
accrued insurance obligations, which are included in current accrued expenses at
April 2, 2022. The self insurance reserve is composed of estimated liability for
claims arising for workers' compensation, auto liability and general liability
claims. The self insurance reserve liability is determined annually, based upon
a third party actuarial estimate. The actuarial estimate may vary from year to
year due to changes in cost of health care, the pending number of claims or
other factors beyond the control of management of the Company.

Based upon current actuarial estimates, the Company expects to contribute
approximately $0.3 million to its domestic pension plans in order to meet
minimum pension funding requirements during the next twelve months.  In
addition, the Company expects to make payments of approximately $3.6 million
under its foreign pension plans in the next twelve months. The minimum pension
funding requirements are determined annually, based upon a third party actuarial
estimate. The actuarial estimate may vary from year to year due to fluctuations
in return on investments or other factors beyond the control of management of
the Company or the administrator of the Company's pension funds. No assurance
can be given that the minimum pension funding requirements will not increase in
the future. The Company has made tax deductible discretionary and required
contributions to its domestic pension plans for the first three months ended
April 2, 2022 of approximately $0.1 million. Additionally, the Company has made
required and tax deductible discretionary contributions to its foreign pension
plans for the first three months ended April 2, 2022 of approximately $0.7
million.

The U.S. Pension Protection Act of 2006 ("PPA") went into effect in January
2008. The stated goal of the PPA is to improve the funding of U.S. pension
plans. U.S. plans in an under-funded status are required to increase employer
contributions to improve the funding level within PPA timelines. Volatility in
the world equity and other financial markets, including that associated with the
current COVID-19 outbreak and the Russia-Ukraine war, could have a material
negative impact on U.S. pension plan assets and the status of required funding
under the PPA. The Company participates in various U.S. multiemployer pension
plans which provide defined benefits to certain employees covered by labor
contracts. These plans are not administered by the Company and contributions are
determined in accordance with provisions of negotiated labor contracts to meet
their pension benefit obligations to their participants. The Company's
contributions to each individual U.S. multiemployer plan represent less than 5%
of the total contributions to each plan. Based on the most currently available
information, the Company has determined that, if a withdrawal were to occur,
withdrawal liabilities for two of the U.S. plans in which the Company currently
participates could be material to the Company, with one of these material plans
certified as critical or red zone under PPA guidelines. With respect to the
other U.S. multiemployer pension plans in which the Company participates and
which are not individually significant, five plans have certified as critical or
red zone and two have certified as endangered or yellow zone as defined by the
PPA. The Company currently has withdrawal liabilities recorded on four U.S.
multiemployer plans in which it participated. As of April 2, 2022, the Company
has an aggregate accrued liability of approximately $3.8 million representing
the present value of scheduled withdrawal liability payments on the
multiemployer plans that have given notice of withdrawal. While the Company has
no ability to calculate a possible current liability for under-funded
multiemployer plans that could terminate or could require additional funding
under the PPA, the amounts could be material.

DGD Joint Venture



In January 2011, Darling, through a wholly-owned subsidiary, entered into a
limited liability company agreement (as subsequently amended, the "DGD LLC
Agreement") with Valero to form the DGD Joint Venture. The DGD Joint Venture is
owned 50% / 50% with Valero and was formed to design, engineer, construct and
operate a renewable diesel plant located adjacent to Valero's refinery in Norco,
Louisiana (the "DGD Norco Facility"). The DGD Norco Facility reached mechanical
completion and began the production of renewable diesel and certain other
co-products in late June 2013. In October 2021, the DGD Joint Venture completed
an expansion of the DGD Norco Facility that increased its renewable diesel
production capability to up to 750 million gallons per year of renewable diesel,
as well as separating renewable naphtha (approximately 30 million gallons) and
other light end renewable hydrocarbons for sale into low carbon fuel markets.
The expansion of the DGD Norco Facility was completed and became operational in
October 2021, at a total cost, including naphtha production and improved
logistics capability, of approximately $1.1 billion, which was substantially
funded by DGD Joint Venture cash flow. Additionally, in January 2021, we and our
DGD Joint Venture partner approved the construction of a new facility to be
located next to Valero's Port Arthur Refinery in Port Arthur, Texas, capable of
producing 470 million gallons per year of renewable diesel and 20 million
gallons per year of renewable naphtha and having similar logistics flexibilities
as those of the DGD Norco Facility. Construction is underway, and the new plant
is anticipated to commence operations in the fourth quarter of 2022, with the
total cost of the expansion project estimated to be approximately $1.45 billion.
Once operational, the new plant is expected to increase the DGD Joint Venture's
total renewable diesel production capacity to approximately 1.2 billion gallons
per year. Based on forecasted margins as of the date of this report, the
remaining capital expenditures at the Port Arthur expansion project are expected
to be primarily funded by DGD Joint Venture cash flow; however, if the DGD Joint
Venture cash flow is not sufficient to
                                       37
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fund the remaining project costs, the DGD Joint Venture may need to borrow funds
or the joint venture partners may be required to contribute additional funds to
complete the project.

On May 1, 2019, Darling, through its wholly owned subsidiary Darling Green
Energy LLC, ("Darling Green"), and Diamond Alternative Energy, LLC, a wholly
owned subsidiary of Valero ("Diamond Alternative" and together with Darling
Green, the "DGD Lenders") entered into a revolving loan agreement (the "DGD Loan
Agreement") with the DGD Joint Venture. The DGD Lenders have committed to make
loans available to the DGD Joint Venture in the total amount of $50.0 million
with each lender committed to $25.0 million of the total commitment. Any
borrowings by the DGD Joint Venture under the DGD Loan Agreement are at the
applicable annum rate equal to the sum of (a) the LIBO Rate (meaning Reuters BBA
Libor Rates Page 3750) on such day plus (b) 2.50%. The DGD Loan Agreement
matures on April 29, 2023, unless extended by agreement of the parties. During
the fourth quarter of fiscal 2021, the DGD Joint Venture borrowed all $50.0
million available under the DGD Loan Agreement, including the Company's full
$25.0 million commitment and paid interest to the Company for the three months
ended April 2, 2022 of approximately $0.2 million. As of April 2, 2022, $25.0
million was owed to Darling Green under the DGD Loan Agreement.

On March 30, 2021, the DGD Joint Venture entered into a $400.0 million senior,
unsecured revolving credit facility, with CoBank ACB acting as lead arranger and
the administrative agent for the lending group, which is comprised of Farm
Credit System institutions. The revolving credit facility matures March 30, 2024
and is non-recourse to the joint venture partners. As of April 2, 2022, the DGD
Joint Venture has borrowings outstanding of $165.0 million under this unsecured
revolving credit facility.

Based on the sponsor support agreements executed in connection with the initial
construction of the DGD Norco Facility, the Company contributed a total of
approximately $111.7 million for initial completion of the DGD Norco Facility
including the Company's portion of cost overruns and working capital funding. In
fiscal year 2021, each joint partner contributed a total of approximately $189.0
million and in the three months ended April 2, 2022, each joint venture partner
made additional capital contributions of approximately $164.75 million to the
DGD Joint Venture. As of April 2, 2022, under the equity method of accounting,
the Company has an investment in the DGD Joint Venture of approximately $1,528.7
million included on the consolidated balance sheet.

The Company's original investment in DGD has expanded since 2011 to the point
that it is now integral to how Darling operates its business. Darling
traditionally collected and converted used cooking oil and animal fats into feed
ingredients which were sold on a caloric value to feed animals as well as for
industrial technical uses. Over the past decade, the world's increasing focus on
climate change and greenhouse gas has provided a new finished market for the
Company's finished fats ingredients. With Darling's significant fats ownership,
this has and continues to transform how Darling operates. In 2021, a large
portion of Darling's total U.S. finished fats products were sold to the DGD
Norco Facility as feedstock for renewable diesel. In 2021, DGD was Darling's
largest finished product customer in terms of net sales, with Darling recording
sales of approximately $521.7 million to DGD or 11% of total net sales.

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


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Financial Impact of Significant Debt Outstanding



The Company has a substantial amount of indebtedness, which could make it more
difficult for the Company to satisfy its obligations to its financial lenders
and its contractual and commercial commitments, limit the Company's ability to
obtain additional financing to fund future working capital, capital
expenditures, acquisitions or other general corporate requirements on
commercially reasonable terms or at all, require the Company to use a
substantial portion of its cash flows from operations to pay principal and
interest on its indebtedness instead of other purposes, thereby reducing the
amount of the Company's cash flows from operations available for working
capital, capital expenditures, acquisitions and other general corporate
purposes, increase the Company's vulnerability to adverse economic, industry and
business conditions, expose the Company to the risk of increased interest rates
as certain of the Company's borrowings are at variable rates of interest, limit
the Company's flexibility in planning for, or reacting to, changes in the
Company's business and the industry in which the Company operates, place the
Company at a competitive disadvantage compared to other, less leveraged
competitors, and/or increase the Company's cost of borrowing.

Cash Flows and Liquidity Risks



Management believes that the Company's cash flows from operating activities,
unrestricted cash and funds available under the Amended Credit Agreement, will
be sufficient to meet the Company's working capital needs and maintenance and
compliance-related capital expenditures, scheduled debt and interest payments,
income tax obligations, and other contemplated needs through the next twelve
months. Numerous factors could have adverse consequences to the Company that
cannot be estimated at this time, such as negative impacts from the current
COVID-19 outbreak and the Russia-Ukraine war and those other factors discussed
below under the heading "Forward Looking Statements". These factors, coupled
with volatile prices for natural gas and diesel fuel, currency exchange
fluctuations, general performance of the U.S. and global economies, disturbances
in world financial, credit, commodities and stock markets, and any decline in
consumer confidence, including the inability of consumers and companies to
obtain credit due to lack of liquidity in the financial markets, among others,
could negatively impact the Company's results of operations in fiscal year 2022
and thereafter.  The Company reviews the appropriate use of unrestricted cash
periodically. As of the date of this report, other than the Company's previously
announced acquisition of FASA Group for approximately R$2.8 billion Brazilian
Real in cash ($560.0 million USD at the exchange rate in effect on the signing
date), subject to post closing adjustments and a contingent payment based on
future earnings growth, no decision has been made as to non-ordinary course
material cash usages at this time; however, potential usages could
include: opportunistic capital expenditures and/or acquisitions and joint
ventures; investments relating to the Company's renewable energy strategy,
including, without limitation, potential required funding obligations with
respect to the DGD Joint Venture expansion project or potential investments in
additional renewable diesel and/or biofuel projects; investments in response to
governmental regulations relating to climate change, human and animal food
safety or other regulations; unexpected funding required by the legislation,
regulation or mass termination of multiemployer plans; and paying dividends or
repurchasing stock, subject to limitations under the Amended Credit Agreement,
the 5.25% Notes and the 3.625% Notes, as well as suitable cash conservation to
withstand adverse commodity cycles. The Company's Board of Directors has
approved a share repurchase program of up to an aggregate of $500.0 million of
the Company's Common Stock depending on market conditions. The repurchases may
be made from time to time on the open market at prevailing market prices or in
negotiated transactions off the market. The program runs through August 13,
2024, unless further extended or shortened by the Board of Directors. During the
first three months of fiscal 2022, the Company has repurchased approximately
$17.2 million of its common stock in the open market. As of April 2, 2022, the
Company had approximately $482.8 million remaining in its share repurchase
program.

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

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


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OFF BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS



Based upon the underlying purchase agreements, the Company has commitments to
purchase $252.6 million of commodity products consisting of approximately $104.5
million of finished products, approximately $126.2 million of natural gas and
diesel fuel and approximately $21.9 million of other commitments during the next
five years, which are not included in liabilities on the Company's balance sheet
at April 2, 2022. The Company intends to take physical delivery of the
commodities under the forward purchase agreements and accordingly, these
contracts are not subject to the requirements of fair value accounting because
they qualify as normal purchases. The commitments will be recorded on the
balance sheet of the Company when delivery of these commodities or products
occurs and ownership passes to the Company during the remainder of fiscal 2022
and through fiscal 2024, in accordance with accounting principles generally
accepted in the United States.

The following table summarizes the Company's other commercial commitments, including both on- and off-balance sheet arrangements that are part of the Company's Amended Credit Agreement and other foreign bank guarantees that are not a part of the Company's Amended Credit Agreement at April 2, 2022 (in thousands):




Other commercial commitments:
Standby letters of credit                          $  3,849

Standby letters of credit (ancillary facility) 27,400 Foreign bank guarantees

                              11,805
Total other commercial commitments:                $ 43,054

CRITICAL ACCOUNTING POLICIES



The Company follows certain significant accounting policies when preparing its
consolidated financial statements. A complete summary of these policies is
included in the Company's Annual Report on Form 10-K for the fiscal year ended
January 1, 2022, filed with the SEC on March 1, 2022.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 22, "New Accounting Pronouncements," to the consolidated financial statements for a description of new accounting pronouncements.

FORWARD LOOKING STATEMENTS



This Quarterly Report on Form 10-Q includes "forward-looking" statements that
are subject to risks and uncertainties that could cause actual results to differ
materially from those expressed or implied in the statements.  Statements that
are not statements of historical facts are forward-looking statements and are
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Words such as "estimate," "project," "planned,"
"contemplate," "potential," "possible," "proposed," "intend," "believe,"
"anticipate," "expect," "may," "will," "would," "should," "could," and similar
expressions are intended to identify forward-looking statements. All statements
other than statements of historical facts included in this report are forward
looking statements, including, without limitation, the statements under the
section entitled "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and located elsewhere herein regarding industry
prospects, the Company's financial position and the Company's use of
cash. Forward-looking statements are based on the Company's current expectations
and assumptions regarding its business, the economy and other future conditions.
The Company cautions readers that any such forward-looking statements it makes
are not guarantees of future performance and that actual results may differ
materially from anticipated results or expectations expressed in its
forward-looking statements as a result of a variety of factors, including many
that are beyond the Company's control.

In addition to those factors discussed elsewhere in this report and in the
Company's other public filings with the SEC, important factors that could cause
actual results to differ materially from the Company's expectations
include: existing and unknown future limitations on the ability of the Company's
direct and indirect subsidiaries to make their cash flow available to the
Company for payments on the Company's indebtedness or other purposes; global
demands for bio-fuels and grain and oilseed commodities, which have exhibited
volatility, and can impact the cost of feed for cattle, hogs and poultry, thus
affecting available rendering feedstock and selling prices for the Company's
products; reductions in raw material volumes available to the Company due to
weak margins in the meat production industry as a result of higher feed costs,
reduced consumer demand or other factors, reduced volume from food service
establishments, or
                                       40

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otherwise; reduced demand for animal feed; reduced finished product prices,
including a decline in fat and used cooking oil finished product prices; changes
to worldwide government policies relating to renewable fuels and greenhouse gas
("GHG") emissions that adversely affect programs like the U.S. government's
renewable fuel standard, low carbon fuel standards ("LCFS") and tax credits for
biofuels both in the United States and abroad; possible product recall resulting
from developments relating to the discovery of unauthorized adulterations to
food or food additives; the occurrence of 2009 H1N1 flu (initially known as
"Swine Flu"), highly pathogenic strains of avian influenza (collectively known
as "Bird Flu"), severe acute respiratory syndrome ("SARS"), bovine spongiform
encephalopathy (or "BSE"), porcine epidemic diarrhea ("PED") or other diseases
associated with animal origin in the United States or elsewhere, such as the
outbreak of ASF in China and elsewhere; the occurrence of pandemics, epidemics
or disease outbreaks, such as the current COVID-19 outbreak; unanticipated costs
and/or reductions in raw material volumes related to the Company's compliance
with the existing or unforeseen new U.S. or foreign (including, without
limitation, China) regulations (including new or modified animal feed, Bird Flu,
SARS, PED, BSE or ASF or similar or unanticipated regulations) affecting the
industries in which the Company operates or its value added products; risks
associated with the DGD Joint Venture, including possible unanticipated
operating disruptions and issues relating to the ongoing expansion project;
risks and uncertainties relating to international sales and operations,
including imposition of tariffs, quotas, trade barriers and other trade
protections imposed by foreign countries; difficulties or a significant
disruption in the Company's information systems or failure to implement new
systems and software successfully; risks relating to possible third party claims
of intellectual property infringement; increased contributions to the Company's
pension and benefit plans, including multiemployer and employer-sponsored
defined benefit pension plans as required by legislation, regulation or other
applicable U.S. or foreign law or resulting from a U.S. mass withdrawal event;
bad debt write-offs; loss of or failure to obtain necessary permits and
registrations; continued or escalated conflict in the Middle East, North Korea,
Ukraine or elsewhere, including the Russia-Ukraine war; uncertainty regarding
the exit of the U.K. from the European Union; and/or unfavorable export or
import markets. These factors, coupled with volatile prices for natural gas and
diesel fuel, climate conditions, currency exchange fluctuations, general
performance of the U.S. and global economies, disturbances in world financial,
credit, commodities and stock markets, and any decline in consumer confidence
and discretionary spending, including the inability of consumers and companies
to obtain credit due to lack of liquidity in the financial markets, among
others, could cause actual results to vary materially from the forward-looking
statements included in this report or negatively impact the Company's results of
operations. Among other things, future profitability may be affected by the
Company's ability to grow its business, which faces competition from companies
that may have substantially greater resources than the Company. The Company's
announced share repurchase program may be suspended or discontinued at any time
and purchases of shares under the program are subject to market conditions and
other factors, which are likely to change from time to time. For more detailed
discussion of these factors see the Risk Factors discussion in Item 1A of Part I
of the Company's Annual Report on Form 10-K for the fiscal year ended January 1,
2022. The Company cautions readers that all forward-looking statements speak
only as of the date made, and the Company undertakes no obligation to update any
forward-looking statements, whether as a result of changes in circumstances, new
events or otherwise.

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