10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Mark One)

x AMENDMENT NO. 1 TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2015

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from                  to               

Commission file number: 000-21467

PACIFIC ETHANOL, INC.

(Exact name of registrant as specified in its charter)

Delaware	41-2170618
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

400 Capitol Mall, Suite 2060, Sacramento, California	95814
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (916) 403-2123

Securities registered pursuant to Section 12(b) of the Act:

Title of Class	Name of Exchange on Which Registered
Common Stock, $0.001 par value	The Nasdaq Stock Market LLC (Nasdaq Capital Market)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes x No ¨

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨	Accelerated filer x
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

The aggregate market value of the voting common equity held by nonaffiliates of the registrant computed by reference to the closing sale price of such stock, was approximately $247.2 million as of June 30, 2015, the last business day of the registrant’s most recently completed second fiscal quarter. The registrant had no non-voting common equity as of June 30, 2015.

As of March 14, 2016, there were 38,982,931 shares of the registrant’s common stock $0.001 par value per share, and 3,540,132 shares of the registrant’s non-voting common stock $0.001 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None.

EXPLANATORY NOTE

This Amendment No. 1 (this “Amendment No. 1”) on Form 10-K/A amends the Annual Report on Form 10-K of Pacific Ethanol, Inc. (“we,” “us,” or “our”) for the year ended December 31, 2015 filed with the Securities and Exchange Commission on March 15, 2016 (the “Original Report”).

The purpose of this Amendment No. 1 is solely to furnish the Interactive Data files as Exhibit 101, in accordance with Rule 405 of Regulation S-T, which were inadvertently excluded from the Original Report. No other changes are or have been made to the Original Report.

This Amendment No. 1 together with the Original Report constitutes our Annual Report on Form 10-K for the year ended December 31, 2015.

2

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)(1) Financial Statements

See Item 8 of the registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2016.

(a)(2) Financial Statement Schedules

None.

(a)(3) Exhibits

Reference is made to the exhibits listed on the Index to Exhibits.

3

		Where Located
Exhibit Number	Description*	Form	File Number	Exhibit Number	Filing Date	Filed Herewith
2.1	Form of Agreement for Purchase and Sale of Units in New PE Holdco LLC dated December 6, 2013 between the Registrant and each of CIFC Funding 2007-III Asset-V LLC and CIFC Funding 2007-IV Asset-IV LLC	10-K	000-21467	2.13	03/31/2014
2.2	Agreement for Purchase and Sale of Units in New PE Holdco LLC dated December 10, 2013 between the Registrant and Armory Fund L.P.	10-K	000-21467	2.14	03/31/2014
2.3	Form of Agreement for Purchase and Sale of Units in New PE Holdco LLC dated December 14, 2013 between the Registrant and each of Mariner Partners, L.P. and Dee River Holdings, Inc.	10-K	000-21467	2.15	03/31/2014
2.4	Agreement and Plan of Merger dated as of December 30, 2014 by and among Pacific Ethanol, Inc., AVR Merger Sub, Inc. and Aventine Renewable Energy Holdings, Inc.	8-K	000-21467	2.1	12/31/2014
2.5	Amendment No. 1 to Agreement and Plan of Merger dated as of March 31, 2015 by and among Pacific Ethanol, Inc., AVR Merger Sub, Inc. and Aventine Renewable Energy Holdings, Inc.	8-K	000-21467	2.1	04/02/2015
3.1	Certificate of Incorporation	10-Q	000-21467	3.1	11/06/2015
3.2	Certificate of Designations, Powers, Preferences and Rights of the Series A Cumulative Redeemable Convertible Preferred Stock	10-Q	000-21467	3.2	11/06/2015
3.3	Certificate of Designations, Powers, Preferences and Rights of the Series B Cumulative Convertible Preferred Stock	10-Q	000-21467	3.3	11/06/2015
3.4	Certificate of Amendment to Certificate of Incorporation dated June 3, 2010	10-Q	000-21467	3.4	11/06/2015
3.5	Certificate of Amendment to Certificate of Incorporation effective June 8, 2011	10-Q	000-21467	3.5	11/06/2015
3.6	Certificate of Amendment to Certificate of Incorporation effective May 14, 2013	10-Q	000-21467	3.6	11/06/2015
3.7	Certificate of Amendment to Certificate of Incorporation effective July 1, 2015	10-Q	000-21467	3.7	11/06/2015
3.8	Amended and Restated Bylaws	10-Q	000-21467	3.1	11/12/2014
10.1	2006 Stock Incentive Plan, as amended#	S-8	333-196876	4.1	06/18/2014
10.2	Form of Employee Restricted Stock Agreement#	8-K	000-21467	10.2	10/10/2006

4

		Where Located
Exhibit Number	Description*	Form	File Number	Exhibit Number	Filing Date	Filed Herewith
10.3	Form of Non-Employee Director Restricted Stock Agreement#	8-K	000-21467	10.3	10/10/2006
10.4	Amended and Restated Executive Employment Agreement dated December 11, 2007 between the Registrant and Neil M. Koehler#	8-K	000-21467	10.3	12/17/2007
10.5	Amended and Restated Executive Employment Agreement dated December 11, 2007 between the Registrant and Christopher W. Wright#	8-K	000-21467	10.5	12/17/2007
10.6	Amended and Restated Executive Employment Agreement dated November 25, 2009 between the Registrant and Bryon T. McGregor#	8-K	000-21467	10.1	11/27/2009
10.7	Executive Employment Agreement dated January 6, 2013 between the Registrant and Michael D. Kandris#	8-K	000-21467	10.1	01/10/2013
10.8	Amended and Restated Executive Employment Agreement dated October 1, 2012 between the Registrant and Paul P. Kohler#	10-K	000-21467	10.11	03/31/2014
10.9	Employment Agreement dated November 12, 2012 between the Registrant and James R. Sneed#	10-K	000-21467	10.12	03/31/2014
10.10	Pacific Ethanol, Inc. 2015 Short-Term Incentive Plan Description#	10-K	000-21467	10.10	03/15/2016
10.11	Form of Indemnity Agreement between the Registrant and each of its Executive Officers and Directors#	10-K	000-21467	10.46	03/31/2010
10.12	Warrant dated March 27, 2008 issued by the Registrant to Lyles United, LLC	8-K	000-21467	10.3	03/27/2008
10.13	Registration Rights Agreement dated March 27, 2008 between the Registrant and Lyles United, LLC	8-K	000-21467	10.4	03/27/2008
10.14	Letter Agreement dated March 27, 2008 between the Registrant and Lyles United, LLC	8-K	000-21467	10.5	03/27/2008
10.15	Letter Agreement dated May 22, 2008 among the Registrant, Neil M. Koehler, Bill Jones, Paul P. Koehler and Thomas D. Koehler#	8-K	000-21467	10.3	05/23/2008
10.16	Form of Warrant dated May 23, 2008 issued by the Registrant	8-K	000-21467	10.2	05/23/2008

5

		Where Located
Exhibit Number	Description*	Form	File Number	Exhibit Number	Filing Date	Filed Herewith
10.17	Amended and Restated Loan and Security Agreement dated May 4, 2012 among Kinergy Marketing LLC, Pacific Ag. Products, LLC, the parties thereto from time to time as Lenders, Wells Fargo Bank, National Association and Wells Fargo Capital Finance, LLC	8-K	000-21467	10.1	05/08/2012
10.18	Amendment No. 1 to Amended and Restated Loan and Security Agreement dated December 4, 2013 among Kinergy Marketing LLC, Pacific Ag. Products, LLC and Wells Fargo Capital Finance, LLC	8-K	000-21467	10.3	07/06/2015
10.19	Amendment No. 2 to Amended and Restated Loan and Security Agreement dated December 29, 2014 among Kinergy Marketing LLC, Pacific Ag. Products, LLC and Wells Fargo Capital Finance, LLC	8-K	000-21467	10.2	07/06/2015
10.20	Amendment No. 3 to Amended and Restated Loan and Security Agreement dated July 1, 2015 among Kinergy Marketing LLC, Pacific Ag. Products, LLC and Wells Fargo Capital Finance, LLC	8-K	000-21467	10.1	07/06/2015
10.21	Amendment No. 4 to Amended and Restated Loan and Security Agreement dated December 11, 2015 among Kinergy Marketing LLC, Pacific Ag. Products, LLC and Wells Fargo Capital Finance, LLC	10-K	000-21467	10.21	03/15/2016
10.22	Amendment No. 5 to Amended and Restated Loan and Security Agreement dated December 28, 2015 among Kinergy Marketing LLC, Pacific Ag. Products, LLC and Wells Fargo Capital Finance, LLC	10-K	000-21467	10.22	03/15/2016
10.23	Amended and Restated Guarantee dated May 4, 2012 by the Registrant in favor of Wells Fargo Capital Finance, LLC for and on behalf of Lenders	8-K	000-21467	10.2	05/08/2012
10.24	Form of Warrants dated December 13, 2011 issued by the Registrant	8-K/A	000-21467	10.2	12/12/2011
10.25	Form of Series I Warrants issued by the Registrant on July 3, 2012	8-K	000-21467	10.1	06/28/2012

6

		Where Located
Exhibit Number	Description*	Form	File Number	Exhibit Number	Filing Date	Filed Herewith
10.26	Second Amended and Restated Credit Agreement dated October 29, 2012 among Pacific Ethanol Holding Co. LLC, Pacific Ethanol Madera LLC, Pacific Ethanol Columbia , LLC, Pacific Ethanol Stockton LLC, Pacific Ethanol Magic Valley, LLC, the Lenders referred to therein, Wells Fargo Bank, N.A. and Amarillo National Bank	10-Q	000-21467	10.6	11/14/2012
10.27	First Amendment to Second Amended and Restated Credit Agreement dated January 4, 2013 among Pacific Ethanol Holding Co. LLC, Pacific Ethanol Madera LLC, Pacific Ethanol Columbia , LLC, Pacific Ethanol Stockton LLC, Pacific Ethanol Magic Valley, LLC, the Lenders referred to therein, Wells Fargo Bank, N.A. and the other parties identified therein	S-1	333-189713	10.44	06/28/2013
10.28	Second Amendment to Second Amended and Restated Credit Agreement dated March 28, 2013 among Pacific Ethanol Holding Co. LLC, Pacific Ethanol Madera LLC, Pacific Ethanol Columbia , LLC, Pacific Ethanol Stockton LLC, Pacific Ethanol Magic Valley, LLC, the Lenders referred to therein, Wells Fargo Bank, N.A. and the other parties identified therein	10-K	000-21467	10.28	03/15/2016
10.29	Third Amendment to Second Amended and Restated Credit Agreement dated April 1, 2014 among Pacific Ethanol Holding Co. LLC, Pacific Ethanol Madera LLC, Pacific Ethanol Columbia , LLC, Pacific Ethanol Stockton LLC, Pacific Ethanol Magic Valley, LLC, the Lenders referred to therein, Wells Fargo Bank, N.A. and the other parties identified therein	8-K	000-21467	10.2	04/01/2014
10.30	Fourth Amendment to Second Amended and Restated Credit Agreement dated January 30, 2016 among Pacific Ethanol Holding Co. LLC, Pacific Ethanol Madera LLC, Pacific Ethanol Columbia , LLC, Pacific Ethanol Stockton LLC, Pacific Ethanol Magic Valley, LLC, PE Op Co., the Lenders referred to therein, Wells Fargo Bank, N.A. and the other parties identified therein	10-K	000-21467	10.30	03/15/2016

7

		Where Located
Exhibit Number	Description*	Form	File Number	Exhibit Number	Filing Date	Filed Herewith
10.31	Fifth Amendment to Second Amended and Restated Credit Agreement dated February 26, 2016 among Pacific Ethanol Holding Co. LLC, Pacific Ethanol Madera LLC, Pacific Ethanol Columbia , LLC, Pacific Ethanol Stockton LLC, Pacific Ethanol Magic Valley, LLC, PE Op Co., the Lenders referred to therein, Wells Fargo Bank, N.A. and the other parties identified therein	10-K	000-21467	10.31	03/15/2016
10.32	Lender Assignment Agreement dated June 9, 2014 between Pacific Ethanol, Inc. and CWD OC 522 Master Fund, Ltd.	8-K	000-21467	10.1	06/10/2014
10.33	Lender Assignment Agreement dated June 9, 2014 between Pacific Ethanol, Inc. and Candlewood Special Situations Master Fund, Ltd.	8-K	000-21467	10.2	06/10/2014
10.34	Agreement for Purchase and Sale of Loans and Assignment of Commitment dated June 9, 2014 between Pacific Ethanol, Inc. and Candlewood Credit Value Master Fund II, L.P.	8-K	000-21467	10.3	06/10/2014
10.35	Letter Agreement dated May 23, 2014 among the Registrant and the holders of the Registrant’s Series B Cumulative Convertible Preferred Stock	8-K	000-21467	10.1	05/28/2014
10.36	Stockholders Agreement dated December 30, 2014 between Pacific Ethanol, Inc. and the parties identified therein	8-K	000-21467	10.1	12/31/2014
10.37	Stockholders Agreement dated December 30, 2014 between Pacific Ethanol, Inc. and Credit Suisse Securities (USA) LLC	8-K	000-21467	10.2	12/31/2014
10.38	Amended and Restated Senior Secured Term Loan Credit Agreement dated September 24, 2012 among Aventine Renewable Energy Holdings, Inc., the lenders from time to time party thereto, and Citibank, N.A.	S-4	333-201879	10.1	02/04/2015
10.39	Incremental Amendment dated June 18, 2013 among Aventine Renewable Energy Holdings, Inc., the lenders identified therein, and Citibank, N.A.	S-4	333-201879	10.2	02/04/2015
10.40	Loan and Security Agreement dated September 17, 2014 among Aventine Renewable Energy, Inc., the lenders from time to time party thereto, Midcap Financial, LLC and Alostar Bank of Commerce	S-4	333-201879	10.3	02/04/2015

8

		Where Located
Exhibit Number	Description*	Form	File Number	Exhibit Number	Filing Date	Filed Herewith
14.1	Code of Ethics	8-K	000-21467	14.1	07/06/2015
21.1	Subsidiaries of the Registrant	10-K	000-21467	21.1	03/15/2016
23.1	Consent of Independent Registered Public Accounting Firm	10-K	000-21467	23.1	03/15/2016
23.2	Consent of Independent Registered Public Accounting Firm	10-K	000-21467	23.2	03/15/2016
31.1	Certification Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	10-K	000-21467	31.1	03/15/2016
31.2	Certification Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	10-K	000-21467	31.2	03/15/2016
31.3	Certification Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
31.4	Certification Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	10-K	000-21467	32.1	03/15/2016
101.INS	XBRL Instance Document					X
101.SCH	XBRL Taxonomy Extension Schema					X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase					X
101.DEF	XBRL Taxonomy Extension Definition Linkbase					X
101.LAB	XBRL Taxonomy Extension Label Linkbase					X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase					X

_______________

(#)

A contract, compensatory plan or arrangement to which a director or executive officer is a party or in which one or more directors or executive officers are eligible to participate.

(*)

Certain of the agreements filed as exhibits contain representations and warranties made by the parties thereto. The assertions embodied in such representations and warranties are not necessarily assertions of fact, but a mechanism for the parties to allocate risk. Accordingly, investors should not rely on the representations and warranties as characterizations of the actual state of facts or for any other purpose at the time they were made or otherwise.

9

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 15th day of March, 2016.

PACIFIC ETHANOL, INC.

/s/ NEIL M. KOEHLER

Neil M. Koehler

President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ WILLIAM L. JONES William L. Jones	Chairman of the Board and Director	March 15, 2016
/s/ NEIL M. KOEHLER Neil M. Koehler	President, Chief Executive Officer (Principal Executive Officer) and Director	March 15, 2016
/s/ BRYON T. MCGREGOR Bryon T. McGregor	Chief Financial Officer (Principal Financial and Accounting Officer)	March 15, 2016
/s/ MICHAEL D. KANDRIS Michael D. Kandris	Chief Operating Officer and Director	March 15, 2016
/s/ TERRY L. STONE Terry L. Stone	Director	March 15, 2016
/s/ JOHN L. PRINCE John L. Prince	Director	March 15, 2016
/s/ DOUGLAS L. KIETA Douglas L. Kieta	Director	March 15, 2016
/s/ LARRY D. LAYNE Larry D. Layne	Director	March 15, 2016

10

EXHIBITS FILED WITH THIS REPORT

Exhibit Number	Description
31.3	Certification Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.4	Certification Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

11

EX-31.3

EXHIBIT 31.3

CERTIFICATION

I, Neil M. Koehler, certify that:

1. I have reviewed this Amendment No. 1 to Annual Report on Form 10-K/A of Pacific Ethanol, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. [Intentionally omitted];

4. [Intentionally omitted]; and

5. [Intentionally omitted].

Date: March 15, 2016

/s/ NEIL M. KOEHLER

Neil M. Koehler

President and Chief Executive Officer
(Principal Executive Officer)

EX-31.4

EXHIBIT 31.4

CERTIFICATION

I, Bryon T. McGregor, certify that:

1. I have reviewed this Amendment No. 1 to Annual Report on Form 10-K/A of Pacific Ethanol, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. [Intentionally omitted];

4. [Intentionally omitted]; and

5. [Intentionally omitted].

Date: March 15, 2016

/s/ BRYON T. MCGREGOR

Bryon T. McGregor

Chief Financial Officer
(Principal Financial and Accounting Officer)

XML

Document and Entity Information - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Mar. 14, 2016	Jun. 30, 2015
Document And Entity Information
Entity Registrant Name	Pacific Ethanol, Inc.
Entity Central Index Key	0000778164
Document Type	10-K
Document Period End Date	Dec. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 247,200
Entity Common Stock, Shares Outstanding		38,982,931
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2015

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 52,712	$ 62,084
Accounts receivable, net of allowance for doubtful accounts of $25 and $6, respectively	61,346	34,612
Inventories	60,820	18,550
Prepaid inventory	5,973	11,595
Income tax receivables	10,654	8,121
Other current assets	6,437	2,983
Total current assets	197,942	137,945
Property and equipment, net	464,960	155,302
Other Assets:
Intangible assets, net	2,678	2,786
Other assets	9,563	1,863
Total other assets	12,241	4,649
Total Assets	675,143	297,896
Current Liabilities:
Accounts payable - trade	30,520	13,122
Accrued liabilities	10,072	6,203
Current portion - capital leases	4,248	4,077
Current portion - long-term debt	17,003	0
Accrued PE Op Co. purchase	3,828	0
Other current liabilities	7,238	2,045
Total current liabilities	72,909	25,447
Long-term debt, net of current portion	204,324	34,533
Capital leases, net of current portion	4,183	2,055
Warrant liabilities at fair value	273	1,986
Deferred tax liabilities	1,174	15,434
Other liabilities	20,736	459
Total Liabilities	$ 303,599	$ 79,914
Commitments and contingencies (Notes 1, 8, 9 and 15)
Pacific Ethanol, Inc. Stockholders' Equity:
Additional paid-in capital	$ 902,843	$ 725,813
Accumulated other comprehensive income	1,040	0
Accumulated deficit	(532,383)	(512,332)
Total Pacific Ethanol, Inc. Stockholders' Equity	371,544	213,507
Noncontrolling interests	0	4,475
Total Stockholders' Equity	371,544	217,982
Total Liabilities and Stockholders' Equity	675,143	297,896
Series A Preferred Stock
Pacific Ethanol, Inc. 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, 2015 and 2014; Series B: 1,580,790 shares authorized; 926,942 shares issued and outstanding as of December 31, 2015 and 2014; liquidation preference of $18,075 as of December 31, 2015	0	0
Series B Preferred Stock
Pacific Ethanol, Inc. 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, 2015 and 2014; Series B: 1,580,790 shares authorized; 926,942 shares issued and outstanding as of December 31, 2015 and 2014; liquidation preference of $18,075 as of December 31, 2015	1	1
Common Stock [Member]
Pacific Ethanol, Inc. Stockholders' Equity:
Common stock value	39	25
Nonvoting Common Stock [Member]
Pacific Ethanol, Inc. Stockholders' Equity:
Common stock value	$ 4	$ 0

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Accounts receivable, net of allowance	$ 25	$ 6
Stockholders' Equity:
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	10,000,000	10,000,000
Series A Preferred Stock
Stockholders' Equity:
Preferred stock par value	$ 0.001	$ 0.001
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
Stockholders' Equity:
Preferred stock par value	$ 0.001	$ 0.001
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
Common Stock [Member]
Stockholders' Equity:
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	300,000,000	300,000,000
Common stock, issued	38,974,972	24,499,534
Common stock, outstanding	38,974,972	24,499,534
Nonvoting Common Stock [Member]
Stockholders' Equity:
Common stock, par value	$ .001	$ .001
Common stock, authorized	3,553,000	3,553,000
Common stock, issued	3,540,132	0
Common stock, outstanding	3,540,132	0

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Statement [Abstract]
Net sales	$ 1,191,176	$ 1,107,412	$ 908,437
Cost of goods sold	1,183,766	998,927	875,507
Gross profit	7,410	108,485	32,930
Selling, general and administrative expenses	23,412	17,108	14,021
Asset impairments	1,970	0	0
Income (loss) from operations	(17,972)	91,377	18,909
Fair value adjustments and warrant inducements	1,641	(37,532)	(1,013)
Interest expense, net	(12,594)	(9,438)	(15,671)
Loss on extinguishments of debt	0	(2,363)	(3,035)
Other income (expense), net	18	(905)	(352)
Income (loss) before provision for income taxes	(28,907)	41,139	(1,162)
(Benefit) provision for income taxes	(10,034)	15,137	0
Consolidated net income (loss)	(18,873)	26,002	(1,162)
Net (income) loss attributed to noncontrolling interests	87	(4,713)	381
Net income (loss) attributed to Pacific Ethanol, Inc.	(18,786)	21,289	(781)
Preferred stock dividends	(1,265)	(1,265)	(1,265)
Income allocated to participating securities	0	(585)	0
Income (loss) available to common stockholders	$ (20,051)	$ 19,439	$ (2,046)
Income (loss) per share, basic	$ (0.60)	$ 0.93	$ (0.17)
Income (loss) per share, diluted	$ (0.60)	$ 0.86	$ (0.17)
Weighted-average shares outstanding, basic	33,173,000	20,810,000	12,264,000
Weighted-average shares outstanding, diluted	33,173,000	22,669,000	12,264,000

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Statement of Comprehensive Income [Abstract]
Consolidated net income (loss)	$ (18,873)	$ 26,002	$ (1,162)
Net (income) loss attributed to noncontrolling interests	87	(4,713)	381
Net income (loss) attributed to Pacific Ethanol, Inc.	(18,786)	21,289	(781)
Other comprehensive income - net gain arising during the period on defined benefit pension plans	1,040	0	0
Comprehensive income (loss) attributed to Pacific Ethanol, Inc.	$ (17,746)	$ 21,289	$ (781)

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Noncontrolling Interest	Total
Beginning balance, shares at Dec. 31, 2012	927,000	9,789,000
Beginning balance, value at Dec. 31, 2012	$ 1	$ 10	$ 582,861	$ (830,310)	$ 20,345	$ 72,907
Stock-based compensation expense - restricted stock and options to employees and directors, net of cancellations, shares		600,000
Stock-based compensation expense - restricted stock and options to employees and directors, net of cancellations, value		$ 1	1,696			1,697
Shares issued on convertible notes, shares issued		4,446,000
Shares issued on convertible notes, value		$ 4	18,551			18,555
Shares issued on senior notes, shares issued		500,000
Shares issued on senior notes, value			2,000			2,000
Warrant exercises, shares issued		280,000
Warrant exercises, value			2,317			2,317
Shares issued as payment of prior unpaid Series B preferred dividends, shares		511,000
Shares issued as payment of prior unpaid Series B preferred dividends, value		$ 1	2,192			2,193
Pension plan adjustment						0
Purchases of interests in PE Op Co.			11,940		(14,281)	(2,341)
Preferred stock dividends				(1,265)		(1,265)
Net income (loss)				(781)	(381)	(1,162)
Ending balance, shares at Dec. 31, 2013	927,000	16,126,000
Ending balance, value at Dec. 31, 2013	$ 1	$ 16	621,557	(532,356)	5,683	94,901
Stock-based compensation expense - restricted stock and options to employees and directors, net of cancellations, shares		90,000
Stock-based compensation expense - restricted stock and options to employees and directors, net of cancellations, value			1,890			1,890
Issuance of common stock, shares		1,750,000
Issuance of common stock, value		$ 2	26,071			26,073
Warrant exercises, shares issued		6,413,000
Warrant exercises, value		$ 6	85,156			85,162
Shares issued as payment of prior unpaid Series B preferred dividends, shares		120,000
Shares issued as payment of prior unpaid Series B preferred dividends, value		$ 1	1,462			1,463
Pension plan adjustment						0
Purchases of interests in PE Op Co.			(79)		(5,921)	(6,000)
Tax impact of purchases of interests in PE Op Co.			(10,244)			(10,244)
Preferred stock dividends				(1,265)		(1,265)
Net income (loss)				21,289	4,713	26,002
Ending balance, shares at Dec. 31, 2014	927,000	24,499,000
Ending balance, value at Dec. 31, 2014	$ 1	$ 25	725,813	(512,332)	4,475	217,982
Stock-based compensation expense - restricted stock and options to employees and directors, net of cancellations, shares		216,000
Stock-based compensation expense - restricted stock and options to employees and directors, net of cancellations, value			1,475			1,475
Warrant exercises, shares issued		42,000
Warrant exercises, value			440			440
Aventine acquisition, shares issued		17,758,000
Aventine acquisition, value		$ 18	174,555			174,573
Pension plan adjustment						1,040
Purchases of interests in PE Op Co.			560		(4,388)	(3,828)
Preferred stock dividends				(1,265)		(1,265)
Net income (loss)				(18,786)	(87)	(18,873)
Ending balance, shares at Dec. 31, 2015	927,000	42,515,000
Ending balance, value at Dec. 31, 2015	$ 1	$ 43	$ 902,843	$ (532,383)	$ 0	$ 371,544

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Operating Activities:
Consolidated net income (loss)	$ (18,873)	$ 26,002	$ (1,162)
Adjustments to reconcile consolidated net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization of intangibles	23,632	13,186	12,136
Fair value adjustments	(1,641)	35,260	227
Loss on extinguishments of debt	0	2,363	3,035
Asset impairments	1,970	0	0
Deferred income taxes	(2,023)	5,129	0
Inventory valuation	509	970	8
Change in fair value on commodity derivative instruments	542	808	1,821
Amortization of deferred financing costs	272	1,217	2,009
Amortization of debt discounts	716	1,815	1,272
Noncash compensation	2,019	1,838	1,724
Bad debt expense (recovery)	(354)	(42)	169
Loss on disposals of assets	0	439	0
Interest expense added to plant owners' debt	0	0	4,745
Interest on convertible debt paid with stock	0	0	111
Changes in operating assets and liabilities, net of effects from acquisition of Aventine:
Accounts receivable	(15,950)	726	(9,414)
Inventories	(13,296)	3,866	(2,150)
Prepaid expenses and other assets	58	(7,818)	(2,340)
Prepaid inventory	5,622	720	(6,893)
Accounts payable and accrued expenses	(10,045)	1,853	8,889
Net cash provided by (used in) operating activities	(26,842)	88,332	14,187
Investing Activities:
Additions to property and equipment	(20,507)	(13,259)	(3,993)
Net cash from acquisition of Aventine	18,756	0	0
Purchase of cash collateralized letters of credit	(4,574)	0	0
Purchases of PE Op Co. ownership interests	0	(6,000)	(2,340)
Net cash used in investing activities	(6,325)	(19,259)	(6,333)
Financing Activities:
Net proceeds from common stock and warrants	0	26,073	0
Proceeds from warrant exercises	368	43,676	2,064
Proceeds from senior notes and warrants	0	0	22,192
Proceeds from convertible notes and warrants	0	0	14,000
Proceeds from plant borrowings	0	0	7,000
Net proceeds (payments) on Kinergy's line of credit	43,584	(1,512)	(669)
Payments on plant borrowings	(13,833)	(39,792)	(17,115)
Purchase of plant owners' debt	0	(17,038)	(27,088)
Payments on senior unsecured notes	0	(13,984)	(6,208)
Debt issuance costs	0	(438)	(1,560)
Payment on related party note	0	(750)	0
Preferred stock dividend payments	(1,265)	(3,459)	(1,265)
Payments on capital leases	(5,059)	(4,916)	(1,640)
Net cash provided by (used in) financing activities	23,795	(12,140)	(10,289)
Net increase (decrease) in cash and cash equivalents	(9,372)	56,933	(2,435)
Cash and cash equivalents at beginning of period	62,084	5,151	7,586
Cash and cash equivalents at end of period	52,712	62,084	5,151
Supplemental Information:
Interest paid	11,685	6,596	7,515
Income taxes (received) paid	(5,710)	17,930	0
Noncash financing and investing activities:
Preferred stock dividends paid in common stock	0	1,463	2,192
Accrued payment for ownership positions of PE Op Co.	3,828	0	0
Capital leases added to plant and equipment	1,864	0	12,829
Original discount on senrior and convertible debt	0	0	8,558
Purchase of sugar inventory with note	0	0	5,000
Reclass of warrant liability to equity upon warrant exercises	72	41,486	260
Reclass of noncontrolling interest to APIC upon acquisitions of ownership interests in New PE Holdco	560	(79)	11,940
Debt extinguished with issuance of common stock	0	0	16,000
Common Stock issued in Aventine acquisition (see Note 2)	$ 174,573	$ 0	$ 0

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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Business – The consolidated financial statements include, for all periods presented, the accounts of Pacific Ethanol, Inc., a Delaware corporation (“Pacific Ethanol”), and its direct and indirect subsidiaries (collectively, the “Company”), including its wholly-owned subsidiaries, Kinergy Marketing LLC, an Oregon limited liability company (“Kinergy”), Pacific Ag. Products, LLC, a California limited liability company (“PAP”) and PE Op Co., a Delaware corporation (“PE Op Co.”). The Company had a 100% and 96% ownership interest in PE Op Co. as of December 31, 2015 and 2014, respectively.

The Company’s acquisition of Aventine Renewable Energy Holdings, Inc. (now, Pacific Ethanol Central, LLC, a Delaware limited liability company, “Aventine”) was consummated on July 1, 2015, and as a result, the Company’s consolidated financial statements include the results of Aventine only as of and for the six months ended December 31, 2015.

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 Aventine, the Company now has a combined ethanol production capacity of 515 million gallons per year, markets, on an annualized basis, over 800 million gallons of ethanol, and produces, on an annualized basis, over one million tons of co-products such as wet and dry distillers grains, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, distillers yeast and CO₂. The Company’s four 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 December 31, 2015, all eight facilities were operating. On April 30, 2014, the Company’s previously idled facility in Madera, California commenced producing ethanol. 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 – The consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company. All significant intercompany accounts and transactions have been eliminated in consolidation.

Segments – A segment is a component of an enterprise whose operating results are regularly reviewed by the enterprise’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company determines and discloses its segments in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification Section 280, Segment Reporting (“ASC 280”), which defines how to determine segments. The Company reports its financial and operating performance in two reportable segments: (1) ethanol production, which includes the production and sale of ethanol and co-products, with all eight of the Company’s production facilities aggregated, and (2) marketing and distribution, which includes marketing and merchant trading for Company-produced ethanol and co-products and third-party ethanol.

Cash and Cash Equivalents – The Company considers all highly-liquid investments with an original maturity of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts – Trade accounts receivable are presented at face value, net of the allowance for doubtful accounts. The Company sells ethanol to gasoline refining and distribution companies, sells distillers grains and other feed co-products to dairy operators and animal feedlots and sells corn oil to poultry and biodiesel customers generally without requiring collateral. Due to a limited number of ethanol customers, the Company had significant concentrations of credit risk from sales of ethanol as of December 31, 2015 and 2014, as described below.

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 $42,049,000 and $28,427,000 at December 31, 2015 and 2014, respectively, were used as collateral under Kinergy’s operating line of credit. The allowance for doubtful accounts was $25,000 and $6,000 as of December 31, 2015 and 2014, respectively. The Company recorded a bad debt recovery of $354,000 and $42,000, and a bad debt expense of $169,000 for the years ended December 31, 2015, 2014 and 2013, respectively. The Company does not have any off-balance sheet credit exposure related to its customers.

Concentration Risks – Credit risk represents the accounting loss that would be recognized at the reporting date if counterparties failed completely to perform as contracted. Concentrations of credit risk, whether on- or off-balance sheet, that arise from financial instruments exist for groups of customers or counterparties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions described below. Financial instruments that subject the Company to credit risk consist of cash balances maintained in excess of federal depository insurance limits and accounts receivable, which have no collateral or security. The Company has not experienced any significant losses in such accounts and believes that it is not exposed to any significant risk of loss of cash.

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,
	2015		2014		2013
Customer A		15%		20%		23%
Customer B		12%		20%		17%
Customer C		12%		11%		6%
Customer D		6%		8%		12%

The Company had accounts receivable due from these customers totaling $21,358,000 and $20,706,000, representing 35% and 60% of total accounts receivable, as of December 31, 2015 and 2014, respectively.

The Company purchases fuel-grade ethanol for resale and corn, its largest cost component in producing ethanol, from its suppliers. The Company purchased ethanol and corn from suppliers representing 10% or more of the Company’s total purchases for the purchase and production of ethanol, as follows:

	Years Ended December 31,
	2015		2014		2013
Supplier A		19%		26%		37%
Supplier B		13%		12%		8%
Supplier C		9%		15%		14%

Approximately 29% of the Company’s employees are covered by a collective bargaining agreement.

Inventories – Inventories consisted primarily of bulk ethanol, corn, co-products, Low-Carbon Fuel Standard (“LCFS”) credits, beet sugar 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 balances consisted of the following (in thousands):

	December 31,
	2015		2014
Finished goods	$	31,153	$	10,143
LCFS credits		6,957		975
Raw materials		9,891		2,695
Work in progress		11,121		3,274
Other		1,698		1,463
Total	$	60,820	$	18,550

Property and Equipment – 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

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 fixed assets 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 – The Company amortizes intangible assets with definite lives using the straight-line method over their established lives, generally 2-10 years. Additionally, the Company tests these assets with established lives for impairment if conditions exist that indicate that carrying values may not be recoverable. Possible conditions leading to the unrecoverability of these assets include changes in market conditions, changes in future economic conditions or changes in technological feasibility that impact the Company’s assessments of future operations. The Company assesses indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. If the Company determines that an impairment charge is needed, the charge will be recorded as asset impairment in the consolidated statements of operations.

Deferred Financing Costs – Deferred financing costs are costs incurred to obtain debt financing, including all related fees, and are amortized as interest expense over the term of the related financing using the straight-line method, which approximates the interest rate method. Amortization of deferred financing costs was $272,000, $779,000 and $2,009,000 for the years ended December 31, 2015, 2014 and 2013, respectively. Unamortized deferred financing costs were approximately $462,000 at December 31, 2015 and are recorded in other assets in the consolidated balance sheets.

Derivative Instruments and Hedging Activities – Derivative transactions, which can include exchange-traded forward contracts and futures positions on the New York Mercantile Exchange or the Chicago Board of Trade, are recorded on the balance sheet as assets and liabilities based on the derivative’s fair value. Changes in the fair value of derivative contracts are recognized currently in income unless specific hedge accounting criteria are met. If derivatives meet those criteria, and hedge accounting is elected, effective gains and losses are deferred in accumulated other comprehensive income (loss) and later recorded together with the hedged item in consolidated income (loss). For derivatives designated as a cash flow hedge, the Company formally documents the hedge and assesses the effectiveness with associated transactions. The Company has designated and documented contracts for the physical delivery of commodity products to and from counterparties as normal purchases and normal sales.

Revenue Recognition – The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable, and collection is reasonably assured. The Company derives revenue primarily from sales of ethanol and related co-products. The Company recognizes revenue when title transfers to its customers, which is generally upon the delivery of these products to a customer’s designated location. These deliveries are made in accordance with sales commitments and related sales orders entered into either verbally or in writing with customers. The sales commitments and related sales orders provide quantities, pricing and conditions of sales. In this regard, the Company engages in three basic types of revenue generating transactions:

· As a producer. Sales as a producer consist of sales of the Company’s inventory produced at its plants.

· As a merchant. Sales as a merchant consist of sales to customers through purchases from third-party suppliers in which the Company may or may not obtain physical control of the ethanol or co-products, in which shipments are directed from the Company’s suppliers to its terminals or direct to its customers but for which the Company accepts the risk of loss in the transactions.

· As an agent. Sales as an agent consist of sales to customers through purchases from third-party suppliers in which the risks and rewards of inventory ownership remain with third-party suppliers and the Company receives a predetermined service fee under these transactions.

Revenue from sales of third-party ethanol and co-products 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 $1,510,000, $1,908,000 and $1,928,000 in net sales when acting as an agent for the years ended December 31, 2015, 2014 and 2013, 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 its co-products 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 are classified as a component of cost of goods sold in the accompanying consolidated statements of operations.

California Ethanol Producer Incentive Program – The Company participated in the California Ethanol Producer Incentive Program (“CEPIP”) through the Pacific Ethanol West Plants located in California since the program’s inception in 2010. The CEPIP was a program to provide funds to an eligible California facility—up to $0.25 per gallon of production—when current production corn crush spreads, measured as the difference between specified ethanol and corn index prices, were less than prescribed levels determined by the California Energy Commission. As of December 31, 2014, the program is no longer funded. For any month in which a payment was made by the CEPIP, the Company would be required to reimburse the funds within the subsequent five years from each payment date, if the corn crush spread exceeded $1.00 per gallon. In 2010 and 2011, the Company received an aggregate of $2,000,000 in CEPIP funds. Since these funds were provided to subsidize low production costs and encourage eligible facilities to either continue production or start up production in low margin environments, the Company recorded the proceeds as a credit to cost of goods sold in the periods the funds were received. For the years ended December 31, 2014 and 2013, the Company recorded aggregate amounts of $1,878,000 and $122,000 as cost of goods sold, respectively, in respect of the Company’s repayments under the CEPIP to the California Energy Commission.

Stock-Based Compensation – The Company accounts for the cost of employee services received in exchange for the award of equity instruments based on the fair value of the award, determined on the date of grant. The expense is to be recognized over the period during which an employee is required to provide services in exchange for the award. The Company estimates forfeitures at the time of grant and makes revisions, if necessary, in the second quarter of each year if actual forfeitures differ from those estimates. Based on historical experience, the Company estimated future unvested forfeitures at 8% for the years ended December 31, 2015, 2014 and 2013. The Company recognizes stock-based compensation expense as a component of selling, general and administrative expenses in the consolidated statements of operations.

Impairment of Long-Lived Assets – The Company assesses the impairment of long-lived assets, including property and equipment, internally developed software and purchased intangibles subject to amortization, when events or changes in circumstances indicate that the fair value of assets could be less than their net book value. In such event, the Company assesses long-lived assets for impairment by first determining the forecasted, undiscounted cash flows the asset is expected to generate plus the net proceeds expected from the sale of the asset. If this amount is less than the carrying value of the asset, the Company will then determine the fair value of the asset. An impairment loss would be recognized when the fair value is less than the related asset’s net book value, and an impairment expense would be recorded in the amount of the difference. Forecasts of future cash flows are judgments based on the Company’s experience and knowledge of its operations and the industries in which it operates. These forecasts could be significantly affected by future changes in market conditions, the economic environment, including inflation, and purchasing decisions of the Company’s customers.

Provision for Income Taxes – Income taxes are accounted for under the asset and liability approach, where deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities, and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

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, net and other income (expense), net, respectively. The Company adopted early the provisions of ASU 2015-17, whereby all 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 entities 80% or more owned by the Company as well as the Company’s pro-rata share of taxable income from pass-through entities in which the Company holds an ownership interest. 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 – Basic income (loss) per share is computed on the basis of the weighted-average number of shares of common stock outstanding during the period. Preferred dividends are deducted from net income (loss) attributed to Pacific Ethanol, Inc. and are considered in the calculation of income (loss) available to common stockholders in computing basic income (loss) per share. Common stock equivalents to the preferred stock are considered participating securities and are also included in this calculation when dilutive. For the year ended December 31, 2014, the calculation has been revised from the calculation previously reported to reflect the participating securities.

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

	Year Ended December 31, 2015
	Loss Numerator			Shares Denominator		Per-Share Amount
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	)

	Year Ended December 31, 2014
	Income Numerator			Shares Denominator		Per-Share Amount
Net income attributed to Pacific Ethanol	$	21,289
Less: Preferred stock dividends		(1,265	)
Less: Allocated to participating securities		(585	)
Basic income per share:
Income available to common stockholders	$	19,439			20,810	$	0.93
Add: Warrants		–			1,859
Diluted income per share:
Income available to common stockholders	$	19,439			22,669	$	0.86

	Year Ended December 31, 2013
	Loss Numerator			Shares Denominator		Per-Share Amount
Net loss attributed to Pacific Ethanol	$	(781	)
Less: Preferred stock dividends		(1,265	)
Basic and diluted loss per share:
Loss available to common stockholders	$	(2,046	)		12,264	$	(0.17	)

There were an aggregate of 817,000, 660,000 and 1,357,000 potentially dilutive shares from convertible securities outstanding as of December 31, 2015, 2014 and 2013, respectively. These convertible securities were not considered in calculating diluted income (loss) per common share for the years ended December 31, 2015, 2014 and 2013 as their effect would be anti-dilutive.

Financial Instruments – The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are reasonable estimates of their fair values because of the short maturity of these items. The Company recorded at fair value its warrants and conversion features of its convertible notes. The Company believes the carrying value of its long-term debt approximates fair value because the interest rates on these instruments are variable.

Employment-related Benefits – Employment-related benefits associated with pensions and postretirement health care are expensed based on actuarial analysis. The recognition of expense is affected by estimates made by management, such as discount rates used to value certain liabilities, investment rates of return on plan assets, increases in future wage amounts and future health care costs. Discount rates are determined based on a spot yield curve that includes bonds with maturities that match expected benefit payments under the plan.

Estimates and Assumptions – The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates are required as part of determining the fair value of warrants and conversion features, allowance for doubtful accounts, net realizable value of inventory, estimated lives of property and equipment and intangibles, long-lived asset impairments, valuation allowances on deferred income taxes and the potential outcome of future tax consequences of events recognized in the Company’s financial statements or tax returns, and the valuation of assets acquired and liabilities assumed as a result of business combinations. Actual results and outcomes may materially differ from management’s estimates and assumptions.

Subsequent Events – Management evaluates, as of each reporting period, events or transactions that occur after the balance sheet date through the date that the financial statements are issued for either disclosure or adjustment to the consolidated financial results.

Reclassifications – Certain prior year amounts have been reclassified to conform to the current presentation. Such reclassification had no effect on the consolidated net income (loss) reported in the consolidated statements of operations.

Recent Accounting Pronouncements – 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, 2019, and for interim periods beginning after December 15, 2020. Early adoption is permitted. The Company has several operating leases that may be impacted by this guidance. The Company is currently evaluating the impact of the adoption of this accounting standard on its consolidated results of operations and financial condition.

In November 2015, the FASB issued new guidance that requires deferred tax liabilities and assets to be classified as noncurrent in a classified balance sheet. The guidance is effective for public companies for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. For the year ended December 31, 2015, the Company adopted the guidance.

In May 2014, the FASB issued new guidance on the recognition of revenue. The guidance 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 was originally effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, but has been further deferred one year. The Company’s adoption begins with the first fiscal quarter of fiscal year 2018. The Company is currently evaluating the impact of the adoption of this accounting standard update on its consolidated results of operations and financial condition.

In April 2015, the FASB issued new guidance on presentation of debt issuance costs. Historically, entities have presented debt issuance costs as an asset. Under the new guidance, effective for fiscal years beginning after December 31, 2015, debt issuance costs will be reclassified as a deduction to the carrying amount of the related debt balance. The guidance does not change any of the Company’s other debt recognition or disclosure. The Company will adopt the guidance beginning January 1, 2016.

In July 2015, the FASB issued new guidance on simplifying the measurement of inventory. Under the new guidance, entities are required to measure most inventory at the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. This guidance is effective prospectively for fiscal years beginning after December 15, 2016. Early adoption is permitted. The Company has adopted the guidance with no material impact on its results of operations or financial condition.

In September 2015, the FASB issued new guidance on simplifying the accounting for measurement-period adjustments. Under the new guidance, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The guidance also requires acquirers to present separately on the face of the statement of operations or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The guidance is effective for fiscal years beginning after December 31, 2015, applied prospectively. Early adoption is permitted. The Company will consider early adoption in future periods related to its current measurement period for its acquisition of Aventine.

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2. PACIFIC ETHANOL CENTRAL PLANTS

12 Months Ended

Dec. 31, 2015

Pacific Ethanol Central Plants

PACIFIC ETHANOL CENTRAL PLANTS

On December 30, 2014, the Company entered into a definitive merger agreement with Aventine, a Midwest ethanol producer, under which the Company agreed to acquire Aventine and, therefore indirectly, the Pacific Ethanol Central Plants, through a stock-for-stock merger. The acquisition closed on July 1, 2015 and 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 Aventine. 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 Aventine acquisition resulting in a number of synergies and strategic advantages. The Company believes the acquisition has spread commodity and basis price risks across diverse markets and products, assisting in its efforts to optimize margin management; improve its hedging opportunities with a greater correlation to the liquid physical and paper markets in Chicago; and increase its flexibility and alternatives in feedstock procurement for its Midwestern and Western production facilities. The acquisition also expands the Company’s marketing reach into new markets and extends its mix of co-products. The Company believes the acquisition will enable it to have deeper market insight and engagement in major ethanol and feed markets outside the Western United States, thereby improving pricing opportunities; allows 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 enable it to use its more diverse mix of co-products to generate strong co-product returns. In addition, the acquisition also increases the Company’s combined annual ethanol production capacity to 515 million gallons per year and annualized ethanol marketing volume to over 800 million gallons, including Aventine’s historical volumes.

The Company has recognized the following allocation of the purchase price at fair values. The Company has 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 is based on the interest rate environment at the acquisition date. The fair value allocation related to deferred taxes is provisional and incomplete as the Company is finalizing its review of deferred taxes. The Company expects to complete its review by mid-2016. Based on the current allocation, the Company has recorded an immaterial bargain purchase gain on the acquisition.

Based upon these fair value estimates, the purchase price consideration allocation is as follows (in thousands):

Cash and cash equivalents	$	18,756
Accounts receivable		10,430
Inventory		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	$	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. As discussed in Note 15, the Company recorded $3.7 million, included in other noncurrent liabilities above, as a litigation contingency related to certain legal cases for amounts that were probable and estimable as of the acquisition date. Subsequent to the acquisition date, the Company paid approximately $0.4 million of this amount.

The following table presents unaudited pro forma financial information assuming the acquisition occurred on January 1, 2014 (in thousands except per share data).

	Years Ended December 31,
	2015			2014
Net sales – pro forma	$	1,484,676		$	1,695,440
Cost of goods sold – pro forma	$	1,469,512		$	1,528,387
Selling, general and administrative expenses – pro forma	$	34,735		$	47,796
Net income (loss) – pro forma	$	(34,136	)	$	12,596
Diluted net income (loss) per share – pro forma	$	(0.81	)	$	0.31
Diluted weighted-average shares – pro forma		42,053			40,428

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, and instead recorded for the year 2014, as if the acquisition had occurred on January 1, 2014. For the six months ended December 31, 2015, Aventine contributed $299.0 million in net sales and $16.3 million in pre-tax loss. For the years ended December 31, 2015 and 2014, the Company recorded approximately $1.4 million and $0.7 million, respectively, in costs associated with the Aventine 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.

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3. PACIFIC ETHANOL WEST PLANTS

12 Months Ended

Dec. 31, 2015

Pacific Ethanol Central Plants

PACIFIC ETHANOL WEST PLANTS

Consolidation of PE Op Co. – The Company concluded that from PE Op Co.’s inception to the time the Company became a 91% owner, PE Op Co. was a variable interest entity (“VIE”) because the other owners of PE Op Co., due to the Company’s involvement through the contractual arrangements discussed below, at all times lacked the power to direct the activities that most significantly impacted PE Op Co.’s economic performance. However, since the Company’s acquisition in December 2013 that brought its ownership interest in PE Op Co. to 91%, the Company has obtained and maintained sufficient control, both by way of agreements as well as based on structural control of PE Op Co., such that PE Op Co. is no longer considered a VIE, and as such the Company consolidates PE Op Co. under the voting rights model. On April 1, 2014, PE Op Co. was converted from a Delaware limited liability company to a Delaware C-corporation and changed its name from New PE Holdco LLC to PE Op Co.

In August 2014, the Company purchased an additional 5% of the ownership interests in PE Op Co. for $6,000,000 in cash, bringing its total ownership interest to 96% as of December 31, 2014.

In May 2015, the Company purchased the remaining 4% ownership interest in PE Op Co. that it did not own, giving it 100% ownership of PE Op Co.

Because the Company has a controlling financial interest in PE Op Co., it did not record any gain or loss on these purchases, but instead reduced the amount of noncontrolling interest on the consolidated balance sheets by an aggregate of $4,388,000, $5,921,000 and $14,281,000 and recorded the difference of $560,000, $79,000 and $11,940,000 for the years ended December 31, 2015, 2014 and 2013, respectively, which represents the fair value of these purchases above the price paid by the Company, to additional paid-in capital on the consolidated balance sheets. Further, in 2014, the Company recorded a deferred tax liability related to its cumulative adjustments to additional paid-in capital of $10,244,000.

The Company’s acquisition of its ownership interest in PE Op Co. does not impact the Company’s rights or obligations under any of the agreements described below. Further, creditors of PE Op Co. or its subsidiaries do not have recourse to the Company. Since its acquisition, the Company has not provided any additional support to PE Op Co. beyond the terms of the agreements described below.

The Company, directly or through one of its subsidiaries, has entered into the management and marketing agreements described below.

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4. INTERCOMPANY AGREEMENTS

12 Months Ended

Dec. 31, 2015

Intercompany Agreements

INTERCOMPANY AGREEMENTS

Affiliate Management Agreement – Pacific Ethanol, Inc. (the “Parent”) entered into an Affiliate Management Agreement (“AMA”) with its operating subsidiaries, namely Kinergy, PAP, the Pacific Ethanol West Plants and the Pacific Ethanol Central Plants, effective July 1, 2015, under which the Company agreed to provide operational and administrative and staff support services. These services generally include, but are not limited to, administering the subsidiaries’ compliance with their credit agreements and performing billing, collection, record keeping and other administrative and ministerial tasks. The Parent agreed to supply all labor and personnel required to perform its services under the AMA, including the labor and personnel required to operate and maintain the production facilities and marketing activities. These services are billed at a predetermined amount per subsidiary each month plus out of pocket costs such as employee wages and benefits.

The AMA had an initial term of one year and automatic successive one year renewal periods. In addition to typical conditions for a party to terminate the agreement prior to its expiration, the Parent 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.

The Parent recorded revenues of approximately $8.1 million related to the AMA for the year ended December 31, 2015. These amounts have been eliminated upon consolidation. As the Parent was in the process of integrating the Pacific Ethanol Central Plants in the last half of 2015, no such fees were charged to the Pacific Ethanol Central Plants, but such fees commenced in January 2016.

Prior Plant Management Agreement – Prior July 1, 2015, the Parent entered into a Plant Management Agreement (“PMA”) with the Pacific Ethanol West Plants under which the Parent agreed to operate and maintain the Pacific Ethanol West Plants. These services generally included, but were not limited to, administering the Plants’ compliance with their credit agreements and performing billing, collection, record keeping and other administrative and ministerial tasks. The Parent agreed to supply all labor and personnel required to perform its services under the PMA, including the labor and personnel required to operate and maintain the production facilities.

The costs and expenses associated with the Parent’s provision of services under the PMA were prefunded by the Pacific Ethanol West Plants under a preapproved budget. The Parent’s obligation to provide services was limited to the extent there were sufficient funds advanced by the plants to cover the associated costs and expenses.

As compensation for providing the services under the PMA, the Parent was paid $75,000 per month for each production facility that was operational and $40,000 per month for each production facility that was idled. The Parent recorded revenues attributed to the PMA of approximately $1.8 million, for the year ended December 31, 2015 and $3.5 million for each of the years ended December 31, 2014 and 2013. These amounts have been eliminated upon consolidation.

In addition to the monthly fee, the Parent was to be paid a performance bonus if certain profit metrics were met. During the year ended December 31, 2014, the Company earned $2.8 million in performance bonuses. These amounts have been eliminated upon consolidation. No bonuses were paid in 2015 and 2013.

Ethanol Marketing Agreements – Kinergy entered into separate ethanol marketing agreements with each of the Company’s eight plants, which granted it the exclusive right to purchase, market and sell the ethanol produced at those facilities. Under the terms of the ethanol marketing agreements, within ten days after delivering ethanol to Kinergy, an amount is paid to Kinergy equal to (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. Each of the ethanol marketing agreements had an initial term of one year and successive one year renewal periods at the option of the individual plant.

Kinergy recorded revenues of approximately $5,262,000, $3,986,000 and $3,351,000 related to the ethanol marketing agreements for the years ended December 31, 2015, 2014 and 2013, respectively. These amounts have been eliminated upon consolidation.

Corn Procurement and Handling Agreements – PAP entered into separate corn procurement and handling agreements with each of the four Pacific Ethanol West Plants. Under the terms of the corn procurement and handling agreements, 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. PAP also provides grain handling services including, but not limited to, receiving, unloading and conveying corn into the facility’s storage and, in the case of whole corn delivered, processing and hammering the whole corn.

PAP is to receive a fee of $0.045 per bushel of corn delivered to each facility as consideration for its procurement and handling services, payable monthly. 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 $2,910,000, $2,989,000 and $2,423,000 related to the corn procurement and handling agreements for the years ended December 31, 2015, 2014 and 2013, respectively. These amounts have been eliminated upon consolidation.

Distillers Grains Marketing Agreements – PAP entered into separate distillers grains marketing agreements with each of the Company’s eight plants, which grant PAP the exclusive right to market, purchase and sell the various co-products produced at each facility. Under the terms of the distillers grains marketing agreements, 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.

PAP recorded revenues of approximately $4,438,000, $4,788,000 and $4,584,000 related to the distillers grain marketing agreements for the years ended December 31, 2015, 2014 and 2013, respectively. These amounts have been eliminated upon consolidation.

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5. SEGMENTS

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

SEGMENTS

The Company previously reported as a single segment, however, as a result of changes in the Company’s business in 2015, after a reassessment, the Company changed the number of its operating and reportable segments as determined under ASC 280.

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

Income before provision for income taxes includes management fees charged by the Parent to the segment. The production segment incurred $6.0 million, $8.8 million and $5.6 million in management fees for the years ended December 31, 2015, 2014 and 2013, respectively. The marketing and distribution segment incurred $3.9 million, $3.9 million and $3.6 million in management fees for the years ended December 31, 2015, 2014 and 2013, 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 4. 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,
	2015			2014			2013
Net Sales:
Ethanol production:
Net sales from external customers	$	710,201		$	562,388		$	507,162
Intersegment net sales		–			–			–
Total segment revenues		710,201			562,388			507,162
Marketing and distribution:
Net sales from external customers		480,975			545,024			401,275
Intersegment net sales		5,262			3,986			3,351
Total segment net sales		486,237			549,010			404,626
Net sales including intersegment activity		1,196,438			1,111,398			911,788
Intersegment eliminations		(5,262	)		(3,986	)		(3,351	)
Net sales as reported	$	1,191,176		$	1,107,412		$	908,437
Cost of goods sold:
Ethanol production	$	719,833		$	473,598		$	492,186
Marketing and distribution		476,411			537,010			393,366
Intersegment eliminations		(12,477	)		(11,681	)		(10,045	)
	$	1,183,767		$	998,927		$	875,507
Income (loss) before provision for income taxes:
Ethanol production	$	(32,723	)	$	72,278		$	3,776
Marketing and distribution		3,200			6,068			5,217
Corporate activities		616			(37,207	)		(10,155	)
	$	(28,907	)	$	41,139		$	(1,162	)
Depreciation and amortization:
Ethanol production	$	23,091		$	12,509		$	11,533
Marketing and distribution		151			551			499
Corporate activities		390			126			104
	$	23,632		$	13,186		$	12,136
Interest expense:
Ethanol production	$	(11,969	)	$	(7,048	)	$	(11,248	)
Marketing and distribution		(625	)		(566	)		(527	)
Corporate activities		–			(1,824	)		(3,896	)
	$	(12,594	)	$	(9,438	)	$	(15,671	)

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

	Years Ended December 31,
	2015		2014
Total assets:
Ethanol production	$	536,013	$	190,630
Marketing and distribution		107,532		70,068
Corporate assets		31,598		37,198
	$	675,143	$	297,896

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6. PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and equipment consisted of the following (in thousands):

	December 31,
	2015			2014
Facilities and plant equipment	$	501,800		$	190,714
Land		7,541			2,570
Other equipment, vehicles and furniture		9,084			7,641
Construction in progress		23,579			8,720
		542,004			209,645
Accumulated depreciation		(77,044	)		(54,343	)
	$	464,960		$	155,302

Depreciation expense, including idled facilities, was $23,524,000, $12,712,000 and $11,662,000 for the years ended December 31, 2015, 2014 and 2013, respectively. One of the Pacific Ethanol West Plants was idled for four months in 2014 and for all of 2013. Depreciation on the Company’s idled assets was an aggregate of $699,000 and $2,108,000 for the years ended December 31, 2014 and 2013, respectively.

Included in plant and equipment is $9,971,000 and $3,467,000 at December 31, 2015 and 2014, respectively, attributable to capital leases. Depreciation expense related to these capital leases was $340,000, $231,000 and none for the years ended December 31, 2015, 2014 and 2013, 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 its integration of Aventine.

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7. INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

Intangible assets consisted of the following (in thousands):

		December 31, 2015							December 31, 2014
	Useful Life (Years)	Gross		Accumulated Amortization			Net Book Value		Gross		Accumulated Amortization			Net Book Value
Non-Amortizing:
Kinergy tradename		$	2,678	$	–		$	2,678	$	2,678	$	–		$	2,678
Amortizing:
Customer relationships	10		4,741		(4,741	)		–		4,741		(4,633	)		108
Total intangible assets, net		$	7,419	$	(4,741	)	$	2,678	$	7,419	$	(4,633	)	$	2,786

Kinergy Tradename – 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, 2015, 2014 and 2013.

Customer Relationships – The Company recorded customer relationships valued at $4,741,000 as part of its acquisition of Kinergy. The Company has established a useful life of ten years for these customer relationships. Amortization expense associated with intangible assets totaled $108,000, $474,000 and $474,000 for the years ended December 31, 2015, 2014 and 2013, respectively.

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8. DERIVATIVES

12 Months Ended

Dec. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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 – The Company uses derivative instruments to protect cash flows from fluctuations caused by volatility in commodity prices for periods of up to twelve months in order to protect gross profit margins from potentially adverse effects of market and price volatility on ethanol sale and purchase commitments where the prices are set at a future date and/or if the contracts specify a floating or index-based price for ethanol. In addition, the Company hedges anticipated sales of ethanol to minimize its exposure to the potentially adverse effects of price volatility. These derivatives may be designated and documented as cash flow hedges and effectiveness is evaluated by assessing the probability of the anticipated transactions and regressing commodity futures prices against the Company’s purchase and sales prices. Ineffectiveness, which is defined as the degree to which the derivative does not offset the underlying exposure, is recognized immediately in cost of goods sold. For the years ended December 31, 2015, 2014 and 2013, the Company did not designate any of its derivatives as cash flow hedges.

Commodity Risk – Non-Designated Hedges – The Company uses derivative instruments to lock in prices for certain amounts of corn and ethanol by entering into exchange-traded forward contracts for those commodities. These derivatives are not designated for special hedge accounting treatment. The changes in fair value of these contracts are recorded on the balance sheet and recognized immediately in cost of goods sold. The Company recognized net losses of $542,000, $808,000 and $1,821,000 as the change in the fair value of these contracts for the years ended December 31, 2015, 2014 and 2013, respectively.

Non Designated Derivative Instruments – The classification and amounts of the Company’s derivatives not designated as hedging instruments are as follows (in thousands):

	As of December 31, 2015
	Assets			Liabilities
Type of Instrument	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value
Commodity contracts	Other current assets	$	2,081	Other current liabilities	$	1,848
		$	2,081		$	1,848

	As of December 31, 2015
	Assets			Liabilities
Type of Instrument	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value
Commodity contracts	Other current assets	$	1,586	Other current liabilities	$	1,149
		$	1,586		$	1,149

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 Losses
			For the Years Ended December 31,
Type of Instrument	Statements of Operations Location		2015			2014			2013
Commodity contracts	Cost of goods sold	$	(338	)	$	(1,144	)	$	(1,901	)
		$	(338	)	$	(1,144	)	$	(1,901	)

			Unrealized (Losses) Gains
			For the Years Ended December 31,
Type of Instrument	Statements of Operations Location		2015			2014		2013
Commodity contracts	Cost of goods sold	$	(204	)	$	336	$	80
		$	(204	)	$	336	$	80

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9. DEBT

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

DEBT

Long-term borrowings are summarized as follows (in thousands):

	December 31, 2015			December 31, 2014
Kinergy operating line of credit	$	61,003		$	17,530
Term debt		162,622			17,003
		223,625			34,533
Less unamortized discount		(2,298	)		–
Less short-term portion		(17,003	)		–
Long-term debt	$	204,324		$	34,533

Kinergy Line of Credit – Kinergy has an operating line of credit for an aggregate amount of up to $75,000,000 with an “accordion” feature to further increase the maximum credit under the credit facility to up to $100,000,000 in minimum increments of $5,000,000 each, upon Kinergy’s request, but subject to the consent of the agent and the lenders in their sole discretion. The line of credit matures on December 31, 2020. The credit facility is based on Kinergy’s eligible accounts receivable and inventory levels, subject to certain concentration reserves. The credit facility is subject to certain other sublimits, including inventory loan limits. 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 1.75% and 2.75%. The applicable margin was 1.75%, for a total rate of 2.375% at December 31, 2015. The credit facility’s monthly unused line fee is an annual rate equal to 0.25% to 0.375% depending on the average daily principal balance during the immediately preceding month. 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 $1,100,000 per fiscal quarter.

The credit facility also includes the accounts receivable of PAP as additional collateral. Payments that may be made by PAP to Pacific Ethanol as reimbursement for management and other services provided by 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.

For each calendar month, Kinergy and PAP 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, 2015, Kinergy had an available borrowing base under the credit facility of $67,161,000.

Pacific Ethanol West Plants’ Term Debt – The Pacific Ethanol West Plants’ debt as of December 31, 2015 consisted of a $32,487,000 tranche A-1 term loan and a $26,279,000 tranche A-2 term loan, both of which have a maturity date in June 2016. Pacific Ethanol, Inc. holds a combined $41,763,000 of these term loans, which are eliminated upon consolidation. As of December 31, 2015, the combined outstanding balance of these loans was $17,003,000 on a consolidated basis (net of Pacific Ethanol, Inc. holdings).

The term debt requires monthly interest payments at a floating rate equal to the three-month LIBOR or the Prime Rate of interest, at the election of the Pacific Ethanol West Plants, plus 10.0%. At December 31, 2015, the interest rate was approximately 13.25%. Repayments of principal are based on available free cash flow of the Pacific Ethanol West Plants, until maturity, when all principal amounts are due.

On February 26, 2016, the Company retired the $17,003,000 outstanding balance by purchasing the lender’s position for cash at par without any prepayment penalty. This purchase increased the amount of the term loans held by Pacific Ethanol to a combined $58,766,000. As a result, the Company has no continuing obligations to any third-party lender under the credit agreements associated with this term debt.

Senior Unsecured Notes – On January 11, 2013, under the terms of a securities purchase agreement dated December 19, 2012 among the Company and five accredited investors, the Company issued and sold to the investors in a private offering $22,192,000 in aggregate principal amount of its senior unsecured notes (“January 2013 Notes”) and warrants to purchase an aggregate of 1,708,700 shares of the Company’s common stock (“January 2013 Financing Transaction”) for aggregate net proceeds of $22,072,000. The warrants have an exercise price of $6.32 per share and expire in January 2018. The January 2013 Notes had an original maturity date of March 30, 2016 and bore interest at a rate of 5% per annum, subject to adjustment. Payments due under the January 2013 Notes ranked senior to all other indebtedness of the Company and its subsidiaries, other than certain permitted senior indebtedness.

Upon closing of the January 2013 Financing Transaction, the Company recorded a debt discount of $2,657,000 associated with the value of the warrants issued in connection with the financing. The debt discount will be amortized over the life of the January 2013 Notes to approximate a yield adjustment.

If at any time the Company were to receive net cash proceeds from an issuance of equity or equity-linked securities of the Company, interest received from any purchased and outstanding plant owners’ term debt, certain sales of assets or as a result of incurring certain indebtedness, then the Company would be obligated to prepay the January 2013 Notes using 100% of all such net cash proceeds, provided that any net proceeds received in connection with an equity-linked issuance must be used to either prepay the January 2013 Notes or purchase certain outstanding debt issued by the plant owners.

During 2014, the Company made principal cash payments on the January 2013 Notes in the aggregate amount of $13,984,000, fully retiring the debt prior to maturity. During 2013, the Company made principal cash payments on the January 2013 Notes in the aggregate amount of $6,208,000 and the Company issued 500,000 shares of its common stock as a $2,000,000 principal payment, resulting in a loss of $229,000 on extinguishment of debt.

Subordinated Convertible Notes – On March 28, 2013, the Company issued $6,000,000 in aggregate principal amount of its Series A Subordinated Convertible Notes (“Series A Notes”), and warrants to purchase an aggregate of 1,839,600 shares of common stock for aggregate gross proceeds of $6,000,000. On June 21, 2013, the Company issued $8,000,000 in aggregate principal amount of its Series B Subordinated Convertible Notes (“Series B Notes”) for aggregate gross proceeds of $8,000,000. The warrants had an exercise price of $7.59 per share. Of the warrants issued in the transaction, warrants to purchase 788,400 shares of common stock expired in March 2015 and warrants to purchase 1,051,200 shares of common stock expired in June 2015. The net proceeds of these offerings of $12,560,000 were used to (i) purchase $6,665,000 of the plant owners’ debt maturing in June 2013, the maturity of which was also extended at the time from June 2013 to June 2016, and of which the Company immediately retired $1,122,000; (ii) acquire an additional 5% ownership interest in PE Op Co.; and (iii) purchase and immediately retire an additional $3,500,000 of the plant owners’ term debt.

Unless converted or redeemed earlier, the Series A and B Notes were to mature on March 28, 2014. The Series A and B Notes bore interest at 5% per annum, compounded monthly. All amounts due under the Series A and B Notes were convertible at any time, in whole or in part, at the option of the holders into shares of the Company’s common stock at a conversion price (“Fixed Conversion Price”), which was subject to adjustment as described below.

The Series A and B Notes were initially convertible into shares of the Company’s common stock at the initial Fixed Conversion Price of $15.00 per share. If the Company sold or issued any securities with “floating” conversion prices based on the market price of its common stock, the holder of a Series A or B Note would have the right thereafter to substitute the “floating” conversion price for the Fixed Conversion Price upon conversion of all or part of the Series A or B Note.

The Company determined that the conversion feature of the Series A and B Notes and the related warrants require bifurcation and liability classification and measurement, at fair value, and require evaluation at each reporting period. The initial fair values of the conversion feature of the Series A Notes of $1,400,800 and the warrants of $882,500 were accounted for as a debt discount and were amortized into interest expense as a yield adjustment over the term of the Series A Notes. The initial fair values of the conversion feature of the Series B Notes of $2,928,500 and the warrants of $689,300 were accounted for as a debt discount and were amortized into interest expense as a yield adjustment over the term of the Series B Notes.

In 2013, the Company made installment payments and processed a number of conversions. In the aggregate, the Company issued 4,446,000 shares of its common stock in payment of principal and interest in an aggregate amount of the $14,000,000 in respect of the Series A and B Notes. In connection with these installment payments and conversions, the Company recorded losses on extinguishments of debt of $4,621,000 for the year ended December 31, 2013.

As of December 31, 2013, the Series A and B Notes had been fully retired.

Acquisitions of Pacific Ethanol West Plant Debt – On January 11, 2013, the Company used $21,500,000 of the proceeds of the January 2013 Financing Transaction to purchase from certain lenders an aggregate amount of $21,500,000 of the Pacific Ethanol West plant owners’ tranche A-2 term loans. The Company determined that the acquisition of the plant debt was a modification of terms because the lenders who held the acquired plant debt were the lenders under the January 2013 Notes. Based on the Company’s review of the present value of cash flows of the January 2013 Notes compared to the older plant debt, which resulted in a less than 10% change, the modification was not significant and the Company did not record a gain or loss associated with the modification. The Company expensed certain legal costs associated with the debt modification of approximately $408,000, rather than amortizing those expenses over the life of the debt. Because the plant debt acquired is now held by Pacific Ethanol, Inc. this specific debt is eliminated in consolidation.

On March 28, 2013, the Company used proceeds from the issuance of its Series A Notes and warrants to purchase $3,500,000 of revolving credit facility debt, at par, from a lender. Under the terms of the amended credit facility, the Company was obligated to immediately forgive the purchased amount of revolving credit facility debt and has permanently reduced the maximum commitment on this facility to $36,500,000.

On March 28, 2013, the Company also used proceeds from the issuance of its Series A Notes and warrants to purchase $2,636,000 of tranche A-2 term loans and an additional 3% ownership interest in PE Op Co. for a combined purchase price of $2,150,000. The Company first allocated $331,000 of this payment to the PE Op Co. ownership interest and the remainder was allocated to the tranche A-2 term loans. The $817,000 difference between the amount the Company allocated to the term loans and the face amount of $2,636,000 was recorded as a gain on extinguishment of debt.

On June 21, 2013, the Company used proceeds from the issuance of its Series B Notes to purchase $1,122,000 of revolving credit facility debt at a discount. Under the terms of the amended credit facility, the Company was obligated to immediately forgive the purchased amount of revolving credit facility debt and has permanently reduced the maximum commitment on this facility to $35,378,000.

On June 21, 2013, the Company also used proceeds from the issuance of its Series B Notes to purchase $2,907,000 of tranche A-1 and A-2 term loans at a discount and an additional 2% ownership interest in PE Op Co. for $197,000. The Company recorded a gain on extinguishment of debt of $998,000 related to the discount it paid for the revolving and term loans.

On June 6, 2014, the Company purchased $14,675,000 of term debt for $17,038,000 in cash, reducing its consolidated plant term debt by $14,675,000, and recorded a $2,363,000 loss on extinguishment of debt for the amount paid in excess of the principal balance.

As of December 31, 2015, the Company held an aggregate of $41,763,000 of the tranche A-1 and tranche A-2 term loans, which has been eliminated upon consolidation.

Pacific Ethanol Central Plants’ Term Debt– As of September 30, 2015, the Pacific Ethanol Central Plants had term debt with an outstanding balance of $145,619,000. On July 1, 2015, upon effectiveness of the Aventine acquisition, Aventine became a wholly-owned subsidiary of the Company and, on a consolidated basis, the combined company became obligated with respect to the Pacific Ethanol Central Plants’ term loan and revolving credit facilities. The creditors under the term loan for the Pacific Ethanol Central Plants have recourse solely against the Pacific Ethanol Central Plants and their subsidiaries but not against Pacific Ethanol, Inc. or its other direct or indirect subsidiaries. In connection with the Company’s allocation of purchase price, the debt was recorded at $142,744,000, net of a discount of $2,875,000.

The term loan facility matures on September 24, 2017. The term loan facility is secured through a first-priority lien on substantially all of the Pacific Ethanol Central Plants’ assets and contains customary financial covenants, including the requirement that Aventine maintain a cash balance of at least $2.0 million. Interest on the term loan facility accrues and may be paid in cash at a rate of 10.5% per annum or may be paid in-kind at a rate of 15.0% per annum by adding such interest to the outstanding principal balance. If the Company were to elect to pay interest in-kind, the interest would be capitalized at the end of each quarter. The Company paid interest in cash for the period from July 1, 2015, the effective date of the Aventine acquisition, through December 31, 2015.

On July 1, 2015, the Company repaid in full $14.5 million, including approximately $0.7 million in termination fees, representing all amounts owed under Aventine’s revolving credit facility.

Interest Expense on Borrowings and Maturities – Interest expense on all borrowings discussed above was $11,745,000, $6,546,000 and $12,680,000 for the years ended December 31, 2015, 2014 and 2013, respectively. The consolidated long-term debt matures as follows: $17,003,000 was to mature in 2016 but was repaid in February 2016; $145,619,000 matures in September 2017 and $61,003,000 matures in December 2020.

At December 31, 2015, there were approximately $164.0 million of net assets of the Company’s subsidiaries that were not available to be transferred to the parent company in the form of dividends, loans or advances due to restrictions contained in the credit facilities of these subsidiaries.

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10. PENSION PLANS

12 Months Ended

Dec. 31, 2015

Compensation and Retirement Disclosure [Abstract]

PENSION PLANS

Retirement Plan - The Company sponsors a defined benefit pension plan (the “Retirement Plan”) that is noncontributory, and covers only “grandfathered” unionized employees at its Pekin, Illinois, facility. Benefits are based on a prescribed formula based upon the employee's years of service. On October 31, 2015, the Union ratified a new collective bargaining agreement with the Company for its hourly production workers in Pekin, Illinois. This new agreement was effective November 1, 2015. The revised amended agreement states that, among other things, employees hired after November 1, 2010, will not be eligible to participate in the Retirement Plan. The Company uses a December 31 measurement date for its Retirement Plan. The Company's funding policy is to make the minimum annual contribution that is required by applicable regulations.

The Company assumed the Retirement Plan as part of its acquisition of Aventine on July 1, 2015. Information related to the Retirement Plan as of and for the period from July 1, 2015 to December 31, 2015 is presented below (dollars in thousands):

Amounts at the end of the year:
Accumulated/projected benefit obligation	$	16,552
Fair value of plan assets		12,567
Funded status, (underfunded)/overfunded	$	(3,985	)
Amounts recognized in the consolidated balance sheets:
Other liabilities	$	(3,985	)
Accumulated other comprehensive income, unrecognized net income	$	(885	)
Amounts recognized in the plan for the year:
Company contributions	$	–
Participant contributions	$	–
Benefits paid	$	(315	)
Net periodic benefit cost	$	49
Other changes recognized in other comprehensive income:
Net gain	$	885
Amortization of net gain/(loss)		–
Total recognized in other comprehensive income	$	885
Assumptions used in computation benefit obligations:
Discount rate		4.23%
Expected long-term return on plan assets		7.75%
Rate of compensation increase		–

The Company is not expected to make contributions in the year ending December 31, 2016. Expected net periodic benefit cost for 2016 is estimated at approximately $0.2 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:
2016	$	648
2017		657
2018		672
2019		684
2020		699
2021-25		3,893
	$	7,253

See Note 16 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 - The Company also sponsors a health care plan and life insurance plan (the “Postretirement Plan”) that 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 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.

The Company assumed the Postretirement Plan as part of its acquisition of Aventine on July 1, 2015. Information related to the Postretirement Plan as of and for the period from July 1, 2015 to December 31, 2015 is presented below (dollars in thousands):

Amounts at the end of the year:
Accumulated/projected benefit obligation	$	3,619
Fair value of plan assets		–
Funded status, (underfunded)/overfunded	$	(3,619	)
Amounts recognized in the consolidated balance sheets:
Accrued liabilities	$	(214	)
Other liabilities	$	(3,405	)
Accumulated other comprehensive income, unrecognized net income	$	(155	)
Amounts recognized in the plan for the year:
Company contributions	$	20
Participant contributions	$	15
Benefits paid	$	(35	)
Net periodic benefit cost	$	97
Other changes recognized in OCI:
Net gain	$	155
Amortization of net gain/(loss)		–
Total recognized in other comprehensive income	$	155
Assumptions used in computation benefit obligations:
Discount rate		3.95%

The Company does not expect to recognize any amortization of net actuarial loss during the year ended December 31, 2016.

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:
2016	$	214
2017		226
2018		174
2019		190
2020		177
2021-25		1,056
	$	2,037

For purposes of determining the cost and obligation for pre-Medicare postretirement medical benefits, a 5.0% annual rate of increase in the per capita cost of covered benefits (i.e., health care trend rate) was assumed for the plan in 2016, adjusting to a rate of 5.5% in 2025. Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans.

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11. INCOME TAXES

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

INCOME TAXES

The Company recorded a provision (benefit) for income taxes as follows (in thousands):

	Years Ended December 31,
	2015			2014		2013
Current provision (benefit)	$	(8,011	)	$	11,040	$	–
Deferred provision (benefit)		(2,023	)		4,097		–
Total	$	(10,034	)	$	15,137	$	–

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,
	2015			2014			2013
Statutory rate		35.0%			35.0%			35.0%
State income taxes, net of federal benefit		9.2			10.0			(8.2	)
Change in valuation allowance		(4.2	)		(11.5	)		458.0
Fair value adjustments and warrant inducements		2.0			31.8			–
Domestic production gross receipts deduction		(2.9	)		(2.0	)		–
Section 382 reduction to loss carryover		0.1			(24.2	)		(141.1	)
Stock compensation		(0.8	)		–			(20.9	)
Non-deductible items		(0.5	)		0.6			(27.7	)
Change in tax status of PE Op Co.		–			(1.6	)		–
Convertible debt instruments		–			–			(297.7	)
Other		(3.2	)		(1.3	)		2.6
Effective rate		34.7%			36.8%			0.0%

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,
	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	53,867		$	12,385
Railcar contracts		5,143			–
Pension liability		2,647			–
R&D and AMT credits		2,303			–
Litigation accrual		1,290			–
Capital leases		1,021			–
Stock-based compensation		724			781
Other		5,367			1,944
Total deferred tax assets		72,362			15,110
Deferred tax liabilities:
Fixed assets		(30,272	)		(24,813	)
Intangibles		(1,091	)		(1,134	)
Debt basis		(912	)		–
Other		(1,423	)		(450	)
Total deferred tax liabilities		(33,698	)		(26,397	)
Valuation allowance		(39,838	)		(4,147	)
Net deferred tax liabilities	$	(1,174	)	$	(15,434	)
Classified in balance sheet as:
Deferred tax liabilities	$	(1,174	)	$	(15,434	)

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, the Company had federal net operating loss carryforwards of approximately $137,611,000 and state net operating loss carryforwards of approximately $123,462,000 at December 31, 2015. These net operating loss carryforwards expire as follows (in thousands):

Tax Years	Federal		State
2016–2020	$	–	$	21,344
2021–2025		7,258		1,412
2026–2030		13,624		33,635
2031–2035		116,729		67,071
	$	137,611	$	123,462

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
	2016	$	26,820	$	32,504
	2017		10,862		6,748
	2018		10,862		6,748
	2019		6,383		6,277
	2020		5,282		6,169
	Thereafter		77,402		65,016
		$	137,611	$	123,462

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 has been established in the amount of $39,838,000, $4,147,000 and $8,422,000 at December 31, 2015, 2014 and 2013, respectively, based on the Company’s assessment of the future realizability of certain deferred tax assets. For the years ended December 31, 2015 and 2014, the Company recorded an increase of $1,221,000 and a decrease of $4,275,000 in the valuation allowance, respectively. During 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. In addition, a valuation allowance of $34,469,000 was recorded against the Aventine deferred tax assets with respect to purchase accounting, attributable almost exclusively to the expected expiration of net operating loss carryforwards due to limitations caused by ownership changes as previously discussed. 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.

At December 31, 2015, the Company had no increase or decrease in unrecognized income tax benefits for the year as a result of uncertain tax positions taken in a prior or current period. There was no accrued interest or penalties relating to tax uncertainties at December 31, 2015. Unrecognized tax benefits are not expected to increase or decrease within the next twelve months.

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	2012 – 2014
Arizona	2012 – 2014
California	2011 – 2014
Colorado	2011 – 2014
Idaho	2012 – 2014
Illinois	2012 – 2014
Indiana	2012 – 2014
Iowa	2014
Kansas	2014
Minnesota	2014
Missouri	2014
Nebraska	2012 – 2014
Oklahoma	2014
Oregon	2012 – 2014

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.

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12. PREFERRED STOCK

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

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, 2015, the Company had the following designated preferred stock:

Series A Preferred Stock – The Company has authorized 1,684,375 shares of Series A Cumulative Redeemable Convertible Preferred Stock (“Series A Preferred Stock”), with none outstanding at December 31, 2015 and 2014. Shares of Series A Preferred Stock that are converted into shares of the Company’s common stock revert to undesignated shares of authorized and unissued 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 Company has authorized 1,580,790 shares of Series B Cumulative Convertible Preferred Stock (“Series B Preferred Stock”), with 926,942 shares outstanding at December 31, 2015 and 2014. Shares of Series B Preferred Stock that are converted into shares of the Company’s common stock revert to undesignated shares of authorized and unissued 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, 2015, 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 – In connection with the sale of its Series B Preferred Stock, the Company entered into a registration rights agreement with Lyles United. The registration rights agreement is to be effective until the holders of the Series B Preferred Stock, and their affiliates, as a group, own less than 10% for each of the series issued, including common stock into which such Series B Preferred Stock has been converted. The registration rights agreement provides that holders of a majority of the Series B Preferred Stock, including common stock into which such Series B Preferred Stock has been converted, may demand and cause the Company to register on their behalf the shares of common stock issued, issuable or that may be issuable upon conversion of the Preferred Stock and as payment of dividends thereon, and upon exercise of the related warrants (collectively, the “Registrable Securities”). The Company is required to keep such registration statement effective until such time as all of the Registrable Securities are sold or until such holders may avail themselves of Rule 144 for sales of Registrable Securities without registration under the Securities Act of 1933, as amended. The holders are entitled to two demand registrations on Form S-1 and unlimited demand registrations on Form S-3; provided, however, that the Company is not obligated to effect more than one demand registration on Form S-3 in any calendar year. In addition to the demand registration rights afforded the holders under the registration rights agreement, the holders are entitled to unlimited “piggyback” registration rights. These rights entitle the holders who so elect to be included in registration statements to be filed by the Company with respect to other registrations of equity securities. The Company is responsible for all costs of registration, plus reasonable fees of one legal counsel for the holders, which fees are not to exceed $25,000 per registration. The registration rights agreement includes customary representations and warranties on the part of both the Company and the holders and other customary terms and conditions.

The Company accrued and paid in cash preferred stock dividends of $1,265,000 for each of the years ended December 31, 2015, 2014 and 2013.

For the years ended December 31, 2011, 2010 and 2009, the Company accrued but did not pay any preferred stock dividends. Beginning in 2012, the Company entered into a series of agreements with the parties to whom unpaid dividends were owed under which the Company issued shares of its common stock in satisfaction of a portion of the accrued and unpaid dividends. In connection with each payment of accrued and unpaid dividends, the payees agreed to forebear for a term from exercising any rights they may have with the respect to accrued and unpaid dividends. In 2014, the Company paid the last two installments in cash. The following table summarizes the details of the Company’s payments to the holders of its Series B Preferred Stock:

Agreement/Payment Date	Amount of Dividends Paid		Shares of Common Stock Issued		Extended Forbearance Date
August 12, 2012	$	732,000		157,000		January 1, 2014
December 26, 2012		732,000		144,500		June 30, 2014
March 27, 2013		732,000		139,000		September 30, 2014
July 26, 2013		731,000		175,000		December 31, 2014
September 17, 2013		731,000		197,000		March 31, 2015
May 23, 2014		1,463,000		120,000		November 30, 2015
November 24, 2014		1,000,000		–
December 23, 2014		1,194,000		–
Total	$	7,315,000		932,500

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13. COMMON STOCK AND WARRANTS

12 Months Ended

Dec. 31, 2015

Stockholders' Equity Note [Abstract]

COMMON STOCK AND WARRANTS

The following table summarizes warrant activity for the years ended December 31, 2015, 2014 and 2013 (number of shares in thousands):

	Number of Shares			Price per Share		Weighted Average Exercise Price
Balance at December 31, 2012		5,039			$1.80 – $745.50	$	17.10
Warrants issued		3,548			$6.32 – $7.59	$	6.98
Warrants exercised		(285	)		$1.80 – $8.85	$	7.27
Warrants expired		(27	)	$	745.50	$	745.50
Balance at December 31, 2013		8,275			$5.47 – $735.00	$	10.04
Warrants exercised		(6,615	)		$6.09 – $8.85	$	7.17
Warrants expired		(804	)	$	5.47	$	5.47
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

January 2013 Financing – In connection with the January 2013 Financing Transaction, the Company issued warrants to purchase an aggregate of 1,708,700 shares of common stock. All of the warrants were exercised in 2014.

Series A and B Notes – In connection with the Company’s issuance of its Series A and B Notes, the Company issued warrants to purchase up to 788,400 and 1,051,200 shares of common stock, respectively. All of the warrants were exercised in 2014.

September 2012 Public Offering – On September 26, 2012, the Company raised $10,091,000, net of $909,000 of underwriting fees and issuance costs, through a public offering of units consisting of an aggregate of 1,833,000 shares of common stock and warrants immediately exercisable to purchase an aggregate of 1,833,000 shares of common stock at an exercise price of $8.85 per share and which expire in September 2015. The Company accounted for the net proceeds of the offering by first allocating the $1,658,000 fair value of the warrants to liabilities and then allocating the remaining amount to equity. As of December 31, 2015, all of these warrants were either exercised or expired.

July 2012 Public Offering – On July 3, 2012, the Company raised $10,903,000, net of $1,137,000 of underwriting fees and issuance costs, through a public offering of units consisting of an aggregate of 1,867,000 shares of common stock, warrants immediately exercisable to purchase an aggregate of 1,867,000 shares of common stock at an exercise price of $9.45 per share and which expire in 2017 (“Series I Warrants”) and warrants immediately exercisable to purchase an aggregate of 933,000 shares of common stock at an exercise price of $7.95 per share and which expire in 2014 (“Series II Warrants”). The Series I Warrants and the Series II Warrants are subject to “weighted-average” anti-dilution adjustments if the Company issues or is deemed to have issued securities at a price lower than their then applicable exercise prices. Due to subsequent transactions, the exercise price of the Series I Warrants was reduced to $6.09 per share and the exercise price of the Series II Warrants was reduced to $5.47 per share. The Company accounted for the net proceeds of the offering by first allocating the $3,380,000 fair value of the warrants to liabilities and then allocating the remaining amount to equity. The Series II Warrants expired unexercised. As of December 31, 2015, Series I Warrants to purchase 211,000 shares of common stock remained outstanding.

Warrant Inducements – During 2014 and 2013, certain holders exercised warrants and received payments from the Company in the aggregate amounts of $2,271,000 and $785,800, respectively, in cash as an inducement for these exercises, which were recorded as an expense. There were no warrant inducements in 2015.

Warrant Terms – The exercise prices of the warrants described above are subject to adjustment for stock splits, combinations or similar events, and, in such event, the number of shares issuable upon the exercise of the warrants will also be adjusted so that the aggregate exercise price shall be the same immediately before and immediately after the adjustment. The warrants generally require payments to be made by the Company for failure to deliver the shares of common stock issuable upon exercise. The warrants may not be exercised if, after giving effect to the exercise, the investor together with its affiliates would beneficially own in excess of 4.99% of the Company’s outstanding shares of common stock. The blocker applicable to the exercise of the warrants may be raised or lowered to any other percentage not in excess of 9.99%, except that any increase will only be effective upon 61-days’ prior notice to the Company. If the Company issues options, convertible securities, warrants, stock, or similar securities to holders of its common stock generally, each holder of certain warrants has the right to acquire the same securities as if the holder had exercised its warrants. The warrants prohibit the Company from entering into specified transactions involving a change of control, unless the successor entity assumes all of the Company’s obligations under the warrants under a written agreement before the transaction is completed. When there is a transaction involving a permitted change of control, a holder of a warrant will have the right to force the Company to repurchase the holder’s warrant for a purchase price in cash equal to the Black-Scholes value (as calculated under the individual warrant agreements) of the then unexercised portion of the warrant.

Accounting for Warrants – The Company has determined that the warrants issued in the above transactions did not meet the conditions for classification in stockholders’ equity and as such, the Company has recorded them as a liability at fair value. The Company will revalue them at each reporting period. Further, as noted above, certain of the exercise prices declined as a result of the anti-dilution adjustments due to subsequent transactions. Accordingly, the Company recorded fair value adjustments quarterly, with total fair value adjustments of $1,641,000 of income for the year ended December 31, 2015 and $35,260,000 and $648,000 of expense for the years ended December 31, 2014, 2013, respectively, which is largely attributed to adjustment, if any, to their exercise prices, term shortening and changes in the market value of the Company’s common stock. See Note 15 for the Company’s fair value assumptions.

Registration Rights Agreements – In connection with the above issuances, the Company entered into a registration rights agreements with all of the investors to file registration statements on Form S-1 or S-3 with the Securities and Exchange Commission by certain dates for the resale by the purchasers of the shares of common stock issued and the shares of common stock issuable upon exercise of the warrants. Subject to customary grace periods, the Company is required to keep the registration statements (and the accompanying prospectuses) available for use for resale by the investors on a delayed or continuous basis at then-prevailing market prices at all times until the earlier of (i) the date as of which all of the investors may sell all of the shares of common stock required to be covered by the registration statement without restriction under Rule 144 under the Securities Act of 1933, as amended (including volume restrictions) and without the need for current public information required by Rule 144(c)(1), if applicable) or (ii) the date on which the investors have sold all of the shares of common stock covered by the registration statement. The Company must pay registration delay payments of up to 2% of each investor’s initial investment per month if the registration statement ceases to be effective prior to the expiration of deadlines provided for in the registration rights agreement. The initial registration statements became effective by the stated deadlines and the Company did not record any liability associated with any registration delay payments under the registration rights agreements.

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14. STOCK BASED COMPENSATION

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

The Company has two equity incentive compensation plans: a 2004 Stock Option Plan and a 2006 Stock Incentive Plan.

2004 Stock Option Plan – The 2004 Stock Option Plan authorized the issuance of incentive stock options (“ISOs”) and non-qualified stock options (“NQOs”) to the Company’s officers, directors or key employees or to consultants that do business with the Company for up to an aggregate of 23,810 shares of common stock. On September 7, 2006, the Company terminated the 2004 Stock Option Plan, except to the extent of issued and outstanding options then existing under the plan. The Company had options outstanding to purchase 762 shares of common stock under its 2004 Stock Option Plan at December 31, 2014. These options expired unexercised in 2015.

2006 Stock Incentive Plan – The 2006 Stock Incentive Plan authorizes the issuance of ISOs, NQOs, restricted stock, restricted stock units, stock appreciation rights, direct stock issuances and other stock-based awards to the Company’s officers, directors or key employees or to consultants that do business with the Company for up to an aggregate of 1,715,000 shares of common stock.

Stock Options – On June 18, 2013, the Company granted options to purchase an aggregate of 229,000 shares of the Company’s common stock at an exercise price of $3.74 per share, which was the closing price per share of the Company’s common stock on the date of grant, with an estimated fair value of $1.68. The options vested as to 33% on each of April 1, 2014 and April 1, 2015 and vest as to 34% on April 1, 2016. The options expire 10 years from the date of grant. Fair value was determined using the Black-Scholes Option Pricing Model. The inputs to estimating fair value were: exercise price of $3.74; estimated life of 3.0 years; expected volatility of 68.0%, risk free interest rate of 0.57% and no dividend yield. The Company estimated expected volatility using peer companies within its industry.

Summaries of the status of Company’s stock option plans as of December 31, 2015 and 2014 and of changes in options outstanding under the Company’s plans during those years are as follows (shares in thousands):

	Years Ended December 31,
	2015					2014
	Number of Shares			Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
Outstanding at beginning of year		241		$	6.91		241	$	6.91
Expired		(1	)		867.24		–		–
Outstanding at end of year		240		$	4.18		241	$	6.91
Options exercisable at end of year		164		$	4.18		89	$	11.59

Stock options outstanding as of December 31, 2015 were as follows (number of shares in thousands):

		Options Outstanding				Options Exercisable
	Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (yrs.)		Weighted Average Exercise Price	Number Exercisable		Weighted Average Exercise Price
$	3.74	229	7.47	$	3.74	153	$	3.74
$	12.90	11	5.59	$	12.90	11	$	12.90

The options outstanding at December 31, 2015 and 2014 had intrinsic values of $238,000 and $1,509,000, respectively.

Restricted Stock – The Company granted to certain employees and directors shares of restricted stock under its 2006 Stock Incentive Plan pursuant to restricted stock agreements. A summary of unvested restricted stock activity is as follows (shares in thousands):

	Number of Shares			Weighted Average Grant Date Fair Value Per Share
Unvested at December 31, 2012		16		$	50.40
Issued		615		$	4.56
Vested		(142	)	$	7.85
Canceled		(17	)	$	6.20
Unvested at December 31, 2013		472		$	5.07
Issued		155		$	15.23
Vested		(227	)	$	5.79
Canceled		(10	)	$	4.30
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

The fair value of the common stock at vesting aggregated $2,603,000, $3,858,000 and $601,000 for the years ended December 31, 2015, 2014 and 2013, 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,
	2015		2014		2013
Employees	$	1,694	$	1,493	$	1,333
Non-employees		325		345		391
Total stock-based compensation expense	$	2,019	$	1,838	$	1,724

At December 31, 2015, the total compensation cost related to unvested awards which had not been recognized was $4,622,000 and the associated weighted-average period over which the compensation cost attributable to those unvested awards would be recognized is approximately 2 years.

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15. COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Commitments – The following is a description of significant commitments at December 31, 2015:

Leases – Future minimum lease payments required by non-cancelable leases in effect at December 31, 2015 are as follows (in thousands):

Years Ended December 31,	Capital Leases				Operating Leases
2016	$	4,630		$	15,662
2017		3,731			11,647
2018		547			8,212
2019		–			5,558
2020		–			953
Thereafter		–			1,649
Total minimum payments		8,908		$	43,681
Amount representing interest		(477	)
Obligations under capital leases		8,431
Obligations due within one year		(4,248	)
Long-term obligations under capital leases	$	4,183

Total rent expense during the years ended December 31, 2015, 2014 and 2013 was $9,528,000 $2,417,000 and $1,454,000, respectively.

Sales Commitments – At December 31, 2015, the Company had entered into sales contracts with its major customers to sell certain quantities of ethanol and co-products. The Company had open ethanol indexed-price contracts for 307,670,000 gallons of ethanol as of December 31, 2015 and open indexed-price ethanol sales contracts valued at $15,041,000 as of December 31, 2015. The Company had open fixed-price co-product sales contracts valued at $23,241,000 and open indexed-price co-product sales contracts for 181,000 tons as of December 31, 2015. These sales contracts are scheduled to be completed throughout 2016.

Purchase Commitments – At December 31, 2015, the Company had indexed-price purchase contracts to purchase 23,944,000 gallons of ethanol and fixed-price purchase contracts to purchase $5,793,000 of ethanol from its suppliers. The Company had fixed-price purchase contracts to purchase $20,693,000 of corn from its suppliers. These purchase commitments are scheduled to be satisfied throughout 2016.

Other Commitments – At December 31, 2015, the Company had firm commitments for various capital and process improvement projects at the Company’s plants of approximately $5,198,000, most of which is expected to be completed in 2016.

Contingencies – The following is a description of significant contingencies at December 31, 2015:

Litigation – The Company is subject to various claims and contingencies in the ordinary course of its business, including those related to litigation, business transactions, employee-related matters, and others. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the claim if the likelihood of a potential loss is reasonably possible and the amount involved could be material. While there can be no assurances, the Company does not expect that any of its pending legal proceedings will have a material financial impact on the Company’s operating results.

Pacific Ethanol, Inc., through a subsidiary acquired in its acquisition of Aventine, became involved in a pending lawsuit with Western Sugar Cooperative (“Western Sugar”) that pre-dated the Aventine 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 Aventine Renewable Energy, Inc. (“ARE, Inc.”), one of Aventine’s subsidiaries, as defendant. Western Sugar amended its complaint on April 21, 2015. ARE, Inc. purchased surplus sugar through a United States Department of Agriculture program. Western Sugar was one of the entities that warehoused this sugar for ARE, Inc. The suit alleges that ARE, Inc. 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 alleges that the penalty rates apply because ARE, Inc. failed to take timely delivery or otherwise cause timely shipment of the sugar. Western Sugar claims “expectation damages” in the amount of approximately $8.6 million. ARE, Inc. filed answers to Western Sugar’s complaint and amended complaint generally denying Western Sugar’s allegations and asserting various defenses. The case is currently in its discovery phase.

The Company, through subsidiaries acquired in its acquisition of Aventine, became involved in various pending lawsuits with Aurora Cooperative Elevator Company (“Aurora Coop”) that pre-dated the Aventine acquisition.

On July 26, 2015, the Company settled all outstanding litigation with Aurora Coop. The Company and Aurora Coop agreed to dismiss all lawsuits with prejudice with no admission of fault or liability by the parties, and to release the alleged option held by Aurora Coop to repurchase the land upon which the Company’s 110 million gallon ethanol production facility in Aurora, Nebraska is located (the “Aurora West Facility”). In addition, the parties agreed to terminate the grain supply, marketing and various other agreements between them or their subsidiaries. Under the terms of the settlement, the Company and Aurora Coop will each bear its own costs and fees associated with the lawsuits and the settlement. The Company and Aurora Coop agreed to continue to work together to amend or replace certain real property easements currently in place to ensure continued mutual access by both parties to a system of rails, rail switches, roads, electrical improvements, and utilities already constructed near the Aurora West Facility.

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. GS CleanTech has said it will appeal this decision when the remaining claim in the suit has been decided. The only remaining claim alleges that GS CleanTech inequitably conducted itself before the United States Patent Office when obtaining the patents at issue.

A trial in the District Court for the Southern District of Indiana was conducted in October 2015 on that single issue as well as whether GS CleanTech’s behavior during prosecution of the patents renders this an exceptional case. The Company is awaiting the court’s decision. If the Defendants, including Pacific Ethanol, Inc., PE Stockton and PE Magic Valley, succeed in proving inequitable conduct, and that GS CleanTech’s behavior makes this an “exceptional case” such a finding would allow the Court to award to Pacific Ethanol, Inc., PE Stockton and PE Magic Valley the attorneys’ fees expended to date for defense in this case. It is unknown whether GS CleanTech would appeal such a ruling.

The Company did not record a provision for these matters as of December 31, 2015 as the Court has now ruled that all of the GS CleanTech patents in the suit are invalid and, therefore, not infringed. Further, the Company believes a material adverse ruling on appeal against Pacific Ethanol, Inc., PE Stockton and/or PE Magic Valley is not probable. The Company believes that any liability Pacific Ethanol, Inc., PE Stockton and/or PE Magic Valley may incur would not have a material adverse effect on the Company’s financial condition or its results of operations.

The Company has evaluated the above cases as well as other pending cases. The Company currently has recorded $3.3 million as a litigation contingency liability with respect to these cases for amounts that are probable and estimable.

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16. FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

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 – Pooled separate accounts invest primarily in domestic and international stocks, commercial paper or single mutual funds. The net asset value is used as a practical expedient to determine fair value for these accounts. Each pooled separate account provides for redemptions by the Retirement Plan at reported net asset values per share, with little to no advance notice requirement, therefore these funds are classified within Level 2 of the valuation hierarchy.

Warrants – Except for the warrants issued September 26, 2012, the Company’s warrants were valued using a Monte Carlo Binomial Lattice-Based valuation methodology, adjusted for marketability restrictions. The warrants issued September 26, 2012, due to no anti-dilution protection features, were valued using the Black-Scholes Valuation Model.

The Company recorded its warrants issued from 2011 through 2012 and the conversion features associated with its convertible notes at fair value and designated them as Level 3 on their issuance dates.

Significant assumptions used and related fair values for the warrants as of December 31, 2015 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		49.1%		0.86%		1.51		22.9%		211,000		200,000
	12/13/2011	$	8.43		48.4%		0.65%		0.95		18.3%		138,000		73,000
														$	273,000

Significant assumptions used and related fair values for the warrants as of December 31, 2014 were as follows:

Original Issuance		Exercise Price		Volatility		Risk Free Interest Rate		Term (years)		Market Discount		Warrants Outstanding		Fair Value
	09/26/2012	$	8.85		51.0%		0.19%		0.74		37.0%		473,000		748,000
	07/3/2012	$	6.09		56.1%		0.89%		2.51		32.8%		211,000		811,000
	12/13/2011	$	8.43		54.3%		0.67%		1.95		28.7%		138,000		427,000
														$	1,986,000

The estimated fair value of the warrants is affected by the above underlying inputs. Observable inputs include the values of exercise price, stock price, term and risk-free interest rate. As separate inputs, an increase (decrease) in either the term or risk free interest rate will result in an increase (decrease) in the estimated fair value of the warrant.

Unobservable inputs include volatility and market discount. An increase (decrease) in volatility will result in an increase (decrease) in the estimated warrant value and an increase (decrease) in the market discount will result in a decrease (increase) in the estimated warrant fair value.

The volatility utilized was a blended average of the Company’s historical volatility and implied volatilities derived from a selected peer group. The implied volatility component has remained relatively constant over time given that implied volatility is a forward-looking assumption based on observable trades in public option markets. Should the Company’s historical volatility increase (decrease) on a go-forward basis, the resulting value of the warrants would increase (decrease).

The market discount, or a discount for lack of marketability, is quantified using a Black-Scholes option pricing model, with a primary model input of assumed holding period restriction. As the assumed holding period increases (decreases), the market discount increases (decreases), conversely impacting the value of the warrant fair value.

Convertible Notes – The conversion feature imbedded in the convertible notes was valued using a Monte Carlo Binomial Lattice-Based valuation methodology, adjusted for marketability restrictions. The Company estimated the fair value of the conversion feature until the retirement of the convertible notes in December 2013.

Other Derivative Instruments – The Company’s other derivative instruments consist of commodity positions. The fair values of the commodity positions are based on quoted prices on the commodity exchanges and are designated as Level 1 inputs.

The following table summarizes recurring fair value measurements by level at December 31, 2015 (in thousands):

		Fair Value			Level 1			Level 2		Level 3		Benefit Plan Percentage Allocation
Assets:
Derivative financial instruments(1)	$	2,081		$	2,081		$	–	$	–
Defined benefit plan assets(2) (pooled separate accounts):
Large U.S. Equity (3)		3,662			–			3,662		–		29%
Small/Mid U.S. Equity(4)		1,099			–			1,099		–		9%
International Equity(5)		1,525			–			1,525		–		12%
Fixed Income(6)		6,281			–			6,281		–		50%
	$	14,648		$	2,081			12,567	$	–
Liabilities:
Warrants (7)	$	(273	)	$	–		$	–	$	(273	)
Derivative financial instruments(8)		(1,848	)		(1,848	)		–		–
	$	(2,121	)	$	(1,848	)	$	–	$	(273	)

The following table summarizes recurring fair value measurements by level at December 31, 2014 (in thousands):

		Fair Value			Level 1			Level 2		Level 3
Assets:
Derivative financial instruments(1)	$	1,586		$	1,586		$	–	$	–
	$	1,586		$	1,586		$	–	$	–
Liabilities:
Warrants	$	(1,986	)	$	–		$	–	$	(1,986	)
Derivative financial instruments		(1,149	)		(1,149	)		–		–
	$	(3,135	)	$	(1,149	)	$	–	$	(1,986	)

__________

(1) Included in other current assets in the consolidated balance sheets.

(2) See Note 10 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 warrant liabilities at fair value in the consolidated balance sheets.

(8) Included in accrued liabilities in the consolidated balance sheets.

For fair value measurements using significant unobservable inputs (Level 3), 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. The changes in the Company’s fair value of its Level 3 inputs with respect to its warrants were as follows (in thousands):

	Warrants			Conversion Features
Balance, December 31, 2012	$	4,892		$	–
Issuance of warrants in January offering	$	2,657		$	–
Issuance of notes and warrants in March offering		1,572			1,401
Issuance of notes in June offering		–			2,929
Conversions of notes		–			(5,205	)
Exercises of warrants		(260	)		–
Adjustments to fair value for the period		(646	)		875
Balance, December 31, 2013	$	8,215		$	–
Exercises of warrants		(41,486	)		–
Expiration of warrants		(3	)		–
Adjustments to fair value for the period		35,260			–
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		$	–

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17. PARENT COMPANY FINANCIALS

12 Months Ended

Dec. 31, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

PARENT COMPANY FINANCIALS

Pacific Ethanol, Inc.

Condensed Financial Information of the Registrant

Balance Sheets - Parent Company Only

(in thousands)

	December 31,
	2015			2014
Cash and cash equivalents	$	20,618		$	23,915
Receivables from consolidated subsidiaries		14,505			8,547
Other current assets		11,361			8,647
Total current assets		46,484			41,109
Property and equipment, net		1,695			2,572
Investments in consolidated subsidiaries		301,416			154,134
Pacific Ethanol West plant term debt		41,763			41,763
Other assets		838			1,933
Total other assets		344,017			197,830
Total Assets	$	392,196		$	241,511
Accounts payable and accrued liabilities	$	1,963		$	2,347
Payables to consolidated subsidiaries		13,230			3,526
Accrued PE Op Co. purchase		3,828			–
Total current liabilities		19,021			5,873
Warrant liabilities at fair value		273			1,986
Deferred tax liabilities		1,174			15,434
Other liabilities		184			236
Total Liabilities		20,652			23,529
Preferred stock		1			1
Non-voting common stock		4			–
Common stock		39			25
Additional paid-in capital		902,843			725,813
Accumulated other comprehensive income		1,040			–
Accumulated deficit		(532,383	)		(512,332	)
Total Pacific Ethanol, Inc. stockholders' equity		371,544			213,507
Noncontrolling interests		–			4,475
Total stockholders' equity		371,544			217,982
Total Liabilities and Stockholders' Equity	$	392,196		$	241,511

Pacific Ethanol, Inc.

Condensed Financial Information of the Registrant

Statements of Operations - Parent Company Only

(in thousands)

	Years Ended December 31,
	2015			2014			2013
Management fees from subsidiaries	$	9,857		$	12,731		$	9,837
Selling, general and administrative expenses		(14,336	)		(12,779	)		(10,188	)
Asset impairments		(1,970	)		–			–
Loss from operations		(6,449	)		(48	)		(351	)
Fair value adjustments and warrant inducements		1,641			(37,532	)		(1,013	)
Interest income		5,739			4,753			5,088
Interest expense		(27	)		(1,813	)		(3,912	)
Loss on extinguishments of debt		–			(2,363	)		(9,481	)
Income (loss) before provision for income taxes		904			(37,003	)		(9,669	)
Provision for income taxes		–			–			–
Income before equity earnings of subsidiaries		904			(37,003	)		(9,669	)
Equity earnings of consolidated subsidiaries		(19,690	)		58,292			8,888
Consolidated net income (loss)	$	(18,786	)	$	21,289		$	(781	)

Pacific Ethanol, Inc.

Condensed Financial Information of the Registrant

Statements of Cash Flows - Parent Company Only

(in thousands)

	Years Ended December 31,
	2015			2014			2013
Operating Activities:
Net income (loss)	$	(18,786	)	$	21,289		$	(781	)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Equity Earnings		19,690			(58,292	)		(8,888	)
Depreciation and amortization		390			126			104
Fair value adjustments		(1,641	)		35,260			(648	)
Loss on extinguishments of debt		–			2,363			9,481
Asset impairments		1,970			–			–
Deferred income taxes		(14,260	)		5,128			–
Amortization of debt discount		–			1,674			(179	)
Changes in operating assets and liabilities:
Accounts receivables		(5,958	)		(7,001	)		(495	)
Other assets		5,895			(13,772	)		828
AP and accruals		604			(587	)		(1,358	)
Accounts payable with subsidiaries		11,179			5,846			1,724
Net cash used in operating activities	$	(917	)	$	(7,966	)	$	(212	)
Investing Activities:
Additions to property and equipment	$	(1,483	)	$	(455	)	$	(72	)
Purchase of PE OP Co. Ownership		–			(6,000	)		(2,340	)
Net cash used in Investing activities	$	(1,483	)	$	(6,455	)	$	(2,412	)
Financing Activities:
Preferred stock Dividends	$	(1,265	)	$	(3,459	)	$	(1,265	)
Proceeds from Equity Raise		–			26,073			–
Proceeds from issuance of senior notes		–			–			22,192
Proceeds from issuance of convertible notes		–			–			14,000
Payment on related party Note		–			(750	)		–
Payments on senior notes		–			(13,984	)		(6,208	)
Purchase of PE OP Co. debt		–			(17,038	)		(27,088	)
Proceeds from exercise of warrants		368			43,676			2,064
Net Cash (used in) provided by financing activities	$	(897	)	$	34,518		$	3,695
Net (decrease) increase in cash and equivalents		(3,297	)		20,097			1,071
Cash and equivalents at beginning of period		23,915			3,818			2,747
Cash and equivalents at ending of period	$	20,618		$	23,915		$	3,818

Restricted Net Assets – At December 31, 2015, the Company had approximately $164.0 million of net assets at its subsidiaries that were not available to be transferred to the Parent company in the form of dividends, loans or advances due to restrictions contained in the credit facilities of these subsidiaries.

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18. SUBSEQUENT EVENT

12 Months Ended

Dec. 31, 2015

Subsequent Events [Abstract]

SUBSEQUENT EVENT

Pacific Ethanol West Plants’ Term Debt Repayment – On February 26, 2016, the Company retired the $17,003,000 outstanding balance of the Pacific Ethanol West Plants’ term debt by purchasing the lender’s position for cash at par without any prepayment penalty. This purchase increased the amount held by Pacific Ethanol to a combined $58,766,000. As a result, the Company has no continuing obligations to any third-party lender under the credit agreements associated with this term debt.

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19. QUARTERLY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

QUARTERLY FINANCIAL DATA (UNAUDITED)

The Company’s quarterly results of operations for the years ended December 31, 2015 and 2014 are as follows (in thousands). Certain of these calculations has been revised from the calculations previously reported to reflect the participating securities.

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
December 31, 2015:
Net sales	$	206,176		$	227,621		$	380,622		$	376,757
Gross profit (loss)	$	(987	)	$	6,254		$	(7,380	)	$	9,523
Income (loss) from operations	$	(5,892	)	$	2,261		$	(14,826	)	$	485
Net income (loss) attributed to Pacific Ethanol, Inc.	$	(4,380	)	$	1,010		$	(14,663	)	$	(753	)
Preferred stock dividends	$	(312	)	$	(315	)	$	(319	)	$	(319	)
Income allocated to participating securities	$	–		$	(18	)	$	–		$	–
Net income (loss) available to common stockholders	$	(4,692	)	$	677		$	(14,982	)	$	(1,072	)
Income (loss) per common share:
Basic	$	(0.19	)	$	0.03		$	(0.36	)	$	(0.03	)
Diluted	$	(0.19	)	$	0.03		$	(0.36	)	$	(0.03	)

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
December 31, 2014:
Net sales	$	254,543		$	321,144		$	275,573		$	256,152
Gross profit	$	38,545		$	33,576		$	17,986		$	18,378
Income from operations	$	34,875		$	29,261		$	13,594		$	13,647
Net income (loss) attributed to Pacific Ethanol, Inc.	$	(10,826	)	$	15,572		$	4,025		$	12,518
Preferred stock dividends	$	(312	)	$	(315	)	$	(319	)	$	(319	)
Income allocated to participating securities	$	–		$	(462	)	$	(100	)	$	(314	)
Net income (loss) available to common stockholders	$	(11,138	)	$	14,795		$	3,606		$	11,885
Income (loss) per common share:
Basic	$	(0.69	)	$	0.74		$	0.16		$	0.49
Diluted	$	(0.69	)	$	0.65		$	0.15		$	0.48

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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business

Organization and Business – The consolidated financial statements include, for all periods presented, the accounts of Pacific Ethanol, Inc., a Delaware corporation (“Pacific Ethanol”), and its direct and indirect subsidiaries (collectively, the “Company”), including its wholly-owned subsidiaries, Kinergy Marketing LLC, an Oregon limited liability company (“Kinergy”), Pacific Ag. Products, LLC, a California limited liability company (“PAP”) and PE Op Co., a Delaware corporation (“PE Op Co.”). The Company had a 100% and 96% ownership interest in PE Op Co. as of December 31, 2015 and 2014, respectively.

The Company’s acquisition of Aventine Renewable Energy Holdings, Inc. (now, Pacific Ethanol Central, LLC, a Delaware limited liability company, “Aventine”) was consummated on July 1, 2015, and as a result, the Company’s consolidated financial statements include the results of Aventine only as of and for the six months ended December 31, 2015.

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 Aventine, the Company now has a combined ethanol production capacity of 515 million gallons per year, markets, on an annualized basis, over 800 million gallons of ethanol, and produces, on an annualized basis, over one million tons of co-products such as wet and dry distillers grains, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, distillers yeast and CO₂. The Company’s four 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 December 31, 2015, all eight facilities were operating. On April 30, 2014, the Company’s previously idled facility in Madera, California commenced producing ethanol. 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 – The consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company. All significant intercompany accounts and transactions have been eliminated in consolidation.

Segments

Segments – A segment is a component of an enterprise whose operating results are regularly reviewed by the enterprise’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company determines and discloses its segments in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification Section 280, Segment Reporting (“ASC 280”), which defines how to determine segments. The Company reports its financial and operating performance in two reportable segments: (1) ethanol production, which includes the production and sale of ethanol and co-products, with all eight of the Company’s production facilities aggregated, and (2) marketing and distribution, which includes marketing and merchant trading for Company-produced ethanol and co-products and third-party ethanol.

Cash and Cash Equivalents

Cash and Cash Equivalents – The Company considers all highly-liquid investments with an original maturity of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts – Trade accounts receivable are presented at face value, net of the allowance for doubtful accounts. The Company sells ethanol to gasoline refining and distribution companies, sells distillers grains and other feed co-products to dairy operators and animal feedlots and sells corn oil to poultry and biodiesel customers generally without requiring collateral. Due to a limited number of ethanol customers, the Company had significant concentrations of credit risk from sales of ethanol as of December 31, 2015 and 2014, as described below.

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 $42,049,000 and $28,427,000 at December 31, 2015 and 2014, respectively, were used as collateral under Kinergy’s operating line of credit. The allowance for doubtful accounts was $25,000 and $6,000 as of December 31, 2015 and 2014, respectively. The Company recorded a bad debt recovery of $354,000 and $42,000, and a bad debt expense of $169,000 for the years ended December 31, 2015, 2014 and 2013, respectively. The Company does not have any off-balance sheet credit exposure related to its customers.

Concentration Risks

Concentration Risks – Credit risk represents the accounting loss that would be recognized at the reporting date if counterparties failed completely to perform as contracted. Concentrations of credit risk, whether on- or off-balance sheet, that arise from financial instruments exist for groups of customers or counterparties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions described below. Financial instruments that subject the Company to credit risk consist of cash balances maintained in excess of federal depository insurance limits and accounts receivable, which have no collateral or security. The Company has not experienced any significant losses in such accounts and believes that it is not exposed to any significant risk of loss of cash.

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,
	2015		2014		2013
Customer A		15%		20%		23%
Customer B		12%		20%		17%
Customer C		12%		11%		6%
Customer D		6%		8%		12%

The Company had accounts receivable due from these customers totaling $21,358,000 and $20,706,000, representing 35% and 60% of total accounts receivable, as of December 31, 2015 and 2014, respectively.

The Company purchases fuel-grade ethanol for resale and corn, its largest cost component in producing ethanol, from its suppliers. The Company purchased ethanol and corn from suppliers representing 10% or more of the Company’s total purchases for the purchase and production of ethanol, as follows:

	Years Ended December 31,
	2015		2014		2013
Supplier A		19%		26%		37%
Supplier B		13%		12%		8%
Supplier C		9%		15%		14%

Approximately 29% of the Company’s employees are covered by a collective bargaining agreement.

Inventories

Inventories – Inventories consisted primarily of bulk ethanol, corn, co-products, Low-Carbon Fuel Standard (“LCFS”) credits, beet sugar 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 balances consisted of the following (in thousands):

	December 31,
	2015		2014
Finished goods	$	31,153	$	10,143
LCFS credits		6,957		975
Raw materials		9,891		2,695
Work in progress		11,121		3,274
Other		1,698		1,463
Total	$	60,820	$	18,550

Property and Equipment

Property and Equipment – 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

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 fixed assets 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 Assets – The Company amortizes intangible assets with definite lives using the straight-line method over their established lives, generally 2-10 years. Additionally, the Company tests these assets with established lives for impairment if conditions exist that indicate that carrying values may not be recoverable. Possible conditions leading to the unrecoverability of these assets include changes in market conditions, changes in future economic conditions or changes in technological feasibility that impact the Company’s assessments of future operations. The Company assesses indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. If the Company determines that an impairment charge is needed, the charge will be recorded as asset impairment in the consolidated statements of operations.

Deferred Financing Costs

Deferred Financing Costs – Deferred financing costs are costs incurred to obtain debt financing, including all related fees, and are amortized as interest expense over the term of the related financing using the straight-line method, which approximates the interest rate method. Amortization of deferred financing costs was $272,000, $779,000 and $2,009,000 for the years ended December 31, 2015, 2014 and 2013, respectively. Unamortized deferred financing costs were approximately $462,000 at December 31, 2015 and are recorded in other assets in the consolidated balance sheets.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities – Derivative transactions, which can include exchange-traded forward contracts and futures positions on the New York Mercantile Exchange or the Chicago Board of Trade, are recorded on the balance sheet as assets and liabilities based on the derivative’s fair value. Changes in the fair value of derivative contracts are recognized currently in income unless specific hedge accounting criteria are met. If derivatives meet those criteria, and hedge accounting is elected, effective gains and losses are deferred in accumulated other comprehensive income (loss) and later recorded together with the hedged item in consolidated income (loss). For derivatives designated as a cash flow hedge, the Company formally documents the hedge and assesses the effectiveness with associated transactions. The Company has designated and documented contracts for the physical delivery of commodity products to and from counterparties as normal purchases and normal sales.

Revenue Recognition

Revenue Recognition – The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable, and collection is reasonably assured. The Company derives revenue primarily from sales of ethanol and related co-products. The Company recognizes revenue when title transfers to its customers, which is generally upon the delivery of these products to a customer’s designated location. These deliveries are made in accordance with sales commitments and related sales orders entered into either verbally or in writing with customers. The sales commitments and related sales orders provide quantities, pricing and conditions of sales. In this regard, the Company engages in three basic types of revenue generating transactions:

· As a producer. Sales as a producer consist of sales of the Company’s inventory produced at its plants.

· As a merchant. Sales as a merchant consist of sales to customers through purchases from third-party suppliers in which the Company may or may not obtain physical control of the ethanol or co-products, in which shipments are directed from the Company’s suppliers to its terminals or direct to its customers but for which the Company accepts the risk of loss in the transactions.

· As an agent. Sales as an agent consist of sales to customers through purchases from third-party suppliers in which the risks and rewards of inventory ownership remain with third-party suppliers and the Company receives a predetermined service fee under these transactions.

Revenue from sales of third-party ethanol and co-products 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 $1,510,000, $1,908,000 and $1,928,000 in net sales when acting as an agent for the years ended December 31, 2015, 2014 and 2013, 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 its co-products 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 – Shipping and handling costs are classified as a component of cost of goods sold in the accompanying consolidated statements of operations.

California Ethanol Producer Incentive Program

California Ethanol Producer Incentive Program – The Company participated in the California Ethanol Producer Incentive Program (“CEPIP”) through the Pacific Ethanol West Plants located in California since the program’s inception in 2010. The CEPIP was a program to provide funds to an eligible California facility—up to $0.25 per gallon of production—when current production corn crush spreads, measured as the difference between specified ethanol and corn index prices, were less than prescribed levels determined by the California Energy Commission. As of December 31, 2014, the program is no longer funded. For any month in which a payment was made by the CEPIP, the Company would be required to reimburse the funds within the subsequent five years from each payment date, if the corn crush spread exceeded $1.00 per gallon. In 2010 and 2011, the Company received an aggregate of $2,000,000 in CEPIP funds. Since these funds were provided to subsidize low production costs and encourage eligible facilities to either continue production or start up production in low margin environments, the Company recorded the proceeds as a credit to cost of goods sold in the periods the funds were received. For the years ended December 31, 2014 and 2013, the Company recorded aggregate amounts of $1,878,000 and $122,000 as cost of goods sold, respectively, in respect of the Company’s repayments under the CEPIP to the California Energy Commission.

Stock-Based Compensation

Stock-Based Compensation – The Company accounts for the cost of employee services received in exchange for the award of equity instruments based on the fair value of the award, determined on the date of grant. The expense is to be recognized over the period during which an employee is required to provide services in exchange for the award. The Company estimates forfeitures at the time of grant and makes revisions, if necessary, in the second quarter of each year if actual forfeitures differ from those estimates. Based on historical experience, the Company estimated future unvested forfeitures at 8% for the years ended December 31, 2015, 2014 and 2013. The Company recognizes stock-based compensation expense as a component of selling, general and administrative expenses in the consolidated statements of operations.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets – The Company assesses the impairment of long-lived assets, including property and equipment, internally developed software and purchased intangibles subject to amortization, when events or changes in circumstances indicate that the fair value of assets could be less than their net book value. In such event, the Company assesses long-lived assets for impairment by first determining the forecasted, undiscounted cash flows the asset is expected to generate plus the net proceeds expected from the sale of the asset. If this amount is less than the carrying value of the asset, the Company will then determine the fair value of the asset. An impairment loss would be recognized when the fair value is less than the related asset’s net book value, and an impairment expense would be recorded in the amount of the difference. Forecasts of future cash flows are judgments based on the Company’s experience and knowledge of its operations and the industries in which it operates. These forecasts could be significantly affected by future changes in market conditions, the economic environment, including inflation, and purchasing decisions of the Company’s customers.

Provision for Income Taxes

Provision for Income Taxes – Income taxes are accounted for under the asset and liability approach, where deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities, and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

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, net and other income (expense), net, respectively. The Company adopted early the provisions of ASU 2015-17, whereby all 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 entities 80% or more owned by the Company as well as the Company’s pro-rata share of taxable income from pass-through entities in which the Company holds an ownership interest. 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 – Basic income (loss) per share is computed on the basis of the weighted-average number of shares of common stock outstanding during the period. Preferred dividends are deducted from net income (loss) attributed to Pacific Ethanol, Inc. and are considered in the calculation of income (loss) available to common stockholders in computing basic income (loss) per share. Common stock equivalents to the preferred stock are considered participating securities and are also included in this calculation when dilutive. For the year ended December 31, 2014, the calculation has been revised from the calculation previously reported to reflect the participating securities.

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

	Year Ended December 31, 2015
	Loss Numerator			Shares Denominator		Per-Share Amount
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	)

	Year Ended December 31, 2014
	Income Numerator			Shares Denominator		Per-Share Amount
Net income attributed to Pacific Ethanol	$	21,289
Less: Preferred stock dividends		(1,265	)
Less: Allocated to participating securities		(585	)
Basic income per share:
Income available to common stockholders	$	19,439			20,810	$	0.93
Add: Warrants		–			1,859
Diluted income per share:
Income available to common stockholders	$	19,439			22,669	$	0.86

	Year Ended December 31, 2013
	Loss Numerator			Shares Denominator		Per-Share Amount
Net loss attributed to Pacific Ethanol	$	(781	)
Less: Preferred stock dividends		(1,265	)
Basic and diluted loss per share:
Loss available to common stockholders	$	(2,046	)		12,264	$	(0.17	)

There were an aggregate of 817,000, 660,000 and 1,357,000 potentially dilutive shares from convertible securities outstanding as of December 31, 2015, 2014 and 2013, respectively. These convertible securities were not considered in calculating diluted income (loss) per common share for the years ended December 31, 2015, 2014 and 2013 as their effect would be anti-dilutive.

Financial Instruments

Financial Instruments – The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are reasonable estimates of their fair values because of the short maturity of these items. The Company recorded at fair value its warrants and conversion features of its convertible notes. The Company believes the carrying value of its long-term debt approximates fair value because the interest rates on these instruments are variable.

Employment-related Benefits

Stock-Based Compensation – The Company accounts for the cost of employee services received in exchange for the award of equity instruments based on the fair value of the award, determined on the date of grant. The expense is to be recognized over the period during which an employee is required to provide services in exchange for the award. The Company estimates forfeitures at the time of grant and makes revisions, if necessary, in the second quarter of each year if actual forfeitures differ from those estimates. Based on historical experience, the Company estimated future unvested forfeitures at 8% for the years ended December 31, 2015, 2014 and 2013. The Company recognizes stock-based compensation expense as a component of selling, general and administrative expenses in the consolidated statements of operations.

Estimates and Assumptions

Estimates and Assumptions – The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates are required as part of determining the fair value of warrants and conversion features, allowance for doubtful accounts, net realizable value of inventory, estimated lives of property and equipment and intangibles, long-lived asset impairments, valuation allowances on deferred income taxes and the potential outcome of future tax consequences of events recognized in the Company’s financial statements or tax returns, and the valuation of assets acquired and liabilities assumed as a result of business combinations. Actual results and outcomes may materially differ from management’s estimates and assumptions.

Subsequent Events

Subsequent Events – Management evaluates, as of each reporting period, events or transactions that occur after the balance sheet date through the date that the financial statements are issued for either disclosure or adjustment to the consolidated financial results.

Reclassifications

Reclassifications – Certain prior year amounts have been reclassified to conform to the current presentation. Such reclassification had no effect on the consolidated net income (loss) reported in the consolidated statements of operations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements – 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, 2019, and for interim periods beginning after December 15, 2020. Early adoption is permitted. The Company has several operating leases that may be impacted by this guidance. The Company is currently evaluating the impact of the adoption of this accounting standard on its consolidated results of operations and financial condition.

In November 2015, the FASB issued new guidance that requires deferred tax liabilities and assets to be classified as noncurrent in a classified balance sheet. The guidance is effective for public companies for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. For the year ended December 31, 2015, the Company adopted the guidance.

In May 2014, the FASB issued new guidance on the recognition of revenue. The guidance 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 was originally effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, but has been further deferred one year. The Company’s adoption begins with the first fiscal quarter of fiscal year 2018. The Company is currently evaluating the impact of the adoption of this accounting standard update on its consolidated results of operations and financial condition.

In April 2015, the FASB issued new guidance on presentation of debt issuance costs. Historically, entities have presented debt issuance costs as an asset. Under the new guidance, effective for fiscal years beginning after December 31, 2015, debt issuance costs will be reclassified as a deduction to the carrying amount of the related debt balance. The guidance does not change any of the Company’s other debt recognition or disclosure. The Company will adopt the guidance beginning January 1, 2016.

In July 2015, the FASB issued new guidance on simplifying the measurement of inventory. Under the new guidance, entities are required to measure most inventory at the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. This guidance is effective prospectively for fiscal years beginning after December 15, 2016. Early adoption is permitted. The Company has adopted the guidance with no material impact on its results of operations or financial condition.

In September 2015, the FASB issued new guidance on simplifying the accounting for measurement-period adjustments. Under the new guidance, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The guidance also requires acquirers to present separately on the face of the statement of operations or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The guidance is effective for fiscal years beginning after December 31, 2015, applied prospectively. Early adoption is permitted. The Company will consider early adoption in future periods related to its current measurement period for its acquisition of Aventine.

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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2015

Organization And Significant Accounting Policies Tables

Concentrations of Credit Risk Major Customers

	Years Ended December 31,
	2015		2014		2013
Customer A		15%		20%		23%
Customer B		12%		20%		17%
Customer C		12%		11%		6%
Customer D		6%		8%		12%

Purchases from external customers

	Years Ended December 31,
	2015		2014		2013
Supplier A		19%		26%		37%
Supplier B		13%		12%		8%
Supplier C		9%		15%		14%

Inventory

	December 31,
	2015		2014
Finished goods	$	31,153	$	10,143
LCFS credits		6,957		975
Raw materials		9,891		2,695
Work in progress		11,121		3,274
Other		1,698		1,463
Total	$	60,820	$	18,550

Property and equipment 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

	Year Ended December 31, 2015
	Loss Numerator			Shares Denominator		Per-Share Amount
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	)

	Year Ended December 31, 2014
	Income Numerator			Shares Denominator		Per-Share Amount
Net income attributed to Pacific Ethanol	$	21,289
Less: Preferred stock dividends		(1,265	)
Less: Allocated to participating securities		(585	)
Basic income per share:
Income available to common stockholders	$	19,439			20,810	$	0.93
Add: Warrants		–			1,859
Diluted income per share:
Income available to common stockholders	$	19,439			22,669	$	0.86

	Year Ended December 31, 2013
	Loss Numerator			Shares Denominator		Per-Share Amount
Net loss attributed to Pacific Ethanol	$	(781	)
Less: Preferred stock dividends		(1,265	)
Basic and diluted loss per share:
Loss available to common stockholders	$	(2,046	)		12,264	$	(0.17	)

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2. PACIFIC ETHANOL CENTRAL PLANTS (Tables)

12 Months Ended

Dec. 31, 2015

Pacific Ethanol Central Plants

Value and classification of assets that are collateral for obligations of New PE Holdco

Cash and cash equivalents	$	18,756
Accounts receivable		10,430
Inventory		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	$	218,090
Net assets acquired	$	174,573

Pro forma financial information regarding the acquisition

	Years Ended December 31,
	2015			2014
Net sales – pro forma	$	1,484,676		$	1,695,440
Cost of goods sold – pro forma	$	1,469,512		$	1,528,387
Selling, general and administrative expenses – pro forma	$	34,735		$	47,796
Net income (loss) – pro forma	$	(34,136	)	$	12,596
Diluted net income (loss) per share – pro forma	$	(0.81	)	$	0.31
Diluted weighted-average shares – pro forma		42,053			40,428

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5. SEGMENTS (Tables)

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Financial date for operating segments

	Years Ended December 31,
	2015			2014			2013
Net Sales:
Ethanol production:
Net sales from external customers	$	710,201		$	562,388		$	507,162
Intersegment net sales		–			–			–
Total segment revenues		710,201			562,388			507,162
Marketing and distribution:
Net sales from external customers		480,975			545,024			401,275
Intersegment net sales		5,262			3,986			3,351
Total segment net sales		486,237			549,010			404,626
Net sales including intersegment activity		1,196,438			1,111,398			911,788
Intersegment eliminations		(5,262	)		(3,986	)		(3,351	)
Net sales as reported	$	1,191,176		$	1,107,412		$	908,437
Cost of goods sold:
Ethanol production	$	719,833		$	473,598		$	492,186
Marketing and distribution		476,411			537,010			393,366
Intersegment eliminations		(12,477	)		(11,681	)		(10,045	)
	$	1,183,767		$	998,927		$	875,507
Income (loss) before provision for income taxes:
Ethanol production	$	(32,723	)	$	72,278		$	3,776
Marketing and distribution		3,200			6,068			5,217
Corporate activities		616			(37,207	)		(10,155	)
	$	(28,907	)	$	41,139		$	(1,162	)
Depreciation and amortization:
Ethanol production	$	23,091		$	12,509		$	11,533
Marketing and distribution		151			551			499
Corporate activities		390			126			104
	$	23,632		$	13,186		$	12,136
Interest expense:
Ethanol production	$	(11,969	)	$	(7,048	)	$	(11,248	)
Marketing and distribution		(625	)		(566	)		(527	)
Corporate activities		–			(1,824	)		(3,896	)
	$	(12,594	)	$	(9,438	)	$	(15,671	)

Schedule Of Segment Assets By Segment Text Block

	Years Ended December 31,
	2015		2014
Total assets:
Ethanol production	$	536,013	$	190,630
Marketing and distribution		107,532		70,068
Corporate assets		31,598		37,198
	$	675,143	$	297,896

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6. PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Property and equipment

	December 31,
	2015			2014
Facilities and plant equipment	$	501,800		$	190,714
Land		7,541			2,570
Other equipment, vehicles and furniture		9,084			7,641
Construction in progress		23,579			8,720
		542,004			209,645
Accumulated depreciation		(77,044	)		(54,343	)
	$	464,960		$	155,302

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7. INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets

		December 31, 2015							December 31, 2014
	Useful Life (Years)	Gross		Accumulated Amortization			Net Book Value		Gross		Accumulated Amortization			Net Book Value
Non-Amortizing:
Kinergy tradename		$	2,678	$	–		$	2,678	$	2,678	$	–		$	2,678
Amortizing:
Customer relationships	10		4,741		(4,741	)		–		4,741		(4,633	)		108
Total intangible assets, net		$	7,419	$	(4,741	)	$	2,678	$	7,419	$	(4,633	)	$	2,786

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8. DERIVATIVES (Tables)

12 Months Ended

Dec. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives not designated as hedging instruments

	As of December 31, 2015
	Assets			Liabilities
Type of Instrument	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value
Commodity contracts	Other current assets	$	2,081	Other current liabilities	$	1,848
		$	2,081		$	1,848

	As of December 31, 2015
	Assets			Liabilities
Type of Instrument	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value
Commodity contracts	Other current assets	$	1,586	Other current liabilities	$	1,149
		$	1,586		$	1,149

Recognized gains (losses) on Derivatives

			Realized Losses
			For the Years Ended December 31,
Type of Instrument	Statements of Operations Location		2015			2014			2013
Commodity contracts	Cost of goods sold	$	(338	)	$	(1,144	)	$	(1,901	)
		$	(338	)	$	(1,144	)	$	(1,901	)

			Unrealized (Losses) Gains
			For the Years Ended December 31,
Type of Instrument	Statements of Operations Location		2015			2014		2013
Commodity contracts	Cost of goods sold	$	(204	)	$	336	$	80
		$	(204	)	$	336	$	80

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9. DEBT (Tables)

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Long Term Debt

	December 31, 2015			December 31, 2014
Kinergy operating line of credit	$	61,003		$	17,530
Term debt		162,622			17,003
		223,625			34,533
Less unamortized discount		(2,298	)		–
Less short-term portion		(17,003	)		–
Long-term debt	$	204,324		$	34,533

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10. PENSION PLANS (Tables)

12 Months Ended

Dec. 31, 2015

Retirement Plan [Member]

Defined contribution plan schedule

Amounts at the end of the year:
Accumulated/projected benefit obligation	$	16,552
Fair value of plan assets		12,567
Funded status, (underfunded)/overfunded	$	(3,985	)
Amounts recognized in the consolidated balance sheets:
Other liabilities	$	(3,985	)
Accumulated other comprehensive income, unrecognized net income	$	(885	)
Amounts recognized in the plan for the year:
Company contributions	$	–
Participant contributions	$	–
Benefits paid	$	(315	)
Net periodic benefit cost	$	49
Other changes recognized in other comprehensive income:
Net gain	$	885
Amortization of net gain/(loss)		–
Total recognized in other comprehensive income	$	885
Assumptions used in computation benefit obligations:
Discount rate		4.23%
Expected long-term return on plan assets		7.75%
Rate of compensation increase		–

Schedule of Expected Benefit Payments

December 31:
2016	$	648
2017		657
2018		672
2019		684
2020		699
2021-25		3,893
	$	7,253

Postretirement Plan [Member]

Defined contribution plan schedule

Amounts at the end of the year:
Accumulated/projected benefit obligation	$	3,619
Fair value of plan assets		–
Funded status, (underfunded)/overfunded	$	(3,619	)
Amounts recognized in the consolidated balance sheets:
Accrued liabilities	$	(214	)
Other liabilities	$	(3,405	)
Accumulated other comprehensive income, unrecognized net income	$	(155	)
Amounts recognized in the plan for the year:
Company contributions	$	20
Participant contributions	$	15
Benefits paid	$	(35	)
Net periodic benefit cost	$	97
Other changes recognized in OCI:
Net gain	$	155
Amortization of net gain/(loss)		–
Total recognized in other comprehensive income	$	155
Assumptions used in computation benefit obligations:
Discount rate		3.95%

Schedule of Expected Benefit Payments

December 31:
2016	$	214
2017		226
2018		174
2019		190
2020		177
2021-25		1,056
	$	2,037

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11. INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Provision for income taxes

	Years Ended December 31,
	2015			2014		2013
Current provision (benefit)	$	(8,011	)	$	11,040	$	–
Deferred provision (benefit)		(2,023	)		4,097		–
Total	$	(10,034	)	$	15,137	$	–

Schedule of Effective Income Tax Rate Reconciliation

	Years Ended December 31,
	2015			2014			2013
Statutory rate		35.0%			35.0%			35.0%
State income taxes, net of federal benefit		9.2			10.0			(8.2	)
Change in valuation allowance		(4.2	)		(11.5	)		458.0
Fair value adjustments and warrant inducements		2.0			31.8			–
Domestic production gross receipts deduction		(2.9	)		(2.0	)		–
Section 382 reduction to loss carryover		0.1			(24.2	)		(141.1	)
Stock compensation		(0.8	)		–			(20.9	)
Non-deductible items		(0.5	)		0.6			(27.7	)
Change in tax status of PE Op Co.		–			(1.6	)		–
Convertible debt instruments		–			–			(297.7	)
Other		(3.2	)		(1.3	)		2.6
Effective rate		34.7%			36.8%			0.0%

Components of deferred income taxes

	December 31,
	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	53,867		$	12,385
Railcar contracts		5,143			–
Pension liability		2,647			–
R&D and AMT credits		2,303			–
Litigation accrual		1,290			–
Capital leases		1,021			–
Stock-based compensation		724			781
Other		5,367			1,944
Total deferred tax assets		72,362			15,110
Deferred tax liabilities:
Fixed assets		(30,272	)		(24,813	)
Intangibles		(1,091	)		(1,134	)
Debt basis		(912	)		–
Other		(1,423	)		(450	)
Total deferred tax liabilities		(33,698	)		(26,397	)
Valuation allowance		(39,838	)		(4,147	)
Net deferred tax liabilities	$	(1,174	)	$	(15,434	)
Classified in balance sheet as:
Deferred tax liabilities	$	(1,174	)	$	(15,434	)

Net operating loss carryforwards

Tax Years	Federal		State
2016–2020	$	–	$	21,344
2021–2025		7,258		1,412
2026–2030		13,624		33,635
2031–2035		116,729		67,071
	$	137,611	$	123,462

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
	2016	$	26,820	$	32,504
	2017		10,862		6,748
	2018		10,862		6,748
	2019		6,383		6,277
	2020		5,282		6,169
	Thereafter		77,402		65,016
		$	137,611	$	123,462

Federal Income Tax Note

Jurisdiction	Tax Years
Federal	2012 – 2014
Arizona	2012 – 2014
California	2011 – 2014
Colorado	2011 – 2014
Idaho	2012 – 2014
Illinois	2012 – 2014
Indiana	2012 – 2014
Iowa	2014
Kansas	2014
Minnesota	2014
Missouri	2014
Nebraska	2012 – 2014
Oklahoma	2014
Oregon	2012 – 2014

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12. PREFERRED STOCK (Tables)

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Company's agreements with the holders of its Series B Preferred Stock:

Agreement/Payment Date	Amount of Dividends Paid		Shares of Common Stock Issued		Extended Forbearance Date
August 12, 2012	$	732,000		157,000		January 1, 2014
December 26, 2012		732,000		144,500		June 30, 2014
March 27, 2013		732,000		139,000		September 30, 2014
July 26, 2013		731,000		175,000		December 31, 2014
September 17, 2013		731,000		197,000		March 31, 2015
May 23, 2014		1,463,000		120,000		November 30, 2015
November 24, 2014		1,000,000		–
December 23, 2014		1,194,000		–
Total	$	7,315,000		932,500

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13. COMMON STOCK AND WARRANTS (Tables)

12 Months Ended

Dec. 31, 2015

Stockholders' Equity Note [Abstract]

Warrant activity

	Number of Shares			Price per Share		Weighted Average Exercise Price
Balance at December 31, 2012		5,039			$1.80 – $745.50	$	17.10
Warrants issued		3,548			$6.32 – $7.59	$	6.98
Warrants exercised		(285	)		$1.80 – $8.85	$	7.27
Warrants expired		(27	)	$	745.50	$	745.50
Balance at December 31, 2013		8,275			$5.47 – $735.00	$	10.04
Warrants exercised		(6,615	)		$6.09 – $8.85	$	7.17
Warrants expired		(804	)	$	5.47	$	5.47
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

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14. STOCK BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Option activity

	Years Ended December 31,
	2015					2014
	Number of Shares			Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
Outstanding at beginning of year		241		$	6.91		241	$	6.91
Expired		(1	)		867.24		–		–
Outstanding at end of year		240		$	4.18		241	$	6.91
Options exercisable at end of year		164		$	4.18		89	$	11.59

Stock options by exercise price range

		Options Outstanding				Options Exercisable
	Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (yrs.)		Weighted Average Exercise Price	Number Exercisable		Weighted Average Exercise Price
$	3.74	229	7.47	$	3.74	153	$	3.74
$	12.90	11	5.59	$	12.90	11	$	12.90

Unvested restricted stock activity

	Number of Shares			Weighted Average Grant Date Fair Value Per Share
Unvested at December 31, 2012		16		$	50.40
Issued		615		$	4.56
Vested		(142	)	$	7.85
Canceled		(17	)	$	6.20
Unvested at December 31, 2013		472		$	5.07
Issued		155		$	15.23
Vested		(227	)	$	5.79
Canceled		(10	)	$	4.30
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

Stock-based compensation expense

	Years Ended December 31,
	2015		2014		2013
Employees	$	1,694	$	1,493	$	1,333
Non-employees		325		345		391
Total stock-based compensation expense	$	2,019	$	1,838	$	1,724

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15. COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Future Minimum Payment of Operating Lease

Years Ended December 31,	Capital Leases				Operating Leases
2016	$	4,630		$	15,662
2017		3,731			11,647
2018		547			8,212
2019		–			5,558
2020		–			953
Thereafter		–			1,649
Total minimum payments		8,908		$	43,681
Amount representing interest		(477	)
Obligations under capital leases		8,431
Obligations due within one year		(4,248	)
Long-term obligations under capital leases	$	4,183

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16. FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Significant assumptions

Significant assumptions used and related fair values for the warrants as of December 31, 2015 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		49.1%		0.86%		1.51		22.9%		211,000		200,000
	12/13/2011	$	8.43		48.4%		0.65%		0.95		18.3%		138,000		73,000
														$	273,000

Significant assumptions used and related fair values for the warrants as of December 31, 2014 were as follows:

Original Issuance		Exercise Price		Volatility		Risk Free Interest Rate		Term (years)		Market Discount		Warrants Outstanding		Fair Value
	09/26/2012	$	8.85		51.0%		0.19%		0.74		37.0%		473,000		748,000
	07/3/2012	$	6.09		56.1%		0.89%		2.51		32.8%		211,000		811,000
	12/13/2011	$	8.43		54.3%		0.67%		1.95		28.7%		138,000		427,000
														$	1,986,000

Schedule of fair value measurements

The following table summarizes recurring fair value measurements by level at December 31, 2015 (in thousands):

		Fair Value			Level 1			Level 2		Level 3		Benefit Plan Percentage Allocation
Assets:
Derivative financial instruments(1)	$	2,081		$	2,081		$	–	$	–
Defined benefit plan assets(2) (pooled separate accounts):
Large U.S. Equity (3)		3,662			–			3,662		–		29%
Small/Mid U.S. Equity(4)		1,099			–			1,099		–		9%
International Equity(5)		1,525			–			1,525		–		12%
Fixed Income(6)		6,281			–			6,281		–		50%
	$	14,648		$	2,081			12,567	$	–
Liabilities:
Warrants (7)	$	(273	)	$	–		$	–	$	(273	)
Derivative financial instruments(8)		(1,848	)		(1,848	)		–		–
	$	(2,121	)	$	(1,848	)	$	–	$	(273	)

The following table summarizes recurring fair value measurements by level at December 31, 2014 (in thousands):

		Fair Value			Level 1			Level 2		Level 3
Assets:
Derivative financial instruments(1)	$	1,586		$	1,586		$	–	$	–
	$	1,586		$	1,586		$	–	$	–
Liabilities:
Warrants	$	(1,986	)	$	–		$	–	$	(1,986	)
Derivative financial instruments		(1,149	)		(1,149	)		–		–
	$	(3,135	)	$	(1,149	)	$	–	$	(1,986	)

__________

(1) Included in other current assets in the consolidated balance sheets.

(2) See Note __ 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 warrant liabilities at fair value in the consolidated balance sheets.

(8) Included in accrued liabilities in the consolidated balance sheets.

Level 3 fair value schedule

	Warrants			Conversion Features
Balance, December 31, 2012	$	4,892		$	–
Issuance of warrants in January offering	$	2,657		$	–
Issuance of notes and warrants in March offering		1,572			1,401
Issuance of notes in June offering		–			2,929
Conversions of notes		–			(5,205	)
Exercises of warrants		(260	)		–
Adjustments to fair value for the period		(646	)		875
Balance, December 31, 2013	$	8,215		$	–
Exercises of warrants		(41,486	)		–
Expiration of warrants		(3	)		–
Adjustments to fair value for the period		35,260			–
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		$	–

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17. PARENT COMPANY FINANCIALS (Tables)

12 Months Ended

Dec. 31, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Balance Sheets - Parent Company Only

	December 31,
	2015			2014
Cash and cash equivalents	$	20,618		$	23,915
Receivables from consolidated subsidiaries		14,505			8,547
Other current assets		11,361			8,647
Total current assets		46,484			41,109
Property and equipment, net		1,695			2,572
Investments in consolidated subsidiaries		301,416			154,134
Pacific Ethanol West plant term debt		41,763			41,763
Other assets		838			1,933
Total other assets		344,017			197,830
Total Assets	$	392,196		$	241,511
Accounts payable and accrued liabilities	$	1,963		$	2,347
Payables to consolidated subsidiaries		13,230			3,526
Accrued PE Op Co. purchase		3,828			–
Total current liabilities		19,021			5,873
Warrant liabilities at fair value		273			1,986
Deferred tax liabilities		1,174			15,434
Other liabilities		184			236
Total Liabilities		20,652			23,529
Preferred stock		1			1
Non-voting common stock		4			–
Common stock		39			25
Additional paid-in capital		902,843			725,813
Accumulated other comprehensive income		1,040			–
Accumulated deficit		(532,383	)		(512,332	)
Total Pacific Ethanol, Inc. stockholders' equity		371,544			213,507
Noncontrolling interests		–			4,475
Total stockholders' equity		371,544			217,982
Total Liabilities and Stockholders' Equity	$	392,196		$	241,511

Statements Of Operations Parent Company Only

	Years Ended December 31,
	2015			2014			2013
Management fees from subsidiaries	$	9,857		$	12,731		$	9,837
Selling, general and administrative expenses		(14,336	)		(12,779	)		(10,188	)
Asset impairments		(1,970	)		–			–
Loss from operations		(6,449	)		(48	)		(351	)
Fair value adjustments and warrant inducements		1,641			(37,532	)		(1,013	)
Interest income		5,739			4,753			5,088
Interest expense		(27	)		(1,813	)		(3,912	)
Loss on extinguishments of debt		–			(2,363	)		(9,481	)
Income (loss) before provision for income taxes		904			(37,003	)		(9,669	)
Provision for income taxes		–			–			–
Income before equity earnings of subsidiaries		904			(37,003	)		(9,669	)
Equity earnings of consolidated subsidiaries		(19,690	)		58,292			8,888
Consolidated net income (loss)	$	(18,786	)	$	21,289		$	(781	)

Statements Of Cash Flows Parent Company Only

	Years Ended December 31,
	2015			2014			2013
Operating Activities:
Net income (loss)	$	(18,786	)	$	21,289		$	(781	)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Equity Earnings		19,690			(58,292	)		(8,888	)
Depreciation and amortization		390			126			104
Fair value adjustments		(1,641	)		35,260			(648	)
Loss on extinguishments of debt		–			2,363			9,481
Asset impairments		1,970			–			–
Deferred income taxes		(14,260	)		5,128			–
Amortization of debt discount		–			1,674			(179	)
Changes in operating assets and liabilities:
Accounts receivables		(5,958	)		(7,001	)		(495	)
Other assets		5,895			(13,772	)		828
AP and accruals		604			(587	)		(1,358	)
Accounts payable with subsidiaries		11,179			5,846			1,724
Net cash used in operating activities	$	(917	)	$	(7,966	)	$	(212	)
Investing Activities:
Additions to property and equipment	$	(1,483	)	$	(455	)	$	(72	)
Purchase of PE OP Co. Ownership		–			(6,000	)		(2,340	)
Net cash used in Investing activities	$	(1,483	)	$	(6,455	)	$	(2,412	)
Financing Activities:
Preferred stock Dividends	$	(1,265	)	$	(3,459	)	$	(1,265	)
Proceeds from Equity Raise		–			26,073			–
Proceeds from issuance of senior notes		–			–			22,192
Proceeds from issuance of convertible notes		–			–			14,000
Payment on related party Note		–			(750	)		–
Payments on senior notes		–			(13,984	)		(6,208	)
Purchase of PE OP Co. debt		–			(17,038	)		(27,088	)
Proceeds from exercise of warrants		368			43,676			2,064
Net Cash (used in) provided by financing activities	$	(897	)	$	34,518		$	3,695
Net (decrease) increase in cash and equivalents		(3,297	)		20,097			1,071
Cash and equivalents at beginning of period		23,915			3,818			2,747
Cash and equivalents at ending of period	$	20,618		$	23,915		$	3,818

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15. QUARTERLY FINANCIAL DATA (Tables)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Quarterly financial data

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
December 31, 2015:
Net sales	$	206,176		$	227,621		$	380,622		$	376,757
Gross profit (loss)	$	(987	)	$	6,254		$	(7,380	)	$	9,523
Income (loss) from operations	$	(5,892	)	$	2,261		$	(14,826	)	$	485
Net income (loss) attributed to Pacific Ethanol, Inc.	$	(4,380	)	$	1,010		$	(14,663	)	$	(753	)
Preferred stock dividends	$	(312	)	$	(315	)	$	(319	)	$	(319	)
Income allocated to participating securities	$	–		$	(18	)	$	–		$	–
Net income (loss) available to common stockholders	$	(4,692	)	$	677		$	(14,982	)	$	(1,072	)
Income (loss) per common share:
Basic	$	(0.19	)	$	0.03		$	(0.36	)	$	(0.03	)
Diluted	$	(0.19	)	$	0.03		$	(0.36	)	$	(0.03	)

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
December 31, 2014:
Net sales	$	254,543		$	321,144		$	275,573		$	256,152
Gross profit	$	38,545		$	33,576		$	17,986		$	18,378
Income from operations	$	34,875		$	29,261		$	13,594		$	13,647
Net income (loss) attributed to Pacific Ethanol, Inc.	$	(10,826	)	$	15,572		$	4,025		$	12,518
Preferred stock dividends	$	(312	)	$	(315	)	$	(319	)	$	(319	)
Income allocated to participating securities	$	–		$	(462	)	$	(100	)	$	(314	)
Net income (loss) available to common stockholders	$	(11,138	)	$	14,795		$	3,606		$	11,885
Income (loss) per common share:
Basic	$	(0.69	)	$	0.74		$	0.16		$	0.49
Diluted	$	(0.69	)	$	0.65		$	0.15		$	0.48

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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details-Concentration sales) - Sales [Member]	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Customer A [Member]
Concentration risk percentage	15.00%	20.00%	23.00%
Customer B [Member]
Concentration risk percentage	12.00%	20.00%	17.00%
Customer C [Member]
Concentration risk percentage	12.00%	11.00%	6.00%
Customer D [Member]
Concentration risk percentage	6.00%	8.00%	12.00%

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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details-Purchase concentration) - Purchases [Member]	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Supplier A [Member]
Concentration percentage	19.00%	26.00%	37.00%
Supplier B [Member]
Concentration percentage	13.00%	12.00%	8.00%
Supplier C [Memebr]
Concentration percentage	9.00%	15.00%	14.00%

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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details-Inventories) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Finished goods	$ 31,153	$ 10,143
LCFS credits	6,957	975
Raw materials	9,891	2,695
Work in progress	11,121	3,274
Other	1,698	1,463
Total inventories	$ 60,820	$ 18,550

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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details-Useful Lives)	12 Months Ended
	Dec. 31, 2015
Building [Member]
Estimated useful lives	40 years
Facilities and plant equipment [Member]
Estimated useful lives	10 to 25 years
Other equipment, vehicles and furniture [Member]
Estimated useful lives	5 to 10 years

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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details-EPS computation) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Loss Numerator
Net income (loss) attributed to Pacific Ethanol, Inc.	$ (753)	$ (14,663)	$ 1,010	$ (4,380)	$ 12,518	$ 4,025	$ 15,572	$ (10,826)	$ (18,786)	$ 21,289	$ (781)
Preferred stock dividends	(319)	(319)	(315)	(312)	(319)	(319)	(315)	(312)	(1,265)	(1,265)	(1,265)
Less: Allocated to participating securities	0	0	(18)	0	(314)	(100)	(462)	0	0	(585)	0
Basic and diluted loss per share:
Loss available to common stockholders	$ (1,072)	$ (14,982)	$ 677	$ (4,692)	$ 11,885	$ 3,606	$ 14,795	$ (11,138)	$ (20,051)	$ 19,439	$ (2,046)
Shares Denominator
Shares available to common stockholders - basic									33,173,000	20,810,000	12,264,000
Incremental shares - warrants									1,859,000
Shares available to common stockholders - diluted									33,173,000	22,669,000	12,264,000
Per-Share Amount
Per-Share amount - basic	$ (.03)	$ (.36)	$ .03	$ (.19)	$ .49	$ .16	$ .74	$ (.69)	$ (0.60)	$ 0.93	$ (0.17)
Per-Shares amount - diluted	$ (.03)	$ (.36)	$ .03	$ (.19)	$ .48	$ .15	$ .65	$ (.69)	$ (0.60)	$ 0.86	$ (0.17)

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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Accounts receivable used as collateral	$ 42,049	$ 28,427
Allowance for doubtful accounts	25	6
Bad debt recoveries	354	42
Bad debt expense			$ 169
Accounts receivable	$ 61,346	34,612
Employees covered by collective bargaining agreement	29.00%
Amortization of deferred financing costs	$ 272	779	2,009
Unamortized deferred financing costs	462
Net sales when company acting as an agent	$ 1,510	1,908	1,928
Reduction in costs related to government payments		$ 1,878	$ 122
Potentially dilutive shares from convertible securities outstanding	817,000	660,000	1,357,000
Customers A, B, C, D
Accounts receivable	$ 21,358	$ 20,706
Customers A, B, C, D | Accounts Receivable [Member]
Concentration risk percentage	35.00%	60.00%
PE Op Co. [Member]
Equity interest owned	100.00%	96.00%

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2. PACIFIC ETHANOL CENTRAL PLANTS (Details - Purchase allocation) - Aventine $ in Thousands	Jun. 30, 2015 USD ($)
Cash and equivalents	$ 18,756
Accounts receivables	10,430
Inventory	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

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2. PACIFIC ETHANOL CENTRAL PLANTS (Details - Pro forma) - Aventine - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Net sales - pro forma	$ 1,484,676	$ 1,695,440
Cost of goods sold - pro forma	1,469,512	1,528,387
Selling, general and administrative expenses - pro forma	34,735	47,796
Net income (loss) - pro forma	$ (34,136)	$ 12,596
Diluted net income (loss) per share - pro forma	$ (.81)	$ .31
Diluted weighted-average shares - pro forma	42,053,000	40,428,000

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2. PACIFIC ETHANOL CENTRAL PLANTS (Details Narrative) - USD ($) $ in Thousands	3 Months Ended								6 Months Ended	12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Jun. 30, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Stock issued for acquisition, value										$ 174,573
Net sales	$ 376,757	$ 380,622	$ 227,621	$ 206,176	$ 256,152	$ 275,573	$ 321,144	$ 254,543		1,191,176	$ 1,107,412	$ 908,437
Pre-tax loss attributed by Aventine										$ (28,907)	41,139	$ (1,162)
Aventine
Stock issued for acquisition, shares issued									17,800,000
Stock issued for acquisition, value									$ 174,600
Ethanol production capacity per year										515 million gallons per year
Ethanol market capacity per year										800 million gallons annualized
Accounts receivable acquired gross	10,800									$ 10,800
Uncollectible accounts receivable from acquisition	400									400
Litigation contingency accrual	$ 3,700									3,700
Litigation contingency paid										400
Step-up of inventories and open contracts										8,700
Net sales										299,000
Pre-tax loss attributed by Aventine										(16,300)
Costs associated with acquisition										$ 1,400	$ 700

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3. PACIFIC ETHANOL WEST PLANTS (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Deferred tax liability related to cumulative adjustments		$ (10,244)
PE Op Co. [Member]
Equity interest owned	100.00%	96.00%
Reduction in noncontrolling interest	$ 4,388	$ 5,921	$ 14,281
Increase (decrease) in additional paid in capital due to acquisition	$ 560	$ 79	$ 11,940

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4. INTERCOMPANY AGREEMENTS (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Kinergy Marketing LLC [Member] | Ethanol Marketing Agreement [Member]
Revenues from related party	$ 5,262	$ 3,986	$ 3,351
Pacific Ag. Products, LLC [Member] | Corn Procurement and Handling Agreement [Member]
Revenues from related party	2,910	2,989	2,423
Pacific Ag. Products, LLC [Member] | Distillers Grains Marketing Agreement [Member]
Revenues from related party	4,438	4,788	4,584
Affiliate Management Agreement [Member]
Revenues from related party	8,100
Plant Management Agreement [Member]
Revenues from related party	1,800	$ 3,500	$ 3,500
Performance bonus earned	$ 2,800

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5. SEGMENTS (Details - Income Statement) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Total segment revenues									$ 710,201	$ 562,388	$ 507,162
Total segment net sales									486,237	549,010	404,626
Revenues									1,196,438	1,111,398	911,788
Net sales as reported	$ 376,757	$ 380,622	$ 227,621	$ 206,176	$ 256,152	$ 275,573	$ 321,144	$ 254,543	1,191,176	1,107,412	908,437
Cost of goods sold									1,183,766	998,927	875,507
Income (loss) before provision for income taxes									(28,907)	41,139	(1,162)
Depreciation and amortization									23,632	13,186	12,136
Interest expense									(12,594)	(9,438)	(15,671)
External Customers [Member]
Total segment revenues									710,201	562,388	507,162
Total segment net sales									480,975	545,024	401,275
Intersegment Net Sales [Member]
Total segment revenues									0	0	0
Total segment net sales									5,262	3,986	3,351
Intersegment Eliminations [Member]
Revenues									(5,262)	(3,986)	(3,351)
Cost of goods sold									(12,477)	(11,681)	(10,045)
Ethanol Production [Member]
Cost of goods sold									719,833	473,598	492,186
Income (loss) before provision for income taxes									(32,723)	72,278	3,776
Depreciation and amortization									23,091	12,509	11,533
Interest expense									(11,969)	(7,048)	(11,248)
Marketing and Distribution [Member]
Cost of goods sold									476,411	537,010	393,366
Income (loss) before provision for income taxes									3,200	6,068	5,217
Depreciation and amortization									151	551	499
Interest expense									(625)	(566)	(527)
Corporate Activities [Member]
Income (loss) before provision for income taxes									616	(37,207)	(10,155)
Depreciation and amortization									390	126	104
Interest expense									$ 0	$ (1,824)	$ (3,896)

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5. SEGMENTS (Details - Assets) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Assets	$ 675,143	$ 297,896
Ethanol Production [Member]
Assets	536,013	190,630
Marketing and Distribution [Member]
Assets	107,532	70,068
Corporate Activities [Member]
Assets	$ 31,598	$ 37,198

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5. SEGMENTS (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Ethanol Production [Member]
Management fees	$ 6,000	$ 8,800	$ 5,600
Marketing and Distribution [Member]
Management fees	$ 3,900	$ 3,900	$ 3,600

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6. PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment, Gross	$ 542,004	$ 209,645
Accumulated Depreciation	(77,044)	(54,343)
Property, Plant and Equipment, Net	464,960	155,302
Facilities and plant equipment [Member]
Property, Plant and Equipment, Gross	501,800	190,714
Land [Member]
Property, Plant and Equipment, Gross	7,541	2,570
Other equipment, vehicles and furniture [Member]
Property, Plant and Equipment, Gross	9,084	7,641
Construction in Progress [Member]
Property, Plant and Equipment, Gross	$ 23,579	$ 8,720

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6. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Depreciation expense	$ 23,524	$ 12,712	$ 11,662
Property and equpment, gross	542,004	209,645
Asset impairment	1,970	0	0
Idled Facilities [Member]
Depreciation expense		699	2,108
Assets Held under Capital Leases [Member]
Depreciation expense	340	231	$ 0
Property and equpment, gross	$ 9,971	$ 3,467

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7. INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Gross	$ 7,419	$ 7,419
Accumulated Amortization	(4,741)	(4,633)
Net Book Value	2,678	2,786
Kinergy Tradename [Member]
Gross	2,678	2,678
Accumulated Amortization	0	0
Net Book Value	$ 2,678	2,678
Customer Relationships [Member]
Useful Life (Years)	10 years
Gross	$ 4,741	4,741
Accumulated Amortization	(4,741)	(4,633)
Net Book Value	$ 0	$ 108

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7. INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense of intangible assets	$ 108	$ 474	$ 474

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8. DERIVATIVES (Details - Fair value) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Commodity contracts, Other current assets	$ 2,081	$ 1,586
Commodity contracts, Other current liabilities	1,848	1,149
Non Designated Derivative Instruments [Member] | Commodity contracts [Member] | Other Current Assets [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Commodity contracts, Other current assets	2,081	1,586
Commodity contracts, Other current liabilities	$ 1,848	$ 1,149

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8. DERIVATIVES (Details - Recognized gains/losses) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Realized Gains (Losses)	$ (338)	$ (1,144)	$ (1,901)
Unrealized Gains (Losses)	(204)	336	80
Commodity contracts [Member] | Non Designated Derivative Instruments [Member] | Cost of goods sold [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized Gains (Losses)	(338)	(1,144)	(1,901)
Unrealized Gains (Losses)	$ (204)	$ 336	$ 80

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8. DERIVATIVES (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Recognized gains and losses due to change in fair value	$ (542)	$ (808)	$ (1,821)

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9. DEBT (Details - Long term borrowings) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Long-term borrowings are summarized as follows
Line of credit	$ 61,003	$ 17,530
Term debt	162,622	17,003
Total debt	223,625	34,533
Less: Unamortized discount	(2,298)	0
Less short-term portion	(17,003)	0
Long-term debt	$ 204,324	$ 34,533

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9. DEBT (Details Narrative) - USD ($) $ in Thousands	2 Months Ended	12 Months Ended
	Feb. 26, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Line of credit		$ 61,003	$ 17,530
Term debt		162,622	17,003
Debt discount		2,298	0
Note payable related party		0
Interest expense on all debt		11,745	6,546
Loss on extinguishment of debt		0	(2,363)	$ (3,035)
Future maturity of long-term debt 2017		145,619
Future maturity of long-term debt 2020		61,003
Asset unavailable for transfer due to loan restrictions		164,000
Senior Secured Notes [Member]
Interest expense on all debt			12,680
Loss on extinguishment of debt			$ (229)
Subordinated Convertible Notes [Member]
Loss on extinguishment of debt				$ (4,621)
Pacific Ethanol Central Plants [Member] | Term Loans [Member]
Term debt		142,744
Debt discount		$ 2,875
Maturity date		Sep. 24, 2017
Payment of term loan		$ 145,000
Termination fees paid		700
Line of Credit [Member] | Kinergy [Member]
Line of credit maximum borrowing capacity		75,000
Line of credit remaining borrowing availability		$ 67,161
Maturity date		Dec. 31, 2020
Line of Credit [Member] | Pacific Ethanol West Plants [Member]
Line of credit remaining borrowing availability		$ 41,763
Term debt		$ 17,003
Line of Credit [Member] | Pacific Ethanol West Plants [Member] | Subsequent Event [Member]
Line of credit remaining borrowing availability	$ 58,766
Payment on line of credit	$ 17,003

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10. PENSION PLANS (Details - Retirement Plans) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Other changes recognized in other comprehensive income:
Total recognized in other comprehensive income	$ 1,040	$ 0	$ 0
Retirement Plan [Member]
Amounts at the end of the year
Accumulated/projected benefit obligation	16,552
Fair value of plan assets	12,567
Funded status, (underfunded)/overfunded	(3,985)
Amounts recognized in the consolidated balance sheets:
Other liabilities	(3,985)
Accumulated other comprehensive income, unrecognized net income	(885)
Amounts recognized in the plan for the year:
Company contributions	0
Participant contributions	0
Benefits paid	(315)
Net periodic benefit cost	49
Other changes recognized in other comprehensive income:
Net gain	885
Amortization of net gain/(loss)	0
Total recognized in other comprehensive income	$ 885
Assumptions used in computation benefit obligations:
Discount rate	4.23%
Expected long-term return on plan assets	7.75%
Rate of compensation increase	0.00%
Postretirement Plan [Member]
Amounts at the end of the year
Accumulated/projected benefit obligation	$ 3,619
Fair value of plan assets	0
Funded status, (underfunded)/overfunded	(3,619)
Amounts recognized in the consolidated balance sheets:
Accrued liabilities	(214)
Other liabilities	(3,405)
Accumulated other comprehensive income, unrecognized net income	(155)
Amounts recognized in the plan for the year:
Company contributions	20
Participant contributions	15
Benefits paid	(35)
Net periodic benefit cost	97
Other changes recognized in other comprehensive income:
Net gain	155
Amortization of net gain/(loss)	0
Total recognized in other comprehensive income	$ 155
Assumptions used in computation benefit obligations:
Discount rate	3.95%

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10. PENSION PLANS (Details - Expected Benefit Payments) $ in Thousands	Dec. 31, 2015 USD ($)
Retirement Plan [Member]
Expected benefit future expected benefit payments 2016	$ 648
Expected benefit future expected benefit payments 2017	657
Expected benefit future expected benefit payments 2018	672
Expected benefit future expected benefit payments 2019	684
Expected benefit future expected benefit payments 2020	699
Expected benefit future expected benefit payments 2021-2025	3,893
Total expected benefit payments	7,253
Postretirement Plan [Member]
Expected benefit future expected benefit payments 2016	214
Expected benefit future expected benefit payments 2017	226
Expected benefit future expected benefit payments 2018	174
Expected benefit future expected benefit payments 2019	190
Expected benefit future expected benefit payments 2020	177
Expected benefit future expected benefit payments 2021-2025	1,056
Total expected benefit payments	$ 2,037

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10. PENSION PLANS (Details Narrative) - Retirement Plan [Member] $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($)
Expected contributions by the company	$ 0
Expected net periodic benefit cost for 2016	200
Amortization of net acutuarial loss	$ 0

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11. INCOME TAXES (Details - Provision) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Current provision (benefit)	$ (8,011)	$ 11,040	$ 0
Deferred provision (benefit)	(2,023)	4,097	0
Total	$ (10,034)	$ 15,137	$ 0

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11. INCOME TAXES (Details - Effective rate)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Effective income tax rate reconciliation
Statutory rate	35.00%	35.00%	35.00%
State income taxes, net of federal benefit	9.20%	10.00%	(8.20%)
Change in valuation allowance	(4.20%)	(11.50%)	458.00%
Fair value adjustments and warrant inducements	2.00%	31.80%	0.00%
Domestic production gross receipts deduction	(2.90%)	(2.00%)	0.00%
Section 382 reduction to loss carryover	0.10%	(24.20%)	(141.10%)
Stock compensation	(0.80%)		(20.90%)
Non-deductible items	(0.50%)	0.60%	(27.70%)
Change in tax status of PE Op Co.		(1.60%)
Convertible debt instruments			(297.70%)
Other	(3.20%)	(1.30%)	(2.60%)
Effective rate	34.70%	36.80%	0.00%

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11. INCOME TAXES (Details - Deferred tax assets) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Deferred tax assets:
Net operating loss carryforward	$ 53,867	$ 12,385
Railcar contracts	5,143	0
Pension liability	2,647	0
R&D and AMT credits	2,303	0
Litigation accrual	1,290	0
Capital leases	1,021	0
Stock-based compensation	724	781
Other	5,367	1,944
Total deferred tax assets	72,362	15,110
Deferred tax liabilities:
Fixed assets	(30,272)	(24,813)
Intangibles	(1,091)	(1,134)
Debt basis	(912)	0
Other	(1,423)	(450)
Total deferred tax liabilities	(33,698)	(26,397)
Valuation allowance	(39,838)	(4,147)	$ (8,422)
Classified in balance sheet as:
Deferred tax liabilties	$ (1,174)	$ (15,434)

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11. INCOME TAXES (Details - Operating loss carryovers) $ in Thousands	Dec. 31, 2015 USD ($)
Federal [Member]
Net operating loss carryforward	$ 137,611
Federal [Member] | 2016-2020 [Member]
Net operating loss carryforward	0
Federal [Member] | 2021-2025 [Member]
Net operating loss carryforward	7,258
Federal [Member] | 2026-2030 [Member]
Net operating loss carryforward	13,624
Federal [Member] | 2031-2035 [Member]
Net operating loss carryforward	116,729
State [Member]
Net operating loss carryforward	123,462
State [Member] | 2016-2020 [Member]
Net operating loss carryforward	21,344
State [Member] | 2021-2025 [Member]
Net operating loss carryforward	1,412
State [Member] | 2026-2030 [Member]
Net operating loss carryforward	33,635
State [Member] | 2031-2035 [Member]
Net operating loss carryforward	$ 67,071

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11. INCOME TAXES (Details - Operating loss carryovers by year) $ in Thousands	Dec. 31, 2015 USD ($)
Federal [Member]
Net operating loss carryforward	$ 137,611
Federal [Member] | 2016 [Member]
Net operating loss carryforward	26,820
Federal [Member] | 2017 [Member]
Net operating loss carryforward	10,862
Federal [Member] | 2018 [Member]
Net operating loss carryforward	10,862
Federal [Member] | 2020 [Member]
Net operating loss carryforward	5,282
Federal [Member] | Thereafter [Member]
Net operating loss carryforward	77,402
State [Member]
Net operating loss carryforward	123,462
State [Member] | 2016 [Member]
Net operating loss carryforward	32,504
State [Member] | 2017 [Member]
Net operating loss carryforward	6,748
State [Member] | 2018 [Member]
Net operating loss carryforward	6,748
State [Member] | 2020 [Member]
Net operating loss carryforward	6,169
State [Member] | Thereafter [Member]
Net operating loss carryforward	65,016
State [Member] | 2019 [Member]
Net operating loss carryforward	$ 6,277

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11. INCOME TAXES (Details - Tax jurisdictions)	12 Months Ended
	Dec. 31, 2015
Federal [Member]
Tax Years still open to audit	2012-2014
Arizona [Member]
Tax Years still open to audit	2012-2014
California [Member]
Tax Years still open to audit	2011-2014
Colorado [Member]
Tax Years still open to audit	2011-2014
Idaho [Member]
Tax Years still open to audit	2012-2014
Illinois [Member]
Tax Years still open to audit	2012-2014
Indiana [Member]
Tax Years still open to audit	2012-2014
Iowa [Member]
Tax Years still open to audit	2014
Kansas [Member]
Tax Years still open to audit	2014
Minnesota [Member]
Tax Years still open to audit	2014
Missouri [Member]
Tax Years still open to audit	2014
Nebraska [Member]
Tax Years still open to audit	2012-2014
Oklahoma [Member]
Tax Years still open to audit	2014
Oregon [Member]
Tax Years still open to audit	2012-2014

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11. INCOME TAXES (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Valuation allowance	$ 39,838	$ 4,147	$ 8,422
Change in valuation allowance	1,221	$ (4,275)
Tax benefit related to adjustments to tax asset valuation allowance from prior year	1,500
Aventine
Valuation allowance	$ 34,469

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12. PREFERRED STOCK (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Amount of Dividends Paid	$ 319	$ 319	$ 315	$ 312	$ 319	$ 319	$ 315	$ 312	$ 1,265	$ 1,265	$ 1,265
Series B Preferred Stock
Amount of Dividends Paid									$ 7,315
Shares of Common Stock Issued									932,500
Series B Preferred Stock | January 1, 2014
Agreement Date									Aug. 12, 2012
Amount of Dividends Paid									$ 732
Shares of Common Stock Issued									157,000
Extended Forbearance Date									Jan. 01, 2014
Series B Preferred Stock | June 30, 2014
Agreement Date									Dec. 26, 2012
Amount of Dividends Paid									$ 732
Shares of Common Stock Issued									144,500
Extended Forbearance Date									Jun. 30, 2014
Series B Preferred Stock | September 30, 2014
Agreement Date									Mar. 27, 2013
Amount of Dividends Paid									$ 732
Shares of Common Stock Issued									139,000
Extended Forbearance Date									Sep. 30, 2014
Series B Preferred Stock | December 31, 2014
Agreement Date									Jul. 26, 2013
Amount of Dividends Paid									$ 731
Shares of Common Stock Issued									175,000
Extended Forbearance Date									Dec. 31, 2014
Series B Preferred Stock | March 31, 2015
Agreement Date									Sep. 17, 2013
Amount of Dividends Paid									$ 731
Shares of Common Stock Issued									197,000
Extended Forbearance Date									Mar. 31, 2015
Series B Preferred Stock | November 30, 2015
Agreement Date									May 23, 2014
Amount of Dividends Paid									$ 1,463
Shares of Common Stock Issued									120,000
Extended Forbearance Date									Nov. 30, 2015
Series B Preferred Stock | Payment Date November 24, 2014
Agreement Date									Nov. 24, 2014
Amount of Dividends Paid									$ 1,000
Series B Preferred Stock | Payment Date December 23, 2014
Agreement Date									Dec. 23, 2014
Amount of Dividends Paid									$ 1,194

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12. PREFERRED STOCK (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Authorized and unissued preferred stock	10,000,000	10,000,000
Preferred stock dividends paid	$ 1,265	$ 1,265	$ 1,265
Preferred Stock [Member]
Authorized and unissued preferred stock	6,734,835
Series A Preferred Stock
Authorized and unissued preferred stock	1,684,375	1,684,375
Preferred stock convertible into common shares, common shares	634,641
Series B Preferred Stock
Authorized and unissued preferred stock	1,580,790	1,580,790

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13. COMMON STOCK AND WARRANTS (Details) - Warrant	12 Months Ended
	Dec. 31, 2015 $ / shares $ / Warrant shares	Dec. 31, 2014 $ / shares $ / Warrant shares	Dec. 31, 2013 $ / shares $ / Warrant shares
Number of Shares
Begining Balance | shares	856,000	8,275,000	2,039,000
Warrants issued | shares			3,548,000
Warrants exercised | shares	(42,000)	(6,615,000)	(285,000)
Warrants expired | shares	(432,000)	(804,000)	(27,000)
Ending Balance | shares	382,000	856,000	8,275,000
Weighted Average Exercise Price
Begining Balance	$ 36.55	$ 10.04	$ 17.10
Warrants issued			6.98
Warrants exercised	8.85	7.17	7.27
Warrants expired	8.85	5.47	745.50
Ending Balance	70.87	36.55	10.04
Minimum [Member]
Price per Share
Begining Balance	6.09	$ 5.47	$ 1.80
Warrants issued | $ / Warrant			6.32
Warrants exercised | $ / Warrant		6.09	1.80
Ending Balance	6.09	$ 6.09	$ 5.47
Maximum [Member]
Price per Share
Begining Balance	$ 735.00	$ 735.00	$ 745.50
Warrants issued | $ / Warrant			7.59
Warrants exercised | $ / Warrant	8.85	8.85	8.85
Warrants expired | $ / Warrant	8.85	5.47	745.50
Ending Balance	$ 735.00	$ 735.00	$ 735.00

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13. COMMON STOCK AND WARRANTS (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Warrant inducements	$ 0	$ 2,271,000	$ 785,800
Fair value adjustments for warrants	$ (1,641,000)	$ 35,260,000	$ 227,000
July 2012 Public Offering [Member]
Warrants outstanding	211,000

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14. STOCK-BASED COMPENSATION (Details - Option Activity) - Stock Options [Member] - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Number of Shares
Begining Balance	241,000	241,000
Issued
Expired	(1,000)
Ending Balance	240,000	241,000
Options exercisable at end of year	164,000	89,000
Weighted Average Exercise Price
Begining Balance	$ 6.91	$ 6.91
Issued
Expired	$ 867.24
Ending Balance	4.18	$ 6.91
Options exercisable at end of year	$ 4.18	$ 11.59

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14. STOCK-BASED COMPENSATION (Detail - Options Outstanding and Exercisable)	12 Months Ended
	Dec. 31, 2015 $ / shares shares
$3.74
Number Outstanding | shares	229,000
Weighted Average Remaining Contractual Life (yrs)	7 years 5 months 19 days
Weighted Average Exercise Price | $ / shares	$ 3.74
Number Exercisable | shares	153,000
Weighted Average Exercise Price | $ / shares	$ 3.74
$12.90
Number Outstanding | shares	11,000
Weighted Average Remaining Contractual Life (yrs)	5 years 7 months 2 days
Weighted Average Exercise Price | $ / shares	$ 12.90
Number Exercisable | shares	11,000
Weighted Average Exercise Price | $ / shares	$ 12.90

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14. STOCK-BASED COMPENSATION (Details - Restricted Stock Activity) - Restricted Stock - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Number of Shares
Begining Balance	390,000	472,000	16,000
Issued	307,000	155,000	615,000
Vested	(220,000)	(227,000)	(142,000)
Canceled	(14,000)	(10,000)	(17,000)
Ending Balance	463,000	390,000	472,000
Weighted Average Grant Date Fair Value
Begining Balance	$ 8.71	$ 5.07	$ 50.40
Issued	10.16	15.23	4.56
Vested	7.94	5.79	7.85
Canceled	10.08	4.30	6.20
Ending Balance	$ 10.00	$ 8.71	$ 5.07

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14. STOCK-BASED COMPENSATION (Details - Stock based compensation expense) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Total stock-based compensation expense	$ 2,019	$ 1,838	$ 1,724
Employees [Member]
Total stock-based compensation expense	1,694	1,493	1,333
Non-Employees [Member]
Total stock-based compensation expense	$ 325	$ 345	$ 391

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14. STOCK-BASED COMPENSATION (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Total compensation cost related to unvested awards	$ 4,622
Compensation cost weighted average period	2 years
Stock Options [Member]
Intrinsic values of outstanding options	$ 238	$ 1,509
Fair value of stock vested	$ 2,603	$ 3,858	$ 601

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15. COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Capital Leases
2016	$ 4,630
2017	3,731
2018	547
2019	0
2020	0
Thereafter	0
Total minimum payments	8,908
Amount representing interest	(477)
Obligations under capital leases	8,431
Obligations due within one year	4,248	$ 4,077
Long-term obligations under capital leases	4,183	$ 2,055
Operating Leases
2016	15,662
2017	11,647
2018	8,212
2019	5,558
2020	953
Thereafter	1,649
Total minimum payments	$ 43,681

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15. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Rent expense	$ 9,528	$ 2,517	$ 1,454
Capital improvement commitments	5,198
Litigation contingent liability	3,300
Ethanol contracts
Sales commitments	$ 15,041
Indexed-price contracts to sell	307,670,000 gallons
Purchase commitments	$ 5,793
Indexed-price purchase contracts	23,944,000 gallons
Co-product contracts [Member]
Sales commitments	$ 23,241
Indexed-price contracts to sell	181,000 tons
Corn contract
Purchase commitments	$ 20,693
Syrup contracts
Sales commitments	$ 871

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16. FAIR VALUE MEASUREMENTS (Details - Significant Assumptions and Fair Value) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Significant assumptions used in the valuations
Fair value (in dollars)	$ 273,000	$ 1,986,000
Original issuance 7/3/2012
Significant assumptions used in the valuations
Exercise price	$ 6.09	$ 6.09
Volatility	49.10%	56.10%
Risk free interest rate	0.86%	0.89%
Term (years)	1 year 6 months 4 days	2 years 6 months 4 days
Market Discount	22.90%	32.80%
Warrants Outstanding	211,000	211,000
Fair value (in dollars)	$ 200,000	$ 811,000
Original issuance 12/13/2011
Significant assumptions used in the valuations
Exercise price	$ 8.43	$ 8.43
Volatility	48.40%	54.30%
Risk free interest rate	0.65%	0.67%
Term (years)	11 months 12 days	1 year 11 months 12 days
Market Discount	18.30%	28.70%
Warrants Outstanding	138,000	138,000
Fair value (in dollars)	$ 73,000	$ 427,000
Original Issuance 09/26/2012
Significant assumptions used in the valuations
Exercise price		$ 8.85
Volatility		51.00%
Risk free interest rate		0.19%
Term (years)		8 months 26 days
Market Discount		37.00%
Warrants Outstanding		473,000
Fair value (in dollars)		$ 748,000

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16. FAIR VALUE MEASUREMENTS (Details - Other derivatives) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Assets:
Assets	$ 14,648	$ 1,586
Liabilities:
Liabilities	(2,121)	(3,135)
Level 1 [Member]
Assets:
Assets	2,081	1,586
Liabilities:
Liabilities	(1,848)	(1,149)
Level 2 [Member]
Assets:
Assets	12,567	1,586
Liabilities:
Liabilities	0	(1,149)
Level 3 [Member]
Assets:
Assets	0	0
Liabilities:
Liabilities	(273)	0
Derivative Financial Instrument [Member]
Assets:
Assets	2,081	1,586
Liabilities:
Liabilities	(1,848)	(1,149)
Derivative Financial Instrument [Member] | Level 1 [Member]
Assets:
Assets	2,081	1,586
Liabilities:
Liabilities	0	(1,149)
Derivative Financial Instrument [Member] | Level 2 [Member]
Assets:
Assets	0	0
Liabilities:
Liabilities	0	0
Derivative Financial Instrument [Member] | Level 3 [Member]
Assets:
Assets	0	0
Liabilities:
Liabilities	0	0
Warrant
Assets:
Assets	0
Liabilities:
Liabilities	(273)	(1,986)
Warrant | Level 1 [Member]
Liabilities:
Liabilities	0	0
Warrant | Level 2 [Member]
Liabilities:
Liabilities	0	0
Warrant | Level 3 [Member]
Liabilities:
Liabilities	(273)	$ (1,986)
Defined Benefit Plan Assets Large U.S. Equity [Member]
Assets:
Assets	$ 3,662
Liabilities:
Benefit plan allocation percentage	29.00%
Defined Benefit Plan Assets Large U.S. Equity [Member] | Level 1 [Member]
Assets:
Assets	$ 0
Defined Benefit Plan Assets Large U.S. Equity [Member] | Level 2 [Member]
Assets:
Assets	3,662
Defined Benefit Plan Assets Large U.S. Equity [Member] | Level 3 [Member]
Assets:
Assets	0
Defined Benefit Plan Assets Small/Mid U.S. Equity [Member]
Assets:
Assets	$ 1,099
Liabilities:
Benefit plan allocation percentage	9.00%
Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | Level 1 [Member]
Assets:
Assets	$ 0
Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | Level 2 [Member]
Assets:
Assets	1,099
Defined Benefit Plan Assets Small/Mid U.S. Equity [Member] | Level 3 [Member]
Assets:
Assets	0
Defined Benefit Plan Assets International Equity [Member]
Assets:
Assets	$ 1,525
Liabilities:
Benefit plan allocation percentage	12.00%
Defined Benefit Plan Assets International Equity [Member] | Level 1 [Member]
Assets:
Assets	$ 0
Defined Benefit Plan Assets International Equity [Member] | Level 2 [Member]
Assets:
Assets	1,525
Defined Benefit Plan Assets International Equity [Member] | Level 3 [Member]
Assets:
Assets	0
Defined Benefit Plan Assets Fixed Income [Member]
Assets:
Assets	$ 6,281
Liabilities:
Benefit plan allocation percentage	50.00%
Defined Benefit Plan Assets Fixed Income [Member] | Level 1 [Member]
Assets:
Assets	$ 0
Defined Benefit Plan Assets Fixed Income [Member] | Level 2 [Member]
Assets:
Assets	6,281
Defined Benefit Plan Assets Fixed Income [Member] | Level 3 [Member]
Assets:
Assets	$ 0

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16. FAIR VALUE MEASUREMENTS (Details - Level 3) - Level 3 [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Warrant
Changes in the fair value of the Company's Level 3 inputs
Beginning Balance	$ 1,986	$ 8,215	$ 4,892
Adjustments to fair value for the period	(1,114)	35,260	(646)
Ending Balance	273	1,986	8,215
Warrant | Issuance In January [Member]
Changes in the fair value of the Company's Level 3 inputs
Issuances			2,657
Warrant | Issuance In March [Member]
Changes in the fair value of the Company's Level 3 inputs
Issuances			1,572
Warrant | Issuance In June [Member]
Changes in the fair value of the Company's Level 3 inputs
Issuances			0
Warrant | Conversions of Notes [Member]
Changes in the fair value of the Company's Level 3 inputs
Transfers out			0
Warrant | Exercises of Warrants [Member]
Changes in the fair value of the Company's Level 3 inputs
Transfers out	(72)		(260)
Warrant | Expiration of Warrants [Member]
Changes in the fair value of the Company's Level 3 inputs
Transfers out	(527)	(3)
Conversion Features [Member]
Changes in the fair value of the Company's Level 3 inputs
Beginning Balance	0	0
Adjustments to fair value for the period		875
Ending Balance	$ 0	0	0
Conversion Features [Member] | Issuance In March [Member]
Changes in the fair value of the Company's Level 3 inputs
Issuances			1,401
Conversion Features [Member] | Issuance In June [Member]
Changes in the fair value of the Company's Level 3 inputs
Issuances			2,929
Conversion Features [Member] | Conversions of Notes [Member]
Changes in the fair value of the Company's Level 3 inputs
Transfers out			$ (5,205)
Conversion Features [Member] | Exercises of Warrants [Member]
Changes in the fair value of the Company's Level 3 inputs
Transfers out		$ (41,486)

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17. PARENT COMPANY FINANCIALS (Details - Balance Sheet) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash and cash equivalents	$ 52,712	$ 62,084	$ 5,151	$ 7,586
Other current assets	6,437	2,983
Total current assets	197,942	137,945
Property and equipment, net	464,960	155,302
Other assets	9,563	1,863
Total Assets	675,143	297,896
Accrued PE Op Co. purchase	3,828	0
Total current liabilities	72,909	25,447
Deferred tax liabilities	1,174	15,434
Other liabilities	7,238	2,045
Total Liabilities	303,599	79,914
Additional paid-in capital	902,843	725,813
Accumulated other comprehensive income	1,040	0
Accumulated deficit	(532,383)	(512,332)
Total Pacific Ethanol, Inc. stockholders' equity	371,544	213,507
Noncontrolling interests	0	4,475
Total stockholders' equity	371,544	217,982	94,901	72,907
Total Liabilities and Stockholders' Equity	675,143	297,896
Parent Company [Member]
Cash and cash equivalents	20,618	23,915	$ 3,818	$ 2,747
Receivables from consolidated subsidiaries	14,505	8,547
Other current assets	11,361	8,647
Total current assets	46,484	41,109
Property and equipment, net	1,695	2,572
Investments in consolidated subsidiaries	301,416	154,134
Pacific Ethanol West plant term debt	41,763	41,763
Other assets	838	1,933
Total other assets	344,017	197,830
Total Assets	392,196	241,511
Accounts payable and accrued liabilities	1,963	2,347
Payables to consolidated subsidiaries	13,230	3,526
Accrued PE Op Co. purchase	3,828	0
Total current liabilities	19,021	5,873
Warrant liabilities at fair value	273	1,986
Deferred tax liabilities	1,174	15,434
Other liabilities	184	236
Total Liabilities	20,652	23,529
Preferred stock	1	$ 1
Non-voting common stock	4
Common stock	39	$ 25
Additional paid-in capital	902,843	725,813
Accumulated other comprehensive income	1,040	0
Accumulated deficit	(532,383)	(512,332)
Total Pacific Ethanol, Inc. stockholders' equity	371,544	213,507
Noncontrolling interests	0	4,475
Total stockholders' equity	371,544	217,982
Total Liabilities and Stockholders' Equity	$ 392,196	$ 241,511

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17. PARENT COMPANY FINANCIALS (Details - Statement of Operations) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Selling, general and administrative expenses									$ (23,412)	$ (17,108)	$ (14,021)
Asset impairments									(1,970)	0	0
Loss from operations	$ 485	$ (14,826)	$ 2,261	$ (5,892)	$ 13,647	$ 13,594	$ 29,261	$ 34,875	(17,972)	91,377	18,909
Interest expense									(12,594)	(9,438)	(15,671)
Loss on extinguishments of debt									0	(2,363)	(3,035)
Income (loss) before provision for income taxes									(28,907)	41,139	(1,162)
Provision for income taxes									(10,034)	15,137	0
Consolidated net income (loss)	$ (753)	$ (14,663)	$ 1,010	$ (4,380)	$ 12,518	$ 4,025	$ 15,572	$ (10,826)	(18,786)	21,289	(781)
Parent Company [Member]
Management fees from subsidiaries									9,857	12,731	9,837
Selling, general and administrative expenses									(14,336)	(12,779)	(10,188)
Asset impairments									(1,970)	0	0
Loss from operations									(6,449)	(48)	(351)
Fair value adjustments and warrant inducements									1,641	(37,532)	(1,013)
Interest income									5,739	4,753	5,088
Interest expense									(27)	(1,813)	(3,912)
Loss on extinguishments of debt									0	(2,363)	(9,481)
Income (loss) before provision for income taxes									904	(37,003)	(9,669)
Provision for income taxes									0	0	0
Income before equity earnings of subsidiaries									904	(37,003)	(9,669)
Equity earnings of consolidated subsidiaries									(19,690)	58,292	8,888
Consolidated net income (loss)									$ (18,786)	$ 21,289	$ (781)

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17. PARENT COMPANY FINANCIALS (Details - Statements of Cash Flows) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Operating Activities:
Net income	$ (753)	$ (14,663)	$ 1,010	$ (4,380)	$ 12,518	$ 4,025	$ 15,572	$ (10,826)	$ (18,786)	$ 21,289	$ (781)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization									23,632	13,186	12,136
Fair value adjustments									(1,641)	35,260	227
Loss on extinguishments of debt									0	2,363	3,035
Asset impairments									1,970	0	0
Deferred income taxes									(2,023)	5,129	0
Amortization of debt discount									716	1,815	1,272
Changes in operating assets and liabilities:
Accounts receivables									(15,950)	726	(9,414)
Other assets									5,622	720	(6,893)
AP and accruals									(10,045)	1,853	8,889
Net cash used in operating activities									(26,842)	88,332	14,187
Investing Activities:
Additions to property and equipment									(20,507)	(13,259)	(3,993)
Purchase of PE OP Co. Ownership									0	(6,000)	(2,340)
Net cash used in Investing activities									(6,325)	(19,259)	(6,333)
Financing Activities:
Proceeds from Equity Raise									0	26,073	0
Proceeds from issuance of convertible notes									0	0	14,000
Payment on related party Note									0	(750)	0
Proceeds from exercise of warrants									368	43,676	2,064
Net Cash (used in) provided by financing activities									23,795	(12,140)	(10,289)
Net (decrease) increase in cash and equivalents									(9,372)	56,933	(2,435)
Cash and cash equivalents at beginning of period				62,084				5,151	62,084	5,151	7,586
Cash and cash equivalents at end of period	52,712				62,084				52,712	62,084	5,151
Parent Company [Member]
Operating Activities:
Net income									(18,786)	21,289	(781)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Equity Earnings									19,690	(58,292)	(8,888)
Depreciation and amortization									390	126	104
Fair value adjustments									(1,641)	35,260	(648)
Loss on extinguishments of debt									0	2,363	9,481
Asset impairments									1,970	0	0
Deferred income taxes									$ (14,260)	5,128	0
Amortization of debt discount										1,674	(179)
Changes in operating assets and liabilities:
Accounts receivables									$ (5,958)	(7,001)	(495)
Other assets									5,895	(13,772)	828
AP and accruals									(604)	(587)	(1,357)
Accounts payable with subsidiaries									11,179	5,846	1,724
Net cash used in operating activities									(917)	(7,966)	(212)
Investing Activities:
Additions to property and equipment									$ (1,483)	(455)	(72)
Purchase of PE OP Co. Ownership										(6,000)	(2,340)
Net cash used in Investing activities									$ (1,483)	(6,455)	(2,412)
Financing Activities:
Preferred stock Dividends									(1,265)	(3,459)	(1,265)
Proceeds from Equity Raise									0	26,073	0
Proceeds from issuance of senior notes									0	0	22,192
Proceeds from issuance of convertible notes									0	0	14,000
Payment on related party Note									0	(750)	0
Payments on senior notes									0	(13,984)	(6,208)
Purchase of PE OP Co. debt									0	(17,038)	(27,088)
Proceeds from exercise of warrants									368	43,676	2,064
Net Cash (used in) provided by financing activities									(897)	34,518	3,695
Net (decrease) increase in cash and equivalents									(3,297)	20,097	1,071
Cash and cash equivalents at beginning of period				$ 23,915				$ 3,818	23,915	3,818	2,747
Cash and cash equivalents at end of period	$ 20,618				$ 23,915				$ 20,618	$ 23,915	$ 3,818

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19. QUARTERLY FINANCIAL DATA (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Quarterly Financial Information Disclosure [Abstract]
Net sales	$ 376,757	$ 380,622	$ 227,621	$ 206,176	$ 256,152	$ 275,573	$ 321,144	$ 254,543	$ 1,191,176	$ 1,107,412	$ 908,437
Gross profit (loss)	9,523	(7,380)	6,254	(987)	18,378	17,986	33,576	38,545	7,410	108,485	32,930
Income (loss) from operations	485	(14,826)	2,261	(5,892)	13,647	13,594	29,261	34,875	(17,972)	91,377	18,909
Net income (loss) attributed to Pacific Ethanol, Inc.	(753)	(14,663)	1,010	(4,380)	12,518	4,025	15,572	(10,826)	(18,786)	21,289	(781)
Preferred stock dividends	(319)	(319)	(315)	(312)	(319)	(319)	(315)	(312)	(1,265)	(1,265)	(1,265)
Income allocated to participating securities	0	0	(18)	0	(314)	(100)	(462)	0	0	(585)	0
Net income (loss) available to common stockholders	$ (1,072)	$ (14,982)	$ 677	$ (4,692)	$ 11,885	$ 3,606	$ 14,795	$ (11,138)	$ (20,051)	$ 19,439	$ (2,046)
Income (loss) per common share: Basic	$ (.03)	$ (.36)	$ .03	$ (.19)	$ .49	$ .16	$ .74	$ (.69)	$ (0.60)	$ 0.93	$ (0.17)
Income (loss) per common share: Diluted	$ (.03)	$ (.36)	$ .03	$ (.19)	$ .48	$ .15	$ .65	$ (.69)	$ (0.60)	$ 0.86	$ (0.17)