Investment in Unconsolidated Subsidiaries

On January 21, 2011 a wholly-owned subsidiary of Darling entered into a limited liability company agreement with a wholly-owned subsidiary of Valero Energy Corporation (“Valero”) to form Diamond Green Diesel Holdings LLC (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 (the “DGD Facility”), which is capable of processing approximately 12,000 barrels per day of input feedstock to produce renewable diesel fuel and certain other co-products, and is located adjacent to Valero's refinery in Norco, Louisiana. The DGD Joint Venture reached mechanical completion and began the production of renewable diesel in late June 2013.

On May 31, 2011, the DGD Joint Venture and Diamond Green Diesel LLC, a wholly-owned subsidiary of the DGD Joint Venture (“Opco”), entered into (i) a facility agreement (the “Facility Agreement”) with Diamond Alternative Energy, LLC, a wholly-owned subsidiary of Valero (the “Lender”), and (ii) a loan agreement (the “Loan Agreement”) with the Lender, which provided the DGD Joint Venture with a 14 year multiple advance term loan facility of approximately $221.3 million (the “JV Loan”) to support the design, engineering and construction of the DGD Facility, which is now in production. The Facility Agreement and the Loan Agreement prohibit the Lender from assigning all or any portion of the Facility Agreement or the Loan Agreement to unaffiliated third parties. Opco has also pledged substantially all of its assets to the Lender, and the DGD Joint Venture has pledged all of Opco's equity interests to the Lender, until the JV Loan has been paid in full and the JV Loan has terminated in accordance with its terms.

In addition to the DGD Joint Venture, the Company has investments in other unconsolidated subsidiaries that are insignificant to the Company. Selected financial information for the Company's DGD Joint Venture is as follows (in thousands):



(in thousands)	June 30, 2016		December 31, 2015
Assets:
Total current assets	$	175,782	$	261,444
Property, plant and equipment, net	355,809		356,230
Other assets	17,070		3,034
Total assets	$	548,661	$	620,708
Liabilities and members' equity:
Total current portion of long term debt	$	17,023	$	62,023
Total other current liabilities	22,785		19,935
Total long term debt	68,564		86,819
Total other long term liabilities	400		380
Total members' equity	439,889		451,551
Total liabilities and member's equity	$	548,661	$	620,708



	Three Months Ended						Six Months Ended
(in thousands)	June 30, 2016			June 30, 2015			June 30, 2016			June 30, 2015
Revenues:
Operating revenues	$	132,226		$	156,160		$	203,994		$	272,888
Expenses:
Total costs and expenses less depreciation, amortization and accretion expense	95,565			140,343			148,074			252,378
Depreciation, amortization and accretion expense	7,547			4,956			12,925			9,965
Total costs and expenses	103,112			145,299			160,999			262,343
Operating income	29,114			10,861			42,995			10,545
Other income	70			32			85			52
Interest and debt expense, net	(1,928		)	(3,352		)	(4,742		)	(7,508		)
Net income	$	27,256		$	7,541		$	38,338		$	3,089

As of July 2, 2016 under the equity method of accounting, the Company has an investment in the DGD Joint Venture of approximately $219.9 million on the consolidated balance sheet and has recorded an equity net gain of approximately $19.2 million and $1.5 million for the six months ended July 2, 2016 and July 4, 2015, respectively. In the second quarter of fiscal 2016, the DGD Joint Venture received $156.4 million of the 2015 calendar year blenders tax credits from the Internal Revenue Service, made a debt payment of approximately $54.7 million and made dividend distributions to each partner in the amount $25.0 million. Additionally, with Congress' extension of the biodiesel blenders tax credit in December 2015 through December 31, 2016, the DGD Joint Venture fiscal 2016 results include blenders tax credits, while no blenders tax credits are included in the same period in the prior year.