Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 14, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | Pacific Ethanol, Inc. | ||
Entity Central Index Key | 778,164 | ||
Document Type | 10-K | ||
Trading Symbol | PEIX | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 266,300 | ||
Entity Common Stock, Shares Outstanding | 43,959,245 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 49,489 | $ 64,259 |
Accounts receivable, net of allowance for doubtful accounts of $19 and $331, respectively | 80,344 | 86,275 |
Inventories | 61,550 | 60,070 |
Prepaid inventory | 3,281 | 9,946 |
Income tax receivables | 743 | 5,730 |
Derivative assets | 998 | 978 |
Other current assets | 6,841 | 7,943 |
Total current assets | 203,246 | 235,201 |
Property and equipment, net | 508,352 | 465,190 |
Other Assets: | ||
Intangible assets | 2,678 | 2,678 |
Other assets | 6,020 | 5,169 |
Total other assets | 8,698 | 7,847 |
Total Assets | 720,296 | 708,238 |
Current Liabilities: | ||
Accounts payable - trade | 39,738 | 37,051 |
Accrued liabilities | 21,673 | 20,280 |
Current portion - capital leases | 592 | 794 |
Current portion - long-term debt | 20,000 | 10,500 |
Derivative liabilities | 2,307 | 4,115 |
Other current liabilities | 6,396 | 6,101 |
Total current liabilities | 90,706 | 78,841 |
Long-term debt, net of current portion | 221,091 | 188,028 |
Capital leases, net of current portion | 123 | 547 |
Warrant liabilities at fair value | 651 | |
Other liabilities | 24,676 | 21,910 |
Total Liabilities | 336,596 | 289,977 |
Commitments and contingencies (Notes 1, 8, 9 and 14) | ||
Stockholders' Equity: | ||
Common stock value | 44 | 40 |
Additional paid-in capital | 927,090 | 922,698 |
Accumulated other comprehensive loss | (2,234) | (2,620) |
Accumulated deficit | (568,462) | (532,233) |
Total Pacific Ethanol, Inc. stockholders' equity | 356,439 | 387,890 |
Noncontrolling interests | 27,261 | 30,371 |
Total stockholders' equity | 383,700 | 418,261 |
Total Liabilities and Stockholders' Equity | 720,296 | 708,238 |
Series A Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized: Series A: 1,684,375 shares authorized; no shares issued and outstanding as of December 31, 2017 and 2016 Series B: 1,580,790 shares authorized; 926,942 shares issued and outstanding as of December 31, 2017 and 2016; liquidation preference of $18,075 as of December 31, 2017 | ||
Series B Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized: Series A: 1,684,375 shares authorized; no shares issued and outstanding as of December 31, 2017 and 2016 Series B: 1,580,790 shares authorized; 926,942 shares issued and outstanding as of December 31, 2017 and 2016; liquidation preference of $18,075 as of December 31, 2017 | 1 | 1 |
Nonvoting Common Stock [Member] | ||
Stockholders' Equity: | ||
Common stock value | $ 4 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts receivable, net of allowance | $ 19 | $ 331 |
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 300,000,000 | 300,000,000 |
Common stock, issued | 43,984,975 | 39,772,238 |
Common stock, outstanding | 43,984,975 | 39,772,238 |
Series A Preferred Stock | ||
Preferred stock shares authorized | 1,684,375 | 1,684,375 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Series B Preferred Stock | ||
Preferred stock shares authorized | 1,580,790 | 1,580,790 |
Preferred stock shares issued | 926,942 | 926,942 |
Preferred stock shares outstanding | 926,942 | 926,942 |
Preferred stock liquidation preference | $ 18,075 | |
Nonvoting Common Stock [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 3,553,000 | 3,553,000 |
Common stock, issued | 896 | 3,540,132 |
Common stock, outstanding | 896 | 3,540,132 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Net sales | $ 1,632,255 | $ 1,624,758 | $ 1,191,176 |
Cost of goods sold | 1,626,324 | 1,570,400 | 1,180,810 |
Gross profit | 5,931 | 54,358 | 10,366 |
Selling, general and administrative expenses | 31,516 | 30,849 | 26,368 |
Asset impairment | 1,970 | ||
Income (loss) from operations | (25,585) | 23,509 | (17,972) |
Fair value adjustments and warrant inducements | 473 | (557) | 1,641 |
Interest expense | (12,938) | (22,406) | (12,594) |
Other income (expense), net | (345) | (1) | 18 |
Income (loss) before provision for income taxes | (38,395) | 545 | (28,907) |
Provision (benefit) for income taxes | (321) | (981) | (10,034) |
Consolidated net income (loss) | (38,074) | 1,526 | (18,873) |
Net (income) loss attributed to noncontrolling interests | 3,110 | (107) | 87 |
Net income (loss) attributed to Pacific Ethanol, Inc. | (34,964) | 1,419 | (18,786) |
Preferred stock dividends | (1,265) | (1,269) | (1,265) |
Income allocated to participating securities | (2) | ||
Income (loss) available to common stockholders | $ (36,229) | $ 148 | $ (20,051) |
Income (loss) per share, basic and diluted | $ (0.85) | $ 0 | $ (0.6) |
Weighted-average shares outstanding, basic | 42,745 | 42,182 | 33,173 |
Weighted-average shares outstanding, diluted | 42,745 | 42,251 | 33,173 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Consolidated net income (loss) | $ (38,074) | $ 1,526 | $ (18,873) |
Other comprehensive income (expense) - net gain (loss) arising during the period on defined benefit pension plans | 386 | (3,660) | 1,040 |
Total comprehensive loss | (37,688) | (2,134) | (17,833) |
Comprehensive (income) loss attributed to noncontrolling interests | 3,110 | (107) | 87 |
Comprehensive loss attributed to Pacific Ethanol, Inc. | $ (34,578) | $ (2,241) | $ (17,746) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Noncontrolling Interest [Member] | Total |
Balance at Beginning at Dec. 31, 2014 | $ 1 | $ 25 | $ 725,813 | $ (512,332) | $ 4,475 | $ 217,982 | |
Balance at Beginning (in shares) at Dec. 31, 2014 | 927 | 24,499 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense - restricted stock issued to employees and directors, net of cancellations and tax | 1,475 | 1,475 | |||||
Stock-based compensation expense - restricted stock issued to employees and directors, net of cancellations and tax (in shares) | 216 | ||||||
Pension plan adjustment | 1,040 | (1,040) | |||||
Warrant and option exercises | 440 | 440 | |||||
Warrant and option exercises (in shares) | 42 | ||||||
Shares issued in PE Central acquisition | $ 18 | 174,555 | 174,573 | ||||
Shares issued in PE Central acquisition (in shares) | 17,758 | ||||||
Purchases of interests in PE Op Co. | 560 | (4,388) | (3,828) | ||||
Preferred stock dividends | (1,265) | 1,265 | |||||
Net loss | (18,786) | (87) | (18,873) | ||||
Balance at End at Dec. 31, 2015 | $ 1 | $ 43 | 902,843 | (532,383) | 1,040 | 371,544 | |
Balance at End (in shares) at Dec. 31, 2015 | 927 | 42,515 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense - restricted stock issued to employees and directors, net of cancellations and tax | $ 1 | 2,281 | 2,282 | ||||
Stock-based compensation expense - restricted stock issued to employees and directors, net of cancellations and tax (in shares) | 659 | ||||||
Pension plan adjustment | (3,660) | 3,660 | |||||
Warrant and option exercises | 1,338 | 1,338 | |||||
Warrant and option exercises (in shares) | 138 | ||||||
Preferred stock dividends | (1,269) | 1,269 | |||||
Sale of Pacific Aurora interests to ACEC | 10,475 | 19,525 | 30,000 | ||||
ACEC contribution to form Pacific Aurora | 5,761 | 10,739 | 16,500 | ||||
Net loss | 1,419 | 107 | 1,526 | ||||
Balance at End at Dec. 31, 2016 | $ 1 | $ 44 | 922,698 | (532,233) | (2,620) | 30,371 | 418,261 |
Balance at End (in shares) at Dec. 31, 2016 | 927 | 43,312 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense - restricted stock issued to employees and directors, net of cancellations and tax | 3,014 | 3,014 | |||||
Stock-based compensation expense - restricted stock issued to employees and directors, net of cancellations and tax (in shares) | 473 | ||||||
Pension plan adjustment | 386 | (386) | |||||
Warrant and option exercises | 1,378 | 1,378 | |||||
Warrant and option exercises (in shares) | 201 | ||||||
Preferred stock dividends | (1,265) | 1,265 | |||||
Net loss | (34,964) | (3,110) | (38,074) | ||||
Balance at End at Dec. 31, 2017 | $ 1 | $ 44 | $ 927,090 | $ (568,462) | $ (2,234) | $ 27,261 | $ 383,700 |
Balance at End (in shares) at Dec. 31, 2017 | 927 | 43,986 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Activities: | |||
Consolidated net income (loss) | $ (38,074) | $ 1,526 | $ (18,873) |
Adjustments to reconcile consolidated net income (loss) to cash provided by (used in) operating activities: | |||
Depreciation and amortization of intangibles | 38,651 | 35,441 | 23,632 |
Fair value adjustments | (473) | 557 | (1,641) |
Asset impairment | 1,970 | ||
Deferred income taxes | 169 | (1,122) | (2,023) |
Inventory valuation | 2,678 | 509 | |
Change in fair value on commodity derivative instruments | 2,077 | 1,984 | 542 |
Amortization of deferred financing costs | 503 | 137 | 272 |
Amortization of debt discounts | 636 | 2,322 | 716 |
Noncash compensation | 3,828 | 2,616 | 2,019 |
Bad debt expense (recovery) | 5 | 306 | (354) |
Interest expense added to plant term debt | 9,451 | ||
Changes in operating assets and liabilities, net of effects from acquisitions: | |||
Accounts receivable | 17,562 | (25,235) | (15,950) |
Inventories | 5,070 | 750 | (13,296) |
Prepaid expenses and other assets | 2,677 | 3,189 | (1,093) |
Prepaid inventory | 6,738 | (3,973) | 5,622 |
Accounts payable and accrued expenses | (5,538) | 9,279 | (10,045) |
Net cash provided by (used in) operating activities | 36,509 | 37,228 | (27,993) |
Investing Activities: | |||
Additions to property and equipment | (20,866) | (19,171) | (20,507) |
Purchase of ICP, net of cash acquired | (29,574) | ||
Proceeds (payments) for cash collateralized letters of credit | 4,574 | (4,574) | |
Net cash from acquisition of PE Central | 18,756 | ||
Net cash used in investing activities | (50,440) | (14,597) | (6,325) |
Financing Activities: | |||
Proceeds from warrant and option exercises | 1,202 | 1,164 | 368 |
Proceeds from plant term and revolving credit agreements | 42,000 | 97,000 | |
Proceeds from parent notes | 13,530 | 53,350 | |
Sale of noncontrolling interests | 30,000 | ||
Proceeds from assessment financing | 5,618 | 2,096 | |
Net proceeds (payments) on Kinergy's line of credit | (385) | (11,141) | 43,584 |
Payments on plant borrowings | (59,927) | (172,073) | (13,833) |
Debt issuance costs | (986) | (1,960) | |
Preferred stock dividend payments | (1,265) | (1,269) | (1,265) |
Payments on capital leases | (626) | (7,089) | (5,059) |
Net cash provided by (used in) financing activities | (839) | (9,922) | 23,795 |
Net increase (decrease) in cash and cash equivalents | (14,770) | 12,709 | (10,523) |
Cash and cash equivalents at beginning of period | 64,259 | 51,550 | 62,073 |
Cash and cash equivalents at end of period | 49,489 | 64,259 | 51,550 |
Supplemental Information: | |||
Interest paid | 11,133 | 11,168 | 11,685 |
Income tax refunds | 5,614 | 4,784 | 5,710 |
Noncash financing and investing activities: | |||
Accrued payment for ownership positions of PE Op Co. | 3,828 | ||
Capital leases added to plant and equipment | 180 | 1,864 | |
Reclass of warrant liability to equity upon exercises | 178 | 179 | 72 |
Contribution of property and equipment for noncontrolling interest (see Note 2) | 16,500 | ||
Debt issued in ICP acquisition (see Note 2) | 46,927 | ||
Common stock issued in PE Central acquisition (see Note 2) | $ 174,573 |
ORGANIZATION AND SIGNIFICANT AC
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. | 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES . Organization and Business The Company’s acquisition of Aventine Renewable Energy Holdings, Inc. (now, Pacific Ethanol Central, LLC, a Delaware limited liability company, “PE Central”) was consummated on July 1, 2015, and as a result, the Company’s consolidated financial statements include the results of PE Central only as of and for the years ended December 31, 2017 and 2016 and for the six months ended December 31, 2015. On December 15, 2016, the Company and Aurora Cooperative Elevator Company, a Nebraska cooperative corporation (“ACEC”), closed a transaction under a contribution agreement under which the Company contributed its Aurora, Nebraska ethanol facilities and ACEC contributed its Aurora grain elevator and related grain handling assets to Pacific Aurora, LLC (“Pacific Aurora”) in exchange for equity interests in Pacific Aurora. On December 15, 2016, concurrently with the closing under the contribution agreement, the Company sold a portion of its equity interest in Pacific Aurora to ACEC. As a result, the Company owned 73.93% of Pacific Aurora and ACEC owned 26.07% of Pacific Aurora as of December 31, 2017 and 2016. Further, the Company has consolidated 100% of the results of Pacific Aurora and recorded ACEC’s 26.07% equity interest as noncontrolling interests in the accompanying financial statements for the year ended December 31, 2017 and for the period December 15, 2016 through December 31, 2016. The Company’s acquisition of Illinois Corn Processing, LLC (“ICP”) was consummated on July 3, 2017, and as a result, the Company’s consolidated financial statements include the results of ICP only for the period from July 3, 2017 through December 31, 2017. The Company is a leading producer and marketer of low-carbon renewable fuels in the United States. The Company’s four ethanol plants in the Western United States (together with their respective holding companies, the “Pacific Ethanol West Plants”) are located in close proximity to both feed and ethanol customers and thus enjoy unique advantages in efficiency, logistics and product pricing. These plants produce among the lowest-carbon ethanol produced in the United States due to low energy use in production. With the addition of four Midwestern ethanol plants in July 2015 as a result of the Company’s acquisition of PE Central and the addition of ICP’s plant in July 2017, the Company now has a combined production capacity of 605 million gallons per year, markets, on an annualized basis, nearly 1.0 billion gallons of ethanol and specialty alcohols, and produces, on an annualized basis, over 3.0 million tons of co-products on a dry matter basis, such as wet and dry distillers grains, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, dried yeast and CO 2 As of December 31, 2017, all nine facilities were operating. As market conditions change, the Company may increase, decrease or idle production at one or more operational facilities or resume operations at any idled facility. Basis of Presentation Segments Segment Reporting Cash and Cash Equivalents Accounts Receivable and Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for balances that appear to have specific collection issues. The collection process is based on the age of the invoice and requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivable are charged against the allowance for doubtful accounts once uncollectibility has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of ability to make payments, additional allowances may be required. Of the accounts receivable balance, approximately $64,501,000 and $64,853,000 at December 31, 2017 and 2016, respectively, were used as collateral under Kinergy’s operating line of credit. The allowance for doubtful accounts was $19,000 and $331,000 as of December 31, 2017 and 2016, respectively. The Company recorded a bad debt expense of $5,000 and $306,000 and a recovery of $354,000 for the years ended December 31, 2017, 2016 and 2015, respectively. The Company does not have any off-balance sheet credit exposure related to its customers. Concentration Risks The Company sells fuel-grade ethanol to gasoline refining and distribution companies. The Company sold ethanol to customers representing 10% or more of the Company’s total net sales, as follows. Years Ended December 31, 2017 2016 2015 Customer A 16 % 17 % 12 % Customer B 11 % 12 % 15 % Customer C 6 % 6 % 12 % The Company had accounts receivable due from these customers totaling $21,584,000 and $21,274,000, representing 27% and 25% of total accounts receivable, as of December 31, 2017 and 2016, respectively. The Company purchases corn, its largest cost component in producing ethanol, from its suppliers. The Company purchased corn from suppliers representing 10% or more of the Company’s total corn purchases, as follows: Years Ended December 31, 2017 2016 2015 Supplier A 14 % 13 % 19 % Supplier B 13 % 4 % — % Supplier C 10 % 8 % 9 % Supplier D 9 % 13 % 13 % Approximately 32% of the Company’s employees are covered by a collective bargaining agreement. Inventories December 31, 2017 2016 Finished goods $ 35,652 $ 33,773 Work in progress 8,807 7,092 Raw materials 7,601 6,571 Low-carbon and RIN credits 7,952 10,926 Other 1,538 1,708 Total $ 61,550 $ 60,070 Property and Equipment Buildings 40 years Facilities and plant equipment 10 – 25 years Other equipment, vehicles and furniture 5 – 10 years The cost of normal maintenance and repairs is charged to operations as incurred. Significant capital expenditures that increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the asset. The cost of property and equipment sold, or otherwise disposed of, and the related accumulated depreciation or amortization are removed from the accounts, and any resulting gains or losses are reflected in current operations. Intangible Asset Derivative Instruments and Hedging Activities Revenue Recognition ● As a producer ● As a merchant ● As an agent Revenue from sales of third-party ethanol is recorded net of costs when the Company is acting as an agent between a customer and a supplier and gross when the Company is a principal to the transaction. The Company recorded $1,663,000, $1,604,000 and $1,510,000 in net sales when acting as an agent for the years ended December 31, 2017, 2016 and 2015, respectively. Several factors are considered to determine whether the Company is acting as an agent or principal, most notably whether the Company is the primary obligor to the customer and whether the Company has inventory risk and related risk of loss or whether the Company adds meaningful value to the supplier’s product or service. Consideration is also given to whether the Company has latitude in establishing the sales price or has credit risk, or both. When the Company acts as an agent, it recognizes revenue on a net basis or recognizes its predetermined fees and any associated freight, based upon the amount of net revenues retained in excess of amounts paid to suppliers. The Company records revenues based upon the gross amounts billed to its customers in transactions where the Company acts as a producer or a merchant and obtains title to ethanol and therefore owns the product and any related, unmitigated inventory risk for the ethanol, regardless of whether the Company actually obtains physical control of the product. Shipping and Handling Costs Selling Costs Stock-Based Compensation Impairment of Long-Lived Assets Deferred Financing Costs Provision for Income Taxes The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. An uncertain tax position is considered effectively settled on completion of an examination by a taxing authority if certain other conditions are satisfied. Should the Company incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of interest expense and other income (expense), net, respectively. Deferred tax assets and liabilities are classified as noncurrent in the Company’s consolidated balance sheets. The Company files a consolidated federal income tax return. This return includes all wholly-owned subsidiaries as well as the Company’s pro-rata share of taxable income from pass-through entities in which the Company owns less than 100%. State tax returns are filed on a consolidated, combined or separate basis depending on the applicable laws relating to the Company and its subsidiaries. Income (Loss) Per Share The following tables compute basic and diluted earnings per share (in thousands, except per share data): Year Ended December 31, 2017 Loss Shares Per-Share Net loss attributed to Pacific Ethanol $ (34,964 ) Less: Preferred stock dividends (1,265 ) Basic and Diluted loss per share: Loss available to common stockholders $ (36,229 ) 42,745 $ (0.85 ) Year Ended December 31, 2016 Income Shares Per-Share Net income attributed to Pacific Ethanol $ 1,419 Less: Preferred stock dividends (1,269 ) Less: Allocated to participating securities (2 ) Basic income per share: Income available to common stockholders $ 148 42,182 $ 0.00 Add: Options — 69 Diluted income per share: Income available to common stockholders $ 148 42,251 $ 0.00 Year Ended December 31, 2015 Loss Shares Per-Share Net loss attributed to Pacific Ethanol $ (18,786 ) Less: Preferred stock dividends (1,265 ) Basic and Diluted loss per share: Loss available to common stockholders $ (20,051 ) 33,173 $ (0.60 ) There were an aggregate of 719,000, 704,000 and 817,000 potentially dilutive shares from convertible securities outstanding as of December 31, 2017, 2016 and 2015, respectively. These convertible securities were not considered in calculating diluted income (loss) per common share for the years ended December 31, 2017, 2016 and 2015 as their effect would be anti-dilutive. Financial Instruments Employment-related Benefits Estimates and Assumptions Subsequent Events Reclassifications Recent Accounting Pronouncements The provisions of ASC 606 include a five-step process by which an entity will determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which an entity expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies the performance obligation. The Company adopted ASC 606 on January 1, 2018. The Company has completed its evaluation of the new requirements under ASC 606 on each of its major revenue types. The Company’s assessment indicates that ASC 606 will not materially change the way the Company accounts for its contracts with its customers, which will continue to be recognized at a point in time, however, will expand certain disclosures of its revenue streams. The Company will adopt the new guidance using the modified retrospective transition method. In February 2016, the FASB issued new guidance on accounting for leases. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted cash flow basis; and (2) a “right of use” asset, which is an asset that represents the lessee’s right to use the specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged, with some minor exceptions. Lessees will no longer be provided with a source of off-balance sheet financing for other than short-term leases. The standard is effective for public companies for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company expects that upon adoption of this accounting standard, right of use assets and lease obligations will be recognized in its consolidated balance sheets in amounts that will be material. In April 2016, the FASB issued new guidance to reduce the complexity of certain aspects of accounting for employee share-based payment transactions. Prior to adoption of the standard, accruals of compensation costs were based on an estimated forfeiture rate. The new guidance allows an entity to make an entity-wide accounting policy election to either continue using an estimate of forfeitures or account for forfeitures only when they occur. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Effective January 1, 2017, the Company elected to discontinue the use of an estimated forfeiture rate and instead account for actual forfeitures as they occur. The transition guidance requires an adjustment to retained earnings for any cumulative effect. The impact to the Company upon adoption was determined to be immaterial. |
PACIFIC ETHANOL PLANTS.
PACIFIC ETHANOL PLANTS. | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
PACIFIC ETHANOL PLANTS. | 2. PACIFIC ETHANOL PLANTS. Illinois Corn Processing On July 3, 2017, the Company purchased 100% of the equity interests of ICP from ICP’s owners, Illinois Corn Processing Holdings Inc. (“ICPH”) and MGPI Processing, Inc. (together with ICPH, the “Sellers”). At the closing, ICP became an indirect wholly-owned subsidiary of the Company. Upon closing, the Company (i) paid to the Sellers $30.0 million in cash, and (ii) issued to the Sellers secured promissory notes in the aggregate principal amount of approximately $46.9 million (the “Seller Notes”). The Seller Notes were secured by a first priority lien on ICP’s assets and a pledge of the membership interests of ICP. ICP is a 90 million gallon per year fuel and industrial alcohol manufacturing, storage and distribution facility adjacent to the Company’s facility in Pekin, Illinois and is located on the Illinois River. ICP produces fuel-grade ethanol, beverage and industrial-grade alcohol, dry distillers grain and corn oil. The facility has direct access to end-markets via barge, rail and truck, and expands the Company’s domestic and international distribution channels. ICP is reflected in the results of the Company’s production segment. The Company has recognized the following allocation of the purchase price at fair values. No intangible assets or liabilities have been recognized due to ICP’s contracts being materially close to market prices. The Company’s purchase price consideration allocation is as follows (in thousands): Cash and equivalents $ 426 Accounts receivable 11,636 Inventories 9,227 Other current assets 1,560 Total current assets 22,849 Property and equipment 61,128 Other assets 328 Total assets acquired $ 84,305 Accounts payable, trade $ 5,683 Other current liabilities 1,486 Total current liabilities 7,169 Other non-current liabilities 209 Total liabilities assumed $ 7,378 Net assets acquired $ 76,927 Estimated goodwill $ — Total purchase price $ 76,927 The contractual amount due on the accounts receivable acquired was $11.6 million, all of which is expected to be collectible. The following table presents unaudited pro forma combined financial information assuming the acquisition of ICP occurred on January 1, 2016. Years Ended December 31, 2017 2016 Revenues – pro forma $ 1,710,317 $ 1,802,159 Consolidated net income (loss) – pro forma $ (42,589 ) $ 8,329 Diluted net income (loss) per share – pro forma $ (0.95 ) $ 0.16 Diluted weighted-average shares – pro forma 42,745 42,251 For the year ended December 31, 2017, ICP contributed $75.9 million in net revenues and $3.7 million in pre-tax income. For the year ended December 31, 2017, the Company recorded approximately $0.3 million in costs associated with the ICP acquisition. These costs are reflected in selling, general and administrative expenses on the Company’s consolidated statements of operations. PE Central On July 1, 2015, the Company acquired 100% of PE Central and its plants, through a stock-for-stock merger. The Company issued an aggregate of 17.8 million shares of common stock and non-voting common stock for 100% of the outstanding shares of common stock of PE Central. The common stock and non-voting common stock issued as consideration had an aggregate fair value of $174.6 million, based on the closing market price of the Company’s common stock on the acquisition date. The Company believes the acquisition of PE Central resulted in a number of synergies and strategic advantages. The Company believes the acquisition spread commodity and basis price risks across diverse markets and products, assisting in its efforts to optimize margin management; improved its hedging opportunities with a greater correlation to the liquid physical and paper markets in Chicago; and increased its flexibility and alternatives in feedstock procurement for its Midwestern and Western production facilities. The acquisition also expanded the Company’s marketing reach into new markets and extended its mix of co-products. The Company believes the acquisition enabled it to have deeper market insight and engagement in major ethanol and feed markets outside the Western United States, thereby improving pricing opportunities; allowed the Company to establish access to markets in 48 states for ethanol sales and access many markets with ethanol and co-product sales reaching domestic and international customers; and enabled it to use its more diverse mix of co-products to generate strong co-product returns. The Company recognized the following allocation of the purchase price at fair values. The Company included in the following allocation its estimated fair values for certain operating lease agreements and open commitments. The fair-value determination of long-term debt was based on the interest rate environment at the acquisition date. Based on the final allocation, the Company recorded an immaterial bargain purchase gain on the acquisition. The purchase price consideration allocation is as follows (in thousands): Cash and equivalents $ 18,756 Accounts receivable 10,430 Inventories 29,483 Other current assets 8,304 Total current assets 66,973 Property and equipment 312,781 Net deferred tax assets 12,159 Other assets 750 Total assets acquired $ 392,663 Accounts payable and accrued liabilities $ 27,780 Long-term debt - revolvers 13,721 Long-term debt - term debt 142,744 Pension plan liabilities 8,518 Other non-current liabilities 25,327 Total liabilities assumed $ 218,090 Net assets acquired $ 174,573 The contractual amount due on the accounts receivable acquired was $10.8 million, of which $0.4 million is expected to be uncollectible. In accounting for the acquisition, the Company recorded $3.7 million in other noncurrent liabilities as a litigation contingency related to certain litigation matters for amounts that were probable and estimable as of the acquisition date. Subsequent to the acquisition date, the Company settled for $2.1 million certain litigation for which liabilities were recorded. Certain of these settlements were made after the measurement period, and as such the Company recorded a gain of $1.1 million for the year ended December 31, 2016 in selling, general and administrative expenses in the accompanying consolidated statements of operations. See Note 14 for further details. The following table presents unaudited pro forma financial information for the year ended December 31, 2015, assuming the acquisition occurred on January 1, 2014 (in thousands except per share data). Net sales – pro forma $ 1,484,676 Cost of goods sold – pro forma $ 1,469,512 Selling, general and administrative expenses – pro forma $ 34,735 Net loss – pro forma $ (34,136 ) Diluted net loss per share – pro forma $ (0.81 ) Diluted weighted-average shares – pro forma 42,053 The effects of the initial step-up of inventories and open contracts in the aggregate of $8.7 million recorded during 2015 were excluded in the above amounts for 2015 as if the acquisition had occurred on January 1, 2014. For the six months ended December 31, 2015, PE Central contributed $299.0 million in net sales and $16.3 million in pre-tax loss. For the year ended December 31, 2017, PE Central contributed $610.5 million in net sales and $8.4 million in pre-tax loss. For the year ended December 31, 2016, PE Central contributed $650.1 million in net sales and $2.1 million in pre-tax income. For the year ended December 31, 2015, the Company recorded approximately $1.4 million in costs associated with the PE Central acquisition. These costs are reflected in selling, general and administrative expenses on the Company’s consolidated statements of operations, but were excluded from the amounts above. Pacific Aurora On December 15, 2016, PE Central closed on an agreement with ACEC under which (i) PE Central contributed to Pacific Aurora 100% of the equity interests of its wholly-owned subsidiaries, Pacific Ethanol Aurora East, LLC (“AE”) and Pacific Ethanol Aurora West, LLC (“AW”), which owned the Company’s Aurora East and Aurora West ethanol plants, respectively, in exchange for an 88.15% ownership interest in Pacific Aurora, and (ii) ACEC contributed to Pacific Aurora its grain elevator adjacent to the Aurora East and Aurora West properties and related grain handling assets, including the outer rail loop and the real property on which they are located, in exchange for an 11.85% ownership interest in Pacific Aurora. On December 15, 2016, concurrent with the closing of the contribution transaction, PE Central sold a 14.22% ownership interest in Pacific Aurora to ACEC for $30.0 million in cash. Following the closing of these transactions, PE Central owned 73.93% of Pacific Aurora and ACEC owned 26.07% of Pacific Aurora. The Company has consolidated 100% of the results of Pacific Aurora and recorded the amount attributed to ACEC as noncontrolling interests under the voting rights model. Since the Company had control of AE and AW prior to forming Pacific Aurora, there was no gain or loss recorded on the contribution and ultimate sale of a portion of the Company’s interests in Pacific Aurora. ACEC contributed $16.5 million in assets at fair market value and paid $30.0 million in cash for its additional ownership interests. A noncontrolling interest was recognized to reflect ACEC’s proportional ownership interest multiplied by the book value of Pacific Aurora’s net assets. As a result, the Company recorded $16.2 million as additional paid-in capital attributed to the difference between Pacific Aurora’s book value and the contribution and sale. On December 15, 2016, the Company entered into a working capital maintenance agreement with Pacific Aurora’s lender, under which the Company agreed to contribute capital to Pacific Aurora from time to time, if needed, in an amount up to $15.0 million to ensure that Pacific Aurora maintains the minimum working capital thresholds required in its credit agreement as further discussed in Note 9. In addition, dividends from Pacific Aurora to its members are limited to 40% of Pacific Aurora’s annual net income. The carrying values and classification of assets and liabilities of Pacific Aurora as of December 31, 2016 were as follows (in thousands): Cash and equivalents $ 1,453 Accounts receivable 16,804 Inventories 3,837 Other current assets 77 Total current assets 22,171 Property and equipment 115,759 Other assets 1,387 Total assets $ 139,317 Accounts payable and accrued liabilities $ 20,152 Other current liabilities 2,045 Long-term debt outstanding, net 621 Total liabilities $ 22,818 PE OP Co. Prior to May 2015, the Company held a 96% ownership in PE Op Co. In May 2015, it purchased the remaining 4% ownership interest in PE Op Co. for $6.0 million in cash, bringing its ownership of PE Op Co. to 100%. Because the Company had a controlling financial interest in PE Op Co. at the time of this purchase, it did not record any gains or losses, but instead reduced the amount of noncontrolling interest on the consolidated balance sheets by an aggregate of $4.4 million and recorded the difference of $0.6 million and for the year ended December 31, 2015, which represented the fair value of this purchase above the price paid by the Company, to additional paid-in capital on the consolidated balance sheet. |
INTERCOMPANY AGREEMENTS.
INTERCOMPANY AGREEMENTS. | 12 Months Ended |
Dec. 31, 2017 | |
Intercompany Agreements | |
INTERCOMPANY AGREEMENTS. | 3. INTERCOMPANY AGREEMENTS. The Company, directly or through one of its subsidiaries, has entered into the following management and marketing agreements: Affiliate Management Agreement The AMAs have an initial term of one year and automatic successive one year renewal periods. Pacific Ethanol may terminate the AMA, and any subsidiary may terminate the AMA, at any time by providing at least 90 days prior notice of such termination. Pacific Ethanol recorded revenues of approximately $11,904,000, $12,968,000 and $9,857,000 related to the AMAs in place for the years ended December 31, 2017, 2016 and 2015, respectively. These amounts have been eliminated upon consolidation. Ethanol Marketing Agreements Kinergy recorded revenues of approximately $8,464,000, $8,029,000 and $5,262,000 related to the ethanol marketing agreements for the years ended December 31, 2017, 2016 and 2015, respectively. These amounts have been eliminated upon consolidation. Corn Procurement and Handling Agreements Under these agreements, PAP receives a fee of $0.045 per bushel of corn delivered to each facility as consideration for its procurement and handling services, payable monthly. Effective December 15, 2016, this fee is $0.03 per bushel of corn. Each corn procurement and handling agreement had an initial term of one year and successive one year renewal periods at the option of the individual plant. PAP recorded revenues of approximately $4,245,000, $4,386,000 and $2,910,000 related to the corn procurement and handling agreements for the years ended December 31, 2017, 2016 and 2015, respectively. These amounts have been eliminated upon consolidation. Effective December 15, 2016, each Pacific Aurora facility entered into a new grain procurement agreement with ACEC. Under this agreement, ACEC receives a fee of $0.03 per bushel of corn delivered to each facility as consideration for its procurement and handling services, payable monthly. The grain procurement agreement has an initial term of one year and successive one year renewal periods at the option of the individual plant. Pacific Aurora recorded expenses of approximately $816,000 and $107,000 for the year ended December 31, 2017 and the period from December 15, 2016 to December 31, 2016, respectively. These amounts have not been eliminated upon consolidation as they are with a related but unconsolidated third-party. Distillers Grains Marketing Agreements PAP recorded revenues of approximately $6,020,000, $6,047,000 and $4,438,000 related to the distillers grains marketing agreements for the years ended December 31, 2017, 2016 and 2015, respectively. These amounts have been eliminated upon consolidation. |
SEGMENTS.
SEGMENTS. | 12 Months Ended |
Dec. 31, 2017 | |
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 $9,744,000, $9,968,000 and $5,957,000 in management fees for the years ended December 31, 2017, 2016 and 2015, respectively. The marketing and distribution segment incurred $2,160,000, $3,000,000 and $3,900,000 in management fees for the years ended December 31, 2017, 2016 and 2015, 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, 2017 2016 2015 Net Sales Production: Net sales to external customers $ 1,102,722 $ 1,045,807 $ 710,201 Intersegment net sales 1,898 1,169 — Total production segment net sales 1,104,620 1,046,976 710,201 Marketing and distribution: Net sales to external customers 529,533 578,951 480,975 Intersegment net sales 8,464 8,029 5,262 Total marketing and distribution net sales 537,997 586,980 486,237 Intersegment eliminations (10,362 ) (9,198 ) (5,262 ) Net sales as reported $ 1,632,255 $ 1,624,758 $ 1,191,176 Cost of goods sold: Production $ 1,098,977 $ 1,015,655 $ 716,877 Marketing and distribution 535,032 575,921 476,410 Intersegment eliminations (7,685 ) (21,176 ) (12,477 ) Cost of goods sold as reported $ 1,626,324 $ 1,570,400 $ 1,180,810 Income (loss) before provision for income taxes: Production $ (27,458 ) $ (6,882 ) $ (32,723 ) Marketing and distribution (2,463 ) 4,517 3,200 Corporate activities (8,474 ) 2,910 616 $ (38,395 ) $ 545 $ (28,907 ) Depreciation and amortization: Production $ 37,637 $ 34,528 $ 23,091 Marketing and distribution — 3 151 Corporate activities 1,014 910 390 $ 38,651 $ 35,441 $ 23,632 Interest expense: Production $ 5,887 $ 20,794 $ 11,969 Marketing and distribution 1,271 1,404 625 Corporate activities 5,780 208 — $ 12,938 $ 22,406 $ 12,594 The following table sets forth the Company’s total assets by operating segment (in thousands): December 31, 2017 2016 Total assets: Production $ 583,696 $ 542,688 Marketing and distribution 127,242 146,356 Corporate assets 9,358 19,194 $ 720,296 $ 708,238 |
PROPERTY AND EQUIPMENT.
PROPERTY AND EQUIPMENT. | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT. | 5. PROPERTY AND EQUIPMENT. Property and equipment consisted of the following (in thousands): December 31, 2017 2016 Facilities and plant equipment $ 601,156 $ 530,735 Land 8,970 7,771 Other equipment, vehicles and furniture 10,189 9,714 Construction in progress 38,041 29,393 658,356 577,613 Accumulated depreciation (150,004 ) (112,423 ) $ 508,352 $ 465,190 Depreciation expense was $38,651,000, $35,441,000 and $23,632,000 for the years ended December 31, 2017, 2016 and 2015, respectively. For the year ended December 31, 2015, the Company recorded an impairment charge of $1,970,000 related to the abandonment of certain accounting and information technology systems following the integration of its PE Central facilities. For the year ended December 31, 2017 and 2016, the Company capitalized interest of $822,000 and $1,307,000, respectively, related to its capital investment activities. |
INTANGIBLE ASSETS.
INTANGIBLE ASSETS. | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS. | 6. INTANGIBLE ASSET. The Company recorded a tradename valued at $2,678,000 in 2006 as part of its acquisition of Kinergy. The Company determined that the Kinergy tradename has an indefinite life and, therefore, rather than being amortized, will be tested annually for impairment. The Company did not record any impairment of the Kinergy tradename for the years ended December 31, 2017, 2016 and 2015. |
DERIVATIVES.
DERIVATIVES. | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES. | 7. DERIVATIVES. The business and activities of the Company expose it to a variety of market risks, including risks related to changes in commodity prices. The Company monitors and manages these financial exposures as an integral part of its risk management program. This program recognizes the unpredictability of financial markets and seeks to reduce the potentially adverse effects that market volatility could have on operating results. Commodity Risk – Cash Flow Hedges Commodity Risk – Non-Designated Hedges Non Designated Derivative Instruments As of December 31, 2017 Assets Liabilities Type of Instrument Balance Sheet Location Fair Balance Sheet Location Fair Cash collateral balance Other current assets $ 3,813 Commodity contracts Derivative assets $ 998 Derivative liabilities $ 2,307 As of December 31, 2016 Assets Liabilities Type of Instrument Balance Sheet Location Fair Balance Sheet Location Fair Cash collateral balance Other current assets $ 4,331 Commodity contracts Derivative assets $ 978 Derivative liabilities $ 4,115 The above amounts represent the gross balances of the contracts, however, the Company does have the right of offset with each of its derivative brokers. The classification and amounts of the Company’s recognized gains (losses) for its derivatives not designated as hedging instruments are as follows (in thousands): Realized Gains (Losses) For the Years Ended December 31, Type of Instrument Statements of Operations Location 2017 2016 2015 Commodity contracts Cost of goods sold $ (4,165 ) $ 1,386 $ (338 ) $ (4,165 ) $ 1,386 $ (338 ) Unrealized Gains (Losses) For the Years Ended December 31, Type of Instrument Statements of Operations Location 2017 2016 2015 Commodity contracts Cost of goods sold $ 2,088 $ (3,370 ) $ (204 ) $ 2,088 $ (3,370 ) $ (204 ) |
DEBT.
DEBT. | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
DEBT. | 8. DEBT. Long-term borrowings are summarized as follows (in thousands): December 31, December 31, Kinergy line of credit $ 49,477 $ 49,862 Pekin term loan 53,500 64,000 Pekin revolving loan 32,000 32,000 ICP term loan 22,500 — ICP revolving loan 18,000 — Pacific Aurora line of credit — 1,000 Parent notes payable 68,948 55,000 244,425 201,862 Less unamortized debt discount (1,409 ) (1,626 ) Less unamortized debt financing costs (1,925 ) (1,708 ) Less short-term portion (20,000 ) (10,500 ) Long-term debt $ 221,091 $ 188,028 Kinergy Line of Credit The credit facility also includes the accounts receivable of PAP as additional collateral. Payments that may be made by PAP to the Company as reimbursement for management and other services provided by the Company to PAP are limited under the terms of the credit facility to $500,000 per fiscal quarter. If Kinergy and PAP’s monthly excess borrowing availability falls below certain thresholds, they are collectively required to maintain a fixed-charge coverage ratio (calculated as a twelve-month rolling EBITDA divided by the sum of interest expense, capital expenditures, principal payments of indebtedness, indebtedness from capital leases and taxes paid during such twelve-month rolling period) of at least 2.0 and are prohibited from incurring certain additional indebtedness (other than specific intercompany indebtedness). Kinergy and PAP’s obligations under the credit facility are secured by a first-priority security interest in all of their assets in favor of the lender. Pacific Ethanol has guaranteed all of Kinergy’s obligations under the line of credit. As of December 31, 2017, Kinergy had an available unused availability under the credit facility of $27,399,000. Pekin Credit Facilities st st On August 7, 2017, Pekin amended its term and revolving credit facilities by agreeing to increase the interest rate under the facilities by 25 basis points to an annual rate equal to the 30-day LIBOR plus 4.00%. Pekin and its lender also agreed that Pekin is required to maintain working capital of not less than $17.5 million from August 31, 2017 through December 31, 2017 and working capital of not less than $20.0 million from January 1, 2018 and continuing at all times thereafter. In addition, the required Debt Service Coverage Ratio was reduced to 0.15 to 1.00 for the fiscal year ending December 31, 2017. For the month ended January 31, 2018, Pekin was not in compliance with its working capital requirement due to larger than anticipated repair and maintenance related expenses to replace faulty equipment. Pekin has received a waiver from its lender for this noncompliance. Further, the lender decreased Pekin’s working capital covenant requirement to be $13.0 million for the month ended February 28, 2018, excluding the $3.5 million principal payment due in May 2018 from the calculation. As of the filing of this report, management believes Pekin is in compliance with its working capital requirement. ICP Credit Facilities Under the terms of the credit facilities, ICP is required to maintain working capital of not less than $8.0 million. In addition, ICP is required to maintain an annual debt service coverage ratio of not less than 1.50 to 1.00 beginning for the year ending December 31, 2018. Pacific Aurora Line of Credit On September 1, 2017, Pacific Aurora and its lender agreed that Pacific Aurora is required to maintain working capital of not less than $18.0 million from September 30, 2017 through February 28, 2018 and working capital of not less than $20.0 million from March 1, 2018 and continuing at all times thereafter. In addition, the required Debt Service Coverage Ratio was reduced to 0.00 to 1.00 for the fiscal year ending December 31, 2017 and 1.50 to 1.00 for the fiscal year ending December 31, 2018. At December 31, 2017, Pacific Aurora was not in compliance with its working capital and Debt Service Coverage Ratio requirements. The Company did not utilize the credit facility in 2017 and has no plans to draw on the facility at this time, having addressed the liquidity and capital needs of Pacific Aurora through other means. Consequently, the Company is in discussions with its lender to either amend the credit facility or terminate it. Pacific Ethanol, Inc. Notes Payable The Notes mature on December 15, 2019 (the “Maturity Date”). Interest on the Notes accrues at a rate equal to (i) the greater of 1% and the three-month LIBOR, plus 7.0% from the closing through December 14, 2017, (ii) the greater of 1% and LIBOR, plus 9% between December 15, 2017 and December 14, 2018, and (iii) the greater of 1% and LIBOR plus 11% between December 15, 2018 and the Maturity Date. The interest rate increases by an additional 2% per annum above the interest rate otherwise applicable upon the occurrence and during the continuance of an event of default until such event of default has been cured. Interest is payable in cash on the 15th calendar day of each March, June, September and December. Pacific Ethanol is required to pay all outstanding principal and any accrued and unpaid interest on the Notes on the Maturity Date. Pacific Ethanol may, at its option, prepay the outstanding principal amount of the Notes at any time without premium or penalty. The Notes contain a variety of events of default. The payments due under the Notes rank senior to all other indebtedness of Pacific Ethanol, other than permitted senior indebtedness. The Notes contain a variety of obligations on the part of Pacific Ethanol not to engage in certain activities, including that (i) Pacific Ethanol and certain of its subsidiaries will not incur other indebtedness, except for certain permitted indebtedness, (ii) Pacific Ethanol and certain of its subsidiaries will not redeem, repurchase or pay any dividend or distribution on their respective capital stock without the prior consent of the holders of the Notes holding 66-2/3% of the aggregate principal amount of the Notes, other than certain permitted distributions, (iii) Pacific Ethanol and certain of its subsidiaries will not sell, lease, assign, transfer or otherwise dispose of any assets of Pacific Ethanol or any such subsidiary, except for certain permitted dispositions (including the sales of inventory or receivables in the ordinary course of business), and (iv) Pacific Ethanol and certain of its subsidiaries will not issue any capital stock or membership interests for any purpose other than to pay down a portion of all of the amounts owed under the Notes and in connection with Pacific Ethanol’s stock incentive plans. The Notes are secured by a first-priority security interest in the equity interest held by Pacific Ethanol in its wholly-owned subsidiary, PE Op. Co., which indirectly owns the Company’s plants located on the West Coast. Pacific Ethanol West Plants’ Term Debt Pacific Ethanol Central Plants’ Term Debt Interest on the term loan facility accrued and could either be paid in cash at a rate of 10.5% per annum or paid in-kind at a rate of 15.0% per annum by adding such interest to the outstanding principal balance. The Company paid interest in cash for the period from July 1, 2015, the effective date of the PE Central acquisition, through December 31, 2015. During the year ended December 31, 2016, the Company elected to pay in-kind an aggregate of $9,451,000 of interest, which was added to the principal balance. As of December 15, 2016, the principal balance was $155,070,205. On December 15, 2016, the Company paid in full the outstanding principal balance and all accrued and unpaid interest. The Company did not pay any prepayment penalties. The Company fully amortized the remaining unamortized debt discount of $1,152,000 and recorded the amount in interest expense for the year ended December 31, 2016. Maturities of Long-term Debt December 31: 2018 $ 20,000 2019 88,948 2020 20,000 2021 16,000 2022 99,477 $ 244,425 |
PENSION PLANS.
PENSION PLANS. | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
PENSION PLANS. | 9. PENSION PLANS. Retirement Plan Information related to the Retirement Plan as of and for the years ended December 31, 2017, 2016 and 2015 is presented below (dollars in thousands): 2017 2016 2015 Changes in plan assets: Fair value of plan assets, beginning $ 12,423 $ 12,567 $ 13,180 Actual gains (losses) 1,722 523 (298 ) Benefits paid (665 ) (667 ) (315 ) Company contributions 478 — — Participant contributions — — — Fair value of plan assets, ending $ 13,958 $ 12,423 $ 12,567 Less: projected accumulated benefit obligation $ 19,658 $ 18,455 $ 16,552 Funded status, (underfunded)/overfunded $ (5,700 ) $ (6,032 ) $ (3,985 ) Amounts recognized in the consolidated balance sheets: Other liabilities $ (5,700 ) $ (6,032 ) $ (3,985 ) Accumulated other comprehensive loss (income) $ 726 $ 1,047 $ (885 ) Components of net periodic benefit costs are as follows: Service cost $ 391 $ 223 $ 211 Interest cost 750 686 338 Expected return on plan assets (674 ) (794 ) (500 ) Net periodic benefit cost $ 467 $ 115 $ 49 Loss (gain) recognized in other comprehensive income (expense) $ (321 ) $ 1,932 $ (885 ) Assumptions used in computation benefit obligations: Discount rate 3.60 % 4.15 % 4.23 % Expected long-term return on plan assets 6.00 % 6.75 % 7.75 % Rate of compensation increase — — — The Company expects to make contributions in the year ending December 31, 2018 of approximately $1.0 million. Net periodic benefit cost for 2018 is estimated at approximately $0.3 million. The following table summarizes the expected benefit payments for the Company’s plan for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter (in thousands): December 31: 2018 $ 730 2019 740 2020 780 2021 790 2022 830 2023-27 4,820 $ 8,690 See Note 15 for discussion of the plan’s fair value disclosures. Historical and future expected returns of multiple asset classes were analyzed to develop a risk-free real rate of return and risk premiums for each asset class. The overall rate for each asset class was developed by combining a long-term inflation component, the risk-free real rate of return, and the associated risk premium. A weighted average rate was developed based on those overall rates and the target asset allocation of the plan. The Company’s pension committee is responsible for overseeing the investment of pension plan assets. The pension committee is responsible for determining and monitoring the appropriate asset allocations and for selecting or replacing investment managers, trustees, and custodians. The pension plan’s current investment target allocations are 50% equities and 50% debt. The pension committee reviews the actual asset allocation in light of these targets periodically and rebalances investments as necessary. The pension committee also evaluates the performance of investment managers as compared to the performance of specified benchmarks and peers and monitors the investment managers to ensure adherence to their stated investment style and to the plan’s investment guidelines. Postretirement Plan Information related to the Postretirement Plan as of December 31, 2017 and 2016 is presented below (dollars in thousands): 2017 2016 Amounts at the end of the year: Accumulated/projected benefit obligation $ 5,565 $ 5,371 Fair value of plan assets — — Funded status, (underfunded)/overfunded $ (5,565 ) $ (5,371 ) Amounts recognized in the consolidated balance sheets: Accrued liabilities $ (240 ) $ (310 ) Other liabilities $ (5,325 ) $ (5,061 ) Accumulated other comprehensive loss $ 1,508 $ 1,573 Information related to the Postretirement Plan for the years ended December 31, 2017, 2016 and 2015 is presented below (dollars in thousands): Years Ended December 31, 2017 2016 2015 Amounts recognized in the plan for the year: Company contributions $ 157 $ 163 $ 20 Participant contributions $ 22 $ 22 $ 15 Benefits paid $ (179 ) $ (184 ) $ (35 ) Components of net periodic benefit costs are as follows: Service cost $ 84 $ 48 $ 32 Interest cost 198 139 65 Amortization of prior service costs 134 — — Net periodic benefit cost $ 416 $ 187 $ 97 Loss (gain) recognized in other comprehensive income $ (65 ) $ 1,728 $ (155 ) Discount rate used in computation of benefit obligations 3.80 % 3.95 % 3.67 % The Company does not expect to recognize any amortization of net actuarial loss during the year ended December 31, 2018. The following table summarizes the expected benefit payments for the Company’s plan for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter (in thousands): December 31: 2018 $ 240 2019 270 2020 300 2021 340 2022 330 2023-27 2,120 $ 3,600 For purposes of determining the cost and obligation for pre-Medicare postretirement medical benefits, a 7.0% annual rate of increase in the per capita cost of covered benefits (i.e., health care trend rate) was assumed for the plan in 2018, adjusting to a rate of 4.5% in 2026. Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. |
INCOME TAXES.
INCOME TAXES. | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES. | 10. INCOME TAXES. The Company recorded a provision (benefit) for income taxes as follows (in thousands): Years Ended December 31, 2017 2016 2015 Current provision (benefit) $ (490 ) $ 141 $ (8,011 ) Deferred provision (benefit) 169 (1,122 ) (2,023 ) Total $ (321 ) $ (981 ) $ (10,034 ) A reconciliation of the differences between the United States statutory federal income tax rate and the effective tax rate as provided in the consolidated statements of operations is as follows: Years Ended December 31, 2017 2016 2015 Statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 4.0 6.4 9.2 Change in valuation allowance (34.5 ) (298.8 ) (4.2 ) Impact of Federal tax rate change on deferreds (28.4 ) — — Impact of Federal tax rate change on valuation allowance 29.4 — — Fair value adjustments and warrant inducements 0.4 37.2 2.0 Noncontrolling interests (3.2 ) — — Domestic production gross receipts deduction — — (2.9 ) Section 382 reduction to loss carryover — — 0.1 Stock compensation (0.1 ) 58.8 (0.8 ) Non-deductible items (0.2 ) 8.9 (0.5 ) Other (1.6 ) (27.5 ) (3.2 ) Effective rate 0.8 % (180.0 )% 34.7 % Deferred income taxes are provided using the asset and liability method to reflect temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities using presently enacted tax rates and laws. The components of deferred income taxes included in the consolidated balance sheets were as follows (in thousands): December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 40,989 $ 45,709 R&D and AMT credits 1,797 2,465 Railcar contracts 1,415 3,348 Stock-based compensation 738 946 Allowance for doubtful accounts and other assets 637 856 Derivatives 267 1,228 Pension liability 2,939 2,204 Other 2,097 4,316 Total deferred tax assets 50,879 61,072 Deferred tax liabilities: Property and equipment (25,194 ) (45,757 ) Intangibles (749 ) (1,091 ) Other (521 ) (1,593 ) Total deferred tax liabilities (26,464 ) (48,441 ) Valuation allowance (24,639 ) (12,683 ) Net deferred tax liabilities, included in other liabilities $ (224 ) $ (52 ) A portion of the Company’s net operating loss carryforwards will be subject to provisions of the tax law that limit the use of losses incurred by a company prior to the date certain ownership changes occur. Due to the limitation, a significant portion of these net operating loss carryforwards will expire regardless of whether the Company generates future taxable income. After reducing these net operating loss carryforwards for the amount which will expire due to this limitation, the Company had remaining federal net operating loss carryforwards of approximately $154,589,000 and state net operating loss carryforwards of approximately $148,921,000 at December 31, 2017. These net operating loss carryforwards expire as follows (in thousands): Tax Years Federal State 2018–2022 $ — $ — 2023–2027 13,038 2,945 2028–2032 22,025 65,921 2033–2036 119,526 80,055 $ 154,589 $ 148,921 Certain of these net operating losses are not immediately available, but become available to be utilized in each of the years ended December 31, as follows (in thousands): Year Federal State 2017 $ 59,675 $ 82,892 2018 6,441 5,372 2019 6,374 5,345 2020 6,308 5,318 2021 6,308 5,318 Thereafter 69,483 44,676 $ 154,589 $ 148,921 To the extent amounts are not utilized in any year, they may be carried forward to the next year until expiration. These amounts may change if there are future additional limitations on their utilization. In assessing whether the deferred tax assets are realizable, a more likely than not standard is applied. If it is determined that it is more likely than not that deferred tax assets will not be realized, a valuation allowance must be established against the deferred tax assets. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the associated temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A valuation allowance was established in the amount of $22,585,000, $12,683,000 and $39,838,000 at December 31, 2017, 2016 and 2015, respectively, based on the Company’s assessment of the future realizability of certain deferred tax assets. The valuation allowance on deferred tax assets is related to future deductible temporary differences and net operating loss carryforwards (exclusive of net operating losses associated with items recorded directly to equity) for which the Company has concluded it is more likely than not that these items will not be realized in the ordinary course of operations. For the year ended December 31, 2017, the Company recorded an increase in the valuation allowance of $11,956,000. This increase was primarily the offsetting impact of a decrease in deferred tax liabilities associated with property and equipment, as a result of the finalization of the deferred tax attributes of Pacific Aurora, which was subject to a 2016 sale of a noncontrolling interest. For the year ended December 31, 2016, the Company recorded a decrease in the valuation allowance of $27,155,000, including approximately $13,500,000 related to finalizing, certain aspects of the deferred tax attributes of the 2015 PE Central acquisition, and approximately $11,500,000 related to the sale of the noncontrolling interest in Pacific Aurora, which had the impact of an increase in both the net deferred tax asset and related valuation allowance. For the year ended December 31, 2015, the Company recognized $1,500,000 in tax benefit related to adjustments to its tax asset valuation allowance from a prior year. At December 31, 2017, the Company accrued $235,000 in tax uncertainties. There was no accrued interest or penalties relating to tax uncertainties at December 31, 2016. The Tax Cuts and Jobs Act (“TCJA”) was enacted on December 22, 2017. The Company recognized the income tax effects of the TCJA in its 2017 financial statements in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes Amounts recorded where accounting is complete principally relate to the reduction in the U.S. corporate income tax rate to 21%, which resulted in the Company reporting an income tax benefit of $321,000 to remeasure deferred taxes liabilities associated with indefinitely lived intangible assets that will reverse at the new 21% rate. This rate reduction decreased gross deferred assets by approximately $10,170,000 and valuation allowance by $10,545,000. Absent this deferred tax liability, the Company is in a net deferred tax asset position that is offset by a full valuation allowance, resulting in a net tax effect of zero. Other significant provisions of the TCJA that are not yet effective but may impact income taxes in future years include: additional limitations on certain meals and entertainment expenses, the inclusion of commissions and performance-based compensation in determining the excessive compensation limitation, limitation on the current deductibility of net interest expense in excess of 30% of adjusted taxable income, and a limitation of net operating losses generated after fiscal 2018 to 80% of taxable income. The Company is subject to income tax in the United States federal jurisdiction and various state jurisdictions and has identified its federal tax return and tax returns in state jurisdictions below as “major” tax filings. These jurisdictions, along with the years still open to audit under the applicable statutes of limitation, are as follows: Jurisdiction Tax Years Federal 2014 – 2016 Arizona 2014 – 2016 California 2013 – 2016 Colorado 2013 – 2016 Idaho 2014 – 2016 Illinois 2014 – 2016 Indiana 2014 – 2016 Iowa 2014 – 2016 Kansas 2014 – 2016 Minnesota 2014 – 2016 Missouri 2014 – 2016 Nebraska 2014 – 2016 Oklahoma 2014 – 2016 Oregon 2014 – 2016 Texas 2013 – 2016 However, because the Company had net operating losses and credits carried forward in several of the jurisdictions, including the United States federal and California jurisdictions, certain items attributable to closed tax years are still subject to adjustment by applicable taxing authorities through an adjustment to tax attributes carried forward to open years. |
PREFERRED STOCK.
PREFERRED STOCK. | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
PREFERRED STOCK. | 11. PREFERRED STOCK. The Company has 6,734,835 undesignated shares of authorized and unissued preferred stock, which may be designated and issued in the future on the authority of the Company’s Board of Directors. As of December 31, 2017, the Company had the following designated preferred stock: Series A Preferred Stock Upon any issuance, the Series A Preferred Stock would rank senior in liquidation and dividend preferences to the Company’s common stock. Holders of Series A Preferred Stock would be entitled to quarterly cumulative dividends payable in arrears in cash in an amount equal to 5% per annum of the purchase price per share of the Series A Preferred Stock. The holders of the Series A Preferred Stock would have conversion rights initially equivalent to two shares of common stock for each share of Series A Preferred Stock, subject to customary antidilution adjustments. Certain specified issuances will not result in antidilution adjustments. The shares of Series A Preferred Stock would also be subject to forced conversion upon the occurrence of a transaction that would result in an internal rate of return to the holders of the Series A Preferred Stock of 25% or more. Accrued but unpaid dividends on the Series A Preferred Stock are to be paid in cash upon any conversion of the Series A Preferred Stock. The holders of Series A Preferred Stock would have a liquidation preference over the holders of the Company’s common stock equivalent to the purchase price per share of the Series A Preferred Stock plus any accrued and unpaid dividends on the Series A Preferred Stock. A liquidation would be deemed to occur upon the happening of customary events, including transfer of all or substantially all of the Company’s capital stock or assets or a merger, consolidation, share exchange, reorganization or other transaction or series of related transactions, unless holders of 66 2/3% of the Series A Preferred Stock vote affirmatively in favor of or otherwise consent to such transaction. Series B Preferred Stock The Series B Preferred Stock ranks senior in liquidation and dividend preferences to the Company’s common stock. Holders of Series B Preferred Stock are entitled to quarterly cumulative dividends payable in arrears in cash in an amount equal to 7.00% per annum of the purchase price per share of the Series B Preferred Stock; however, subject to the provisions of the Letter Agreement described below, such dividends may, at the option of the Company, be paid in additional shares of Series B Preferred Stock based initially on the liquidation value of the Series B Preferred Stock. In addition to the quarterly cumulative dividends, holders of the Series B Preferred Stock are entitled to participate in any common stock dividends declared by the Company to its common stockholders. The holders of Series B Preferred Stock have a liquidation preference over the holders of the Company’s common stock initially equivalent to $19.50 per share of the Series B Preferred Stock plus any accrued and unpaid dividends on the Series B Preferred Stock. A liquidation will be deemed to occur upon the happening of customary events, including the transfer of all or substantially all of the capital stock or assets of the Company or a merger, consolidation, share exchange, reorganization or other transaction or series of related transaction, unless holders of 66 2/3% of the Series B Preferred Stock vote affirmatively in favor of or otherwise consent that such transaction shall not be treated as a liquidation. The Company believes that such liquidation events are within its control and therefore has classified the Series B Preferred Stock in stockholders’ equity . As of December 31, 2017, the Series B Preferred Stock was convertible into 634,641 shares of the Company’s common stock. The conversion ratio is subject to customary antidilution adjustments. In addition, antidilution adjustments are to occur in the event that the Company issues equity securities, including derivative securities convertible into equity securities (on an as-converted or as-exercised basis), at a price less than the conversion price then in effect. The shares of Series B Preferred Stock are also subject to forced conversion upon the occurrence of a transaction that would result in an internal rate of return to the holders of the Series B Preferred Stock of 25% or more. The forced conversion is to be based upon the conversion ratio as last adjusted. Accrued but unpaid dividends on the Series B Preferred Stock are to be paid in cash upon any conversion of the Series B Preferred Stock. The holders of Series B Preferred Stock vote together as a single class with the holders of the Company’s common stock on all actions to be taken by the Company’s stockholders. Each share of Series B Preferred Stock entitles the holder to approximately 0.03 votes per share on all matters to be voted on by the stockholders of the Company. Notwithstanding the foregoing, the holders of Series B Preferred Stock are afforded numerous customary protective provisions with respect to certain actions that may only be approved by holders of a majority of the shares of Series B Preferred Stock. In 2008, the Company entered into Letter Agreements with Lyles United LLC (“Lyles United”) and other purchasers under which the Company expressly waived its rights under the Certificate of Designations relating to the Series B Preferred Stock to make dividend payments in additional shares of Series B Preferred Stock in lieu of cash dividend payments without the prior written consent of Lyles United and the other purchasers. Registration Rights Agreement The Company accrued and paid in cash preferred stock dividends of $1,265,000, $1,269,000 and $1,265,000 for the years ended December 31, 2017, 2016 and 2015, respectively. |
COMMON STOCK AND WARRANTS.
COMMON STOCK AND WARRANTS. | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
COMMON STOCK AND WARRANTS. | 12. COMMON STOCK AND WARRANTS. The following table summarizes warrant activity for the years ended December 31, 2017, 2016 and 2015 (number of shares in thousands): Number of Price per Weighted Balance at December 31, 2014 856 $6.09 – $735.00 $ 36.55 Warrants exercised (42 ) $8.85 $ 8.85 Warrants expired (432 ) $8.85 $ 8.85 Balance at December 31, 2015 382 $6.09 – $735.00 $ 70.87 Warrants exercised (138 ) $8.43 $ 8.43 Balance at December 31, 2016 244 $6.09 – $735.00 $ 106.72 Warrants exercised (191 ) $6.09 $ 6.09 Warrants expired (49 ) $6.09 – $735.00 $ 444.00 Balance at December 31, 2017 4 $735.00 $ 735.00 July 2012 Public Offering Accounting for Warrants Nonvoting Common Stock |
STOCK BASED COMPENSATION.
STOCK BASED COMPENSATION. | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION. | 13. STOCK-BASED COMPENSATION. The Company has two equity incentive compensation plans: a 2006 Stock Incentive Plan and a 2016 Stock Incentive Plan. 2006 Stock Incentive Plan 2016 Stock Incentive Plan Stock Options Years Ended December 31, 2017 2016 Number Weighted Average Exercise Price Number Weighted Average Outstanding at beginning of year 240 $ 4.18 240 $ 4.18 Exercised (10 ) 3.74 — — Outstanding at end of year 230 $ 4.18 240 $ 4.18 Options exercisable at end of year 230 $ 4.18 240 $ 4.18 Stock options outstanding as of December 31, 2017 were as follows (number of shares in thousands): Options Outstanding Options Exercisable Range of Number Outstanding Weighted Average Remaining Contractual Life (yrs.) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 3.74 219 5.47 $ 3.74 219 $ 3.74 $ 12.90 11 3.59 $ 12.90 11 $ 12.90 The options outstanding at December 31, 2017 and 2016 had intrinsic values of $84,000 and $1,319,000, respectively. The intrinsic value of options exercised in 2017 was approximately $30,000. Restricted Stock Number of Weighted Unvested at December 31, 2014 390 $ 8.71 Issued 307 $ 10.16 Vested (220 ) $ 7.94 Canceled (14 ) $ 10.08 Unvested at December 31, 2015 463 $ 10.00 Issued 742 $ 5.24 Vested (250 ) $ 9.01 Canceled (25 ) $ 6.24 Unvested at December 31, 2016 930 $ 6.57 Issued 664 $ 6.65 Vested (480 ) $ 7.30 Canceled (37 ) $ 6.08 Unvested at December 31, 2017 1,077 $ 6.31 The fair value of the common stock at vesting aggregated $3,210,000, $1,142,000 and $2,603,000 for the years ended December 31, 2017, 2016 and 2015, respectively. Stock-based compensation expense related to employee and non-employee restricted stock and option grants recognized in selling, general and administrative expenses, were as follows (in thousands): Years Ended December 31, 2017 2016 2015 Employees $ 3,303 $ 2,173 $ 1,694 Non-employees 525 443 325 Total stock-based compensation expense $ 3,828 $ 2,616 $ 2,019 Employee grants typically have a three year vesting schedule, while the non-employee grants have a one year vesting schedule. At December 31, 2017, the total compensation expense related to unvested awards which had not been recognized was $4,122,000 and the associated weighted-average period over which the compensation expense attributable to those unvested awards will be recognized was approximately 1.54 years. |
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES. | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES. | 14. COMMITMENTS AND CONTINGENCIES. Commitments Leases – Years Ended December 31, Capital Leases Operating Leases 2018 $ 613 $ 11,841 2019 45 9,236 2020 45 7,042 2021 34 4,074 2022 — 3,894 Thereafter — 5,530 Total minimum payments 737 $ 41,617 Amount representing interest (22 ) Obligations under capital leases 715 Obligations due within one year (592 ) Long-term obligations under capital leases $ 123 Total rent expense during the years ended December 31, 2017, 2016 and 2015 was $16,572,000, $16,253,000 and $10,476,000, respectively. Sales Commitments Purchase Commitments Property Tax Assessment Other Commitments Contingencies Litigation The Company assumed certain legal matters which were ongoing at July 1, 2015, the date of the Company’s acquisition of PE Central. Among them were lawsuits between Aventine Renewable Energy, Inc. (now known as Pacific Ethanol Pekin, LLC, or “PE Pekin”) and Glacial Lakes Energy, Aberdeen Energy and Redfield Energy, together, the “Defendants,” in which PE Pekin sought damages for breach of termination agreements that wound down ethanol marketing arrangements between PE Pekin and each of the Defendants. In February and March 2017, the Company and the Defendants entered into settlement agreements and the Defendants paid in cash to the Company $3.9 million in final resolution of these matters. The Company did not assign any value to the claims against the Defendants in its accounting for the PE Central acquisition as of July 1, 2015. The Company recorded a gain, net of legal fees, of $3.6 million upon receipt of the cash settlement and recognized the gain as a reduction to selling, general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2017. Pacific Ethanol, Inc., through a subsidiary acquired in its acquisition of PE Central, became involved in a pending lawsuit with Western Sugar Cooperative (“Western Sugar”) that pre-dated the acquisition. On February 27, 2015, Western Sugar filed a complaint in the United States District Court for the District of Colorado (Case No. 1:15-cv-00415) naming PE Central’s subsidiary as defendant. The PE Central subsidiary purchased surplus sugar through a United States Department of Agriculture program. Western Sugar was one of the entities that warehoused this sugar for the PE Central subsidiary. The suit alleged that the PE Central subsidiary breached its contract with Western Sugar by failing to pay certain penalty rates for the storage of its sugar or alternatively failing to pay a premium rate for storage. Western Sugar alleged that the penalty rates applied because the PE Central subsidiary failed to take timely delivery or otherwise cause timely shipment of the sugar. Western Sugar claimed “expectation damages” in the amount of approximately $8.6 million. On December 29, 2016, Western Sugar and the PE Central subsidiary entered into a settlement pursuant to which the PE Central subsidiary paid $1.7 million and Western Sugar filed a Stipulation of Dismissal with prejudice. As a result, the Company reduced its litigation reserve of $2.8 million and recognized the recovery of $1.1 million as a reduction to selling, general and administrative expenses for the year ended December 31, 2016. On May 24, 2013, GS CleanTech Corporation (“GS CleanTech”), filed a suit in the United States District Court for the Eastern District of California, Sacramento Division (Case No.: 2:13-CV-01042-JAM-AC), naming Pacific Ethanol, Inc. as a defendant. On August 29, 2013, the case was transferred to the United States District Court for the Southern District of Indiana and made part of the pre-existing multi-district litigation involving GS CleanTech and multiple defendants. The suit alleged infringement of a patent assigned to GS CleanTech by virtue of certain corn oil separation technology in use at one or more of the ethanol production facilities in which the Company has an interest, including Pacific Ethanol Stockton LLC (“PE Stockton”), located in Stockton, California. The complaint sought preliminary and permanent injunctions against the Company, prohibiting future infringement on the patent owned by GS CleanTech and damages in an unspecified amount adequate to compensate GS CleanTech for the alleged patent infringement, but in any event no less than a reasonable royalty for the use made of the inventions of the patent, plus attorneys’ fees. The Company answered the complaint, counterclaimed that the patent claims at issue, as well as the claims in several related patents, are invalid and unenforceable and that the Company is not infringing. Pacific Ethanol, Inc. does not itself use any corn oil separation technology and may seek a dismissal on those grounds. On March 17 and March 18, 2014, GS CleanTech filed suit naming as defendants two Company subsidiaries: PE Stockton and Pacific Ethanol Magic Valley, LLC (“PE Magic Valley”). The claims were similar to those filed against Pacific Ethanol, Inc. in May 2013. These two cases were transferred to the multi-district litigation division in United States District Court for the Southern District of Indiana, where the case against Pacific Ethanol, Inc. was pending. Although PE Stockton and PE Magic Valley do separate and market corn oil, Pacific Ethanol, Inc., PE Stockton and PE Magic Valley strongly disagree that either of the subsidiaries use corn oil separation technology that infringes the patent owned by GS CleanTech. In a January 16, 2015 decision, the District Court for the Southern District of Indiana ruled in favor of a stipulated motion for partial summary judgment for Pacific Ethanol, Inc., PE Stockton and PE Magic Valley finding that all of the GS CleanTech patents in the suit were invalid and, therefore, not infringed. A trial in the District Court for the Southern District of Indiana was conducted in October 2015 on the inequitable conduct issue as well as whether GS CleanTech’s behavior during prosecution of the patents rendered this an “exceptional case” which would allow the District Court to award the Defendants reimbursement of their attorneys’ fees expended for defense of the case. On September 15, 2016, the District Court issued an Order finding that GS CleanTech, the inventors and GS CleanTech’s counsel committed inequitable conduct in the prosecution of the GS CleanTech patents before the United States Patent and Trademark Office. As a result, the District Court issued a Final Judgment on September 15, 2016 dismissing with prejudice all of GS CleanTech’s cases against the Defendants, including Pacific Ethanol, Inc., PE Stockton and PE Magic Valley. The District Court’s ruling of inequitable conduct results in the unenforceability of the GS CleanTech patents against third parties, and also enables the Defendants to pursue reimbursement of their costs and attorneys’ fees from GS CleanTech and its counsel. GS CleanTech subsequently appealed the District Court’s finding that all of the GS CleanTech patents were invalid and its finding that the inventors and GS CleanTech’s counsel committed inequitable conduct. The Court of Appeals for the Federal Circuit ordered the appeals stayed until June 15, 2018, pending rulings on certain procedural motions. The Company has evaluated the above cases as well as other pending cases. The Company currently has not recorded a litigation contingency liability with respect to these cases. |
FAIR VALUE MEASUREMENTS.
FAIR VALUE MEASUREMENTS. | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS. | 15. FAIR VALUE MEASUREMENTS. The fair value hierarchy prioritizes the inputs used in valuation techniques into three levels, as follows: ● Level 1 – Observable inputs – unadjusted quoted prices in active markets for identical assets and liabilities; ● Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data; and ● Level 3 – Unobservable inputs – includes amounts derived from valuation models where one or more significant inputs are unobservable. For fair value measurements using significant unobservable inputs, a description of the inputs and the information used to develop the inputs is required along with a reconciliation of Level 3 values from the prior reporting period. Pooled separate accounts Warrants Other Derivative Instruments The following table summarizes recurring fair value measurements by level at December 31, 2017 (in thousands): Benefit Plan Fair Percentage Value Level 1 Level 2 Level 3 Allocation Assets: Derivative financial instruments(1) $ 998 $ 998 $ — $ — Defined benefit plan assets(2) (pooled separate accounts): Large U.S. Equity(3) 3,748 — 3,748 — 27 % Small/Mid U.S. Equity(4) 2,018 — 2,018 — 14 % International Equity(5) 2,528 — 2,528 — 18 % Fixed Income(6) 5,664 — 5,664 — 41 % $ 14,956 $ 998 $ 13,958 $ — Liabilities: Derivative financial instruments(7) $ (2,307 ) $ (2,307 ) $ — $ — The following table summarizes recurring fair value measurements by level at December 31, 2016 (in thousands): Benefit Plan Fair Percentage Value Level 1 Level 2 Level 3 Allocation Assets: Derivative financial instruments(1) $ 978 $ 978 $ — $ — Defined benefit plan assets(2) (pooled separate accounts): Large U.S. Equity(3) 3,134 — 3,134 — 25 % Small/Mid U.S. Equity(4) 1,802 — 1,802 — 15 % International Equity(5) 2,006 — 2,006 — 16 % Fixed Income(6) 5,481 — 5,481 — 44 % $ 13,401 $ 978 $ 12,423 $ — Liabilities: Warrants(8) $ (651 ) $ — $ — $ (651 ) Derivative financial instruments(7) (4,115 ) (4,115 ) — — $ (4,766 ) $ (4,115 ) $ — $ (651 ) (1) Included in derivative assets in the consolidated balance sheets. (2) See Note 9 for accounting discussion. (3) This category includes investments in funds comprised of equity securities of large U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (4) This category includes investments in funds comprised of equity securities of small- and medium-sized U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (5) This category includes investments in funds comprised of equity securities of foreign companies including emerging markets. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (6) This category includes investments in funds comprised of U.S. and foreign investment-grade fixed income securities, high-yield fixed income securities that are rated below investment-grade, U.S. treasury securities, mortgage-backed securities, and other asset-backed securities. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (7) Included in derivative liabilities in the consolidated balance sheets. (8) Included in warrant liabilities at fair value in the consolidated balance sheets. Significant assumptions used and related fair values for the warrants as of December 31, 2016 were as follows: Original Issuance Exercise Price Volatility Risk Free Interest Rate Term (years) Market Discount Warrants Outstanding Fair Value 07/3/2012 $ 6.09 40.9 % 0.62 % 0.50 11.3 % 211,000 $ 651,000 The changes in the Company’s fair value of its Level 3 inputs with respect to its warrants were as follows (in thousands): Warrants Balance, December 31, 2014 $ 1,986 Exercises of warrants (72 ) Expiration of warrants (527 ) Adjustments to fair value for the period (1,114 ) Balance, December 31, 2015 $ 273 Exercises of warrants (179 ) Adjustments to fair value for the period 557 Balance, December 31, 2016 $ 651 Exercises of warrants (178 ) Adjustments to fair value for the period (473 ) Balance, December 31, 2017 $ — \ |
PARENT COMPANY FINANCIALS.
PARENT COMPANY FINANCIALS. | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
PARENT COMPANY FINANCIALS. | 16. PARENT COMPANY FINANCIALS. Restricted Net Assets Parent company financial statements for the periods covered in this report are set forth below. December 31, 2017 2016 ASSETS Current Assets: Cash and cash equivalents $ 5,314 $ 11,060 Receivables from subsidiaries 3,138 7,203 Other current assets 1,631 6,442 Total current assets 10,083 24,705 Property and equipment, net 1,071 1,433 Other Assets: Investments in subsidiaries 359,680 363,401 Pacific Ethanol West plant receivable 58,766 58,766 Other assets 1,565 1,110 Total other assets 420,011 423,277 Total Assets $ 431,165 $ 449,415 Current Liabilities: Accounts payable and accrued liabilities $ 2,218 $ 1,758 Payable to subsidiaries 625 1,568 Accrued PE Op Co. purchase 3,828 3,828 Other current liabilities 245 184 Total current liabilities 6,916 7,338 Long-term debt, net 67,530 53,360 Warrant liabilities at fair value — 651 Deferred tax liabilities 224 52 Other liabilities 56 124 Total Liabilities 74,726 61,525 Stockholders’ Equity: Preferred stock 1 1 Common and non-voting common stock 44 44 Additional paid-in capital 927,090 922,698 Accumulated other comprehensive loss (2,234 ) (2,620 ) Accumulated deficit (568,462 ) (532,233 ) Total Pacific Ethanol, Inc. stockholders’ equity 356,439 387,890 Total Liabilities and Stockholders’ Equity $ 431,165 $ 449,415 Years Ended December 31, 2017 2016 2015 Management fees from subsidiaries $ 11,904 $ 12,968 $ 9,857 Selling, general and administrative expenses 18,185 14,491 14,336 Asset impairment — — 1,970 Loss from operations (6,281 ) (1,523 ) (6,449 ) Fair value adjustments 473 (557 ) 1,641 Interest income 4,793 5,964 5,739 Interest expense (5,829 ) (240 ) (27 ) Other income (expense), net (95 ) 1,931 — Income (loss) before provision for income taxes (6,939 ) 5,575 904 Provision (benefit) for income taxes (321 ) (981 ) (10,034 ) Income (loss) before equity in earnings of subsidiaries (6,618 ) 6,556 10,938 Equity in losses of subsidiaries (28,346 ) (5,137 ) (29,724 ) Consolidated net income (loss) $ (34,964 ) $ 1,419 $ (18,786 ) For the Years Ended December 31, 2017 2016 2015 Operating Activities: Net income (loss) $ (34,964 ) $ 1,419 $ (18,786 ) Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: Equity in losses of subsidiaries 28,346 5,137 29,724 Dividends from subsidiaries 3,500 — — Depreciation and amortization 830 727 390 Fair value adjustments (473 ) 557 (1,641 ) Asset impairment — — 1,970 Deferred income taxes 169 (1,122 ) (14,260 ) Amortization of debt discounts 636 10 — Changes in operating assets and liabilities: Accounts receivables 4,065 7,302 (5,958 ) Other assets 4,356 4,647 (4,139 ) Accounts payable and accrued expenses 3,859 (3,741 ) 604 Accounts payable with subsidiaries (943 ) (9,385 ) 11,179 Net cash provided by (used in) operating activities $ 9,381 $ 5,551 $ (917 ) Investing Activities: Additions to property and equipment $ (468 ) $ (465 ) $ (1,483 ) Investments in subsidiaries (28,126 ) (50,886 ) — Purchase of PE OP Co. debt — (17,003 ) — Net cash used in investing activities $ (28,594 ) $ (68,354 ) $ (1,483 ) Financing Activities: Proceeds from issuances of senior notes $ 13,530 $ 53,350 $ — Proceeds from warrant stock option exercises 1,202 1,164 368 Preferred stock dividend payments (1,265 ) (1,269 ) (1,265 ) Net cash provided by (used in) financing activities $ 13,467 $ 53,245 $ (897 ) Net decrease in cash and cash equivalents (5,746 ) (9,558 ) (3,297 ) Cash and cash equivalents at beginning of period 11,060 20,618 23,915 Cash and cash equivalents at end of period $ 5,314 $ 11,060 $ 20,618 |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED). | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED). | 17. QUARTERLY FINANCIAL DATA (UNAUDITED). The Company’s quarterly results of operations for the years ended December 31, 2017 and 2016 are as follows (in thousands). Certain of these calculations have been revised from the calculations previously reported to reflect the participating securities. First Second Third Fourth December 31, 2017: Net sales $ 386,340 $ 405,202 $ 445,442 $ 395,271 Gross profit (loss) $ (5,773 ) $ 1,653 $ 12,065 $ (2,014 ) Income (loss) from operations $ (11,223 ) $ (7,109 ) $ 3,345 $ (10,598 ) Net loss attributed to Pacific Ethanol, Inc. $ (12,636 ) $ (8,841 ) $ (202 ) $ (13,285 ) Preferred stock dividends $ (312 ) $ (315 ) $ (319 ) $ (319 ) Net loss available to common stockholders $ (12,948 ) $ (9,156 ) $ (521 ) $ (13,604 ) Basic and diluted loss per common share $ (0.31 ) $ (0.22 ) $ (0.01 ) $ (0.32 ) First Second Third Fourth December 31, 2016: Net sales $ 342,373 $ 422,860 $ 417,806 $ 441,719 Gross profit $ 1,668 $ 18,355 $ 7,021 $ 27,314 Income (loss) from operations $ (7,248 ) $ 11,556 $ 393 $ 18,808 Net income (loss) attributed to Pacific Ethanol, Inc. $ (13,226 ) $ 5,086 $ (3,518 ) $ 13,077 Preferred stock dividends $ (315 ) $ (315 ) $ (319 ) $ (320 ) Income allocated to participating securities $ — $ (71 ) $ — $ (189 ) Net income (loss) available to common stockholders $ (13,541 ) $ 4,700 $ (3,837 ) $ 12,569 Basic and diluted income (loss) per common share $ (0.32 ) $ 0.11 $ (0.09 ) $ 0.30 |
ORGANIZATION AND SIGNIFICANT 25
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business The Company’s acquisition of Aventine Renewable Energy Holdings, Inc. (now, Pacific Ethanol Central, LLC, a Delaware limited liability company, “PE Central”) was consummated on July 1, 2015, and as a result, the Company’s consolidated financial statements include the results of PE Central only as of and for the years ended December 31, 2017 and 2016 and for the six months ended December 31, 2015. On December 15, 2016, the Company and Aurora Cooperative Elevator Company, a Nebraska cooperative corporation (“ACEC”), closed a transaction under a contribution agreement under which the Company contributed its Aurora, Nebraska ethanol facilities and ACEC contributed its Aurora grain elevator and related grain handling assets to Pacific Aurora, LLC (“Pacific Aurora”) in exchange for equity interests in Pacific Aurora. On December 15, 2016, concurrently with the closing under the contribution agreement, the Company sold a portion of its equity interest in Pacific Aurora to ACEC. As a result, the Company owned 73.93% of Pacific Aurora and ACEC owned 26.07% of Pacific Aurora as of December 31, 2017 and 2016. Further, the Company has consolidated 100% of the results of Pacific Aurora and recorded ACEC’s 26.07% equity interest as noncontrolling interests in the accompanying financial statements for the year ended December 31, 2017 and for the period December 15, 2016 through December 31, 2016. The Company’s acquisition of Illinois Corn Processing, LLC (“ICP”) was consummated on July 3, 2017, and as a result, the Company’s consolidated financial statements include the results of ICP only for the period from July 3, 2017 through December 31, 2017. The Company is a leading producer and marketer of low-carbon renewable fuels in the United States. The Company’s four ethanol plants in the Western United States (together with their respective holding companies, the “Pacific Ethanol West Plants”) are located in close proximity to both feed and ethanol customers and thus enjoy unique advantages in efficiency, logistics and product pricing. These plants produce among the lowest-carbon ethanol produced in the United States due to low energy use in production. With the addition of four Midwestern ethanol plants in July 2015 as a result of the Company’s acquisition of PE Central and the addition of ICP’s plant in July 2017, the Company now has a combined production capacity of 605 million gallons per year, markets, on an annualized basis, nearly 1.0 billion gallons of ethanol and specialty alcohols, and produces, on an annualized basis, over 3.0 million tons of co-products on a dry matter basis, such as wet and dry distillers grains, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, dried yeast and CO 2 As of December 31, 2017, all nine facilities were operating. As market conditions change, the Company may increase, decrease or idle production at one or more operational facilities or resume operations at any idled facility. |
Basis of Presentation | Basis of Presentation |
Segments | Segments Segment Reporting |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for balances that appear to have specific collection issues. The collection process is based on the age of the invoice and requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivable are charged against the allowance for doubtful accounts once uncollectibility has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of ability to make payments, additional allowances may be required. Of the accounts receivable balance, approximately $64,501,000 and $64,853,000 at December 31, 2017 and 2016, respectively, were used as collateral under Kinergy’s operating line of credit. The allowance for doubtful accounts was $19,000 and $331,000 as of December 31, 2017 and 2016, respectively. The Company recorded a bad debt expense of $5,000 and $306,000 and a recovery of $354,000 for the years ended December 31, 2017, 2016 and 2015, respectively. The Company does not have any off-balance sheet credit exposure related to its customers. |
Concentration Risks | Concentration Risks The Company sells fuel-grade ethanol to gasoline refining and distribution companies. The Company sold ethanol to customers representing 10% or more of the Company’s total net sales, as follows. Years Ended December 31, 2017 2016 2015 Customer A 16 % 17 % 12 % Customer B 11 % 12 % 15 % Customer C 6 % 6 % 12 % The Company had accounts receivable due from these customers totaling $21,584,000 and $21,274,000, representing 27% and 25% of total accounts receivable, as of December 31, 2017 and 2016, respectively. The Company purchases corn, its largest cost component in producing ethanol, from its suppliers. The Company purchased corn from suppliers representing 10% or more of the Company’s total corn purchases, as follows: Years Ended December 31, 2017 2016 2015 Supplier A 14 % 13 % 19 % Supplier B 13 % 4 % — % Supplier C 10 % 8 % 9 % Supplier D 9 % 13 % 13 % Approximately 32% of the Company’s employees are covered by a collective bargaining agreement. |
Inventories | Inventories December 31, 2017 2016 Finished goods $ 35,652 $ 33,773 Work in progress 8,807 7,092 Raw materials 7,601 6,571 Low-carbon and RIN credits 7,952 10,926 Other 1,538 1,708 Total $ 61,550 $ 60,070 |
Property and Equipment | Property and Equipment Buildings 40 years Facilities and plant equipment 10 – 25 years Other equipment, vehicles and furniture 5 – 10 years The cost of normal maintenance and repairs is charged to operations as incurred. Significant capital expenditures that increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the asset. The cost of property and equipment sold, or otherwise disposed of, and the related accumulated depreciation or amortization are removed from the accounts, and any resulting gains or losses are reflected in current operations. |
Intangible Assets | Intangible Asset |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities |
Revenue Recognition | Revenue Recognition ● As a producer ● As a merchant ● As an agent Revenue from sales of third-party ethanol is recorded net of costs when the Company is acting as an agent between a customer and a supplier and gross when the Company is a principal to the transaction. The Company recorded $1,663,000, $1,604,000 and $1,510,000 in net sales when acting as an agent for the years ended December 31, 2017, 2016 and 2015, respectively. Several factors are considered to determine whether the Company is acting as an agent or principal, most notably whether the Company is the primary obligor to the customer and whether the Company has inventory risk and related risk of loss or whether the Company adds meaningful value to the supplier’s product or service. Consideration is also given to whether the Company has latitude in establishing the sales price or has credit risk, or both. When the Company acts as an agent, it recognizes revenue on a net basis or recognizes its predetermined fees and any associated freight, based upon the amount of net revenues retained in excess of amounts paid to suppliers. The Company records revenues based upon the gross amounts billed to its customers in transactions where the Company acts as a producer or a merchant and obtains title to ethanol and therefore owns the product and any related, unmitigated inventory risk for the ethanol, regardless of whether the Company actually obtains physical control of the product. |
Shipping and Handling Costs | Shipping and Handling Costs |
Selling Costs | Selling Costs |
Stock-Based Compensation | Stock-Based Compensation |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets |
Deferred Financing Costs | Deferred Financing Costs |
Provision for Income Taxes | Provision for Income Taxes The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. An uncertain tax position is considered effectively settled on completion of an examination by a taxing authority if certain other conditions are satisfied. Should the Company incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of interest expense and other income (expense), net, respectively. Deferred tax assets and liabilities are classified as noncurrent in the Company’s consolidated balance sheets. The Company files a consolidated federal income tax return. This return includes all wholly-owned subsidiaries as well as the Company’s pro-rata share of taxable income from pass-through entities in which the Company owns less than 100%. State tax returns are filed on a consolidated, combined or separate basis depending on the applicable laws relating to the Company and its subsidiaries. |
Income (Loss) Per Share | Income (Loss) Per Share The following tables compute basic and diluted earnings per share (in thousands, except per share data): Year Ended December 31, 2017 Loss Shares Per-Share Net loss attributed to Pacific Ethanol $ (34,964 ) Less: Preferred stock dividends (1,265 ) Basic and Diluted loss per share: Loss available to common stockholders $ (36,229 ) 42,745 $ (0.85 ) Year Ended December 31, 2016 Income Shares Per-Share Net income attributed to Pacific Ethanol $ 1,419 Less: Preferred stock dividends (1,269 ) Less: Allocated to participating securities (2 ) Basic income per share: Income available to common stockholders $ 148 42,182 $ 0.00 Add: Options — 69 Diluted income per share: Income available to common stockholders $ 148 42,251 $ 0.00 Year Ended December 31, 2015 Loss Shares Per-Share Net loss attributed to Pacific Ethanol $ (18,786 ) Less: Preferred stock dividends (1,265 ) Basic and Diluted loss per share: Loss available to common stockholders $ (20,051 ) 33,173 $ (0.60 ) There were an aggregate of 719,000, 704,000 and 817,000 potentially dilutive shares from convertible securities outstanding as of December 31, 2017, 2016 and 2015, respectively. These convertible securities were not considered in calculating diluted income (loss) per common share for the years ended December 31, 2017, 2016 and 2015 as their effect would be anti-dilutive. |
Financial Instruments | Financial Instruments |
Employment-related Benefits | Employment-related Benefits |
Estimates and Assumptions | Estimates and Assumptions |
Subsequent Events | Subsequent Events |
Reclassifications | Reclassifications |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The provisions of ASC 606 include a five-step process by which an entity will determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which an entity expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies the performance obligation. The Company adopted ASC 606 on January 1, 2018. The Company has completed its evaluation of the new requirements under ASC 606 on each of its major revenue types. The Company’s assessment indicates that ASC 606 will not materially change the way the Company accounts for its contracts with its customers, which will continue to be recognized at a point in time, however, will expand certain disclosures of its revenue streams. The Company will adopt the new guidance using the modified retrospective transition method. In February 2016, the FASB issued new guidance on accounting for leases. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted cash flow basis; and (2) a “right of use” asset, which is an asset that represents the lessee’s right to use the specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged, with some minor exceptions. Lessees will no longer be provided with a source of off-balance sheet financing for other than short-term leases. The standard is effective for public companies for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company expects that upon adoption of this accounting standard, right of use assets and lease obligations will be recognized in its consolidated balance sheets in amounts that will be material. In April 2016, the FASB issued new guidance to reduce the complexity of certain aspects of accounting for employee share-based payment transactions. Prior to adoption of the standard, accruals of compensation costs were based on an estimated forfeiture rate. The new guidance allows an entity to make an entity-wide accounting policy election to either continue using an estimate of forfeitures or account for forfeitures only when they occur. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Effective January 1, 2017, the Company elected to discontinue the use of an estimated forfeiture rate and instead account for actual forfeitures as they occur. The transition guidance requires an adjustment to retained earnings for any cumulative effect. The impact to the Company upon adoption was determined to be immaterial. |
ORGANIZATION AND SIGNIFICANT 26
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization And Significant Accounting Policies Tables | |
Schedule of concentrations of credit risk major customers | The Company sold ethanol to customers representing 10% or more of the Company’s total net sales, as follows. Years Ended December 31, 2017 2016 2015 Customer A 16 % 17 % 12 % Customer B 11 % 12 % 15 % Customer C 6 % 6 % 12 % |
Schedule of purchases from external customers | The Company purchased corn from suppliers representing 10% or more of the Company’s total corn purchases, as follows: Years Ended December 31, 2017 2016 2015 Supplier A 14 % 13 % 19 % Supplier B 13 % 4 % — % Supplier C 10 % 8 % 9 % Supplier D 9 % 13 % 13 % |
Schedule of inventory | Inventory balances consisted of the following (in thousands): December 31, 2017 2016 Finished goods $ 35,652 $ 33,773 Work in progress 8,807 7,092 Raw materials 7,601 6,571 Low-carbon and RIN credits 7,952 10,926 Other 1,538 1,708 Total $ 61,550 $ 60,070 |
Schedule of property and equipment useful lives | Depreciation is computed using the straight-line method over the following estimated useful lives: Buildings 40 years Facilities and plant equipment 10 – 25 years Other equipment, vehicles and furniture 5 – 10 years |
Schedule of earnings per share | The following tables compute basic and diluted earnings per share (in thousands, except per share data): Year Ended December 31, 2017 Loss Shares Per-Share Net loss attributed to Pacific Ethanol $ (34,964 ) Less: Preferred stock dividends (1,265 ) Basic and Diluted loss per share: Loss available to common stockholders $ (36,229 ) 42,745 $ (0.85 ) Year Ended December 31, 2016 Income Shares Per-Share Net income attributed to Pacific Ethanol $ 1,419 Less: Preferred stock dividends (1,269 ) Less: Allocated to participating securities (2 ) Basic income per share: Income available to common stockholders $ 148 42,182 $ 0.00 Add: Options — 69 Diluted income per share: Income available to common stockholders $ 148 42,251 $ 0.00 Year Ended December 31, 2015 Loss Shares Per-Share Net loss attributed to Pacific Ethanol $ (18,786 ) Less: Preferred stock dividends (1,265 ) Basic and Diluted loss per share: Loss available to common stockholders $ (20,051 ) 33,173 $ (0.60 ) |
PACIFIC ETHANOL PLANTS. (Tables
PACIFIC ETHANOL PLANTS. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Pacific Aurora [Member] | |
Schedule of purchase price allocation | The carrying values and classification of assets and liabilities of Pacific Aurora as of December 31, 2016 were as follows (in thousands): Cash and equivalents $ 1,453 Accounts receivable 16,804 Inventories 3,837 Other current assets 77 Total current assets 22,171 Property and equipment 115,759 Other assets 1,387 Total assets $ 139,317 Accounts payable and accrued liabilities $ 20,152 Other current liabilities 2,045 Long-term debt outstanding, net 621 Total liabilities $ 22,818 |
PE Central [Member] | |
Schedule of purchase price allocation | The purchase price consideration allocation is as follows (in thousands): Cash and equivalents $ 18,756 Accounts receivable 10,430 Inventories 29,483 Other current assets 8,304 Total current assets 66,973 Property and equipment 312,781 Net deferred tax assets 12,159 Other assets 750 Total assets acquired $ 392,663 Accounts payable and accrued liabilities $ 27,780 Long-term debt - revolvers 13,721 Long-term debt - term debt 142,744 Pension plan liabilities 8,518 Other non-current liabilities 25,327 Total liabilities assumed $ 218,090 Net assets acquired $ 174,573 |
Schedule of pro forma allocation | The following table presents unaudited pro forma financial information for the year ended December 31, 2015, assuming the acquisition occurred on January 1, 2014 (in thousands except per share data). Net sales – pro forma $ 1,484,676 Cost of goods sold – pro forma $ 1,469,512 Selling, general and administrative expenses – pro forma $ 34,735 Net loss – pro forma $ (34,136 ) Diluted net loss per share – pro forma $ (0.81 ) Diluted weighted-average shares – pro forma 42,053 |
ICP [Member] | |
Schedule of purchase price allocation | The Company has recognized the following allocation of the purchase price at fair values. No intangible assets or liabilities have been recognized due to ICP’s contracts being materially close to market prices. The Company’s purchase price consideration allocation is as follows (in thousands): Cash and equivalents $ 426 Accounts receivable 11,636 Inventories 9,227 Other current assets 1,560 Total current assets 22,849 Property and equipment 61,128 Other assets 328 Total assets acquired $ 84,305 Accounts payable, trade $ 5,683 Other current liabilities 1,486 Total current liabilities 7,169 Other non-current liabilities 209 Total liabilities assumed $ 7,378 Net assets acquired $ 76,927 Estimated goodwill $ — Total purchase price $ 76,927 |
Schedule of pro forma allocation | The following table presents unaudited pro forma combined financial information assuming the acquisition of ICP occurred on January 1, 2016. Years Ended December 31, 2017 2016 Revenues – pro forma $ 1,710,317 $ 1,802,159 Consolidated net income (loss) – pro forma $ (42,589 ) $ 8,329 Diluted net income (loss) per share – pro forma $ (0.95 ) $ 0.16 Diluted weighted-average shares – pro forma 42,745 42,251 |
SEGMENTS. (Tables)
SEGMENTS. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of financial date for operating segments | The following tables set forth certain financial data for the Company’s operating segments (in thousands): Years Ended December 31, 2017 2016 2015 Net Sales Production: Net sales to external customers $ 1,102,722 $ 1,045,807 $ 710,201 Intersegment net sales 1,898 1,169 — Total production segment net sales 1,104,620 1,046,976 710,201 Marketing and distribution: Net sales to external customers 529,533 578,951 480,975 Intersegment net sales 8,464 8,029 5,262 Total marketing and distribution net sales 537,997 586,980 486,237 Intersegment eliminations (10,362 ) (9,198 ) (5,262 ) Net sales as reported $ 1,632,255 $ 1,624,758 $ 1,191,176 Cost of goods sold: Production $ 1,098,977 $ 1,015,655 $ 716,877 Marketing and distribution 535,032 575,921 476,410 Intersegment eliminations (7,685 ) (21,176 ) (12,477 ) Cost of goods sold as reported $ 1,626,324 $ 1,570,400 $ 1,180,810 Income (loss) before provision for income taxes: Production $ (27,458 ) $ (6,882 ) $ (32,723 ) Marketing and distribution (2,463 ) 4,517 3,200 Corporate activities (8,474 ) 2,910 616 $ (38,395 ) $ 545 $ (28,907 ) Depreciation and amortization: Production $ 37,637 $ 34,528 $ 23,091 Marketing and distribution — 3 151 Corporate activities 1,014 910 390 $ 38,651 $ 35,441 $ 23,632 Interest expense: Production $ 5,887 $ 20,794 $ 11,969 Marketing and distribution 1,271 1,404 625 Corporate activities 5,780 208 — $ 12,938 $ 22,406 $ 12,594 |
Schedule of assets by operating segments | The following table sets forth the Company’s total assets by operating segment (in thousands): December 31, 2017 2016 Total assets: Production $ 583,696 $ 542,688 Marketing and distribution 127,242 146,356 Corporate assets 9,358 19,194 $ 720,296 $ 708,238 |
PROPERTY AND EQUIPMENT. (Tables
PROPERTY AND EQUIPMENT. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): December 31, 2017 2016 Facilities and plant equipment $ 601,156 $ 530,735 Land 8,970 7,771 Other equipment, vehicles and furniture 10,189 9,714 Construction in progress 38,041 29,393 658,356 577,613 Accumulated depreciation (150,004 ) (112,423 ) $ 508,352 $ 465,190 |
DERIVATIVES. (Tables)
DERIVATIVES. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivatives not designated as hedging instruments | The classification and amounts of the Company’s derivatives not designated as hedging instruments, and related cash collateral balances, are as follows (in thousands): As of December 31, 2017 Assets Liabilities Type of Instrument Balance Sheet Location Fair Balance Sheet Location Fair Cash collateral balance Other current assets $ 3,813 Commodity contracts Derivative assets $ 998 Derivative liabilities $ 2,307 As of December 31, 2016 Assets Liabilities Type of Instrument Balance Sheet Location Fair Balance Sheet Location Fair Cash collateral balance Other current assets $ 4,331 Commodity contracts Derivative assets $ 978 Derivative liabilities $ 4,115 |
Schedule of recognized gains (losses) on derivatives | The classification and amounts of the Company’s recognized gains (losses) for its derivatives not designated as hedging instruments are as follows (in thousands): Realized Gains (Losses) For the Years Ended December 31, Type of Instrument Statements of Operations Location 2017 2016 2015 Commodity contracts Cost of goods sold $ (4,165 ) $ 1,386 $ (338 ) $ (4,165 ) $ 1,386 $ (338 ) Unrealized Gains (Losses) For the Years Ended December 31, Type of Instrument Statements of Operations Location 2017 2016 2015 Commodity contracts Cost of goods sold $ 2,088 $ (3,370 ) $ (204 ) $ 2,088 $ (3,370 ) $ (204 ) |
DEBT. (Tables)
DEBT. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long term debt | Long-term borrowings are summarized as follows (in thousands): December 31, December 31, Kinergy line of credit $ 49,477 $ 49,862 Pekin term loan 53,500 64,000 Pekin revolving loan 32,000 32,000 ICP term loan 22,500 — ICP revolving loan 18,000 — Pacific Aurora line of credit — 1,000 Parent notes payable 68,948 55,000 244,425 201,862 Less unamortized debt discount (1,409 ) (1,626 ) Less unamortized debt financing costs (1,925 ) (1,708 ) Less short-term portion (20,000 ) (10,500 ) Long-term debt $ 221,091 $ 188,028 |
Schedule of maturities of long-term debt | The Company’s long-term debt matures as follows (in thousands): December 31: 2018 $ 20,000 2019 88,948 2020 20,000 2021 16,000 2022 99,477 $ 244,425 |
PENSION PLANS. (Tables)
PENSION PLANS. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Plan [Member] | |
Schedule of defined contribution plan schedule | Information related to the Retirement Plan as of and for the years ended December 31, 2017, 2016 and 2015 is presented below (dollars in thousands): 2017 2016 2015 Changes in plan assets: Fair value of plan assets, beginning $ 12,423 $ 12,567 $ 13,180 Actual gains (losses) 1,722 523 (298 ) Benefits paid (665 ) (667 ) (315 ) Company contributions 478 — — Participant contributions — — — Fair value of plan assets, ending $ 13,958 $ 12,423 $ 12,567 Less: projected accumulated benefit obligation $ 19,658 $ 18,455 $ 16,552 Funded status, (underfunded)/overfunded $ (5,700 ) $ (6,032 ) $ (3,985 ) Amounts recognized in the consolidated balance sheets: Other liabilities $ (5,700 ) $ (6,032 ) $ (3,985 ) Accumulated other comprehensive loss (income) $ 726 $ 1,047 $ (885 ) Components of net periodic benefit costs are as follows: Service cost $ 391 $ 223 $ 211 Interest cost 750 686 338 Expected return on plan assets (674 ) (794 ) (500 ) Net periodic benefit cost $ 467 $ 115 $ 49 Loss (gain) recognized in other comprehensive income (expense) $ (321 ) $ 1,932 $ (885 ) Assumptions used in computation benefit obligations: Discount rate 3.60 % 4.15 % 4.23 % Expected long-term return on plan assets 6.00 % 6.75 % 7.75 % Rate of compensation increase — — — |
Schedule of expected benefit payments | The following table summarizes the expected benefit payments for the Company’s plan for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter (in thousands): December 31: 2018 $ 730 2019 740 2020 780 2021 790 2022 830 2023-27 4,820 $ 8,690 |
Postretirement Plan [Member] | |
Schedule of defined contribution plan schedule | Information related to the Postretirement Plan as of December 31, 2017 and 2016 is presented below (dollars in thousands): 2017 2016 Amounts at the end of the year: Accumulated/projected benefit obligation $ 5,565 $ 5,371 Fair value of plan assets — — Funded status, (underfunded)/overfunded $ (5,565 ) $ (5,371 ) Amounts recognized in the consolidated balance sheets: Accrued liabilities $ (240 ) $ (310 ) Other liabilities $ (5,325 ) $ (5,061 ) Accumulated other comprehensive loss $ 1,508 $ 1,573 Years Ended December 31, 2017 2016 2015 Amounts recognized in the plan for the year: Company contributions $ 157 $ 163 $ 20 Participant contributions $ 22 $ 22 $ 15 Benefits paid $ (179 ) $ (184 ) $ (35 ) Components of net periodic benefit costs are as follows: Service cost $ 84 $ 48 $ 32 Interest cost 198 139 65 Amortization of prior service costs 134 — — Net periodic benefit cost $ 416 $ 187 $ 97 Loss (gain) recognized in other comprehensive income $ (65 ) $ 1,728 $ (155 ) Discount rate used in computation of benefit obligations 3.80 % 3.95 % 3.67 % |
Schedule of expected benefit payments | The following table summarizes the expected benefit payments for the Company’s plan for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter (in thousands): December 31: 2018 $ 240 2019 270 2020 300 2021 340 2022 330 2023-27 2,120 $ 3,600 |
INCOME TAXES. (Tables)
INCOME TAXES. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | The Company recorded a provision (benefit) for income taxes as follows (in thousands): Years Ended December 31, 2017 2016 2015 Current provision (benefit) $ (490 ) $ 141 $ (8,011 ) Deferred provision (benefit) 169 (1,122 ) (2,023 ) Total $ (321 ) $ (981 ) $ (10,034 ) |
Schedule of reconciliation of effective tax rate | A reconciliation of the differences between the United States statutory federal income tax rate and the effective tax rate as provided in the consolidated statements of operations is as follows: Years Ended December 31, 2017 2016 2015 Statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 4.0 6.4 9.2 Change in valuation allowance (34.5 ) (298.8 ) (4.2 ) Impact of Federal tax rate change on deferreds (28.4 ) — — Impact of Federal tax rate change on valuation allowance 29.4 — — Fair value adjustments and warrant inducements 0.4 37.2 2.0 Noncontrolling interests (3.2 ) — — Domestic production gross receipts deduction — — (2.9 ) Section 382 reduction to loss carryover — — 0.1 Stock compensation (0.1 ) 58.8 (0.8 ) Non-deductible items (0.2 ) 8.9 (0.5 ) Other (1.6 ) (27.5 ) (3.2 ) Effective rate 0.8 % (180.0 )% 34.7 % |
Schedule of components of deferred income taxes | Deferred income taxes are provided using the asset and liability method to reflect temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities using presently enacted tax rates and laws. The components of deferred income taxes included in the consolidated balance sheets were as follows (in thousands): December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 40,989 $ 45,709 R&D and AMT credits 1,797 2,465 Railcar contracts 1,415 3,348 Stock-based compensation 738 946 Allowance for doubtful accounts and other assets 637 856 Derivatives 267 1,228 Pension liability 2,939 2,204 Other 2,097 4,316 Total deferred tax assets 50,879 61,072 Deferred tax liabilities: Property and equipment (25,194 ) (45,757 ) Intangibles (749 ) (1,091 ) Other (521 ) (1,593 ) Total deferred tax liabilities (26,464 ) (48,441 ) Valuation allowance (24,639 ) (12,683 ) Net deferred tax liabilities, included in other liabilities $ (224 ) $ (52 ) |
Schedule of net operating loss carryforwards | These net operating loss carryforwards expire as follows (in thousands): Tax Years Federal State 2018–2022 $ — $ — 2023–2027 13,038 2,945 2028–2032 22,025 65,921 2033–2036 119,526 80,055 $ 154,589 $ 148,921 Certain of these net operating losses are not immediately available, but become available to be utilized in each of the years ended December 31, as follows (in thousands): Year Federal State 2017 $ 59,675 $ 82,892 2018 6,441 5,372 2019 6,374 5,345 2020 6,308 5,318 2021 6,308 5,318 Thereafter 69,483 44,676 $ 154,589 $ 148,921 |
Schedule of income tax in the United States jurisdiction and various state jurisdictions | These jurisdictions, along with the years still open to audit under the applicable statutes of limitation, are as follows: Jurisdiction Tax Years Federal 2014 – 2016 Arizona 2014 – 2016 California 2013 – 2016 Colorado 2013 – 2016 Idaho 2014 – 2016 Illinois 2014 – 2016 Indiana 2014 – 2016 Iowa 2014 – 2016 Kansas 2014 – 2016 Minnesota 2014 – 2016 Missouri 2014 – 2016 Nebraska 2014 – 2016 Oklahoma 2014 – 2016 Oregon 2014 – 2016 Texas 2013 – 2016 |
COMMON STOCK AND WARRANTS. (Tab
COMMON STOCK AND WARRANTS. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrant activity | The following table summarizes warrant activity for the years ended December 31, 2017, 2016 and 2015 (number of shares in thousands): Number of Price per Weighted Balance at December 31, 2014 856 $6.09 – $735.00 $ 36.55 Warrants exercised (42 ) $8.85 $ 8.85 Warrants expired (432 ) $8.85 $ 8.85 Balance at December 31, 2015 382 $6.09 – $735.00 $ 70.87 Warrants exercised (138 ) $8.43 $ 8.43 Balance at December 31, 2016 244 $6.09 – $735.00 $ 106.72 Warrants exercised (191 ) $6.09 $ 6.09 Warrants expired (49 ) $6.09 – $735.00 $ 444.00 Balance at December 31, 2017 4 $735.00 $ 735.00 |
STOCK BASED COMPENSATION. (Tabl
STOCK BASED COMPENSATION. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of option activity | Summaries of the status of Company’s stock option plans as of December 31, 2017 and 2016 and of changes in options outstanding under the Company’s plans during those years are as follows (number of shares in thousands): Years Ended December 31, 2017 2016 Number Weighted Average Exercise Price Number Weighted Average Outstanding at beginning of year 240 $ 4.18 240 $ 4.18 Exercised (10 ) 3.74 — — Outstanding at end of year 230 $ 4.18 240 $ 4.18 Options exercisable at end of year 230 $ 4.18 240 $ 4.18 |
Schedule of stock options by exercise price range | Stock options outstanding as of December 31, 2017 were as follows (number of shares in thousands): Options Outstanding Options Exercisable Range of Number Outstanding Weighted Average Remaining Contractual Life (yrs.) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 3.74 219 5.47 $ 3.74 219 $ 3.74 $ 12.90 11 3.59 $ 12.90 11 $ 12.90 |
Schedule of unvested restricted stock activity | The Company granted to certain employees and directors shares of restricted stock under its 2006 and 2016 Stock Incentive Plans. A summary of unvested restricted stock activity is as follows (shares in thousands): Number of Weighted Unvested at December 31, 2014 390 $ 8.71 Issued 307 $ 10.16 Vested (220 ) $ 7.94 Canceled (14 ) $ 10.08 Unvested at December 31, 2015 463 $ 10.00 Issued 742 $ 5.24 Vested (250 ) $ 9.01 Canceled (25 ) $ 6.24 Unvested at December 31, 2016 930 $ 6.57 Issued 664 $ 6.65 Vested (480 ) $ 7.30 Canceled (37 ) $ 6.08 Unvested at December 31, 2017 1,077 $ 6.31 |
Schedule of stock-based compensation expense | Stock-based compensation expense related to employee and non-employee restricted stock and option grants recognized in selling, general and administrative expenses, were as follows (in thousands):\ Years Ended December 31, 2017 2016 2015 Employees $ 3,303 $ 2,173 $ 1,694 Non-employees 525 443 325 Total stock-based compensation expense $ 3,828 $ 2,616 $ 2,019 |
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments - Capital and Operating Leases | Future minimum lease payments required by non-cancelable leases in effect at December 31, 2017 were as follows (in thousands): Years Ended December 31, Capital Leases Operating Leases 2018 $ 613 $ 11,841 2019 45 9,236 2020 45 7,042 2021 34 4,074 2022 — 3,894 Thereafter — 5,530 Total minimum payments 737 $ 41,617 Amount representing interest (22 ) Obligations under capital leases 715 Obligations due within one year (592 ) Long-term obligations under capital leases $ 123 |
FAIR VALUE MEASUREMENTS. (Table
FAIR VALUE MEASUREMENTS. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurements | Benefit Plan Fair Percentage Value Level 1 Level 2 Level 3 Allocation Assets: Derivative financial instruments(1) $ 998 $ 998 $ — $ — Defined benefit plan assets(2) (pooled separate accounts): Large U.S. Equity(3) 3,748 — 3,748 — 27 % Small/Mid U.S. Equity(4) 2,018 — 2,018 — 14 % International Equity(5) 2,528 — 2,528 — 18 % Fixed Income(6) 5,664 — 5,664 — 41 % $ 14,956 $ 998 $ 13,958 $ — Liabilities: Derivative financial instruments(7) $ (2,307 ) $ (2,307 ) $ — $ — The following table summarizes recurring fair value measurements by level at December 31, 2016 (in thousands): Benefit Plan Fair Percentage Value Level 1 Level 2 Level 3 Allocation Assets: Derivative financial instruments(1) $ 978 $ 978 $ — $ — Defined benefit plan assets(2) (pooled separate accounts): Large U.S. Equity(3) 3,134 — 3,134 — 25 % Small/Mid U.S. Equity(4) 1,802 — 1,802 — 15 % International Equity(5) 2,006 — 2,006 — 16 % Fixed Income(6) 5,481 — 5,481 — 44 % $ 13,401 $ 978 $ 12,423 $ — Liabilities: Warrants(8) $ (651 ) $ — $ — $ (651 ) Derivative financial instruments(7) (4,115 ) (4,115 ) — — $ (4,766 ) $ (4,115 ) $ — $ (651 ) (1) Included in derivative assets in the consolidated balance sheets. (2) See Note 9 for accounting discussion. (3) This category includes investments in funds comprised of equity securities of large U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (4) This category includes investments in funds comprised of equity securities of small- and medium-sized U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (5) This category includes investments in funds comprised of equity securities of foreign companies including emerging markets. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (6) This category includes investments in funds comprised of U.S. and foreign investment-grade fixed income securities, high-yield fixed income securities that are rated below investment-grade, U.S. treasury securities, mortgage-backed securities, and other asset-backed securities. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund. (7) Included in derivative liabilities in the consolidated balance sheets. (8) Included in warrant liabilities at fair value in the consolidated balance sheets. |
Schedule of significant assumptions | Significant assumptions used and related fair values for the warrants as of December 31, 2016 were as follows: Original Issuance Exercise Price Volatility Risk Free Interest Rate Term (years) Market Discount Warrants Outstanding Fair Value 07/3/2012 $ 6.09 40.9 % 0.62 % 0.50 11.3 % 211,000 $ 651,000 |
Schedule of level 3 fair value schedule | The changes in the Company’s fair value of its Level 3 inputs with respect to its warrants were as follows (in thousands): Warrants Balance, December 31, 2014 $ 1,986 Exercises of warrants (72 ) Expiration of warrants (527 ) Adjustments to fair value for the period (1,114 ) Balance, December 31, 2015 $ 273 Exercises of warrants (179 ) Adjustments to fair value for the period 557 Balance, December 31, 2016 $ 651 Exercises of warrants (178 ) Adjustments to fair value for the period (473 ) Balance, December 31, 2017 $ — |
PARENT COMPANY FINANCIALS. (Tab
PARENT COMPANY FINANCIALS. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule of balance sheets - parent company | Parent company financial statements for the periods covered in this report are set forth below. December 31, 2017 2016 ASSETS Current Assets: Cash and cash equivalents $ 5,314 $ 11,060 Receivables from subsidiaries 3,138 7,203 Other current assets 1,631 6,442 Total current assets 10,083 24,705 Property and equipment, net 1,071 1,433 Other Assets: Investments in subsidiaries 359,680 363,401 Pacific Ethanol West plant receivable 58,766 58,766 Other assets 1,565 1,110 Total other assets 420,011 423,277 Total Assets $ 431,165 $ 449,415 Current Liabilities: Accounts payable and accrued liabilities $ 2,218 $ 1,758 Payable to subsidiaries 625 1,568 Accrued PE Op Co. purchase 3,828 3,828 Other current liabilities 245 184 Total current liabilities 6,916 7,338 Long-term debt, net 67,530 53,360 Warrant liabilities at fair value — 651 Deferred tax liabilities 224 52 Other liabilities 56 124 Total Liabilities 74,726 61,525 Stockholders’ Equity: Preferred stock 1 1 Common and non-voting common stock 44 44 Additional paid-in capital 927,090 922,698 Accumulated other comprehensive loss (2,234 ) (2,620 ) Accumulated deficit (568,462 ) (532,233 ) Total Pacific Ethanol, Inc. stockholders’ equity 356,439 387,890 Total Liabilities and Stockholders’ Equity $ 431,165 $ 449,415 |
Schedule of statements of operations parent company | Years Ended December 31, 2017 2016 2015 Management fees from subsidiaries $ 11,904 $ 12,968 $ 9,857 Selling, general and administrative expenses 18,185 14,491 14,336 Asset impairment — — 1,970 Loss from operations (6,281 ) (1,523 ) (6,449 ) Fair value adjustments 473 (557 ) 1,641 Interest income 4,793 5,964 5,739 Interest expense (5,829 ) (240 ) (27 ) Other income (expense), net (95 ) 1,931 — Income (loss) before provision for income taxes (6,939 ) 5,575 904 Provision (benefit) for income taxes (321 ) (981 ) (10,034 ) Income (loss) before equity in earnings of subsidiaries (6,618 ) 6,556 10,938 Equity in losses of subsidiaries (28,346 ) (5,137 ) (29,724 ) Consolidated net income (loss) $ (34,964 ) $ 1,419 $ (18,786 ) |
Schedule of statements of cash flows parent company | For the Years Ended December 31, 2017 2016 2015 Operating Activities: Net income (loss) $ (34,964 ) $ 1,419 $ (18,786 ) Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: Equity in losses of subsidiaries 28,346 5,137 29,724 Dividends from subsidiaries 3,500 — — Depreciation and amortization 830 727 390 Fair value adjustments (473 ) 557 (1,641 ) Asset impairment — — 1,970 Deferred income taxes 169 (1,122 ) (14,260 ) Amortization of debt discounts 636 10 — Changes in operating assets and liabilities: Accounts receivables 4,065 7,302 (5,958 ) Other assets 4,356 4,647 (4,139 ) Accounts payable and accrued expenses 3,859 (3,741 ) 604 Accounts payable with subsidiaries (943 ) (9,385 ) 11,179 Net cash provided by (used in) operating activities $ 9,381 $ 5,551 $ (917 ) Investing Activities: Additions to property and equipment $ (468 ) $ (465 ) $ (1,483 ) Investments in subsidiaries (28,126 ) (50,886 ) — Purchase of PE OP Co. debt — (17,003 ) — Net cash used in investing activities $ (28,594 ) $ (68,354 ) $ (1,483 ) Financing Activities: Proceeds from issuances of senior notes $ 13,530 $ 53,350 $ — Proceeds from warrant stock option exercises 1,202 1,164 368 Preferred stock dividend payments (1,265 ) (1,269 ) (1,265 ) Net cash provided by (used in) financing activities $ 13,467 $ 53,245 $ (897 ) Net decrease in cash and cash equivalents (5,746 ) (9,558 ) (3,297 ) Cash and cash equivalents at beginning of period 11,060 20,618 23,915 Cash and cash equivalents at end of period $ 5,314 $ 11,060 $ 20,618 |
QUARTERLY FINANCIAL DATA. (Tabl
QUARTERLY FINANCIAL DATA. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial data | The Company’s quarterly results of operations for the years ended December 31, 2017 and 2016 are as follows (in thousands). Certain of these calculations have been revised from the calculations previously reported to reflect the participating securities. First Second Third Fourth December 31, 2017: Net sales $ 386,340 $ 405,202 $ 445,442 $ 395,271 Gross profit (loss) $ (5,773 ) $ 1,653 $ 12,065 $ (2,014 ) Income (loss) from operations $ (11,223 ) $ (7,109 ) $ 3,345 $ (10,598 ) Net loss attributed to Pacific Ethanol, Inc. $ (12,636 ) $ (8,841 ) $ (202 ) $ (13,285 ) Preferred stock dividends $ (312 ) $ (315 ) $ (319 ) $ (319 ) Net loss available to common stockholders $ (12,948 ) $ (9,156 ) $ (521 ) $ (13,604 ) Basic and diluted loss per common share $ (0.31 ) $ (0.22 ) $ (0.01 ) $ (0.32 ) First Second Third Fourth December 31, 2016: Net sales $ 342,373 $ 422,860 $ 417,806 $ 441,719 Gross profit $ 1,668 $ 18,355 $ 7,021 $ 27,314 Income (loss) from operations $ (7,248 ) $ 11,556 $ 393 $ 18,808 Net income (loss) attributed to Pacific Ethanol, Inc. $ (13,226 ) $ 5,086 $ (3,518 ) $ 13,077 Preferred stock dividends $ (315 ) $ (315 ) $ (319 ) $ (320 ) Income allocated to participating securities $ — $ (71 ) $ — $ (189 ) Net income (loss) available to common stockholders $ (13,541 ) $ 4,700 $ (3,837 ) $ 12,569 Basic and diluted income (loss) per common share $ (0.32 ) $ 0.11 $ (0.09 ) $ 0.30 |
ORGANIZATION AND SIGNIFICANT 40
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. (Details) - Sales [Member] | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Customer A [Member] | |||
Concentration risk percentage | 16.00% | 17.00% | 12.00% |
Customer C [Member] | |||
Concentration risk percentage | 6.00% | 6.00% | 12.00% |
Customer B [Member] | |||
Concentration risk percentage | 11.00% | 12.00% | 15.00% |
ORGANIZATION AND SIGNIFICANT 41
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. (Details 1) - Purchases [Member] | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Supplier C [Memebr] | |||
Concentration percentage | 10.00% | 8.00% | 9.00% |
Supplier B [Member] | |||
Concentration percentage | 13.00% | 4.00% | |
Supplier A [Member] | |||
Concentration percentage | 14.00% | 13.00% | 19.00% |
Supplier D [Memebr] | |||
Concentration percentage | 9.00% | 13.00% | 13.00% |
ORGANIZATION AND SIGNIFICANT 42
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. (Details 2) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 35,652 | $ 33,773 |
Work in progress | 8,807 | 7,092 |
Raw materials | 7,601 | 6,571 |
Low-carbon and RIN credits | 7,952 | 10,926 |
Other | 1,538 | 1,708 |
Total inventories | $ 61,550 | $ 60,070 |
ORGANIZATION AND SIGNIFICANT 43
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. (Details 3) | 12 Months Ended |
Dec. 31, 2017 | |
Building [Member] | |
Estimated useful lives | P40Y |
Facilities and plant equipment [Member] | Minimum [Member] | |
Estimated useful lives | P10Y |
Facilities and plant equipment [Member] | Maximum [Member] | |
Estimated useful lives | P25Y |
Other equipment, vehicles and furniture [Member] | Minimum [Member] | |
Estimated useful lives | P5Y |
Other equipment, vehicles and furniture [Member] | Maximum [Member] | |
Estimated useful lives | P10Y |
ORGANIZATION AND SIGNIFICANT 44
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. (Details 4) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loss Numerator | |||||||||||
Net income (loss) attributed to Pacific Ethanol, Inc. | $ (13,285) | $ (202) | $ (8,841) | $ (12,636) | $ 13,077 | $ (3,518) | $ 5,086 | $ (13,226) | $ (34,964) | $ 1,419 | $ (18,786) |
Less: Preferred stock dividends | (319) | (319) | (315) | (312) | (320) | (319) | (315) | (315) | (1,265) | (1,269) | (1,265) |
Less: Allocated to participating securities | (189) | 0 | (71) | 0 | (2) | ||||||
Basic income per share: | |||||||||||
Income available to common stockholders, basic | $ (13,604) | $ (521) | $ (9,156) | $ (12,948) | $ 12,569 | $ (3,837) | $ 4,700 | $ (13,541) | $ (36,229) | 148 | $ (20,051) |
Diluted income per share: | |||||||||||
Income available to common stockholders, diluted | $ 148 | ||||||||||
Shares Denominator | |||||||||||
Shares available to common stockholders - basic | 42,745 | 42,182 | 33,173 | ||||||||
Incremental shares - Options | 69 | ||||||||||
Shares available to common stockholders - diluted | 42,745 | 42,251 | 33,173 | ||||||||
Per-Share Amount | |||||||||||
Per-Share amount - basic | $ (0.85) | $ 0 | $ (0.60) | ||||||||
Per-Shares amount - diluted | $ (0.85) | $ 0 | $ (0.6) |
ORGANIZATION AND SIGNIFICANT 45
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. (Details Narrative) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017USD ($)Numbershares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | Dec. 15, 2016 | Jul. 31, 2015Number | |
Ethanol production capacity per year | 605 million gallons per year | ||||
Ethanol market capacity per year | markets nearly 1.0 billion gallons of ethanol | ||||
Other products produced per year | produces over 3.0 million tons of co-products | ||||
Accounts receivable used as collateral | $ 64,501 | $ 64,853 | |||
Allowance for doubtful accounts | 19 | 331 | |||
Bad debt recovery | (5) | (306) | $ 354 | ||
Bad debt expense | 5 | 306 | |||
Accounts receivable | $ 80,344 | 86,275 | |||
Employees covered by collective bargaining agreement | 32.00% | ||||
Net inventory valuation adjustment | $ 2,700 | ||||
Net sales when company acting as an agent | 1,663 | 1,604 | 1,510 | ||
Amortization of deferred financing costs | 503 | 137 | $ 272 | ||
Unamortized deferred financing costs | $ 1,925 | $ 1,708 | |||
Potentially dilutive shares from convertible securities outstanding | shares | 719,000 | 704,000 | 817,000 | ||
Cash collateral balances | $ 4,331 | ||||
Selling, General and Administrative Expenses [Member] | |||||
External selling costs | 2,526 | $ 2,956 | |||
Customer A, B and C [Member] | |||||
Accounts receivable | $ 21,584 | $ 21,274 | |||
Concentration risk percentage | 27.00% | 25.00% | |||
ACEC [Member] | |||||
Noncontrolling interest owned | 26.07% | 26.07% | |||
Pacific Ethanol Central Plants [Member] | |||||
Number of ethanol plants | Number | 4 | ||||
Midwestern Ethanol Plants [Member] | |||||
Number of ethanol plants | Number | 4 | ||||
Pacific Aurora [Member] | |||||
Ownership interest | 73.93% | 73.93% | 100.00% | ||
Pacific Aurora [Member] | ACEC [Member] | |||||
Ownership interest | 26.07% | 26.07% |
PACIFIC ETHANOL PLANTS. (Detail
PACIFIC ETHANOL PLANTS. (Details) - USD ($) $ in Thousands | Jul. 03, 2017 | Dec. 31, 2016 | Jul. 01, 2015 | Jun. 30, 2015 |
ICP [Member] | ||||
Cash and equivalents | $ 426 | |||
Accounts receivable | 11,636 | |||
Inventories | 9,227 | |||
Other current assets | 1,560 | |||
Total current assets | 22,849 | |||
Property and equipment | 61,128 | |||
Other assets | 328 | |||
Total assets acquired | 84,305 | |||
Accounts payable and accrued liabilities | 5,683 | |||
Other current liabilities | 1,486 | |||
Total current liabilities | 7,169 | |||
Other non-current liabilities | 209 | |||
Total liabilities assumed | 7,378 | |||
Net assets acquired | 76,927 | |||
Estimated goodwill | ||||
Total purchase price | $ 76,927 | |||
Pacific Aurora [Member] | ||||
Cash and equivalents | $ 1,453 | |||
Accounts receivable | 16,804 | |||
Inventories | 3,837 | |||
Other current assets | 77 | |||
Total current assets | 22,171 | |||
Property and equipment | 115,759 | |||
Other assets | 1,387 | |||
Total assets acquired | 139,317 | |||
Accounts payable and accrued liabilities | 20,152 | |||
Other current liabilities | 2,045 | |||
Long-term debt - term debt | 621 | |||
Total liabilities assumed | $ 22,818 | |||
PE Central [Member] | ||||
Cash and equivalents | $ 18,756 | |||
Accounts receivable | $ 10,800 | 10,430 | ||
Inventories | 29,483 | |||
Other current assets | 8,304 | |||
Total current assets | 66,973 | |||
Property and equipment | 312,781 | |||
Net deferred tax assets | 12,159 | |||
Other assets | 750 | |||
Total assets acquired | 392,663 | |||
Accounts payable and accrued liabilities | 27,780 | |||
Long-term debt - revolvers | 13,721 | |||
Long-term debt - term debt | 142,744 | |||
Pension plan liabilties | 8,518 | |||
Other non-current liabilities | 25,327 | |||
Total liabilities assumed | 218,090 | |||
Net assets acquired | $ 174,573 |
PACIFIC ETHANOL PLANTS. (Deta47
PACIFIC ETHANOL PLANTS. (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
ICP [Member] | |||
Net sales - pro forma | $ 1,710,317 | $ 1,802,159 | |
Consolidated net income (loss) - pro forma | $ (42,589) | $ 8,329 | |
Diluted net income (loss) per share - pro forma | $ (0.95) | $ 0.16 | |
Diluted weighted-average shares - pro forma | $ 42,745 | $ 42,251 | |
PE Central [Member] | |||
Net sales - pro forma | $ 1,484,676 | ||
Cost of goods sold - pro forma | 1,469,512 | ||
Selling, general and administrative expenses - pro forma | 34,735 | ||
Consolidated net income (loss) - pro forma | $ (34,136) | ||
Diluted net income (loss) per share - pro forma | $ (0.81) | ||
Diluted weighted-average shares - pro forma | $ 42,053 |
PACIFIC ETHANOL PLANTS. (Deta48
PACIFIC ETHANOL PLANTS. (Details Narrative) - USD ($) $ in Thousands | Jul. 03, 2017 | Dec. 15, 2016 | Jul. 01, 2015 | May 31, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Apr. 30, 2015 |
Ethanol production capacity per year | 605 million gallons per year | |||||||||||||||||
Net Revenue | $ 395,271 | $ 445,442 | $ 405,202 | $ 386,340 | $ 441,719 | $ 417,806 | $ 422,860 | $ 342,373 | $ 1,632,255 | $ 1,624,758 | $ 1,191,176 | |||||||
Pre-tax income | (38,395) | 545 | (28,907) | |||||||||||||||
Gain on settlement | $ 31,516 | $ 30,849 | 26,368 | |||||||||||||||
Pacific Aurora [Member] | ||||||||||||||||||
Equity interest owned | 100.00% | 73.93% | 73.93% | 73.93% | 73.93% | |||||||||||||
Cash received in sale of subsidiary | $ 30,000 | |||||||||||||||||
Description of agreement closed term | (i) PE Central contributed to Pacific Aurora 100% of the equity interests of its wholly-owned subsidiaries, Pacific Ethanol Aurora East, LLC (“AE”) and Pacific Ethanol Aurora West, LLC (“AW”), which owned the Company’s Aurora East and Aurora West ethanol plants, respectively, in exchange for an 88.15% ownership interest in Pacific Aurora, and (ii) ACEC contributed to Pacific Aurora its grain elevator adjacent to the Aurora East and Aurora West properties and related grain handling assets, including the outer rail loop and the real property on which they are located, in exchange for an 11.85% ownership interest in Pacific Aurora. | |||||||||||||||||
Ownership interest sold | 14.22% | |||||||||||||||||
ACEC contribution in assets | $ 16,500 | $ 16,500 | ||||||||||||||||
ACEC additional cash contribution | $ 30,000 | 30,000 | ||||||||||||||||
Additional paid in capital for book value and contribution and sale | $ 16,200 | |||||||||||||||||
Minimum working capital | $ 15,000 | |||||||||||||||||
Pacific Aurora [Member] | ACEC [Member] | ||||||||||||||||||
Equity interest owned | 26.07% | 26.07% | 26.07% | 26.07% | ||||||||||||||
ICP [Member] | ||||||||||||||||||
Equity interest owned | 100.00% | |||||||||||||||||
Cash received in sale of subsidiary | $ 30,000 | |||||||||||||||||
Stock issued for acquisition, value | $ 46,900 | |||||||||||||||||
Ethanol production capacity per year | 90 million gallon per year | |||||||||||||||||
Accounts receivable | $ 11,636 | |||||||||||||||||
Net Revenue | $ 75,900 | |||||||||||||||||
Pre-tax income | 3,700 | |||||||||||||||||
Selling, general and administrative expenses | 300 | |||||||||||||||||
PE Central [Member] | ||||||||||||||||||
Stock issued for acquisition, value | $ 174,600 | |||||||||||||||||
Accounts receivable | $ 10,800 | $ 10,430 | ||||||||||||||||
Net Revenue | $ 299,000 | 610,500 | $ 650,100 | |||||||||||||||
Pre-tax income | 16,300 | 8,400 | 2,100 | |||||||||||||||
Selling, general and administrative expenses | 1,400 | |||||||||||||||||
Percentage of interests auquired | 100.00% | |||||||||||||||||
Stock issued for acquisition, shares issued | 17,800,000 | |||||||||||||||||
Uncollectible accounts receivable from acquisition | $ 400 | |||||||||||||||||
Litigation contingency accrual | $ 3,700 | |||||||||||||||||
Litigation contingency paid | $ 2,100 | |||||||||||||||||
Gain on settlement | $ 1,100 | |||||||||||||||||
Effects of inventories and open contracts | 8,700 | |||||||||||||||||
PE Op Co. [Member] | ||||||||||||||||||
Percentage of interests auquired | 4.00% | 96.00% | ||||||||||||||||
Ownership interest purchase in cash | $ 6,000 | |||||||||||||||||
Reduction in noncontrolling interest | $ 4,400 | 4,400 | ||||||||||||||||
Increase (decrease) in additional paid in capital due to acquisition | $ 600 |
INTERCOMPANY AGREEMENTS. (Detai
INTERCOMPANY AGREEMENTS. (Details Narrative) $ / shares in Units, $ in Thousands | Dec. 15, 2016$ / shares | Jul. 01, 2015Number$ / shares | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Affiliate Management Agreement [Member] | ||||||
Agreement term | 1 year | |||||
Agreement renewal term | 1 year | |||||
Description of agreement termination | Pacific Ethanol may terminate the AMA, and any subsidiary may terminate the AMA, at any time by providing at least 90 days prior notice of such termination. | |||||
Revenues from related party | $ 11,904 | $ 12,968 | $ 9,857 | |||
Ethanol Marketing Agreement [Member] | Kinergy Marketing LLC [Member] | ||||||
Agreement term | 1 year | |||||
Agreement renewal term | 1 year | |||||
Number of plants | Number | 9 | |||||
Description of agreement terms | (i) the estimated purchase price payable by the third-party purchaser of the ethanol, minus (ii) the estimated amount of transportation costs to be incurred, minus (iii) the estimated incentive fee payable to Kinergy, which equals 1% of the aggregate third-party purchase price, provided that the marketing fee shall not be less than $0.015 per gallon and not more than $0.0225 per gallon. | |||||
Revenues from related party | 8,464 | 8,029 | 5,262 | |||
Corn Procurement and Handling Agreement [Member] | Pacific Ag. Products, LLC [Member] | ||||||
Agreement term | 1 year | |||||
Agreement renewal term | 1 year | |||||
Description of agreement terms | Each facility appointed PAP as its exclusive agent to solicit, negotiate, enter into and administer, on its behalf, corn supply arrangements to procure the corn necessary to operate its facility. | |||||
Services fees (per bushel) | $ / shares | $ 0.03 | $ 0.045 | ||||
Revenues from related party | 4,245 | 4,386 | 2,910 | |||
New Grain Procurement Agreement [Member] | Pacific Aurora [Member] | ACEC [Member] | ||||||
Agreement term | 1 year | |||||
Agreement renewal term | 1 year | |||||
Services fees (per bushel) | $ / shares | $ 0.03 | |||||
Grain procurement expenses | $ 107 | $ 816 | ||||
Distillers Grains Marketing Agreements [Member] | Pacific Ag. Products, LLC [Member] | ||||||
Description of agreement terms | Within ten days after a plant delivers co-products to PAP, the plant is paid an amount equal to (i) the estimated purchase price payable by the third-party purchaser of the co-products, minus (ii) the estimated amount of transportation costs to be incurred, minus (iii) the estimated amount of fees and taxes payable to governmental authorities in connection with the tonnage of the co-products produced or marketed, minus (iv) the estimated incentive fee payable to the Company, which equals (a) 5% of the aggregate third-party purchase price for wet corn gluten feed, wet distillers grains, corn condensed distillers solubles and distillers grains with solubles, or (b) 1% of the aggregate third-party purchase price for corn gluten meal, dry corn gluten feed, dry distillers grains, corn germ and corn oil. Each distillers grains marketing agreement had an initial term of one year and successive one year renewal periods at the option of the individual plant. | |||||
Revenues from related party | $ 6,020 | $ 6,047 | $ 4,438 |
SEGMENTS. (Details)
SEGMENTS. (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net Sales | $ 395,271 | $ 445,442 | $ 405,202 | $ 386,340 | $ 441,719 | $ 417,806 | $ 422,860 | $ 342,373 | $ 1,632,255 | $ 1,624,758 | $ 1,191,176 |
Cost of goods sold | 1,626,324 | 1,570,400 | 1,180,810 | ||||||||
Income (loss) before provision for income taxes | (38,395) | 545 | (28,907) | ||||||||
Depreciation and amortization | 38,651 | 35,441 | 23,632 | ||||||||
Interest expense | 12,938 | 22,406 | 12,594 | ||||||||
Intersubsegment Eliminations [Member] | |||||||||||
Net Sales | (10,362) | (9,198) | (5,262) | ||||||||
Cost of goods sold | (7,685) | (21,176) | (12,477) | ||||||||
Ethanol Production [Member] | |||||||||||
Net Sales | 1,104,620 | 1,046,976 | 710,201 | ||||||||
Cost of goods sold | 1,098,977 | 1,015,655 | 716,877 | ||||||||
Income (loss) before provision for income taxes | (27,458) | (6,882) | (32,723) | ||||||||
Depreciation and amortization | 37,637 | 34,528 | 23,091 | ||||||||
Interest expense | 5,887 | 20,794 | 11,969 | ||||||||
Ethanol Production [Member] | Intersegment Net Sales [Member] | |||||||||||
Net Sales | 1,898 | 1,169 | |||||||||
Ethanol Production [Member] | External Customers [Member] | |||||||||||
Net Sales | 1,102,722 | 1,045,807 | 710,201 | ||||||||
Marketing and Distribution [Member] | |||||||||||
Net Sales | 537,997 | 586,980 | 486,237 | ||||||||
Cost of goods sold | 535,032 | 575,921 | 476,410 | ||||||||
Income (loss) before provision for income taxes | (2,463) | 4,517 | 3,200 | ||||||||
Depreciation and amortization | 3 | 151 | |||||||||
Interest expense | 1,271 | 1,404 | 625 | ||||||||
Marketing and Distribution [Member] | Intersegment Net Sales [Member] | |||||||||||
Net Sales | 8,464 | 8,029 | 5,262 | ||||||||
Marketing and Distribution [Member] | External Customers [Member] | |||||||||||
Net Sales | 529,533 | 578,951 | 480,975 | ||||||||
Corporate Activities [Member] | |||||||||||
Income (loss) before provision for income taxes | (8,474) | 2,910 | 616 | ||||||||
Depreciation and amortization | 1,014 | 910 | 390 | ||||||||
Interest expense | $ 5,780 | $ 208 |
SEGMENTS. (Details 1)
SEGMENTS. (Details 1) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | $ 720,296 | $ 708,238 |
Ethanol Production [Member] | ||
Assets | 583,696 | 542,688 |
Marketing and Distribution [Member] | ||
Assets | 127,242 | 146,356 |
Corporate Assets [Member] | ||
Assets | $ 9,358 | $ 19,194 |
SEGMENTS. (Details Narrative)
SEGMENTS. (Details Narrative) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)Number | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Number of operating segments | Number | 2 | ||
Ethanol Production [Member] | |||
Management fees | $ 9,744 | $ 9,968 | $ 5,957 |
Marketing and Distribution [Member] | |||
Management fees | $ 2,160 | $ 3,000 | $ 3,900 |
PROPERTY AND EQUIPMENT. (Detail
PROPERTY AND EQUIPMENT. (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment, Gross | $ 658,356 | $ 577,613 |
Accumulated Depreciation | (150,004) | (112,423) |
Property, Plant and Equipment, Net | 508,352 | 465,190 |
Facilities And Plant Equipment [Member] | ||
Property, Plant and Equipment, Gross | 601,156 | 530,735 |
Land [Member] | ||
Property, Plant and Equipment, Gross | 8,970 | 7,771 |
Other Equipment, Vehicles and Furniture [Member] | ||
Property, Plant and Equipment, Gross | 10,189 | 9,714 |
Construction in Progress [Member] | ||
Property, Plant and Equipment, Gross | $ 38,041 | $ 29,393 |
PROPERTY AND EQUIPMENT. (Deta54
PROPERTY AND EQUIPMENT. (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Depreciation expense | $ 38,651 | $ 35,441 | $ 23,632 |
Asset impairment | $ 1,970 | ||
Capital Investment Activities [Member] | |||
Capitalized interest | $ 822 | $ 1,307 |
INTANGIBLE ASSET. (Details Narr
INTANGIBLE ASSET. (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Intangible assets amount | $ 2,678 | $ 2,678 |
Trade Names [Member] | Kinergy Marketing LLC [Member] | ||
Intangible assets amount | $ 2,678 |
DERIVATIVES. (Details)
DERIVATIVES. (Details) - Non Designated Derivative Instruments [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Cash Collateral Balance [Member] | ||
Derivative assets | $ 3,813 | $ 4,331 |
Commodity Contracts [Member] | ||
Derivative assets | 998 | 978 |
Derivative liabilities | $ 2,307 | $ 4,115 |
DERIVATIVES. (Details 1)
DERIVATIVES. (Details 1) - Non Designated Derivative Instruments [Member] - Commodity Contracts [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Realized Gains (Losses) | $ (4,165) | $ 1,386 | $ (338) |
Unrealized Gains (Losses) | 2,088 | (3,370) | (204) |
Cost of goods sold [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Realized Gains (Losses) | (4,165) | 1,386 | (338) |
Unrealized Gains (Losses) | $ 2,088 | $ (3,370) | $ (204) |
DERIVATIVES. (Details Narrative
DERIVATIVES. (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Recognized gains and losses due to change in fair value | $ (2,077) | $ (1,984) | $ (542) |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term borrowings are summarized as follows | ||
Total debt | $ 244,425 | $ 201,862 |
Less: Unamortized debt discount | (1,409) | (1,626) |
Less: unamortized debt financing costs | (1,925) | (1,708) |
Less short-term portion | (20,000) | (10,500) |
Long-term debt | 221,091 | 188,028 |
Term Loan [Member] | Illinois Corn Processing, LLC [Member] | ||
Long-term borrowings are summarized as follows | ||
Line of credit | 32,000 | |
Term debt | 22,500 | |
Parent Notes Payable [Member] | ||
Long-term borrowings are summarized as follows | ||
Notes payable | 68,948 | 55,000 |
Revolving Credit Facility [Member] | Illinois Corn Processing, LLC [Member] | ||
Long-term borrowings are summarized as follows | ||
Line of credit | 18,000 | 0 |
Kinergy Marketing LLC [Member] | Line of Credit [Member] | ||
Long-term borrowings are summarized as follows | ||
Line of credit | 49,477 | 49,862 |
Pacific Ethanol Pekin, Inc [Member] | Term Loan [Member] | ||
Long-term borrowings are summarized as follows | ||
Term debt | 53,500 | 64,000 |
Pacific Ethanol Pekin, Inc [Member] | Revolving Credit Facility [Member] | ||
Long-term borrowings are summarized as follows | ||
Line of credit | 32,000 | |
Pacific Aurora [Member] | Line of Credit [Member] | ||
Long-term borrowings are summarized as follows | ||
Line of credit | $ 0 | $ 1,000 |
DEBT (Details 1)
DEBT (Details 1) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,018 | $ 20,000 | |
2,019 | 88,948 | |
2,020 | 20,000 | |
2,021 | 16,000 | |
2,022 | 99,477 | |
Total debt | $ 244,425 | $ 201,862 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) $ in Thousands | Sep. 15, 2017 | Sep. 01, 2017 | Aug. 07, 2017 | Jun. 30, 2017 | May 20, 2017 | Dec. 15, 2016 | Dec. 12, 2016 | Dec. 31, 2015 | Dec. 15, 2015 | Jul. 01, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Feb. 26, 2016 |
Debt discount | $ 1,409 | $ 1,626 | ||||||||||||
Principal balance | 244,425 | 201,862 | ||||||||||||
Term Loan [Member] | Illinois Corn Processing, LLC [Member] | ||||||||||||||
Line of credit | 32,000 | |||||||||||||
A-1 Term Loan (Pacific Ethanol West Plants' Term Debt) [Member] | ||||||||||||||
Line of credit | $ 17,003,000 | $ 17,003,000 | ||||||||||||
Description of maturity date | mature in June 2016 | |||||||||||||
Debt retiremnt amount | $ 17,003,000 | |||||||||||||
Increased in debt amount | 58,766 | 58,766 | $ 41,763 | |||||||||||
A-1 Term Loan (Pacific Ethanol Central Plants' Term Debt) [Member] | ||||||||||||||
Debt maturity date | Sep. 24, 2017 | |||||||||||||
Description of interest rate | Interest on the term loan facility accrued and could either be paid in cash at a rate of 10.5% per annum or paid in-kind at a rate of 15.0% per annum by adding such interest to the outstanding principal balance. | |||||||||||||
Line of credit | $ 142,744 | |||||||||||||
Description of debt collateral | Secured through a first-priority lien on substantially all of the Pacific Ethanol Central Plants | |||||||||||||
Debt discount | $ 2,875 | 1,152 | ||||||||||||
Paid in kind interest | 9,451 | |||||||||||||
Principal balance | $ 155,070,205 | |||||||||||||
Repayment of debt | $ 155,070,205 | |||||||||||||
Credit Agreement [Member] | Illinois Corn Processing, LLC [Member] | ||||||||||||||
Description payment terms | Maintain working capital of not less than $8.0 million. In addition, ICP is required to maintain an annual debt coverage ratio of not less than 1.5 to 1.0 beginning for the year ending December 31, 2018. | |||||||||||||
Credit Agreement [Member] | Term Loan [Member] | Illinois Corn Processing, LLC [Member] | ||||||||||||||
Debt face amount | $ 24,000 | |||||||||||||
Description of interest rate | Accrues at a rate equal to 3.75% plus the one-month LIBOR index rate. | |||||||||||||
Principal payments | $ 1,500 | |||||||||||||
Frequency of periodic payments | Quarterly | |||||||||||||
Description payment terms | Principal payments in sixteen equal consecutive quarterly installments of $1,500,000 each until September 20, 2021 | |||||||||||||
Note Purchase Agreement [Member] | Notes Payable [Member] | Five Accredited Investors [Member] | ||||||||||||||
Debt face amount | $ 50,000 | |||||||||||||
Description of borrowing terms | Private offering for aggregate gross proceeds of 97% of the principal amount of the Notes sold. | |||||||||||||
Note Purchase Agreement [Member] | Total Notes Payable [Member] | Five Accredited Investors [Member] | ||||||||||||||
Debt maturity date | Dec. 15, 2019 | |||||||||||||
Description of interest rate | (i) the greater of 1% and the three-month LIBOR, plus 7.0% from the closing through December 14, 2017, (ii) the greater of 1% and LIBOR, plus 9% between December 15, 2017 and December 14, 2018, and (iii) the greater of 1% and LIBOR plus 11% between December 15, 2018 and the Maturity Date. | |||||||||||||
Debt default interest rate | 2.00% | |||||||||||||
Description of debt collateral | Secured by a first-priority security interest in the equity interest held by Pacific Ethanol in its wholly-owned subsidiary, PE Op. Co., which indirectly owns the Company’s plants located on the West Coast. | |||||||||||||
Second Note Purchase Agreement [Member] | Notes Payable [Member] | Five Accredited Investors [Member] | ||||||||||||||
Debt face amount | $ 13,900 | |||||||||||||
Description of borrowing terms | Private offering for aggregate gross proceeds of 97% of the principal amount of the notes sold. | |||||||||||||
Revolving Credit Facility [Member] | Illinois Corn Processing, LLC [Member] | ||||||||||||||
Line of credit | 18,000 | 0 | ||||||||||||
Revolving Credit Facility [Member] | Credit Agreement [Member] | Illinois Corn Processing, LLC [Member] | ||||||||||||||
Maximum borrowing capacity | $ 18,000 | |||||||||||||
Unused facility fees | 0.75% | |||||||||||||
Kinergy Marketing LLC [Member] | Line of Credit [Member] | ||||||||||||||
Maximum borrowing capacity | $ 100,000 | |||||||||||||
Line of credit maturity date | Aug. 2, 2022 | |||||||||||||
Description of interest rate | Interest accrues under the line of credit at a rate equal to (i) the three-month London Interbank Offered Rate (LIBOR), plus (ii) a specified applicable margin ranging between 1.50% and 2.00%. | |||||||||||||
Interest rate at end of period | 3.44% | |||||||||||||
Interest margin rate | 1.75% | |||||||||||||
Description of payment made to company | Payments that may be made by Kinergy to the Company as reimbursement for management and other services provided by the Company to Kinergy are limited under the terms of the credit facility to $1,500,000 per fiscal quarter. | |||||||||||||
Description of collateral | The credit facility is based on Kinergys eligible accounts receivable and inventory levels, subject to certain concentration reserves. The credit facility is subject to certain other sublimits, including inventory loan limits. | |||||||||||||
Unused borrowing capacity | $ 27,399 | |||||||||||||
Line of credit | $ 49,477 | 49,862 | ||||||||||||
Kinergy Marketing LLC [Member] | Line of Credit [Member] | Maximum [Member] | ||||||||||||||
Unused facility fees | 0.38% | |||||||||||||
Kinergy Marketing LLC [Member] | Line of Credit [Member] | Minimum [Member] | ||||||||||||||
Unused facility fees | 0.25% | |||||||||||||
Pacific Ag. Products, LLC [Member] | Line of Credit [Member] | ||||||||||||||
Description of payment made to company | Payments that may be made by PAP to the Company as reimbursement for management and other services provided by the Company to PAP are limited under the terms of the credit facility to $500,000 per fiscal quarter. | |||||||||||||
Description of collateral | The credit facility also includes the accounts receivable of PAP as additional collateral | |||||||||||||
Pacific Ethanol Pekin, Inc [Member] | Credit Agreement [Member] | 1st Farm Credit Services [Member] | ||||||||||||||
Description of interest rate | Annual rate equal to the 30-day LIBOR plus 3.75%, payable monthly | |||||||||||||
Description of debt covenant | Under the terms of the Pekin Credit Agreement, Pekin is required to maintain not less than $20.0 million in working capital and an annual debt coverage ratio of not less than 1.25 to 1.0. | |||||||||||||
Pacific Ethanol Pekin, Inc [Member] | Credit Agreement [Member] | 1st Farm Credit Services [Member] | Term Loan [Member] | ||||||||||||||
Debt face amount | $ 64,000 | |||||||||||||
Debt maturity date | Aug. 20, 2021 | |||||||||||||
Pacific Ethanol Pekin, Inc [Member] | Amendment Credit Agreement [Member] | 1st Farm Credit Services [Member] | ||||||||||||||
Description of interest rate | Increase the interest rate under the facilities by 25 basis points to an annual rate equal to the 30-day LIBOR plus 4.00%. | |||||||||||||
Principal payments | $ 3,500 | |||||||||||||
Description of debt covenant | Maintain working capital of not less than $17.5 million from August 31, 2017 through December 31, 2017 and working capital of not less than $20.0 million from January 1, 2018 and continuing at all times thereafter. In addition, the required Debt Service Coverage Ratio was reduced to 0.15 to 1.00 for the fiscal year ending December 31, 2017. | |||||||||||||
Description of debt covenant subsequent | Working capital covenant requirement to be at least $13.0 million for the month ended February, 28, 2018. | |||||||||||||
Pacific Ethanol Pekin, Inc [Member] | Revolving Credit Facility [Member] | ||||||||||||||
Line of credit | $ 32,000 | |||||||||||||
Pacific Ethanol Pekin, Inc [Member] | Revolving Credit Facility [Member] | Credit Agreement [Member] | 1st Farm Credit Services [Member] | ||||||||||||||
Maximum borrowing capacity | $ 32,000 | |||||||||||||
Line of credit maturity date | Feb. 1, 2022 | |||||||||||||
Unused facility fees | 0.75% | |||||||||||||
Description of collateral | Secured by a first-priority security interest in all of Pekins assets under the terms of a Security Agreement | |||||||||||||
Principal payments | $ 3,500 | |||||||||||||
Frequency of periodic payments | Quarterly | |||||||||||||
Description payment terms | Principal payment of $4.5 million at maturity on August 20, 2021 | |||||||||||||
Pacific Aurora [Member] | Line of Credit [Member] | ||||||||||||||
Line of credit | $ 0 | $ 1,000 | ||||||||||||
Pacific Aurora [Member] | Revolving Credit Facility [Member] | Credit Agreement [Member] | CoBank [Member] | ||||||||||||||
Maximum borrowing capacity | $ 30,000 | |||||||||||||
Line of credit maturity date | Feb. 1, 2022 | |||||||||||||
Description of interest rate | Annual rate equal to the 30-day LIBOR plus 4.0%, payable monthly. | |||||||||||||
Unused facility fees | 0.75% | |||||||||||||
Description of collateral | Secured by a first-priority security interest in all of Pacific Auroras assets under the terms of a Security Agreement | |||||||||||||
Description of debt covenant | Maintain working capital of not less than $18.0 million from September 30, 2017 through February 28, 2018 and working capital of not less than $20.0 million from March 1, 2018 and continuing at all times thereafter. In addition, the required Debt Service Coverage Ratio was reduced to 0.00 to 1.00 for the fiscal year ending December 31, 2017 and 1.50 to 1.00 for the fiscal year ending December 31, 2018 | Maintain not less than $22.5 million in working capital through June 30, 2017, not less than $24.0 million in working capital after June 30, 2017, and an annual debt coverage ratio of not less than 1.50 to 1.00. | ||||||||||||
Description of borrowing terms | Borrowing availability under the Pacific Aurora Credit Facility automatically declines by $2.5 million on the first day of each June and December beginning on June 1, 2017 through and including December 1, 2020. |
PENSION PLANS. (Details)
PENSION PLANS. (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of net periodic benefit costs are as follows: | |||
Loss (gain) recognized in other comprehensive income (expense) | $ (386) | $ 3,660 | $ (1,040) |
Retirement Plan [Member] | |||
Changes in plan assets: | |||
Fair value of plan assets, beginning | 12,423 | 12,567 | 13,180 |
Actual gains (losses) | 1,722 | 523 | (298) |
Benefits paid | (665) | (667) | (315) |
Company contributions | 478 | ||
Participant contributions | |||
Fair value of plan assets, ending | 13,958 | 12,423 | 12,567 |
Amounts recognized in the consolidated balance sheets: | |||
Other liabilities | (5,700) | (6,032) | (3,985) |
Accumulated other comprehensive loss (income) | 726 | 1,047 | (885) |
Components of net periodic benefit costs are as follows: | |||
Service cost | 391 | 223 | 211 |
Interest cost | 750 | 686 | 338 |
Expected return on plan assets | (674) | (794) | (500) |
Net periodic benefit cost | 467 | 115 | 49 |
Loss (gain) recognized in other comprehensive income (expense) | $ (321) | $ 1,932 | $ (885) |
Assumptions used in computation benefit obligations: | |||
Discount rate | 3.60% | 4.15% | 4.23% |
Expected long-term return on plan assets | 6.00% | 6.75% | 7.75% |
PENSION PLANS. (Details 1)
PENSION PLANS. (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of net periodic benefit costs are as follows: | |||
Loss (gain) recognized in other comprehensive income (expense) | $ (386) | $ 3,660 | $ (1,040) |
Postretirement Plan [Member] | |||
Changes in plan assets: | |||
Fair value of plan assets, beginning | |||
Benefits paid | (179) | (184) | (35) |
Company contributions | 157 | 163 | 20 |
Participant contributions | 22 | 22 | 15 |
Accumulated/projected benefit obligation | 5,565 | 5,371 | |
Fair value of plan assets, ending | |||
Funded status, (underfunded)/overfunded | (5,565) | (5,371) | |
Amounts recognized in the consolidated balance sheets: | |||
Accrued liabilties | (240) | (310) | |
Other liabilities | (5,325) | (5,061) | |
Accumulated other comprehensive loss (income) | 1,508 | 1,573 | |
Components of net periodic benefit costs are as follows: | |||
Service cost | 84 | 48 | 32 |
Interest cost | 198 | 139 | 65 |
Expected return on plan assets | 134 | ||
Net periodic benefit cost | 416 | 187 | 97 |
Loss (gain) recognized in other comprehensive income (expense) | $ (65) | $ 1,728 | $ (155) |
Assumptions used in computation benefit obligations: | |||
Discount rate | 3.80% | 3.95% | 3.67% |
PENSION PLANS. (Details 2)
PENSION PLANS. (Details 2) $ in Thousands | Dec. 31, 2017USD ($) |
Retirement Plan [Member] | |
2,018 | $ 730 |
2,019 | 740 |
2,020 | 780 |
2,021 | 790 |
2,022 | 830 |
2023-27 | 4,820 |
Total expected benefit payments | 8,690 |
Postretirement Plan [Member] | |
2,018 | 240 |
2,019 | 270 |
2,020 | 300 |
2,021 | 340 |
2,022 | 330 |
2023-27 | 2,120 |
Total expected benefit payments | $ 3,600 |
PENSION PLANS. (Details Narrati
PENSION PLANS. (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Retirement Plan [Member] | |
Expected contributions by the company | $ 1,000 |
Expected net periodic benefit cost for 2017 | 740 |
Postretirement Plan [Member] | |
Expected net periodic benefit cost for 2017 | $ 270 |
Percentage of pre-Medicare postretirement medical benefits | 7.00% |
Percentage of adjusting rate assumed health care | For purposes of determining the cost and obligation for pre-Medicare postretirement medical benefits, a 7.0% annual rate of increase in the per capita cost of covered benefits (i.e., health care trend rate) was assumed for the plan in 2018, adjusting to a rate of 4.5% in 2026. |
INCOME TAXES. (Details)
INCOME TAXES. (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Current provision (benefit) | $ (490) | $ 141 | $ (8,011) |
Deferred provision (benefit) | 169 | (1,122) | (2,023) |
Total | $ (321) | $ (981) | $ (10,034) |
INCOME TAXES. (Details 1)
INCOME TAXES. (Details 1) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective income tax rate reconciliation | |||
Statutory rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 4.00% | 6.40% | 9.20% |
Change in valuation allowance | (34.50%) | (298.80%) | (4.20%) |
Impact of Federal tax rate change on deferreds | (28.40%) | ||
Impact of Federal tax rate change on valuation allowance | 29.40% | ||
Fair value adjustments and warrant inducements | 0.40% | 37.20% | 2.00% |
Noncontrolling interests | (3.20%) | ||
Domestic production gross receipts deduction | (2.90%) | ||
Section 382 reduction to loss carryover | 0.10% | ||
Stock compensation | (0.10%) | 58.80% | (0.80%) |
Non-deductible items | (0.20%) | 8.90% | (0.50%) |
Other | (1.60%) | (27.50%) | (3.20%) |
Effective rate | 0.80% | (180.00%) | 34.70% |
INCOME TAXES. (Details 2)
INCOME TAXES. (Details 2) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | |||
Net operating loss carryforward | $ 40,989 | $ 45,709 | |
R&D and AMT credits | 1,797 | 2,465 | |
Railcar contracts | 1,415 | 3,348 | |
Stock-based compensation | 738 | 946 | |
Allowance for doubtful accounts and other assets | 637 | 856 | |
Derivatives | 267 | 1,228 | |
Pension liability | 2,939 | 2,204 | |
Other | 2,097 | 4,316 | |
Total deferred tax assets | 50,879 | 61,072 | |
Deferred tax liabilities: | |||
Property and equipment | (25,194) | (45,757) | |
Intangibles | (749) | (1,091) | |
Debt basis | |||
Other | (521) | (1,593) | |
Total deferred tax liabilities | (26,464) | (48,441) | |
Valuation allowance | (24,639) | (12,683) | $ (39,838) |
Net deferred tax liabilities | $ (224) | $ (52) |
INCOME TAXES. (Details 3)
INCOME TAXES. (Details 3) $ in Thousands | Dec. 31, 2017USD ($) |
Federal [Member] | |
Net operating loss carryforward | $ 154,589 |
Federal [Member] | 2018-2022 [Member] | |
Net operating loss carryforward | |
Federal [Member] | 2023-2027 [Member] | |
Net operating loss carryforward | 13,038 |
Federal [Member] | 2028-2032 [Member] | |
Net operating loss carryforward | 119,526 |
Federal [Member] | 2032-2036 [Member] | |
Net operating loss carryforward | 112,248 |
Federal [Member] | 2017 [Member] | |
Net operating loss carryforward | 59,675 |
Federal [Member] | 2018 [Member] | |
Net operating loss carryforward | 6,441 |
Federal [Member] | 2020 [Member] | |
Net operating loss carryforward | 6,308 |
Federal [Member] | Thereafter [Member] | |
Net operating loss carryforward | 69,483 |
Federal [Member] | 2019 [Member] | |
Net operating loss carryforward | 6,374 |
Federal [Member] | 2021 [Member] | |
Net operating loss carryforward | 6,308 |
State [Member] | |
Net operating loss carryforward | 148,921 |
State [Member] | 2018-2022 [Member] | |
Net operating loss carryforward | 22,425 |
State [Member] | 2023-2027 [Member] | |
Net operating loss carryforward | 2,945 |
State [Member] | 2028-2032 [Member] | |
Net operating loss carryforward | 65,921 |
State [Member] | 2032-2036 [Member] | |
Net operating loss carryforward | 80,055 |
State [Member] | 2017 [Member] | |
Net operating loss carryforward | 82,892 |
State [Member] | 2018 [Member] | |
Net operating loss carryforward | 5,372 |
State [Member] | 2020 [Member] | |
Net operating loss carryforward | 5,318 |
State [Member] | Thereafter [Member] | |
Net operating loss carryforward | 44,676 |
State [Member] | 2019 [Member] | |
Net operating loss carryforward | 5,345 |
State [Member] | 2021 [Member] | |
Net operating loss carryforward | $ 5,318 |
INCOME TAXES. (Details 4)
INCOME TAXES. (Details 4) | 12 Months Ended |
Dec. 31, 2016 | |
US Treasury and Government [Member] | |
Tax Years still open to audit | 2014-2016 |
Arizona [Member] | |
Tax Years still open to audit | 2014-2016 |
California [Member] | |
Tax Years still open to audit | 2013-2016 |
Colorado [Member] | |
Tax Years still open to audit | 2013-2016 |
Idaho [Member] | |
Tax Years still open to audit | 2014-2016 |
Illinois [Member] | |
Tax Years still open to audit | 2014-2016 |
Indiana [Member] | |
Tax Years still open to audit | 2014-2016 |
Iowa [Member] | |
Tax Years still open to audit | 2014-2016 |
Kansas [Member] | |
Tax Years still open to audit | 2014-2016 |
Minnesota [Member] | |
Tax Years still open to audit | 2014-2016 |
Missouri [Member] | |
Tax Years still open to audit | 2014-2016 |
Nebraska [Member] | |
Tax Years still open to audit | 2014-2016 |
Oklahoma [Member] | |
Tax Years still open to audit | 2014-2016 |
Oregon [Member] | |
Tax Years still open to audit | 2014-2016 |
Texas [Member] | |
Tax Years still open to audit | 2013-2016 |
INCOME TAXES. (Details Narrativ
INCOME TAXES. (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation allowance | $ 24,639 | $ 12,683 | $ 39,838 |
Change in valuation allowance | $ 11,956 | (27,155) | |
Tax benefit related to adjustments to tax asset valuation allowance from prior year | 1,500 | ||
Revised federal income tax rate | 21.00% | ||
Valuation allowance absent of deferred tax liability | $ (10,545) | ||
Decreased gross deferred assets | (10,170) | ||
Accrued tax uncertainties | $ 235 | ||
Description of income tax | Other significant provisions of the TCJA that are not yet effective but may impact income taxes in future years include: additional limitations on certain meals and entertainment expenses, the inclusion of commissions and performance-based compensation in determining the excessive compensation limitation, limitation on the current deductibility of net interest expense in excess of 30% of adjusted taxable income, and a limitation of net operating losses generated after fiscal 2018 to 80% of taxable income. | ||
Income tax benefit | $ (321) | (981) | $ (10,034) |
PE Central [Member] | |||
Change in valuation allowance | (13,500) | ||
Pacific Aurora [Member] | |||
Change in valuation allowance | $ (11,500) |
PREFERRED STOCK. (Details Narra
PREFERRED STOCK. (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Preferred undesignated shares authorized | 6,734,835 | ||
Preferred shares authorized | 10,000,000 | 10,000,000 | |
Preferred stock dividends accrued and paid | $ 1,265 | $ 1,269 | $ 1,265 |
Series A Preferred Stock | |||
Preferred shares authorized | 1,684,375 | 1,684,375 | |
Preferred shares outstanding | 0 | 0 | |
Cumulative dividends payable in cash | 5.00% | ||
Series B Preferred Stock | |||
Preferred shares authorized | 1,580,790 | 1,580,790 | |
Preferred shares outstanding | 926,942 | 926,942 | |
Preferred stock convertible into common shares, common shares | 634,641 | ||
Cumulative dividends payable in cash | 7.00% | ||
Liquidation preference stock holder | $ 19.50 |
COMMON STOCK AND WARRANTS. (Det
COMMON STOCK AND WARRANTS. (Details) - Warrants [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Shares | |||
Begining Balance | 244,000 | 382,000 | 856,000 |
Warrants exercised | (191,000) | (138,000) | (42,000) |
Warrants expired | (49,000) | (432,000) | |
Ending Balance | 4,000 | 244,000 | 382,000 |
Price per Share | |||
Begining Balance | |||
Warrants exercised | 6.09 | 8.43 | 8.85 |
Warrants expired | 8.85 | ||
Ending Balance | 735 | ||
Weighted Average Exercise Price | |||
Begining Balance | 106.72 | 70.87 | 36.55 |
Warrants exercised | 6.09 | 8.43 | 8.85 |
Warrants expired | 444 | 8.85 | |
Ending Balance | 735 | 106.72 | 70.87 |
Minimum [Member] | |||
Price per Share | |||
Begining Balance | 6.09 | 6.09 | 6.09 |
Warrants exercised | |||
Ending Balance | 6.09 | 6.09 | 6.09 |
Maximum [Member] | |||
Price per Share | |||
Begining Balance | 735 | 735 | 735 |
Warrants exercised | |||
Ending Balance | $ 735 | $ 735 | $ 735 |
COMMON STOCK AND WARRANTS. (D74
COMMON STOCK AND WARRANTS. (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |||
Warrant inducements | $ 0 | $ 0 | $ 0 |
Fair value adjustments for warrants | $ (473) | $ 557 | $ (1,641) |
STOCK-BASED COMPENSATION. (Deta
STOCK-BASED COMPENSATION. (Details) - Stock Options [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Shares | ||
Begining Balance | 240,000 | 240,000 |
Expired | (10,000) | |
Ending Balance | 230,000 | 240,000 |
Options exercisable at end of year | 230,000 | 240,000 |
Weighted Average Exercise Price | ||
Begining Balance | $ 4.18 | $ 4.18 |
Expired | 3.74 | |
Ending Balance | 4.18 | 4.18 |
Options exercisable at end of year | $ 4.18 | $ 4.18 |
STOCK-BASED COMPENSATION. (De76
STOCK-BASED COMPENSATION. (Details 1) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
$ 12.90 | |
Number Outstanding | shares | 11,000 |
Weighted Average Remaining Contractual Life (yrs) | 3 years 7 months 2 days |
Weighted Average Exercise Price | $ / shares | $ 12.90 |
Number Exercisable | shares | 11,000 |
Weighted Average Exercise Price | $ / shares | $ 12.90 |
$ 3.74 | |
Number Outstanding | shares | 219,000 |
Weighted Average Remaining Contractual Life (yrs) | 5 years 5 months 19 days |
Weighted Average Exercise Price | $ / shares | $ 3.74 |
Number Exercisable | shares | 219,000 |
Weighted Average Exercise Price | $ / shares | $ 3.74 |
STOCK-BASED COMPENSATION. (De77
STOCK-BASED COMPENSATION. (Details 2) - Restricted Stock - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Shares | |||
Begining Balance | 930,000 | 463,000 | 390,000 |
Issued | 664,000 | 742,000 | 307,000 |
Vested | (480,000) | (250,000) | (220,000) |
Canceled | (37,000) | (25,000) | (14,000) |
Ending Balance | 1,077,000 | 930,000 | 463,000 |
Weighted Average Grant Date Fair Value | |||
Begining Balance | $ 6.57 | $ 10 | $ 8.71 |
Issued | 6.65 | 5.24 | 10.16 |
Vested | 7.30 | 9.01 | 7.94 |
Canceled | 6.08 | 6.24 | 10.08 |
Ending Balance | $ 6.31 | $ 6.57 | $ 10 |
STOCK-BASED COMPENSATION. (De78
STOCK-BASED COMPENSATION. (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Total stock-based compensation expense | $ 3,828 | $ 2,616 | $ 2,019 |
Employees [Member] | |||
Total stock-based compensation expense | 3,303 | 2,173 | 1,694 |
Non-Employees [Member] | |||
Total stock-based compensation expense | $ 525 | $ 443 | $ 325 |
STOCK-BASED COMPENSATION. (De79
STOCK-BASED COMPENSATION. (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Total compensation cost related to unvested awards | $ 4,122 | ||
Compensation cost weighted average period | 1 year 6 months 14 days | ||
2006 Stock Incentive Plan [Member] | |||
Shares authorized | 1,715,000 | ||
2016 Stock Incentive Plan [Member] | |||
Shares authorized | 1,150,000 | ||
Stock Options [Member] | |||
Intrinsic values of outstanding options | $ 84 | $ 1,319 | |
Fair value of stock vested | $ 3,210 | $ 1,142 | $ 2,603 |
COMMITMENTS AND CONTINGENCIES80
COMMITMENTS AND CONTINGENCIES. (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Capital Leases | ||
2,018 | $ 613 | |
2,019 | 45 | |
2,020 | 45 | |
2,021 | 34 | |
2,022 | ||
Thereafter | ||
Total minimum payments | 737 | |
Amount representing interest | (22) | |
Obligations under capital leases | 715 | |
Obligations due within one year | (592) | $ (794) |
Long-term obligations under capital leases | 123 | $ 547 |
Operating Leases | ||
2,018 | 11,841 | |
2,019 | 9,236 | |
2,020 | 7,042 | |
2,021 | 4,074 | |
2,022 | 3,894 | |
Thereafter | 5,530 | |
Total minimum payments | $ 41,617 |
COMMITMENTS AND CONTINGENCIES81
COMMITMENTS AND CONTINGENCIES. (Details Narrative) - USD ($) $ in Thousands | Dec. 29, 2016 | Feb. 27, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Rent expense | $ 16,572 | $ 16,253 | $ 10,476 | ||
Capital improvement commitments | 4,100 | ||||
Gain on litigation settlement | 3,600 | ||||
Proceeds from legal settlement | 3,900 | ||||
Solar Project [Member] | |||||
Capital improvement commitments | 10,000 | ||||
Capital expenditures | 7,700 | ||||
Additional property tax payments | $ 900 | ||||
property tax rate | 5.60% | ||||
Western Sugar Contract [Member] | |||||
Litigation reserve | 2,800 | ||||
Gain on litigation settlement | $ 1,100 | ||||
Settlement cliam | $ 1,700 | ||||
Amount of expectation damages | $ 8,600 | ||||
Corn contract [Member] | |||||
Purchase commitments | $ 21,134 | ||||
Ethanol contracts [Member] | |||||
Sales commitments | $ 90,389 | ||||
Indexed-price contracts to sell | 310,289,000 gallons | ||||
Purchase commitments | $ 8,932 | ||||
Indexed-price purchase contracts | 16,149,000 gallons | ||||
Co-product contracts [Member] | |||||
Sales commitments | $ 35,600 |
FAIR VALUE MEASUREMENTS. (Detai
FAIR VALUE MEASUREMENTS. (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Assets | $ 14,956 | $ 13,401 |
Liabilities: | ||
Liabilities | (4,766) | |
Warrants [Member] | ||
Liabilities: | ||
Liabilities | (651) | |
Defined Benefit Plan Assets Fixed Income [Member] | ||
Assets: | ||
Assets | $ 5,664 | $ 5,481 |
Liabilities: | ||
Benefit plan allocation percentage | 41.00% | 44.00% |
Defined Benefit Plan Assets International Equity [Member] | ||
Assets: | ||
Assets | $ 2,528 | $ 2,006 |
Liabilities: | ||
Benefit plan allocation percentage | 18.00% | 16.00% |
Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | ||
Assets: | ||
Assets | $ 2,018 | $ 1,802 |
Liabilities: | ||
Benefit plan allocation percentage | 14.00% | 15.00% |
Derivative Financial Instrument [Member] | ||
Assets: | ||
Assets | $ 998 | $ 978 |
Liabilities: | ||
Liabilities | (2,307) | (4,115) |
Defined Benefit Plan Assets Large U.S. Equity [Member] | ||
Assets: | ||
Assets | $ 3,748 | $ 3,134 |
Liabilities: | ||
Benefit plan allocation percentage | 27.00% | 25.00% |
Level 3 [Member] | ||
Assets: | ||
Assets | ||
Liabilities: | ||
Liabilities | (651) | |
Level 3 [Member] | Warrants [Member] | ||
Liabilities: | ||
Liabilities | (651) | |
Level 3 [Member] | Defined Benefit Plan Assets Fixed Income [Member] | ||
Assets: | ||
Assets | ||
Level 3 [Member] | Defined Benefit Plan Assets International Equity [Member] | ||
Assets: | ||
Assets | ||
Level 3 [Member] | Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | ||
Assets: | ||
Assets | ||
Level 3 [Member] | Derivative Financial Instrument [Member] | ||
Assets: | ||
Assets | ||
Liabilities: | ||
Liabilities | ||
Level 3 [Member] | Defined Benefit Plan Assets Large U.S. Equity [Member] | ||
Assets: | ||
Assets | ||
Level 2 [Member] | ||
Assets: | ||
Assets | 13,958 | 12,423 |
Liabilities: | ||
Liabilities | ||
Level 2 [Member] | Warrants [Member] | ||
Liabilities: | ||
Liabilities | ||
Level 2 [Member] | Defined Benefit Plan Assets Fixed Income [Member] | ||
Assets: | ||
Assets | 5,664 | 5,481 |
Level 2 [Member] | Defined Benefit Plan Assets International Equity [Member] | ||
Assets: | ||
Assets | 2,528 | 2,006 |
Level 2 [Member] | Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | ||
Assets: | ||
Assets | 2,018 | 1,802 |
Level 2 [Member] | Derivative Financial Instrument [Member] | ||
Assets: | ||
Assets | ||
Liabilities: | ||
Liabilities | ||
Level 2 [Member] | Defined Benefit Plan Assets Large U.S. Equity [Member] | ||
Assets: | ||
Assets | 3,748 | 3,134 |
Level 1 [Member] | ||
Assets: | ||
Assets | 998 | 978 |
Liabilities: | ||
Liabilities | (2,307) | (4,115) |
Level 1 [Member] | Warrants [Member] | ||
Liabilities: | ||
Liabilities | ||
Level 1 [Member] | Defined Benefit Plan Assets Fixed Income [Member] | ||
Assets: | ||
Assets | ||
Level 1 [Member] | Defined Benefit Plan Assets International Equity [Member] | ||
Assets: | ||
Assets | ||
Level 1 [Member] | Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | ||
Assets: | ||
Assets | ||
Level 1 [Member] | Derivative Financial Instrument [Member] | ||
Assets: | ||
Assets | 998 | 978 |
Liabilities: | ||
Liabilities | (2,307) | (4,115) |
Level 1 [Member] | Defined Benefit Plan Assets Large U.S. Equity [Member] | ||
Assets: | ||
Assets |
FAIR VALUE MEASUREMENTS. (Det83
FAIR VALUE MEASUREMENTS. (Details 1) - Original issuance 7/3/2012 $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Exercise price | $ / shares | $ 6.09 |
Volatility | 40.90% |
Risk free interest rate | 0.62% |
Term (years) | 6 months |
Market Discount | 11.30% |
Warrants Outstanding | shares | 211,000 |
Fair value | $ | $ 651 |
FAIR VALUE MEASUREMENTS. (Det84
FAIR VALUE MEASUREMENTS. (Details 2) - Level 3 [Member] - Warrants [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning Balance | $ 651 | $ 273 | $ 1,986 |
Exercised warrants | (178) | (179) | (72) |
Expiration of warrants | (527) | ||
Adjustments to fair value for the period | (473) | 557 | (1,114) |
Ending Balance | $ 651 | $ 273 |
PARENT COMPANY FINANCIALS. (Det
PARENT COMPANY FINANCIALS. (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||||
Cash and cash equivalents | $ 49,489 | $ 64,259 | $ 51,550 | $ 62,073 |
Other current assets | 6,841 | 7,943 | ||
Total current assets | 203,246 | 235,201 | ||
Property and equipment, net | 508,352 | 465,190 | ||
Other Assets: | ||||
Other assets | 6,020 | 5,169 | ||
Total Assets | 720,296 | 708,238 | ||
Current Liabilities: | ||||
Total current liabilities | 90,706 | 78,841 | ||
Long Term debt, net | 244,425 | 201,862 | ||
Warrant liabilities at fair value | 2,307 | 4,115 | ||
Other liabilities | 6,396 | 6,101 | ||
Total Liabilities | 336,596 | 289,977 | ||
Stockholders' Equity: | ||||
Common and non-voting common stock | 44 | 40 | ||
Additional paid-in capital | 927,090 | 922,698 | ||
AAccumulated other comprehensive loss | (2,234) | (2,620) | ||
Accumulated deficit | (568,462) | (532,233) | ||
Total Pacific Ethanol, Inc. stockholders' equity | 356,439 | 387,890 | ||
Total Liabilities and Stockholders' Equity | 720,296 | 708,238 | ||
Parent Company [Member] | ||||
Current Assets: | ||||
Cash and cash equivalents | 5,314 | 11,060 | $ 20,618 | $ 23,915 |
Receivables from consolidated subsidiaries | 3,138 | 7,203 | ||
Other current assets | 1,631 | 6,442 | ||
Total current assets | 10,083 | 24,705 | ||
Property and equipment, net | 1,071 | 1,433 | ||
Other Assets: | ||||
Investments in subsidiaries | 359,680 | 363,401 | ||
Pacific Ethanol West plant receivable | 58,766 | 58,766 | ||
Other assets | 1,565 | 1,110 | ||
Total other assets | 420,011 | 423,277 | ||
Total Assets | 431,165 | 449,415 | ||
Current Liabilities: | ||||
Accounts payable and accrued liabilities | 2,218 | 1,758 | ||
Payable to subsidiaries | 625 | 1,568 | ||
Accrued PE Op Co. purchase | 3,828 | 3,828 | ||
Other current liabilities | 245 | 184 | ||
Total current liabilities | 6,916 | 7,338 | ||
Long Term debt, net | 67,530 | 53,360 | ||
Warrant liabilities at fair value | 651 | |||
Deferred tax liabilities | 224 | 52 | ||
Other liabilities | 56 | 124 | ||
Total Liabilities | 74,726 | 61,525 | ||
Stockholders' Equity: | ||||
Preferred stock | 1 | 1 | ||
Common and non-voting common stock | 44 | 44 | ||
Additional paid-in capital | 927,090 | 922,698 | ||
AAccumulated other comprehensive loss | (2,234) | (2,620) | ||
Accumulated deficit | (568,462) | (532,233) | ||
Total Pacific Ethanol, Inc. stockholders' equity | 356,439 | 387,890 | ||
Total Liabilities and Stockholders' Equity | $ 431,165 | $ 449,415 |
PARENT COMPANY FINANCIALS. (D86
PARENT COMPANY FINANCIALS. (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Selling, general and administrative expenses | $ 31,516 | $ 30,849 | $ 26,368 | ||||||||
Asset impairment | 1,970 | ||||||||||
Loss from operations | $ (10,598) | $ 3,345 | $ (7,109) | $ (11,223) | $ 18,808 | $ 393 | $ 11,556 | $ (7,248) | (25,585) | 23,509 | (17,972) |
Interest expense | (12,938) | (22,406) | (12,594) | ||||||||
Income (loss) before provision for income taxes | (38,395) | 545 | (28,907) | ||||||||
Provision (benefit) for income taxes | (321) | (981) | (10,034) | ||||||||
Consolidated net income (loss) | $ (13,285) | $ (202) | $ (8,841) | $ (12,636) | $ 13,077 | $ (3,518) | $ 5,086 | $ (13,226) | (34,964) | 1,419 | (18,786) |
Parent Company [Member] | |||||||||||
Management fees from subsidiaries | 11,904 | 12,968 | 9,857 | ||||||||
Selling, general and administrative expenses | 18,185 | 14,491 | 14,336 | ||||||||
Asset impairment | 1,970 | ||||||||||
Loss from operations | (6,281) | (1,523) | (6,449) | ||||||||
Fair value adjustments | 473 | (557) | 1,641 | ||||||||
Interest income | 4,793 | 5,964 | 5,739 | ||||||||
Interest expense | (5,829) | (240) | (27) | ||||||||
Other income (expense), net | (95) | 1,931 | |||||||||
Income (loss) before provision for income taxes | (6,939) | 5,575 | 904 | ||||||||
Provision (benefit) for income taxes | (321) | (981) | (10,034) | ||||||||
Income (loss) before equity in earnings of subsidiaries | (6,618) | 6,556 | 10,938 | ||||||||
Equity in losses of subsidiaries | (28,346) | (5,137) | (29,724) | ||||||||
Consolidated net income (loss) | $ (34,964) | $ 1,419 | $ (18,786) |
PARENT COMPANY FINANCIALS. (D87
PARENT COMPANY FINANCIALS. (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Activities: | |||||||||||
Net income (loss) | $ (13,285) | $ (202) | $ (8,841) | $ (12,636) | $ 13,077 | $ (3,518) | $ 5,086 | $ (13,226) | $ (34,964) | $ 1,419 | $ (18,786) |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | |||||||||||
Fair value adjustments | (473) | 557 | (1,641) | ||||||||
Asset impairment | 1,970 | ||||||||||
Deferred income taxes | 169 | (1,122) | (2,023) | ||||||||
Amortization of debt discounts | 636 | 2,322 | 716 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivables | 17,562 | (25,235) | (15,950) | ||||||||
Other assets | 6,738 | (3,973) | 5,622 | ||||||||
Accounts payable and accrued expenses | (5,538) | 9,279 | (10,045) | ||||||||
Net cash provided by (used in) operating activities | 36,509 | 37,228 | (27,993) | ||||||||
Investing Activities: | |||||||||||
Additions to property and equipment | (20,866) | (19,171) | (20,507) | ||||||||
Net cash used in investing activities | (50,440) | (14,597) | (6,325) | ||||||||
Financing Activities: | |||||||||||
Proceeds from issuances of senior notes | 13,530 | 53,350 | |||||||||
Proceeds from warrant stock option exercises | 1,202 | 1,164 | 368 | ||||||||
Net cash provided by (used in) financing activities | (839) | (9,922) | 23,795 | ||||||||
Net decrease in cash and cash equivalents | (14,770) | 12,709 | (10,523) | ||||||||
Cash and cash equivalents at beginning of period | 64,259 | 51,550 | 64,259 | 51,550 | 62,073 | ||||||
Cash and cash equivalents at end of period | 49,489 | 64,259 | 49,489 | 64,259 | 51,550 | ||||||
Parent Company [Member] | |||||||||||
Operating Activities: | |||||||||||
Net income (loss) | (34,964) | 1,419 | (18,786) | ||||||||
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | |||||||||||
Equity in losses of subsidiaries | 28,346 | 5,137 | 29,724 | ||||||||
Dividends from subsidiaries | 3,500 | ||||||||||
Depreciation and amortization | 830 | 727 | 390 | ||||||||
Fair value adjustments | (473) | 557 | (1,641) | ||||||||
Asset impairment | 1,970 | ||||||||||
Deferred income taxes | 169 | (1,122) | (14,260) | ||||||||
Amortization of debt discounts | 636 | 10 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivables | 4,065 | 7,302 | (5,958) | ||||||||
Other assets | 4,356 | 4,647 | (4,139) | ||||||||
Accounts payable and accrued expenses | 3,859 | (3,741) | 604 | ||||||||
Accounts payable with subsidiaries | (943) | (9,385) | 11,179 | ||||||||
Net cash provided by (used in) operating activities | 9,381 | 5,551 | (917) | ||||||||
Investing Activities: | |||||||||||
Additions to property and equipment | (468) | (465) | (1,483) | ||||||||
Investments in subsidiaries | (28,126) | (50,886) | |||||||||
Purchase of PE OP Co. debt | (17,003) | ||||||||||
Net cash used in investing activities | (28,594) | (68,354) | (1,483) | ||||||||
Financing Activities: | |||||||||||
Proceeds from issuances of senior notes | 13,530 | 53,350 | |||||||||
Proceeds from warrant stock option exercises | 1,202 | 1,164 | 368 | ||||||||
Preferred stock dividend payments | (1,265) | (1,269) | (1,265) | ||||||||
Net cash provided by (used in) financing activities | 13,467 | 53,245 | (897) | ||||||||
Net decrease in cash and cash equivalents | (5,746) | (9,558) | (3,297) | ||||||||
Cash and cash equivalents at beginning of period | $ 11,060 | $ 20,618 | 11,060 | 20,618 | 23,915 | ||||||
Cash and cash equivalents at end of period | $ 5,314 | $ 11,060 | $ 5,314 | $ 11,060 | $ 20,618 |
QUARTERLY FINANCIAL DATA (UNA88
QUARTERLY FINANCIAL DATA (UNAUDITED). (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 395,271 | $ 445,442 | $ 405,202 | $ 386,340 | $ 441,719 | $ 417,806 | $ 422,860 | $ 342,373 | $ 1,632,255 | $ 1,624,758 | $ 1,191,176 |
Gross profit (loss) | (2,014) | 12,065 | 1,653 | (5,773) | 27,314 | 7,021 | 18,355 | 1,668 | 5,931 | 54,358 | 10,366 |
Income (loss) from operations | (10,598) | 3,345 | (7,109) | (11,223) | 18,808 | 393 | 11,556 | (7,248) | (25,585) | 23,509 | (17,972) |
Net income (loss) attributed to Pacific Ethanol, Inc. | (13,285) | (202) | (8,841) | (12,636) | 13,077 | (3,518) | 5,086 | (13,226) | (34,964) | 1,419 | (18,786) |
Preferred stock dividends | (319) | (319) | (315) | (312) | (320) | (319) | (315) | (315) | (1,265) | (1,269) | (1,265) |
Income allocated to participating securities | (189) | 0 | (71) | 0 | (2) | ||||||
Net income (loss) available to common stockholders | $ (13,604) | $ (521) | $ (9,156) | $ (12,948) | $ 12,569 | $ (3,837) | $ 4,700 | $ (13,541) | $ (36,229) | $ 148 | $ (20,051) |
Basic and diluted income (loss) per common share | $ (0.32) | $ (0.01) | $ (0.22) | $ (0.31) | $ 0.30 | $ (0.09) | $ 0.11 | $ (0.32) |