What the changes say
- Renewable energy margins depend heavily on shifting government programs, tax credits, and renewable fuel standards.
- Animal disease outbreaks threaten the raw material supply of meat-by-products.
- Debt levels decreased slightly to $3.9 billion.
What changed since the prior 10-K
New
- NewRisks Related to our Business
Our renewable energy businesses, including the DGD Joint Venture, are highly dependent on government programs, incentives and regulatory frameworks, which are subject to change and uncertainty
Renewable energy businesses and the DGD Joint Venture face profitability and demand risks from changing government programs, tax credits, and renewable fuel standards like RFS and LCFS.
- NewRisks Related to Global Disease Outbreaks or Pandemics
With respect to human food, pet food and animal feed safety in the United States, the FDA Food Safety Modernization Act (“FSMA”) gives the FDA various authorities and directs the FDA to promulgate new regulations pursuant to the FSMA, as described in the section entitled “Business—Regulations” included in this report
Outbreaks of diseases such as Bird Flu, Salmonella, and BSE can restrict raw material supply and increase production costs for meat-centric food and feed products.
Dropped
- DroppedRisks Related to the Company
Our renewable energy businesses may be affected by energy policies around the world
- DroppedRisks Related to our Labor Force
The proposed Employment Rights Bill is set to overhaul employment law in the UK, with a number of employee friendly proposals which could have an adverse effect on our business due to increased costs associated with being an employer
- DroppedRisks Related to our Common Stock
We may not successfully identify and complete acquisitions on favorable terms or achieve anticipated synergies relating to any acquisitions, and such acquisitions could result in unknown liabilities, unforeseen operating difficulties and expenditures and require significant management resources
- DroppedRisks Related to our Common Stock
The United Kingdom's withdrawal from the EU could have an adverse effect on our business, investments and future operations in Europe
Renewable energy policies globally affecting biofuels.
Reworded
- 85% rewrittenRisks Related to Global Disease Outbreaks or Pandemics
Our business may be affected by the impact of animal related disease, such as BSE, and by other food safety or food regulatory issues
Updated regulatory reference from OIE to WOAH regarding U.S. BSE status.
Was: Our business may be affected by the impact of animal related disease, such as BSE, and by other food safety issues
- 71% rewrittenRisks Related to our Common Stock
Our European pension funds may require minimum funding contributions
Added reference to corresponding UK pension regulatory regimes alongside EU IORP Directive.
- 66% rewrittenRisks Related to our Common Stock
The healthcare reform legislation in the United States and its implementing regulations could impact the healthcare benefits we are required to provide our employees in the United States and cause our compensation costs to increase, potentially reducing our net income and adversely affecting our cash flows
Minor punctuation update regarding ACA affordability standards.
- 66% rewrittenRisks Related to our Indebtedness
Despite our existing level of indebtedness, we and our subsidiaries could substantially increase our indebtedness, which could further exacerbate the risks to our financial condition described above
Updated senior notes figures, adding 6% Senior Notes due 2030 and 4.5% Senior Notes due 2032 while removing mention of 3.625% notes.
Was: Despite our existing level of indebtedness, we and our subsidiaries may still be able to incur substantially more indebtedness, which could further exacerbate the risks to our financial condition described above
- 61% rewrittenRisks Related to our Common Stock
Artificial intelligence could subject the Company to loss through various internal and external risks
Expanded AI risks to include incorrect outputs, intellectual property infringement, and operational dependencies on third-party AI platforms.
- 59% rewrittenRisks Related to our Business
We may incur losses and additional costs as a result of our hedging transactions
Clarified hedging risks to explicitly include the DGD Joint Venture alongside Darling.
- 59% rewrittenRisks Related to our Common Stock
Downturns and volatility in global economies and commodity and credit markets could materially adversely affect our business, results of operations and financial condition
Retained text regarding macroeconomic downturns and commodity market volatility.
- 59% rewrittenRisks Related to our Indebtedness
Our substantial indebtedness could adversely affect our financial condition
Updated total debt figure from $4.0 billion to $3.9 billion and updated revolving credit facility borrowing amounts.
Was: Our substantial level of indebtedness could adversely affect our financial condition
- 53% rewrittenRisks Related to 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
Was: Seasonal factors and weather, including the physical impacts of climate changes, can impact the availability, quality and volume of raw materials that we process and negatively affect our operations
- 48% rewrittenRisks Related to our Common Stock
Our ability to pay any dividends on our common stock may be limited and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock
- 46% rewrittenRisks Related to Legal and Regulatory Compliance
Our operations are subject to extensive and evolving environmental, health and 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
Was: Our operations are subject to various laws, rules and regulations including those relating to the protection of the environment and to health and safety, and we could incur significant costs to comply with these requirements or be subject to sanctions or held liable for damages, including environmental damages
- 41% rewrittenRisks Related to our Common Stock
We may divest certain of our brands or businesses from time to time, which could adversely affect us
Was: We may divest of certain of our brands or businesses from time to time, which could adversely affect us
- 35% rewrittenRisks Related to our Indebtedness
We may not generate sufficient cash to service all of our debt and may be forced to take other actions to satisfy our debt obligations, which may not be successful
Was: We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
- 35% rewrittenRisks Related to our Common Stock
Large capital projects can take many years to complete, and market conditions could deteriorate over time, negatively impacting project returns
- 32% rewrittenRisks Related to our Business
The DGD Joint Venture subjects us to a number of risks
- 29% rewrittenRisks Related to our Common Stock
We could have a material weakness in our internal control over financial reporting that would require remediation
- 29% rewrittenRisks Related to our Business
We face risks associated with our international activities, which could negatively affect our sales to customers in foreign countries and our operations and assets in such countries
- 29% rewrittenRisks Related to our Common Stock
Increased information technology security threats and more sophisticated computer crime pose a risk to our systems, networks, products and services, while data privacy and cybersecurity laws continue to proliferate presenting heightened regulatory risk
- 25% rewrittenRisks Related to our Business
The prices of many of our products are subject to significant volatility associated with commodities markets
Was: The prices of many of our products are subject to significant volatility
- 25% rewrittenRisks Related to our Common Stock
Our products, processes, methods, and equipment may infringe upon the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products
- 24% rewrittenRisks Related to our Business
A significant percentage of our revenue is attributable to a limited number of suppliers and customers
- 23% rewrittenRisks Related to our Business
We are highly dependent on natural gas, diesel fuel and electricity, the prices of which can be volatile, and such dependency could materially adversely affect our business
- 22% rewrittenRisks Related to our Indebtedness
Our ability to make payments on our debt 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
Was: 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
- 21% rewrittenRisks Related to our Common Stock
Our business may be adversely impacted by fluctuations in foreign currency exchange rates, which could affect our ability to comply with our financial covenants
- 20% rewrittenRisks Related to our Common Stock
Our success is dependent on our key personnel
- 20% rewrittenRisks Related to our Labor Force
We may be subject to work stoppages at our operating facilities, which could cause interruptions in the manufacturing or distribution of our products
All 50 risk factors
Headings as the filing states them, in filing order.
Risks Related to our Business
- 01The prices of many of our products are subject to significant volatility associated with commodities markets25% rewritten
- 02Our business is dependent on the procurement of raw materials, which is a competitive aspect of our business
- 03The DGD Joint Venture subjects us to a number of risks32% rewritten
- 04Our renewable energy businesses, including the DGD Joint Venture, are highly dependent on government programs, incentives and regulatory frameworks, which are subject to change and uncertaintyNew
- 05We are highly dependent on natural gas, diesel fuel and electricity, the prices of which can be volatile, and such dependency could materially adversely affect our business23% rewritten
- 06A significant percentage of our revenue is attributable to a limited number of suppliers and customers24% rewritten
- 07Certain of our operating facilities are highly dependent upon a single or a few suppliers
- 08We face risks associated with our international activities, which could negatively affect our sales to customers in foreign countries and our operations and assets in such countries29% rewritten
- 09Seasonal 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 operations53% rewritten
- 10If we or our customers are the subject of product liability or other claims or product recalls, we may incur significant and unexpected costs and our business reputation could be adversely affected
- 11In certain markets we are highly dependent upon a single operating facility and various events beyond our control could cause an interruption in the operation of our facilities, which could adversely affect our business in those markets
- 12We may incur losses and additional costs as a result of our hedging transactions59% rewritten
- 13Media campaigns related to feed and food ingredient production or fuel production present reputational and other risks
- 14An impairment in the carrying value of our goodwill or other intangible assets may have a material adverse effect on our results of operations
Risks Related to Legal and Regulatory Compliance
- 15Our operations are subject to extensive and evolving environmental, health and 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 damages46% rewritten
Risks Related to Global Disease Outbreaks or Pandemics
- 16Our business may be negatively impacted by the occurrence of any disease correctly or incorrectly linked to animals
- 17Our business may be affected by the impact of animal related disease, such as BSE, and by other food safety or food regulatory issues85% rewritten
- 18With respect to human food, pet food and animal feed safety in the United States, the FDA Food Safety Modernization Act (“FSMA”) gives the FDA various authorities and directs the FDA to promulgate new regulations pursuant to the FSMA, as described in the section entitled “Business—Regulations” included in this reportNew
- 19The actual or perceived effects of a disease outbreak, epidemic, pandemic or similar widespread public health concern could negatively affect our operations, liquidity, financial condition and results of operations
Risks Related to our Labor Force
- 20We may be subject to work stoppages at our operating facilities, which could cause interruptions in the manufacturing or distribution of our products20% rewritten
- 21Certain U.S. multiemployer defined benefit pension plans to which we contribute are underfunded and these plans may require minimum funding contributions or we may be subject to liabilities due to a termination of, or our withdrawal from, such plans
Risks Related to our Indebtedness
- 22Our substantial indebtedness could adversely affect our financial condition59% rewritten
- 23Despite our existing level of indebtedness, we and our subsidiaries could substantially increase our indebtedness, which could further exacerbate the risks to our financial condition described above66% rewritten
- 24We may not generate sufficient cash to service all of our debt and may be forced to take other actions to satisfy our debt obligations, which may not be successful35% rewritten
- 25Our ability to make payments on our debt 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 debt22% rewritten
Risks Related to our Common Stock
- 26The market price of our common stock has been and may continue to be volatile, which could cause the value of your investment to decline
- 27Our ability to pay any dividends on our common stock may be limited and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock48% rewritten
- 28Future sales of our common stock or the issuance of other equity may adversely affect the market price of our common stock
- 29Our common stock is an equity security and is subordinate to our existing and future indebtedness
- 30The issuance of shares of preferred stock could adversely affect holders of common stock, which may negatively impact your investment
- 31We may incur material costs and liabilities in complying with government regulations
- 32Downturns and volatility in global economies and commodity and credit markets could materially adversely affect our business, results of operations and financial condition59% rewritten
- 33Our business may be adversely impacted by fluctuations in foreign currency exchange rates, which could affect our ability to comply with our financial covenants21% rewritten
- 34Large capital projects can take many years to complete, and market conditions could deteriorate over time, negatively impacting project returns35% rewritten
- 35Changes in consumer preference could negatively impact our business
- 36If we experience difficulties or a significant disruption in our information systems or if we fail to implement new systems and software successfully, our business could be materially adversely affected
- 37Increased information technology security threats and more sophisticated computer crime pose a risk to our systems, networks, products and services, while data privacy and cybersecurity laws continue to proliferate presenting heightened regulatory risk29% rewritten
- 38Artificial intelligence could subject the Company to loss through various internal and external risks61% rewritten
- 39Our success is dependent on our key personnel20% rewritten
- 40We could have a material weakness in our internal control over financial reporting that would require remediation29% rewritten
- 41Changes in our tax rates or exposure to additional income tax liabilities could impact our profitability
- 42Litigation or regulatory proceedings may materially adversely affect our business, results of operations and financial condition
- 43Our European pension funds may require minimum funding contributions71% rewritten
- 44We may divest certain of our brands or businesses from time to time, which could adversely affect us41% rewritten
- 45Terrorist attacks or acts of war may cause damage or disruption to us and our employees, facilities, information systems, security systems, suppliers and customers, which could materially and adversely affect our net sales, costs and expenses and financial condition
- 46We may be unable to protect our intellectual property rights
- 47Our products, processes, methods, and equipment may infringe upon the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products25% rewritten
- 48The healthcare reform legislation in the United States and its implementing regulations could impact the healthcare benefits we are required to provide our employees in the United States and cause our compensation costs to increase, potentially reducing our net income and adversely affecting our cash flows66% rewritten
- 49We 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
- 50We may not be able to achieve our climate, sustainability or other such goals, targets or objectives
Other Darling Ingredients 10-Ks
- FY2024 10-K risk factors52 risks
Raw material procurement is intensely competitive due to meat processing consolidation.
Filed Feb 25, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.