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Investment in Unconsolidated Subsidiary
6 Months Ended
Jun. 29, 2024
Equity Method Investments and Joint Ventures [Abstract]  
Investment in Unconsolidated Subsidiary 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 (“DGD” or the “DGD Joint Venture”). 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)June 30, 2024December 31, 2023
Assets:
Total current assets$1,849,534 $1,877,430 
Property, plant and equipment, net3,888,370 3,838,800 
Other assets122,629 89,697 
Total assets$5,860,533 $5,805,927 
Liabilities and members' equity:
Total current portion of long term debt$29,251 $278,639 
Total other current liabilities404,090 417,918 
Total long term debt722,346 737,097 
Total other long term liabilities17,189 16,996 
Total members' equity4,687,657 4,355,277 
Total liabilities and members' equity$5,860,533 $5,805,927 

Three Months EndedSix Months Ended
(in thousands)June 30, 2024June 30, 2023June 30, 2024June 30, 2023
Revenues:
Operating revenues$1,184,076 $2,246,111 $2,595,191 $3,926,161 
Expenses:
Total costs and expenses less lower of cost or market inventory valuation adjustment and depreciation, amortization and accretion expense1,014,927 1,751,315 2,174,283 3,172,719 
Lower of cost or market (LCM) inventory valuation adjustment15,866 — 37,504 — 
Depreciation, amortization and accretion expense
61,910 58,315 127,200 116,922 
Total costs and expenses1,092,703 1,809,630 2,338,987 3,289,641 
Operating income91,373 436,481 256,204 636,520 
Other income6,058 2,121 9,278 4,162 
Interest and debt expense, net(9,037)(12,674)(20,279)(26,080)
Income before income tax expense88,394 425,928 $245,203 $614,602 
Income tax benefit— — (29)— 
Net income$88,394 $425,928 $245,232 $614,602 

As of June 29, 2024, under the equity method of accounting, the Company has an investment in the DGD Joint Venture of approximately $2,347.2 million on the consolidated balance sheet. The Company has recorded equity in net income from the DGD Joint Venture of approximately $44.2 million and $213.0 million for the three months ended June 29, 2024 and July 1, 2023, respectively. The Company has recorded equity in net income from the DGD Joint Venture of approximately $122.6 million and $307.3 million for the six months ended June 29, 2024 and July 1, 2023, respectively. In December 2019, the blenders tax credit was extended for calendar years 2020, 2021 and 2022. 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 from 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 credit, the CFPC requires that production must take place in the United States. For the three
months ended June 29, 2024 and July 1, 2023, the DGD Joint Venture recorded approximately $308.2 million and $387.5 million of blenders tax credits, respectively. For the six months ended June 29, 2024 and July 1, 2023, the DGD Joint Venture recorded approximately $639.2 million and $633.5 million of blenders tax credits, respectively. The blenders tax credits are recorded as a reduction of cost of sales by the DGD Joint Venture. In the six months ended June 29, 2024 and July 1, 2023, respectively, the Company made $90.0 million and $75.0 million capital contributions to the DGD Joint Venture. In the six months ended June 29, 2024 and July 1, 2023, the Company received zero and $101.4 million in dividend distributions from the DGD Joint Venture, respectively. In July 2024, the Company received approximately $77.1 million as a dividend distribution from the DGD Joint Venture. As of June 29, 2024, the DGD Joint Venture had no borrowings outstanding 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.