INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES

The Company announced on January 21, 2011 that a wholly-owned subsidiary of Darling entered into a limited liability company 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 (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 will provide 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 were acquired in the VION Acquisition that are insignificant to the Company. Selected financial information for the Company's DGD Joint Venture is as follows:



(in thousands)	December 31, 2016		December 31, 2015
Assets:
Total current assets	$	268,734	$	261,444
Property, plant and equipment, net	354,871		356,230
Other assets	12,164		3,034
Total assets	$	635,769	$	620,708
Liabilities and members' equity:
Total current portion of long term debt	$	17,023	$	62,023
Total other current liabilities	23,200		19,935
Total long term debt	53,753		86,819
Total other long term liabilities	418		380
Total members' equity	541,375		451,551
Total liabilities and member's equity	$	635,769	$	620,708



	Year Ended December 31,
(in thousands)	2016			2015			2014
Revenues:
Operating revenues	$	527,670		$	475,934		$	487,834
Expenses:
Total costs and expenses less depreciation, amortization and accretion expense	353,222			298,946			324,557
Depreciation, amortization and accretion expense	27,821			19,714			18,186
Operating income	146,627			157,274			145,091
Other income	551			120			82
Interest and debt expense, net	(7,354		)	(13,604		)	(17,640		)
Net income	$	139,824		$	143,790		$	127,533

As of December 31, 2016, under the equity method of accounting, the Company has an investment in the DGD Joint Venture of approximately $270.7 million on the consolidated balance sheet and has recorded approximately $69.9 million, $71.9 million and $63.8 million in equity net income in the unconsolidated subsidiary for the years ended December 31, 2016, January 2, 2016 and January 3, 2015, respectively. Biodiesel blenders registered with the Internal Revenue Service were eligible for a tax incentive in the amount of $1.00 per gallon of renewable diesel blended with petroleum diesel to produce a mixture containing 0.1% diesel fuel. As a blender, the DGD Joint Venture has recorded approximately, $160.6 million, $156.6 million and $126.0 million in blender credits, for its fiscal years ended December 31, 2016, December 31, 2015 and December 31, 2014, respectively. These blenders credits were recorded by the DGD Joint Venture as a reduction of total costs and expenses in the above table. In fiscal 2015 and fiscal 2014, the DGD Joint Venture booked all blenders tax credits in the fourth quarter. In addition, for each of the years ended December 31, 2016 and January 2, 2016, the Company received $25.0 million in dividend distributions from the DGD Joint Venture and subsequent to December 31, 2016, the Company received a $25.0 million dividend distribution from the DGD Joint Venture.