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)	September 30, 2016		December 31, 2015
Assets:
Total current assets	$	207,392	$	261,444
Property, plant and equipment, net	354,285		356,230
Other assets	14,094		3,034
Total assets	$	575,771	$	620,708
Liabilities and members' equity:
Total current portion of long term debt	$	17,023	$	62,023
Total other current liabilities	24,093		19,935
Total long term debt	58,009		86,819
Total other long term liabilities	408		380
Total members' equity	476,238		451,551
Total liabilities and member's equity	$	575,771	$	620,708



	Three Months Ended						Nine Months Ended
(in thousands)	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Revenues:
Operating revenues	$	141,656		$	107,160		$	345,650		$	380,048
Expenses:
Total costs and expenses less depreciation, amortization and accretion expense	96,569			123,779			244,643			376,157
Depreciation, amortization and accretion expense	7,445			4,959			20,370			14,924
Total costs and expenses	104,014			128,738			265,013			391,081
Operating income	37,642			(21,578		)	80,637			(11,033		)
Other income	114			41			199			93
Interest and debt expense, net	(1,406		)	(3,122		)	(6,148		)	(10,629		)
Net income/(loss)	$	36,350		$	(24,659	)	$	74,688		$	(21,569	)

As of October 1, 2016 under the equity method of accounting, the Company has an investment in the DGD Joint Venture of approximately $238.1 million on the consolidated balance sheet and has recorded an equity net gain of approximately $37.3 million and an equity net loss of approximately $10.8 million for the nine months ended October 1, 2016 and October 3, 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.