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, 2017		December 31, 2016
Assets:
Total current assets	$	218,357	$	268,734
Property, plant and equipment, net	390,723		354,871
Other assets	5,482		12,164
Total assets	$	614,562	$	635,769
Liabilities and members' equity:
Total current portion of long term debt	$	17,023	$	17,023
Total other current liabilities	32,924		23,200
Total long term debt	40,986		53,753
Total other long term liabilities	443		418
Total members' equity	523,186		541,375
Total liabilities and member's equity	$	614,562	$	635,769



	Three Months Ended						Nine Months Ended
(in thousands)	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Revenues:
Operating revenues	$	175,585		$	141,656		$	451,768		$	345,650
Expenses:
Total costs and expenses less depreciation, amortization and accretion expense	154,446			96,569			395,743			244,643
Depreciation, amortization and accretion expense	6,733			7,445			22,867			20,370
Total costs and expenses	161,179			104,014			418,610			265,013
Operating income	14,406			37,642			33,158			80,637
Other income	408			114			959			199
Interest and debt expense, net	(455		)	(1,406		)	(2,306		)	(6,148		)
Net income	$	14,359		$	36,350		$	31,811		$	74,688

As of September 30, 2017 under the equity method of accounting, the Company has an investment in the DGD Joint Venture of approximately $261.6 million on the consolidated balance sheet and has recorded an equity net gain of approximately $15.9 million and $37.3 million for the nine months ended September 30, 2017 and October 1, 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 do not include any blenders tax credits, while fiscal 2016 included blenders tax credits.