Alto Ingredients (ALTO) 10-Q 2 Nov 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 01, 2018
Document And Entity Information
Entity Registrant Name	Pacific Ethanol, Inc.
Entity Central Index Key	778,164
Document Type	10-Q
Trading Symbol	PEIX
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity's Reporting Status Current	Yes
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Common Stock, Shares Outstanding		45,716,235
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,018

CONSOLIDATED BALANCE SHEETS (un

CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	[1]
Current Assets:
Cash and cash equivalents	$ 56,093	$ 49,489
Accounts receivable, net (net of allowance for doubtful accounts of $11 and $19, respectively)	67,644	80,344
Inventories	54,766	61,550
Prepaid inventory	1,442	3,281
Derivative instruments	1,954	998
Other current assets	10,367	7,584
Total current assets	192,266	203,246
Property and equipment, net	488,591	508,352
Other Assets:
Intangible assets	2,678	2,678
Other assets	5,012	6,020
Total other assets	7,690	8,698
Total Assets	688,547	720,296
Current Liabilities:
Accounts payable - trade	44,774	39,738
Accrued liabilities	20,885	21,673
Current portion - capital leases	45	592
Current portion - long-term debt	20,000	20,000
Derivative instruments	6,385	2,307
Other current liabilities	6,931	6,396
Total current liabilities	99,020	90,706
Long-term debt, net of current portion	214,419	221,091
Capital leases, net of current portion	89	123
Other liabilities	23,497	24,676
Total Liabilities	337,025	336,596
Commitments and Contingencies (Note 6)
Pacific Ethanol, Inc. Stockholders' Equity:
Preferred stock, $0.001 par value; 10,000 shares authorized; Series A: 1,684 shares authorized; no shares issued and outstanding as of September 30, 2018 and December 31, 2017; Series B: 1,581 shares authorized; 927 shares issued and outstanding as of September 30, 2018 and December 31, 2017; liquidation preference of $18,075 as of September 30, 2018	1	1
Common stock, $0.001 par value; 300,000 shares authorized; 44,946 and 43,985 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively	45	44
Non-voting common stock, $0.001 par value; 3,553 shares authorized; 1 share issued and outstanding as of September 30, 2018 and December 31, 2017, respectively
Additional paid-in capital	929,262	927,090
Accumulated other comprehensive loss	(2,234)	(2,234)
Accumulated deficit	(597,671)	(568,462)
Total Pacific Ethanol, Inc. Stockholders' Equity	329,403	356,439
Noncontrolling interests	22,119	27,261
Total Stockholders' Equity	351,522	383,700
Total Liabilities and Stockholders' Equity	$ 688,547	$ 720,296
[1]	Amounts derived from the audited consolidated financial statements for the year ended December 31, 2017.

CONSOLIDATED BALANCE SHEETS (_2

CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Accounts receivable, net of allowance	$ 11	$ 19
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	10,000	10,000
Liquidation preference	$ 18,075
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	300,000	300,000
Common stock, issued	44,946	43,985
Common stock, outstanding	44,946	43,985
Nonvoting Common Stock [Member]
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	3,553	3,553
Common stock, issued	1	1
Common stock, outstanding	1	1
Series A Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	1,684	1,684
Preferred stock, issued
Preferred stock, outstanding
Series B Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	1,581	1,581
Preferred stock, issued	927	927
Preferred stock, outstanding	927	927

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Net sales	$ 370,407	$ 445,442	$ 1,180,956	$ 1,236,984
Cost of goods sold	366,639	433,377	1,175,099	1,229,039
Gross profit	3,768	12,065	5,857	7,945
Selling, general and administrative expenses	8,970	8,720	27,183	22,932
Income (loss) from operations	(5,202)	3,345	(21,326)	(14,987)
Fair value adjustments				473
Interest expense	(4,193)	(3,826)	(12,875)	(9,157)
Other income (expense), net	91	(60)	233	(293)
Loss before benefit for income taxes	(9,304)	(541)	(33,968)	(23,964)
Benefit for income taxes			563
Consolidated net loss	(9,304)	(541)	(33,405)	(23,964)
Net loss attributed to noncontrolling interests	1,790	339	5,142	2,285
Net loss attributed to Pacific Ethanol, Inc.	(7,514)	(202)	(28,263)	(21,679)
Preferred stock dividends	(319)	(319)	(946)	(946)
Loss available to common stockholders	$ (7,833)	$ (521)	$ (29,209)	$ (22,625)
Net loss per share, basic and diluted	$ (0.18)	$ (0.01)	$ (0.68)	$ (0.53)
Weighted-average shares outstanding, basic and diluted	43,299	42,475	43,171	42,358

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018		Sep. 30, 2017
Operating Activities:
Consolidated net loss	$ (33,405)		$ (23,964)
Adjustments to reconcile consolidated net loss to net cash provided by operating activities:
Depreciation	30,635		28,486
Deferred income taxes	(563)
Fair value adjustments			(473)
Amortization of debt discount	539		454
Amortization of deferred financing fees	754		339
Non-cash compensation	2,579		2,985
Loss on derivative instruments	4,362		836
Bad debt expense	44		4
Changes in operating assets and liabilities:
Accounts receivable	12,656		25,625
Inventories	6,784		(1,891)
Prepaid expenses and other assets	(2,454)		2,197
Prepaid inventory	1,839		4,397
Accounts payable and accrued expenses	2,307		(3,995)
Net cash provided by operating activities	26,077		35,000
Investing Activities:
Additions to property and equipment	(10,874)		(12,348)
Purchase of ICP, net of cash acquired			(28,921)
Net cash used in investing activities	(10,874)		(41,269)
Financing Activities:
Net proceeds from (payments on) Kinergy's line of credit	9,880		(5,889)
Proceeds from ICP credit facilities			42,000
Proceeds from assessment financing	728		1,144
Proceeds from notes			13,530
Payments for debt issuance costs			(924)
Principal payments on borrowings	(17,500)		(54,927)
Payments on capital leases	(761)		(588)
Proceeds from exercise of warrants and options			1,202
Preferred stock dividends paid	(946)		(946)
Net cash used in financing activities	(8,599)		(5,398)
Net increase (decrease) in cash and cash equivalents	6,604		(11,667)
Cash and cash equivalents at beginning of period	49,489	[1]	68,590
Cash and cash equivalents at end of period	56,093		56,923
Supplemental Cash Flow Information:
Interest paid	11,299		8,291
Income tax refunds received	743		5,601
Issuance of notes payable for acquisition of ICP			46,927
Reclass of warrant liability to equity upon warrant exercises			$ 178
[1]	Amounts derived from the audited consolidated financial statements for the year ended December 31, 2017.

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Accum. Other Comprehensive Income (Loss) [Member]	Non-Controlling Interests [Member]	Total
Balance at Beginning at Dec. 31, 2016	$ 1	$ 44	$ 922,698	$ (532,233)	$ (2,620)	$ 30,371	$ 418,261
Balance at Beginning (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			$ 1,220				1,220
Stock-based compensation expense restricted stock issued to employees and directors, net of cancellations and tax (in shares)		505
Warrant and option exercises			$ 37				37
Warrant and option exercises (in shares)		10
Preferred stock dividends				$ (312)			(312)
Net loss				(12,636)		(849)	(13,485)
Balance at End at Mar. 31, 2017	$ 1	$ 44	$ 923,955	$ (545,181)	$ (2,620)	$ 29,522	405,721
Balance at End (in shares) at Mar. 31, 2017	927	43,827
Balance at Beginning at Dec. 31, 2016	$ 1	$ 44	$ 922,698	$ (532,233)	$ (2,620)	$ 30,371	418,261
Balance at Beginning (in shares) at Dec. 31, 2016	927	43,312
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Preferred stock dividends							(946)
Net loss							(23,964)
Balance at End at Sep. 30, 2017	$ 1	$ 44	$ 926,248	$ (554,858)	$ (2,620)	$ 28,086	396,901
Balance at End (in shares) at Sep. 30, 2017	927	43,972
Balance at Beginning at Mar. 31, 2017	$ 1	$ 44	$ 923,955	$ (545,181)	$ (2,620)	$ 29,522	405,721
Balance at Beginning (in shares) at Mar. 31, 2017	927	43,827
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense restricted stock issued to employees and directors, net of cancellations and tax			$ 127				127
Stock-based compensation expense restricted stock issued to employees and directors, net of cancellations and tax (in shares)		(37)
Warrant and option exercises			$ 829				829
Warrant and option exercises (in shares)		120
Preferred stock dividends				$ (315)			(315)
Net loss				(8,841)		(1,097)	(9,938)
Balance at End at Jun. 30, 2017	$ 1	$ 44	$ 924,911	$ (554,337)	$ (2,620)	$ 28,425	396,424
Balance at End (in shares) at Jun. 30, 2017	927	43,910
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense restricted stock issued to employees and directors, net of cancellations and tax			$ 825				825
Stock-based compensation expense restricted stock issued to employees and directors, net of cancellations and tax (in shares)		(9)
Warrant and option exercises			$ 512				512
Warrant and option exercises (in shares)		71
Preferred stock dividends				$ (319)			(319)
Net loss				(202)		(339)	(541)
Balance at End at Sep. 30, 2017	$ 1	$ 44	926,248	(554,858)	(2,620)	28,086	396,901
Balance at End (in shares) at Sep. 30, 2017	927	43,972
Balance at Beginning at Dec. 31, 2017	$ 1	$ 44	$ 927,090	$ (568,462)	$ (2,234)	$ 27,261	383,700	[1]
Balance at Beginning (in shares) at Dec. 31, 2017	927	43,986
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense restricted stock issued to employees and directors, net of cancellations and tax			$ 735				735
Stock-based compensation expense restricted stock issued to employees and directors, net of cancellations and tax (in shares)		(31)
Warrant and option exercises
Warrant and option exercises (in shares)
Preferred stock dividends				$ (312)			(312)
Net loss				(7,841)		(1,656)	(9,497)
Balance at End at Mar. 31, 2018	$ 1	$ 44	$ 927,825	$ (576,615)	$ (2,234)	$ 25,605	374,626
Balance at End (in shares) at Mar. 31, 2018	927	43,955
Balance at Beginning at Dec. 31, 2017	$ 1	$ 44	$ 927,090	$ (568,462)	$ (2,234)	$ 27,261	383,700	[1]
Balance at Beginning (in shares) at Dec. 31, 2017	927	43,986
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Preferred stock dividends							(946)
Net loss							(33,405)
Balance at End at Sep. 30, 2018	$ 1	$ 45	$ 929,262	$ (597,671)	$ (2,234)	$ 22,119	351,522
Balance at End (in shares) at Sep. 30, 2018	927	44,947
Balance at Beginning at Mar. 31, 2018	$ 1	$ 44	$ 927,825	$ (576,615)	$ (2,234)	$ 25,605	374,626
Balance at Beginning (in shares) at Mar. 31, 2018	927	43,955
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense restricted stock issued to employees and directors, net of cancellations and tax		$ 1	$ 553				554
Stock-based compensation expense restricted stock issued to employees and directors, net of cancellations and tax (in shares)		1,006
Warrant and option exercises
Warrant and option exercises (in shares)
Preferred stock dividends				$ (315)			(315)
Net loss				(12,908)		(1,696)	(14,604)
Balance at End at Jun. 30, 2018	$ 1	$ 45	$ 928,378	$ (589,838)	$ (2,234)	$ 23,909	360,261
Balance at End (in shares) at Jun. 30, 2018	927	44,961
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense restricted stock issued to employees and directors, net of cancellations and tax			$ 884				884
Stock-based compensation expense restricted stock issued to employees and directors, net of cancellations and tax (in shares)		(14)
Warrant and option exercises
Warrant and option exercises (in shares)
Preferred stock dividends				$ (319)			(319)
Net loss				(7,514)		(1,790)	(9,304)
Balance at End at Sep. 30, 2018	$ 1	$ 45	$ 929,262	$ (597,671)	$ (2,234)	$ 22,119	$ 351,522
Balance at End (in shares) at Sep. 30, 2018	927	44,947
[1]	Amounts derived from the audited consolidated financial statements for the year ended December 31, 2017.

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	1. ORGANIZATION AND BASIS OF PRESENTATION. Organization and Business The Company’s acquisition of Illinois Corn Processing, LLC (“ICP”) was consummated on July 3, 2017, and as a result, the Company’s accompanying consolidated financial statements include the results of ICP since that date. The Company is a leading producer and marketer of low-carbon renewable fuels in the United States. The Company 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 The Company owns and operates nine production facilities, four in the Western states of California, Oregon and Idaho, and five in the Midwestern states of Illinois and Nebraska. 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. The Company’s five ethanol plants in the Midwest (together with their respective holding companies, the “Pacific Ethanol Central Plants”) are located in the heart of the Corn Belt, benefit from low-cost and abundant feedstock production and allow for access to many additional domestic markets. In addition, the Company’s ability to load unit trains from these facilities in the Midwest allows for greater access to international markets. As of September 30, 2018, 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 – Interim Financial Statements 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 $52,693,000 and $64,501,000 at September 30, 2018 and December 31, 2017, respectively, were used as collateral under Kinergy’s operating line of credit. The allowance for doubtful accounts was $11,000 and $19,000 as of September 30, 2018 and December 31, 2017, respectively. The Company recorded a bad debt recovery of $1,000 and bad debt expense of $2,000 for the three months ended September 30, 2018 and 2017, respectively. The Company recorded a bad debt expense of $44,000 and $4,000 for the nine months ended September 30, 2018 and 2017, respectively. The Company does not have any off-balance sheet credit exposure related to its customers. Benefit for Income Taxes Comprehensive Loss Financial Instruments Recent Accounting Pronouncements In May 2014, the FASB issued new guidance on the recognition of revenue (“ASC 606”). ASC 606 states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. In March and April 2016, the FASB issued further revenue recognition guidance amending principal vs. agent considerations regarding whether an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. 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. Effective January 1, 2018, the Company adopted ASC 606 using the modified retrospective method for all of its contracts. Following the adoption of ASC 606, the Company continues to recognize revenue at a point-in-time when control of goods transfers to the customer. This is consistent with the Company’s previous revenue recognition accounting policy under which the Company recognized revenue when title and risk of loss pass to the customer and collectability was reasonably assured. In addition, ASU 606 did not impact the Company’s presentation of revenue on a gross or net basis. The Company recognizes revenue primarily from sales of ethanol and its related co-products. The Company has nine ethanol production facilities from which it produces and sells ethanol to its customers through Kinergy. Kinergy enters into sales contracts with ethanol customers under exclusive intercompany ethanol sales agreements with each of the Company’s nine ethanol plants. Kinergy also acts as a principal when it purchases third party ethanol which it resells to its customers. Finally, Kinergy has exclusive sales agreements with other third-party owned ethanol plants under which it sells their ethanol production for a fee plus the costs to deliver the ethanol to Kinergy’s customers. These sales are referred to as third-party agent sales. Revenue from these third-party agent sales is recorded on a net basis, with Kinergy recognizing its predetermined fees and any associated delivery costs. The Company has nine ethanol production facilities from which it produces and sells co-products to its customers through PAP. PAP enters into sales contracts with co-product customers under exclusive intercompany co-product sales agreements with each of the Company’s nine ethanol plants. The Company recognizes revenue from sales of ethanol and co-products at the point in time when the customer obtains control of such products, which typically occurs upon delivery depending on the terms of the underlying contracts. In some instances, the Company enters into contracts with customers that contain multiple performance obligations to deliver volumes of ethanol or co-products over a contractual period of less than 12 months. The Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices and recognizes the related revenue as control of each individual product is transferred to the customer in satisfaction of the corresponding performance obligations. When the Company is the agent, the supplier controls the products before they are transferred to the customer because the supplier is primarily responsible for fulfilling the promise to provide the product, has inventory risk before the product has been transferred to a customer and has discretion in establishing the price for the product. When the Company is the principal, the Company controls the products before they are transferred to the customer because the Company is primarily responsible for fulfilling the promise to provide the products, has inventory risk before the product has been transferred to a customer and has discretion in establishing the price for the product. The Company accounts for shipping and handling costs relating to contracts with customers as costs to fulfill its promise to transfer its products. Accordingly, the costs are classified as a component of cost of goods sold. See Note 2 for the Company’s revenue by type of contracts. Estimates and Assumptions

SEGMENTS

SEGMENTS	9 Months Ended
	Sep. 30, 2018
Segment Reporting [Abstract]
SEGMENTS	2. SEGMENTS. The Company reports its financial and operating performance in two segments: (1) ethanol production, which includes the production and sale of ethanol, specialty alcohols and co-products, with all of the Company’s production facilities aggregated, and (2) marketing and distribution, which includes marketing and merchant trading for Company-produced ethanol, specialty alcohols and co-products and third-party ethanol. The following tables set forth certain financial data for the Company’s operating segments (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net Sales Production, recorded as gross: Ethanol/alcohol sales $ 216,788 $ 236,326 $ 670,304 $ 618,438 Co-product sales 73,259 68,487 226,307 185,574 Intersegment sales 518 639 1,531 1,138 Total production sales 290,565 305,452 898,142 805,150 Marketing: Ethanol/alcohol sales, gross $ 79,877 $ 140,208 $ 282,940 $ 431,733 Ethanol/alcohol sales, net 483 421 1,405 1,239 Intersegment sales 2,201 2,334 6,757 6,135 Total marketing sales 82,561 142,963 291,102 439,107 Intersegment eliminations (2,719 ) (2,973 ) (8,288 ) (7,273 ) Net sales as reported $ 370,407 $ 445,442 $ 1,180,956 $ 1,236,984 Cost of goods sold Production $ 295,574 $ 294,047 $ 914,638 $ 799,203 Marketing and distribution 73,784 142,303 268,917 437,109 Intersegment eliminations (2,719 ) (2,973 ) (8,456 ) (7,273 ) Cost of goods sold as reported $ 366,639 $ 433,377 $ 1,175,099 $ 1,229,039 Income (loss) before benefit for income taxes Production $ (15,571 ) $ 2,638 $ (45,355 ) $ (15,981 ) Marketing and distribution 7,416 (757 ) 18,095 (2,043 ) Corporate activities (1,149 ) (2,422 ) (6,708 ) (5,940 ) $ (9,304 ) $ (541 ) $ (33,968 ) $ (23,964 ) Depreciation and amortization: Production $ 10,040 $ 9,841 $ 30,017 $ 27,703 Corporate activities 177 237 618 783 $ 10,217 $ 10,078 $ 30,635 $ 28,486 Interest expense: Production $ 1,692 $ 1,850 $ 5,416 $ 4,061 Marketing and distribution 344 342 1,042 953 Corporate activities 2,157 1,634 6,417 4,143 $ 4,193 $ 3,826 $ 12,875 $ 9,157 The following table sets forth the Company’s total assets by operating segment (in thousands): September 30, 2018 December 31, 2017 Total assets: Production $ 545,360 $ 583,696 Marketing and distribution 139,165 127,242 Corporate assets 4,022 9,358 $ 688,547 $ 720,296

INVENTORIES

INVENTORIES	9 Months Ended
	Sep. 30, 2018
Inventory Disclosure [Abstract]
INVENTORIES	3. INVENTORIES. Inventories consisted primarily of bulk ethanol, specialty alcohols, corn, co-products, low-carbon and Renewable Identification Number (“RIN”) credits and unleaded fuel, and are valued at the lower-of-cost-or-net realizable value, with cost determined on a first-in, first-out basis. Inventory is net of valuation adjustments of $1,513,000 and $2,678,000 as of September 30, 2018 and December 31, 2017, respectively. Inventory balances consisted of the following (in thousands): September 30, 2018 December 31, 2017 Finished goods $ 33,525 $ 35,652 Work in progress 7,753 8,807 Raw materials 7,260 7,601 Low-carbon and RIN credits 4,585 7,952 Other 1,643 1,538 Total $ 54,766 $ 61,550

DERIVATIVES

DERIVATIVES	9 Months Ended
	Sep. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]
DERIVATIVES	4. 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 September 30, 2018 Assets Liabilities Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash collateral balance Other current assets $ 7,752 Commodity contracts Derivative instruments $ 1,954 Derivative instruments $ 6,385 As of December 31, 2017 Assets Liabilities Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash collateral balance Other current assets $ 3,813 Commodity contracts Derivative instruments $ 998 Derivative instruments $ 2,307 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) Three Months Ended September 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ 916 $ (1,576 ) Unrealized Gains (Losses) Three Months Ended September 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (1,907 ) $ 1,093 Realized Losses Nine Months Ended September 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (1,241 ) $ (4,495 ) Unrealized Gains (Losses) Nine Months Ended September 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (3,121 ) $ 3,659

DEBT

DEBT	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
DEBT	5. DEBT. Long-term borrowings are summarized as follows (in thousands): September 30, 2018 December 31, 2017 Kinergy line of credit $ 59,357 $ 49,477 Pekin term loan 46,500 53,500 Pekin revolving loan 30,000 32,000 ICP term loan 18,000 22,500 ICP revolving loan 14,000 18,000 Parent notes payable 68,948 68,948 236,805 244,425 Less unamortized debt discount (870 ) (1,409 ) Less unamortized debt financing costs (1,516 ) (1,925 ) Less short-term portion (20,000 ) (20,000 ) Long-term debt $ 214,419 $ 221,091 Operating Lines of Credit Pekin Term Loan Pacific Aurora Line of Credit Distribution Restrictions

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	6. COMMITMENTS AND CONTINGENCIES. Sales Commitments Purchase Commitments Property Tax Assessment Litigation – General The Company assumed certain legal matters which were ongoing at July 1, 2015, the date of the Company’s acquisition of Aventine Renewable Energy Holdings, Inc. (“PE Central”). Among them were lawsuits between Aventine Renewable Energy, Inc. (now known as Pacific Ethanol Pekin, LLC) 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 nine months ended September 30, 2017.

PENSION AND RETIREMENT BENEFIT

PENSION AND RETIREMENT BENEFIT PLANS	9 Months Ended
	Sep. 30, 2018
Retirement Benefits [Abstract]
PENSION AND RETIREMENT BENEFIT PLANS	7. PENSION AND RETIREMENT BENEFIT PLANS. The Company sponsors a defined benefit pension plan (the “Retirement Plan”) and a health care and life insurance plan (the “Postretirement Plan”). The Company assumed the Retirement Plan and the Postretirement Plan as part of its acquisition of PE Central on July 1, 2015. The Retirement Plan is noncontributory, and covers only “grandfathered” unionized employees at the Company’s Pekin, Illinois facility who fulfill minimum age and service requirements. Benefits are based on a prescribed formula based upon the employee’s years of service. The Retirement Plan, which is part of a collective bargaining agreement, covers only union employees hired prior to November 1, 2010. The Company uses a December 31 measurement date for its Retirement Plan. The Company’s funding policy is to make the minimum annual contribution required by applicable regulations. As of December 31, 2017, the Retirement Plan’s accumulated projected benefit obligation was $19.7 million, with a fair value of plan assets of $14.0 million. The underfunded amount of $5.7 million is recorded on the Company’s consolidated balance sheet in other liabilities. Of the net periodic expense for the Retirement Plan and Postretirement Plan, the Company recognizes the service cost component in cost of goods sold and the interest cost, expected return on plan assets and amortization of gain (loss) in other income (expense), net. The Company’s net periodic Retirement Plan costs are as follows (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Interest cost $ 174 $ 98 $ 522 $ 293 Service cost 106 188 318 563 Expected return on plan assets (204 ) (169 ) (612 ) (506 ) Net periodic expense $ 76 $ 117 $ 228 $ 350 The Postretirement Plan provides postretirement medical benefits and life insurance to certain “grandfathered” unionized employees. Employees hired after December 31, 2000 are not eligible to participate in the Postretirement Plan. The Postretirement Plan is contributory, with contributions required at the same rate as active employees. Benefit eligibility under the plan reduces at age 65 from a defined benefit to a defined dollar cap based upon years of service. As of December 31, 2017, the Postretirement Plan’s accumulated projected benefit obligation was $5.6 million and is recorded on the Company’s consolidated balance sheet in other liabilities. The Company’s funding policy is to make the minimum annual contribution required by applicable regulations. The Company’s net periodic Postretirement Plan costs are as follows (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Interest cost $ 46 $ 21 $ 138 $ 63 Service cost 2 50 6 150 Amortization of (gain) loss 33 33 99 99 Net periodic expense $ 81 $ 104 $ 243 $ 312

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	9 Months Ended
	Sep. 30, 2018
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	8. 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 Other Derivative Instruments The following table summarizes recurring fair value measurements by level at September 30, 2018 (in thousands): Fair Value Level 1 Level 2 Level 3 Assets: Derivative instruments $ 1,954 $ 1,954 $ — $ — Liabilities: Derivative instruments $ (6,385 ) $ (6,385 ) $ — $ —

EARNINGS PER SHARE

EARNINGS PER SHARE	9 Months Ended
	Sep. 30, 2018
Earnings Per Share [Abstract]
EARNINGS PER SHARE	9. EARNINGS PER SHARE. The following tables compute basic and diluted earnings per share (in thousands, except per share data): Three Months Ended September 30, 2018 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (7,514 ) Less: Preferred stock dividends (319 ) Basic and diluted loss per share: Loss available to common stockholders $ (7,833 ) 43,299 $ (0.18 ) Three Months Ended September 30, 2017 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (202 ) Less: Preferred stock dividends (319 ) Basic and diluted loss per share: Loss available to common stockholders $ (521 ) 42,475 $ (0.01 ) Nine Months Ended September 30, 2018 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (28,263 ) Less: Preferred stock dividends (946 ) Basic and diluted loss per share: Loss available to common stockholders $ (29,209 ) 43,171 $ (0.68 ) Nine Months Ended September 30, 2017 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (21,679 ) Less: Preferred stock dividends (946 ) Basic and diluted loss per share: Loss available to common stockholders $ (22,625 ) 42,358 $ (0.53 ) There were an aggregate of 425,000 and 635,000 potentially dilutive weighted-average shares from convertible securities outstanding for the three and nine months ended September 30, 2018, respectively. These convertible securities were not considered in calculating diluted net loss per share for the three and nine months ended September 30, 2018, as their effect would have been anti-dilutive.

ORGANIZATION AND BASIS OF PRE_2

ORGANIZATION AND BASIS OF PRESENTATION (Policies)	9 Months Ended
	Sep. 30, 2018
Accounting Policies [Abstract]
Organization and Business	Organization and Business The Company’s acquisition of Illinois Corn Processing, LLC (“ICP”) was consummated on July 3, 2017, and as a result, the Company’s accompanying consolidated financial statements include the results of ICP since that date. The Company is a leading producer and marketer of low-carbon renewable fuels in the United States. The Company 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 The Company owns and operates nine production facilities, four in the Western states of California, Oregon and Idaho, and five in the Midwestern states of Illinois and Nebraska. 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. The Company’s five ethanol plants in the Midwest (together with their respective holding companies, the “Pacific Ethanol Central Plants”) are located in the heart of the Corn Belt, benefit from low-cost and abundant feedstock production and allow for access to many additional domestic markets. In addition, the Company’s ability to load unit trains from these facilities in the Midwest allows for greater access to international markets. As of September 30, 2018, 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-Interim Financial Statements	Basis of Presentation – Interim Financial Statements
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 $52,693,000 and $64,501,000 at September 30, 2018 and December 31, 2017, respectively, were used as collateral under Kinergy’s operating line of credit. The allowance for doubtful accounts was $11,000 and $19,000 as of September 30, 2018 and December 31, 2017, respectively. The Company recorded a bad debt recovery of $1,000 and bad debt expense of $2,000 for the three months ended September 30, 2018 and 2017, respectively. The Company recorded a bad debt expense of $44,000 and $4,000 for the nine months ended September 30, 2018 and 2017, respectively. The Company does not have any off-balance sheet credit exposure related to its customers.
Benefit for Income Taxes	Benefit for Income Taxes
Comprehensive Loss	Comprehensive Loss
Financial Instruments	Financial Instruments
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the FASB issued new guidance on the recognition of revenue (“ASC 606”). ASC 606 states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. In March and April 2016, the FASB issued further revenue recognition guidance amending principal vs. agent considerations regarding whether an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. 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. Effective January 1, 2018, the Company adopted ASC 606 using the modified retrospective method for all of its contracts. Following the adoption of ASC 606, the Company continues to recognize revenue at a point-in-time when control of goods transfers to the customer. This is consistent with the Company’s previous revenue recognition accounting policy under which the Company recognized revenue when title and risk of loss pass to the customer and collectability was reasonably assured. In addition, ASU 606 did not impact the Company's presentation of revenue on a gross or net basis. The Company recognizes revenue primarily from sales of ethanol and its related co-products. The Company has nine ethanol production facilities from which it produces and sells ethanol to its customers through Kinergy. Kinergy enters into sales contracts with ethanol customers under exclusive intercompany ethanol sales agreements with each of the Company’s nine ethanol plants. Kinergy also acts as a principal when it purchases third party ethanol which it resells to its customers. Finally, Kinergy has exclusive sales agreements with other third-party owned ethanol plants under which it sells their ethanol production for a fee plus the costs to deliver the ethanol to Kinergy’s customers. These sales are referred to as third-party agent sales. Revenue from these third-party agent sales is recorded on a net basis, with Kinergy recognizing its predetermined fees and any associated delivery costs. The Company has nine ethanol production facilities from which it produces and sells co-products to its customers through PAP. PAP enters into sales contracts with co-product customers under exclusive intercompany co-product sales agreements with each of the Company’s nine ethanol plants. The Company recognizes revenue from sales of ethanol and co-products at the point in time when the customer obtains control of such products, which typically occurs upon delivery depending on the terms of the underlying contracts. In some instances, the Company enters into contracts with customers that contain multiple performance obligations to deliver volumes of ethanol or co-products over a contractual period of less than 12 months. The Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices and recognizes the related revenue as control of each individual product is transferred to the customer in satisfaction of the corresponding performance obligations. When the Company is the agent, the supplier controls the products before they are transferred to the customer because the supplier is primarily responsible for fulfilling the promise to provide the product, has inventory risk before the product has been transferred to a customer and has discretion in establishing the price for the product. When the Company is the principal, the Company controls the products before they are transferred to the customer because the Company is primarily responsible for fulfilling the promise to provide the products, has inventory risk before the product has been transferred to a customer and has discretion in establishing the price for the product. The Company accounts for shipping and handling costs relating to contracts with customers as costs to fulfill its promise to transfer its products. Accordingly, the costs are classified as a component of cost of goods sold. See Note 2 for the Company’s revenue by type of contracts.
Estimates and Assumptions	Estimates and Assumptions

SEGMENTS (Tables)

SEGMENTS (Tables)	9 Months Ended
	Sep. 30, 2018
Segment Reporting [Abstract]
Schedule of financial data for operating segments	The following tables set forth certain financial data for the Company’s operating segments (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net Sales Production, recorded as gross: Ethanol/alcohol sales $ 216,788 $ 236,326 $ 670,304 $ 618,438 Co-product sales 73,259 68,487 226,307 185,574 Intersegment sales 518 639 1,531 1,138 Total production sales 290,565 305,452 898,142 805,150 Marketing: Ethanol/alcohol sales, gross $ 79,877 $ 140,208 $ 282,940 $ 431,733 Ethanol/alcohol sales, net 483 421 1,405 1,239 Intersegment sales 2,201 2,334 6,757 6,135 Total marketing sales 82,561 142,963 291,102 439,107 Intersegment eliminations (2,719 ) (2,973 ) (8,288 ) (7,273 ) Net sales as reported $ 370,407 $ 445,442 $ 1,180,956 $ 1,236,984 Cost of goods sold Production $ 295,574 $ 294,047 $ 914,638 $ 799,203 Marketing and distribution 73,784 142,303 268,917 437,109 Intersegment eliminations (2,719 ) (2,973 ) (8,456 ) (7,273 ) Cost of goods sold as reported $ 366,639 $ 433,377 $ 1,175,099 $ 1,229,039 Income (loss) before benefit for income taxes Production $ (15,571 ) $ 2,638 $ (45,355 ) $ (15,981 ) Marketing and distribution 7,416 (757 ) 18,095 (2,043 ) Corporate activities (1,149 ) (2,422 ) (6,708 ) (5,940 ) $ (9,304 ) $ (541 ) $ (33,968 ) $ (23,964 ) Depreciation and amortization: Production $ 10,040 $ 9,841 $ 30,017 $ 27,703 Corporate activities 177 237 618 783 $ 10,217 $ 10,078 $ 30,635 $ 28,486 Interest expense: Production $ 1,692 $ 1,850 $ 5,416 $ 4,061 Marketing and distribution 344 342 1,042 953 Corporate activities 2,157 1,634 6,417 4,143 $ 4,193 $ 3,826 $ 12,875 $ 9,157
Schedule of assets by operating segments	The following table sets forth the Company’s total assets by operating segment (in thousands): September 30, 2018 December 31, 2017 Total assets: Production $ 545,360 $ 583,696 Marketing and distribution 139,165 127,242 Corporate assets 4,022 9,358 $ 688,547 $ 720,296

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
	Sep. 30, 2018
Inventory Disclosure [Abstract]
Schedule of inventories	Inventory is net of valuation adjustments of $1,513,000 and $2,678,000 as of September 30, 2018 and December 31, 2017, respectively. Inventory balances consisted of the following (in thousands): September 30, 2018 December 31, 2017 Finished goods $ 33,525 $ 35,652 Work in progress 7,753 8,807 Raw materials 7,260 7,601 Low-carbon and RIN credits 4,585 7,952 Other 1,643 1,538 Total $ 54,766 $ 61,550

DERIVATIVES (Tables)

DERIVATIVES (Tables)	9 Months Ended
	Sep. 30, 2018
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 September 30, 2018 Assets Liabilities Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash collateral balance Other current assets $ 7,752 Commodity contracts Derivative instruments $ 1,954 Derivative instruments $ 6,385 As of December 31, 2017 Assets Liabilities Type of Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash collateral balance Other current assets $ 3,813 Commodity contracts Derivative instruments $ 998 Derivative instruments $ 2,307
Schedule of recognized gains (losses) for 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) Three Months Ended September 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ 916 $ (1,576 ) Unrealized Gains (Losses) Three Months Ended September 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (1,907 ) $ 1,093 Realized Losses Nine Months Ended September 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (1,241 ) $ (4,495 ) Unrealized Gains (Losses) Nine Months Ended September 30, Type of Instrument Statements of Operations Location 2018 2017 Commodity contracts Cost of goods sold $ (3,121 ) $ 3,659

DEBT (Tables)

DEBT (Tables)	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Schedule of long term debt	Long-term borrowings are summarized as follows (in thousands): September 30, 2018 December 31, 2017 Kinergy line of credit $ 59,357 $ 49,477 Pekin term loan 46,500 53,500 Pekin revolving loan 30,000 32,000 ICP term loan 18,000 22,500 ICP revolving loan 14,000 18,000 Parent notes payable 68,948 68,948 236,805 244,425 Less unamortized debt discount (870 ) (1,409 ) Less unamortized debt financing costs (1,516 ) (1,925 ) Less short-term portion (20,000 ) (20,000 ) Long-term debt $ 214,419 $ 221,091

PENSION AND RETIREMENT BENEFI_2

PENSION AND RETIREMENT BENEFIT PLANS (Tables)	9 Months Ended
	Sep. 30, 2018
Pension And Retirement Benefit Plans
Schedule of pension plans	The Company’s net periodic Retirement Plan costs are as follows (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Interest cost $ 174 $ 98 $ 522 $ 293 Service cost 106 188 318 563 Expected return on plan assets (204 ) (169 ) (612 ) (506 ) Net periodic expense $ 76 $ 117 $ 228 $ 350
Schedule of postretirement plan	The Company’s net periodic Postretirement Plan costs are as follows (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Interest cost $ 46 $ 21 $ 138 $ 63 Service cost 2 50 6 150 Amortization of (gain) loss 33 33 99 99 Net periodic expense $ 81 $ 104 $ 243 $ 312

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	9 Months Ended
	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Schedule of recurring fair value measurements by Level	The following table summarizes recurring fair value measurements by level at September 30, 2018 (in thousands): Fair Value Level 1 Level 2 Level 3 Assets: Derivative instruments $ 1,954 $ 1,954 $ — $ — Liabilities: Derivative instruments $ (6,385 ) $ (6,385 ) $ — $ —

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	9 Months Ended
	Sep. 30, 2018
Earnings Per Share [Abstract]
Schedule of computation of basic and diluted earnings per share	The following tables compute basic and diluted earnings per share (in thousands, except per share data): Three Months Ended September 30, 2018 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (7,514 ) Less: Preferred stock dividends (319 ) Basic and diluted loss per share: Loss available to common stockholders $ (7,833 ) 43,299 $ (0.18 ) Three Months Ended September 30, 2017 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (202 ) Less: Preferred stock dividends (319 ) Basic and diluted loss per share: Loss available to common stockholders $ (521 ) 42,475 $ (0.01 ) Nine Months Ended September 30, 2018 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (28,263 ) Less: Preferred stock dividends (946 ) Basic and diluted loss per share: Loss available to common stockholders $ (29,209 ) 43,171 $ (0.68 ) Nine Months Ended September 30, 2017 Loss Shares Denominator Per-Share Amount Net loss attributed to Pacific Ethanol, Inc. $ (21,679 ) Less: Preferred stock dividends (946 ) Basic and diluted loss per share: Loss available to common stockholders $ (22,625 ) 42,358 $ (0.53 )

ORGANIZATION AND BASIS OF PRE_3

ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Ethanol production capacity per year			<font style="font: 10pt Times New Roman, Times, Serif">605 million gallons per year </font></p>" id="sjs-D4">&lt;p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0">&lt;font style="font: 10pt Times New Roman, Times, Serif">605 million gallons per year&#160;&lt;/font>&lt;/p>
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	$ 52,693		$ 52,693		$ 64,501
Bad debt recovery	1	$ 1
Allowance for doubtful accounts	11		11		$ 19
Bad debt expense	2	2	44	$ 4
Benefit for income taxes			$ (563)

SEGMENTS (Details)

SEGMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net Sales	$ 370,407	$ 445,442	$ 1,180,956	$ 1,236,984
Cost of goods sold	366,639	433,377	1,175,099	1,229,039
Income (loss) before provision for income taxes	(9,304)	(541)	(33,968)	(23,964)
Depreciation and amortization	10,217	10,078	30,635	28,486
Interest expense	4,193	3,826	12,875	9,157
Intersubsegment Eliminations [Member]
Net Sales	(2,719)	(2,973)	(8,288)	(7,273)
Cost of goods sold	(2,719)	(2,973)	(8,456)	(7,273)
Ethanol Production [Member]
Net Sales	290,565	305,452	898,142	805,150
Cost of goods sold	295,574	294,047	914,638	799,203
Income (loss) before provision for income taxes	(15,571)	2,638	(45,355)	(15,981)
Depreciation and amortization	10,040	9,841	30,017	27,703
Interest expense	1,692	1,850	5,416	4,061
Ethanol Production [Member] | Ethanol alcohol [Member]
Net Sales	216,788	236,326	670,304	618,438
Ethanol Production [Member] | Co-product sales [Member]
Net Sales	73,259	68,487	226,307	185,574
Ethanol Production [Member] | Intersegment Sales [Member]
Net Sales	518	639	1,531	1,138
Marketing [Member]
Net Sales	82,561	142,963	291,102	439,107
Marketing [Member] | Intersegment Sales [Member]
Net Sales	2,201	2,334	6,757	6,135
Marketing [Member] | Ethanol alcohol Sales Member]
Net Sales	79,877	140,208	282,940	431,733
Marketing [Member] | Ethanol alcohol Sales Net Member]
Net Sales	483	421	1,405	1,239
Marketing [Member] | Net Ethanol Alcohol Sales [Member]
Net Sales				1,239
Corporate Activities [Member]
Income (loss) before provision for income taxes	(1,149)	(2,422)	(6,708)	(5,940)
Depreciation and amortization	177	237	618	783
Interest expense	2,157	1,634	6,417	4,143
Marketing and Distribution [Member]
Cost of goods sold	73,784	142,303	268,917	437,109
Income (loss) before provision for income taxes	7,416	(757)	18,095	(2,043)
Interest expense	$ 344	$ 342	$ 1,042	$ 953

SEGMENTS (Details 1)

SEGMENTS (Details 1) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Total Assets	$ 688,547	$ 720,296	[1]
Ethanol Production [Member]
Total Assets	545,360	583,696
Marketing and Distribution [Member]
Total Assets	139,165	127,242
Corporate Assets [Member]
Total Assets	$ 4,022	$ 9,358
[1]	Amounts derived from the audited consolidated financial statements for the year ended December 31, 2017.

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Finished goods	$ 33,525	$ 35,652
Work in progress	7,753	8,807
Raw materials	7,260	7,601
Low-carbon and RIN credits	4,585	7,952
Other	1,643	1,538
Total	$ 54,766	$ 61,550	[1]
[1]	Amounts derived from the audited consolidated financial statements for the year ended December 31, 2017.

INVENTORIES (Details Narrative)

INVENTORIES (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Inventory, net of valuation adjustments	$ 1,513	$ 2,678

DERIVATIVES (Details)

DERIVATIVES (Details) - Non Designated Derivative Instruments [Member] - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Cash Collateral Balance [Member]
Derivative assets	$ 7,752	$ 3,813
Commodity Contracts [Member]
Derivative assets	1,954	998
Derivative liabilities	$ 6,385	$ 2,307

DERIVATIVES (Details 1)

DERIVATIVES (Details 1) - Non Designated Derivative Instruments [Member] - Commodity Contracts [Member] - Cost of goods sold [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Realized Gains (Losses)	$ 916	$ (1,576)	$ (1,241)	$ (4,495)
Unrealized Gains (Losses)	$ (1,907)	$ 1,093	$ (3,121)	$ 3,659

DERIVATIVES (Details Narrative)

DERIVATIVES (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Recognized losses due to change in fair value	$ 991	$ 483	$ 4,362	$ 836

DEBT (Details)

DEBT (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Long-term borrowings are summarized as follows
Total debt	$ 236,805	$ 244,425
Less unamortized debt discount	(870)	(1,409)
Less unamortized debt financing costs	(1,516)	(1,925)
Less short-term portion	(20,000)	(20,000)	[1]
Long-term debt	214,419	221,091	[1]
Term Loan [Member] | Illinois Corn Processing, LLC [Member]
Long-term borrowings are summarized as follows
Term debt	18,000	22,500
Parent Notes Payable [Member]
Long-term borrowings are summarized as follows
Notes payable	68,948	68,948
Revolving Credit Facility [Member] | Illinois Corn Processing, LLC [Member]
Long-term borrowings are summarized as follows
Line of credit	14,000	18,000
Kinergy Marketing LLC [Member] | Line of Credit [Member]
Long-term borrowings are summarized as follows
Line of credit	59,357	49,477
Pacific Ethanol Pekin, Inc [Member] | Term Loan [Member]
Long-term borrowings are summarized as follows
Term debt	46,500	53,500
Pacific Ethanol Pekin, Inc [Member] | Revolving Credit Facility [Member]
Long-term borrowings are summarized as follows
Line of credit	$ 30,000	$ 32,000
[1]	Amounts derived from the audited consolidated financial statements for the year ended December 31, 2017.

DEBT (Details Narrative)

DEBT (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017	[1]
Net assets	$ 688,547	$ 720,296
Pacific Ethanol Pekin, Inc [Member] | Line of Credit [Member]
Unused borrowing capacity	$ 2,000
Pacific Ethanol Pekin, Inc [Member] | Term Loan [Member]
Description of debt covenant	<font style="font: 10pt Times New Roman, Times, Serif">Company’s subsidiaries, amended its term loan facility by reducing the amount of working capital it is required to maintain to not less than $13.0 million from March 31, 2018 through November 30, 2018 and not less than $16.0 million from December 1, 2018 and continuing at all times thereafter. </font></p>" id="sjs-B7">&lt;p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0">&lt;font style="font: 10pt Times New Roman, Times, Serif">Company&#8217;s subsidiaries, amended its term loan facility by reducing the amount of working capital it is required to maintain to not less than $13.0 million from March 31, 2018 through November 30, 2018 and not less than $16.0 million from December 1, 2018 and continuing at all times thereafter.&#160;&lt;/font>&lt;/p>
Debt face amount	$ 3,500
Debt maturity date	May 31, 2018
Pacific Aurora Line of Credit [Member] | Line of Credit [Member]
Deferred financing fees	$ 300
Net assets	207,200
Kinergy Marketing LLC [Member] | Line of Credit [Member]
Unused borrowing capacity	5,233
ICP [Member] | Line of Credit [Member]
Unused borrowing capacity	$ 4,000
[1]	Amounts derived from the audited consolidated financial statements for the year ended December 31, 2017.

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2016
Proceeds from legal settlement	$ 3,900
Gain on litigation settlement	$ 3,600
Property Tax Assessment [Member]
Maximum amount of finance to be amortized under property tax assessments		$ 10,000
Project amortized period	20 years
Project costs	$ 9,600
Property tax payments	$ 900
Interest rate on outstanding balance of assessment	5.60%
Ethanol Purchase Contracts [Member]
Indexed-price purchase contracts	<font style="font: 10pt Times New Roman, Times, Serif">9,329,000 gallons</font></p>" id="sjs-B12">&lt;p style="margin: 0">&lt;font style="font: 10pt Times New Roman, Times, Serif">9,329,000 gallons&lt;/font>&lt;/p>
Fixed-price purchase contracts value	$ 5,614
Ethanol Purchase Contracts [Member] | Suppliers [Member]
Fixed-price purchase contracts value	$ 13,038
Co-products Sales Contracts [Member]
Open ethanol indexed-price sales contracts	<font style="font: 10pt Times New Roman, Times, Serif">736,000 tons</font></p>" id="sjs-B17">&lt;p style="margin: 0">&lt;font style="font: 10pt Times New Roman, Times, Serif">736,000 tons&lt;/font>&lt;/p>
Open fixed-price sales contracts valued	$ 53,365
Ethanol Sales Contracts [Member]
Open ethanol indexed-price sales contracts	<font style="font: 10pt Times New Roman, Times, Serif">199,732,000 gallons</font></p>" id="sjs-B20">&lt;p style="margin: 0">&lt;font style="font: 10pt Times New Roman, Times, Serif">199,732,000 gallons&lt;/font>&lt;/p>
Open fixed-price sales contracts valued	$ 74,502

PENSION AND RETIREMENT BENEFI_3

PENSION AND RETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Retirement Plan [Member]
Components of net periodic benefit costs are as follows:
Interest cost	$ 174	$ 98	$ 522	$ 293
Service cost	106	188	318	563
Expected return on plan assets	(204)	(169)	(612)	506
Net periodic benefit cost	76	117	228	350
Postretirement Plan [Member]
Components of net periodic benefit costs are as follows:
Interest cost	46	21	138	63
Service cost	2	50	6	150
Expected return on plan assets	33	33	99	99
Net periodic benefit cost	$ 81	$ 104	$ 243	$ 312

PENSION AND RETIREMENT BENEFI_4

PENSION AND RETIREMENT BENEFIT PLANS (Details Narrative) $ in Thousands	Dec. 31, 2017USD ($)
Postretirement Plan [Member]
Accumulated projected benefit obligation	$ 5,600
Retirement Plan [Member]
Accumulated projected benefit obligation	19,700
Fair value of plan assets	14,000
Underfunded amount	$ 5,700

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - Derivative Financial Instrument [Member] $ in Thousands	Sep. 30, 2018USD ($)
Assets:
Assets	$ 1,954
Liabilities:
Liabilities	(6,385)
Level 1 [Member]
Assets:
Assets	1,954
Liabilities:
Liabilities	(6,385)
Level 2 [Member]
Assets:
Assets
Liabilities:
Liabilities
Level 3 [Member]
Assets:
Assets
Liabilities:
Liabilities

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2018	Sep. 30, 2017
Loss Numerator
Net loss attributed to Pacific Ethanol, Inc.	$ (7,514)			$ (202)			$ (28,263)	$ (21,679)
Less: Preferred stock dividends	(319)	$ (315)	$ (312)	(319)	$ (315)	$ (312)	(946)	(946)
Basic and diluted loss per share:
Net loss available to common stockholders	$ (7,833)			$ (521)			$ (29,209)	$ (22,625)
Shares Denominator
Shares available to common stockholders - basic and diluted	43,299			42,475			43,171	42,358
Per-Share Amount
Per-Share amount - basic and diluted	$ (0.18)			$ (0.01)			$ (0.68)	$ (0.53)

EARNINGS PER SHARE (Details Nar

EARNINGS PER SHARE (Details Narrative) - shares	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018
Earnings Per Share
Potentially dilutive shares from convertible securities outstanding	425,000	635,000