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I listened to the Darling conference call live this morning – these are my quick (and messy) notes. I’ll read through the transcript after it’s available and may add more later.

On the Terra Renewal Acquisition –

Used Oil - Nine used cooking oil collection locations/routes with common/existing DAR clients. Expected to be a seamless integration into DAR’s existing business.

Industrial Residuals aspect of Terra (new to DAR) – always had eye one. Hampton Florida extraction plant (large scale pilot plant that will start up next week) will handle wastewater residuals (mostly from poultry industry that are traditionally land applied). As they built out Hampton, the indusial residuals aspect of Terra became more intriguing (over the past few months), hence the acquisition this week (after years of watching Terra Renewal). Hope to have industrial residuals fund expansion of Hampton road plant - DAR very excited about Terra acquisition and contribution to bottom line moving forward.

On Diamond Green Diesel

Earnings will be deferred until the feed stock is converted to fuel and sold to an outside party. They anticipate a 30 day lag and going forward, they estimate that between 2.5 and 3 million in earnings will be deferred at all times.

Came on line in late June, ran at 50-75% capacity through July, now running at 100%. Stuwee “in 30 year career, this is the smoothest start up I’ve been a part of” – has met or is meeting all expectations.

By Q4, DGD contribution to earnings should start to normalize. (would have contributed 10-12 cents in Q2, Q3 will still have impact of July ramp up)

Currently running on cooking oil, yellow grease, animal fats, corn oil, and now soybean (as soy prices have come down). Not using poultry fat due to some component of fat that gives issues – poultry feed stock to Hampton facility.

Provides strong support to feed stock price – DGD takes 10% of all supply in country (huge!) DGD will hopefully self-fund any expansion going forward. (and expansion is a very real possibility)DAR is very excited about DGD.

Question about cash – how deploy? Dividend?

A - Pay for Terra with cash (read as, no dividend yet ).

DGD – significant tax benefit (cash tax savings for both Valero and DAR). DGD dividend policy – JV can take dividend in future . DGD can ‘pay dividend’ in future years (to DAR and Valero?) [review Q&A transcript to figure this out]

Government Mandates –always a potential risk – biofuel credits, congress, etc. ..

Note to self - buy more DAR today.

I’m confident in this management team, the long term story, and the potential of DGD (and Hampton Fl, which I had not paid all that much attention to previously) .

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