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SEGMENTS. | 9 Months Ended | 12 Months Ended
--- | --- | ---
Sep. 30, 2019 | Dec. 31, 2018
Segment Reporting [Abstract] |  |
SEGMENTS. |
2. | 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. The following tables set forth certain financial data for the Company's operating segments (in thousands):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
Net Sales |  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Production, recorded as gross: |  |  |  |  |  |  |  |  |  |  |  |
Ethanol/alcohol sales |  | $ | 212,897 |  |  | $ | 216,788 |  |  | $ | 586,680 |  |  | $ | 670,304 |
Co-product sales |  |  | 65,693 |  |  |  | 73,259 |  |  |  | 199,177 |  |  |  | 226,307 |
Intersegment sales |  |  | 403 |  |  |  | 518 |  |  |  | 1,187 |  |  |  | 1,531 |
Total production sales |  |  | 278,993 |  |  |  | 290,565 |  |  |  | 787,044 |  |  |  | 898,142 |
Marketing and distribution: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ethanol/alcohol sales, gross |  | $ | 86,124 |  |  | $ | 79,877 |  |  | $ | 280,032 |  |  | $ | 282,940 |
Ethanol/alcohol sales, net |  |  | 446 |  |  |  | 483 |  |  |  | 1,375 |  |  |  | 1,405 |
Intersegment sales |  |  | 2,079 |  |  |  | 2,201 |  |  |  | 5,839 |  |  |  | 6,757 |
Total marketing and distribution sales |  |  | 88,649 |  |  |  | 82,561 |  |  |  | 287,246 |  |  |  | 291,102 |
Intersegment eliminations |  |  | (2,482 | ) |  |  | (2,719 | ) |  |  | (7,026 | ) |  |  | (8,288 | )
Net sales as reported |  | $ | 365,160 |  |  | $ | 370,407 |  |  | $ | 1,067,264 |  |  | $ | 1,180,956 |
Cost of goods sold: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Production |  | $ | 294,888 |  |  | $ | 295,574 |  |  | $ | 810,670 |  |  | $ | 914,638 |
Marketing and distribution |  |  | 87,976 |  |  |  | 73,784 |  |  |  | 277,545 |  |  |  | 268,917 |
Intersegment eliminations |  |  | (2,888 | ) |  |  | (2,719 | ) |  |  | (7,817 | ) |  |  | (8,456 | )
Cost of goods sold as reported |  | $ | 379,976 |  |  | $ | 366,639 |  |  | $ | 1,080,398 |  |  | $ | 1,175,099 |
Income (loss) before benefit for income taxes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Production |  | $ | (25,999 | ) |  | $ | (15,571 | ) |  | $ | (50,682 | ) |  | $ | (45,355 | )
Marketing and distribution |  |  | (998 | ) |  |  | 7,416 |  |  |  | 4,991 |  |  |  | 18,095 |
Corporate activities |  |  | (2,076 | ) |  |  | (1,149 | ) |  |  | (5,833 | ) |  |  | (6,708 | )
|  | $ | (29,073 | ) |  | $ | (9,304 | ) |  | $ | (51,524 | ) |  | $ | (33,968 | )
Depreciation and amortization: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Production |  | $ | 11,833 |  |  | $ | 10,040 |  |  | $ | 35,390 |  |  | $ | 30,017 |
Corporate activities |  |  | 195 |  |  |  | 177 |  |  |  | 554 |  |  |  | 618 |
|  | $ | 12,028 |  |  | $ | 10,217 |  |  | $ | 35,944 |  |  | $ | 30,635 |
Interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Production |  | $ | 1,969 |  |  | $ | 1,692 |  |  | $ | 5,724 |  |  | $ | 5,416 |
Marketing and distribution |  |  | 929 |  |  |  | 344 |  |  |  | 2,291 |  |  |  | 1,042 |
Corporate activities |  |  | 2,265 |  |  |  | 2,157 |  |  |  | 6,999 |  |  |  | 6,417 |
|  | $ | 5,163 |  |  | $ | 4,193 |  |  | $ | 15,014 |  |  | $ | 12,875 |
The following table sets forth the Company's total assets by operating segment (in thousands):
Total assets: |  | September 30, 2019 |  |  | December 31, 2018 |
Production |  | $ | 527,950 |  |  | $ | 532,790 |
Marketing and distribution |  |  | 108,960 |  |  |  | 112,984 |
Corporate assets |  |  | 15,950 |  |  |  | 14,117 |
|  | $ | 652,860 |  |  | $ | 659,891 |
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 $10,248,000, $9,744,000 and $9,968,000 in management fees for the years ended December 31, 2018, 2017 and 2016, respectively. The marketing and distribution segment incurred $2,160,000, $2,160,000 and $3,000,000 in management fees for the years ended December 31, 2018, 2017 and 2016, respectively. 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, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Net Sales |  |  |  |  |  |  |  |  |
Production, recorded as gross: |  |  |  |  |  |  |  |  |
Ethanol/alcohol sales |  | $ | 859,815 |  |  | $ | 845,692 |  |  | $ | 797,363 |
Co-product sales |  |  | 296,686 |  |  |  | 257,031 |  |  |  | 248,444 |
Intersegment sales |  |  | 1,995 |  |  |  | 1,898 |  |  |  | 1,169 |
Total production sales |  |  | 1,158,496 |  |  |  | 1,104,621 |  |  |  | 1,046,976 |
Marketing and distribution: |  |  |  |  |  |  |  |  |  |  |  |
Ethanol/alcohol sales, gross |  | $ | 357,011 |  |  | $ | 527,869 |  |  | $ | 577,347 |
Ethanol/alcohol sales, net |  |  | 1,859 |  |  |  | 1,663 |  |  |  | 1,604 |
Intersegment sales |  |  | 8,773 |  |  |  | 8,464 |  |  |  | 8,029 |
Total marketing and distribution sales |  |  | 367,643 |  |  |  | 537,996 |  |  |  | 586,980 |
Intersegment eliminations |  |  | (10,768 | ) |  |  | (10,362 | ) |  |  | (9,198 | )
Net sales as reported |  | $ | 1,515,371 |  |  | $ | 1,632,255 |  |  | $ | 1,624,758 |
Cost of goods sold: |  |  |  |  |  |  |  |  |
Production |  | $ | 1,197,507 |  |  | $ | 1,101,651 |  |  | $ | 1,003,679 |
Marketing and distribution |  |  | 343,991 |  |  |  | 535,033 |  |  |  | 575,920 |
Intersegment eliminations |  |  | (10,963 | ) |  |  | (10,360 | ) |  |  | (9,199 | )
Cost of goods sold as reported |  | $ | 1,530,535 |  |  | $ | 1,626,324 |  |  | $ | 1,570,400 |
Income (loss) before benefit for income taxes: |  |  |  |  |  |  |  |  |
Production |  | $ | (77,833 | ) |  | $ | (27,457 | ) |  | $ | (6,879 | )
Marketing and distribution |  |  | 18,191 |  |  |  | (2,463 | ) |  |  | 4,517 |
Corporate activities |  |  | (8,856 | ) |  |  | (8,475 | ) |  |  | 2,907 |
|  | $ | (68,498 | ) |  | $ | (38,395 | ) |  | $ | 545 |
Depreciation: |  |  |  |  |  |  |  |  |  |  |  |
Production |  | $ | 40,099 |  |  | $ | 37,637 |  |  | $ | 34,528 |
Corporate activities |  |  | 750 |  |  |  | 1,014 |  |  |  | 913 |
|  | $ | 40,849 |  |  | $ | 38,651 |  |  | $ | 35,441 |
Interest expense: |  |  |  |  |  |  |  |  |
Production |  | $ | 7,116 |  |  | $ | 5,887 |  |  | $ | 20,794 |
Marketing and distribution |  |  | 1,388 |  |  |  | 1,271 |  |  |  | 1,404 |
Corporate activities |  |  | 8,628 |  |  |  | 5,780 |  |  |  | 208 |
|  | $ | 17,132 |  |  | $ | 12,938 |  |  | $ | 22,406 |
The following table sets forth the Company's total assets by operating segment (in thousands):
|  | December 31, 2018 |  |  | December 31, 2017 |
Total assets: |  |  |  |  |  |
Production |  | $ | 532,790 |  |  | $ | 583,696 |
Marketing and distribution |  |  | 112,984 |  |  |  | 127,242 |
Corporate assets |  |  | 14,117 |  |  |  | 9,358 |
|  | $ | 659,891 |  |  | $ | 720,296 |

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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 + Details
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