1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Concentrations of Credit Risk Major Customers

The Company sells fuel-grade ethanol to gasoline refining and distribution companies. The Company had sales of ethanol with customers representing 10% or more of total net sales as follows.

	Years Ended December 31,
	2012		2011
Customer A		21%		22%
Customer B		16%		9%
Customer C		12%		7%

Purchases from external customers

	Years Ended December 31,
	2012		2011
Supplier A		40%		39%
Supplier B		14%		13%
Supplier C		*		12%
____________ *Less than 10%

Inventories

Inventories consisted primarily of bulk ethanol and unleaded fuel, and are valued at the lower-of-cost-or-market, with cost determined on a first-in, first-out basis. Inventory balances consisted of the following (in thousands):

	December 31,
	2012		2011
Finished goods	$	10,230	$	9,429
Work in progress		3,846		4,284
Raw materials		1,363		1,334
Other		805		1,084
Total	$	16,244	$	16,131

Property and Equipment Depreciation

Property and equipment are stated at cost. 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, Diluted, by Common Class, Including Two Class Method

The following tables compute basic and diluted earnings per share (in thousands, except per share data):

		Year Ended December 31, 2012
		Loss Numerator		Shares Denominator		Per-Share Amount
Net loss attributed to Pacific Ethanol, Inc.	$	(19,057	)
Preferred stock dividends		(1,268	)
Basic and diluted loss per share:
Loss available to common stockholders	$	(20,325	)	108,358	$	(0.19	)

		Year Ended December 31, 2011
		Income Numerator		Shares Denominator		Per-Share Amount
Net income attributed to Pacific Ethanol, Inc.	$	3,074
Preferred stock dividends		(1,265	)
Basic income per share:
Income available to common stockholders	$	1,809		33,733	$	0.05
Warrants		–		194
Options		–		57
Diluted income per share:
Income available to common stockholders	$	1,809		33,984	$	0.05