Investment in Unconsolidated Subsidiary

12 Months Ended

Dec. 30, 2023

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, 2023		December 31, 2022
Assets:
Total current assets	$	1,877,430	$	1,304,805
Property, plant and equipment, net	3,838,800		3,866,854
Other assets	89,697		61,665
Total assets	$	5,805,927	$	5,233,324
Liabilities and members' equity:
Total current portion of long term debt	$	278,639	$	217,066
Total other current liabilities	417,918		515,023
Total long term debt	737,097		774,783
Total other long term liabilities	16,996		17,249
Total members' equity	4,355,277		3,709,203
Total liabilities and member's equity	$	5,805,927	$	5,233,324


	Year Ended December 31,
(in thousands)	2023		2022		2021
Revenues:
Operating revenues	$	6,990,622	$	5,501,166	$	2,342,332
Expenses:
Total costs and expenses less lower of cost or market inventory valuation adjustment and depreciation, amortization and accretion expense	5,925,778		4,614,192		1,575,494
Lower of cost or market (LCM) inventory valuation adjustment	60,871		—		—
Depreciation, amortization and accretion expense	230,921		125,656		58,326
Operating income	773,052		761,318		708,512
Other income	10,317		3,170		678
Interest and debt expense, net	(49,857)		(19,796)		(5,936)
Income before income tax expense	$	733,512	$	744,692	$	703,254
Income tax expense	752		—		—
Net income	$	732,760	$	744,692	$	703,254

As of December 30, 2023, under the equity method of accounting, the Company has an investment in the DGD Joint Venture of approximately $2.2 billion on the consolidated balance sheet. The Company has recorded approximately $366.4 million, $372.3 million and $351.6 million in equity in net income of Diamond Green Diesel for the years ended December 30, 2023, December 31, 2022 and January 1, 2022, respectively. In December 2019, the blender tax credit was 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. 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 credit was extended 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 up to $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. In fiscal 2023, fiscal 2022 and fiscal 2021, the DGD Joint Venture recorded approximately $1.2 billion, $761.1 million and $371.2 million, respectively, in blenders tax credits. The Company received approximately $163.6 million, $90.5 million and zero for each of the years ended December 30, 2023, December 31, 2022 and January 1, 2022, in dividend distributions from the DGD Joint Venture. In addition, during fiscal year 2023, 2022 and 2021, the Company made capital contributions to the DGD Joint Venture of approximately $75.0 million, $264.8 million and $189.0 million, respectively. As of December 30, 2023, the DGD Joint Venture has borrowings outstanding of $250.0 million under their unsecured revolving credit facility.

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