Investment in Unconsolidated Subsidiary

12 Months Ended

Dec. 31, 2022

INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES

The DGD Joint Venture is owned 50% / 50% with Valero.

Selected financial information for the Company's DGD Joint Venture is as follows:


(in thousands)	December 31, 2022		December 31, 2021
Assets:
Total current assets	$	1,304,805	$	686,294
Property, plant and equipment, net	3,866,854		2,710,747
Other assets	61,665		51,514
Total assets	$	5,233,324	$	3,448,555
Liabilities and members' equity:
Total current portion of long term debt	$	217,066	$	165,092
Total other current liabilities	515,023		295,860
Total long term debt	774,783		344,309
Total other long term liabilities	17,249		17,531
Total members' equity	3,709,203		2,625,763
Total liabilities and member's equity	$	5,233,324	$	3,448,555


	Year Ended December 31,
(in thousands)	2022		2021		2020
Revenues:
Operating revenues	$	5,501,166	$	2,342,332	$	1,267,477
Expenses:
Total costs and expenses less depreciation, amortization and accretion expense	4,614,192		1,575,494		592,781
Depreciation, amortization and accretion expense	125,656		58,326		44,882
Operating income	761,318		708,512		629,814
Other income	3,170		678		1,636
Interest and debt expense, net	(19,796)		(5,936)		(1,260)
Net income	$	744,692	$	703,254	$	630,190

As of December 31, 2022, under the equity method of accounting, the Company has an investment in the DGD Joint Venture of approximately $1.9 billion on the consolidated balance sheet. The Company has recorded approximately $372.3 million, $351.6 million and $315.1 million in equity in net income of Diamond Green Diesel for the years ended December 31, 2022, January 1, 2022 and January 2, 2021, respectively. In December 2019, the blender tax credits were extended for calendar years 2020, 2021 and 2022. Biodiesel blenders registered with the Internal Revenue Service are currently 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 at least 0.1% diesel fuel. In fiscal 2022, fiscal 2021 and fiscal 2020, the DGD Joint Venture recorded approximately $761.1 million, $371.2 million and $287.9 million, respectively in blenders tax credits. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act ( the “IR Act”). As part of the IR Act, the blender tax credits were extended as is until December 31, 2024. After 2024, the Clean Fuels Production Credit (the “CFPC”) becomes effective for 2025 through 2027. Under the CFPC, on-road transportation fuel receives a base credit of $1.00 per gallon of renewable diesel multiplied by the fuel's emission reduction percentage as long as it is produced at a qualifying facility and it meets prevailing wage requirements and apprenticeship requirements. In contrast to the blenders tax credits, the CFPC requires that production must take place in the United States. The Company received approximately $90.5 million, zero and $205.2 million for each of the years ended December 31, 2022, January 1, 2022 and January 2, 2021, in dividend distributions from the DGD Joint Venture. In addition, during fiscal year 2022 and 2021, the Company made capital contributions to the DGD Joint Venture of approximately $264.8 million and $189.0 million, respectively. Subsequent to December 31, 2022, each joint venture partner made a capital contribution of approximately $75.0 million.

In addition to the DGD Joint Venture, the Company has investments in other unconsolidated subsidiaries that are insignificant to the Company.