Investment in Unconsolidated Subsidiary

9 Months Ended

Oct. 03, 2015

Equity Method Investments and Joint Ventures [Abstract]

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 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 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):



(in thousands)	September 30, 2015		December 31, 2014
Assets:
Total current assets	$	110,625	$	216,991
Property, plant and equipment, net	357,305		373,117
Other assets	1,067		2,092
Total assets	$	468,997	$	592,200
Liabilities and members' equity:
Total current portion of long term debt	$	17,023	$	57,514
Total other current liabilities	29,337		21,313
Total long term debt	136,074		155,273
Total other long term liabilities	371		339
Total members' equity	286,192		357,761
Total liabilities and member's equity	$	468,997	$	592,200



	Three Months Ended						Nine Months Ended
(in thousands)	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Revenues:
Operating revenues	$	107,160		$	80,206		$	380,048		$	347,926
Expenses:
Total costs and expenses	128,738			78,800			391,081			325,355
Operating income/(loss)	(21,578		)	1,406			(11,033		)	22,571
Other income	41			27			93			69
Interest and debt expense, net	(3,122		)	(4,395		)	(10,629		)	(13,296		)
Net income/(loss)	$	(24,659	)	$	(2,962	)	$	(21,569	)	$	9,344

As of October 3, 2015 under the equity method of accounting, the Company has an investment in the DGD Joint Venture of approximately $143.1 million on the consolidated balance sheet and has recorded approximately $10.8 million in equity net loss and $4.7 million in equity net income in the unconsolidated subsidiary for the nine months ended October 3, 2015 and September 27, 2014, respectively. In addition, in April 2015, the Company received a $25.0 million dividend distribution from the DGD Joint Venture.