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)	March 31, 2017		December 31, 2016
Assets:
Total current assets	$	212,915	$	268,734
Property, plant and equipment, net	360,476		354,871
Other assets	10,226		12,164
Total assets	$	583,617	$	635,769
Liabilities and members' equity:
Total current portion of long term debt	$	17,023	$	17,023
Total other current liabilities	24,100		23,200
Total long term debt	49,497		53,753
Total other long term liabilities	427		418
Total members' equity	492,570		541,375
Total liabilities and member's equity	$	583,617	$	635,769



	Three Months Ended
(in thousands)	March 31, 2017			March 31, 2016
Revenues:
Operating revenues	$	125,397		$	71,768
Expenses:
Total costs and expenses less depreciation, amortization and accretion expense	115,322			52,509
Depreciation, amortization and accretion expense	8,113			5,378
Total costs and expenses	123,435			57,887
Operating income	1,962			13,881
Other income	223			15
Interest and debt expense, net	(990		)	(2,814		)
Net income/(loss)	$	1,195		$	11,082

As of April 1, 2017 under the equity method of accounting, the Company has an investment in the DGD Joint Venture of approximately $246.3 million on the consolidated balance sheet and has recorded an equity net gain of approximately $0.6 million and $5.5 million for the three months ended April 1, 2017 and April 2, 2016, respectively. In the first quarter of fiscal 2017, the Company received a dividend distribution of $25.0 million from the DGD Joint Venture. Additionally, the biodiesel blenders tax credit expired on December 31, 2016, as a result the DGD Joint Venture fiscal 2017 results does not include any blenders tax credits, while fiscal 2016 included blenders tax credits.