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SEGMENTS.

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

SEGMENTS.

4. SEGMENTS.

The Company reports its financial and operating performance in two segments: (1) ethanol production, which includes the production and sale of ethanol, specialty alcohols and co-products, with all of the Company's production facilities aggregated, and (2) marketing and distribution, which includes marketing and merchant trading for Company-produced ethanol, specialty alcohols and co-products, and third-party ethanol.

Income before provision for income taxes includes management fees charged by Pacific Ethanol to the segment. The production segment incurred $10,522,000 and $10,248,000 in management fees for the years ended December 31, 2019 and 2018, respectively. The marketing and distribution segment incurred $2,160,000 in management fees for each of the years ended December 31, 2019 and 2018. Corporate activities include selling, general and administrative expenses, consisting primarily of corporate employee compensation, professional fees and overhead costs not directly related to a specific operating segment.

During the normal course of business, the segments do business with each other. The preponderance of this activity occurs when the Company's marketing segment markets ethanol produced by the production segment for a marketing fee, as discussed in Note 3. These intersegment activities are considered arms'-length transactions. Consequently, although these transactions impact segment performance, they do not impact the Company's consolidated results since all revenues and corresponding costs are eliminated in consolidation.

Capital expenditures are substantially all incurred at the Company's production segment.

The following tables set forth certain financial data for the Company's operating segments (in thousands):

		Years Ended December 31,
Net Sales		2019				2018
Production, recorded as gross:
Ethanol/alcohol sales		$	800,262			$	859,815
Co-product sales			268,996				296,686
Intersegment sales			1,619				1,995
Total production sales			1,070,877				1,158,496
Marketing and distribution:
Ethanol/alcohol sales, gross		$	353,792			$	357,011
Ethanol/alcohol sales, net			1,831				1,859
Intersegment sales			7,901				8,773
Total marketing and distribution sales			363,524				367,643
Intersegment eliminations			(9,520	)			(10,768	)
Net sales as reported		$	1,424,881			$	1,515,371

Cost of goods sold:
Production		$	1,095,742			$	1,197,507
Marketing and distribution			349,906				343,991
Intersegment eliminations			(10,829	)			(10,963	)
Cost of goods sold as reported		$	1,434,819			$	1,530,535

Income (loss) before benefit for income taxes:
Production		$	(93,367	)		$	(77,833	)
Marketing and distribution			7,442				18,191
Corporate activities			(15,357	)			(8,856	)
		$	(101,282	)		$	(68,498	)
Depreciation:
Production		$	47,206			$	40,099
Corporate activities			703				750
		$	47,909			$	40,849

Interest expense:
Production		$	7,569			$	7,116
Marketing and distribution			3,053				1,388
Corporate activities			9,584				8,628
		$	20,206			$	17,132

The following table sets forth the Company's total assets by operating segment (in thousands): 

		December 31, 2019				December 31, 2018
Total assets:
Production		$	492,060			$	532,790
Marketing and distribution			106,863				112,984
Corporate assets			13,572				14,117
		$	612,495			$	659,891

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- References

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- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

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