Segments.

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

SEGMENTS.

4. SEGMENTS.

The Company reports its financial and operating performance in three segments: (1) marketing and distribution, which includes marketing and merchant trading for Company-produced alcohols and essential ingredients, on an aggregated basis, and third-party fuel-grade ethanol (2) Pekin Campus production, which includes the production and sale of alcohols and essential ingredients produced at the Company’s Pekin, Illinois campus, and (3) Other production, which includes the production and sale of fuel-grade ethanol and essential ingredients produced at all of the Company’s other production facilities on an aggregated basis, none of which are individually significant to be considered a reportable segment.

Income before provision for income taxes includes management fees charged by Alto Ingredients to the segments. The Pekin Campus production segment incurred $4,344,000 and $4,014,000 in management fees for the years ended December 31, 2020 and 2019, respectively. The marketing and distribution segment incurred $3,480,000 in management fees for each of the years ended December 31, 2020 and 2019, respectively. The Other production segment incurred $3,893,000 and $5,188,000 in management fees for the years ended December 31, 2020 and 2019, 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 alcohol produced by the production segments for a marketing fee, as discussed in Note 3. These intersegment activities are considered arms’-length transactions. Consequently, although these transactions impact segment performance, they do not impact the Company’s consolidated results since all revenues and corresponding costs are eliminated in consolidation.

Capital expenditures are substantially all incurred at the Company’s Pekin Campus production segment.

The following tables set forth certain financial data for the Company’s operating segments (in thousands):

	Years Ended December 31,
	2020			2019
Net Sales
Marketing and distribution:
Alcohol sales, gross	$	256,209		$	355,101
Alcohol sales, net		1,529			1,831
Intersegment sales		9,648			18,219
Total marketing and distribution sales		267,386			375,151
Pekin Campus production, recorded as gross:
Alcohol sales	$	330,432		$	343,610
Essential ingredient sales		130,270			138,987
Intersegment sales		645			1,110
Total Pekin Campus sales		461,347			483,707
Other Production, recorded as gross:
Alcohol sales	$	137,703		$	455,343
Essential ingredient sales		40,880			130,009
Intersegment sales		1,309			509
Total Other production sales		179,892			585,861
Intersegment eliminations		(11,602	)		(19,838	)
Net sales as reported	$	897,023		$	1,424,881

Cost of goods sold:
Marketing and distribution	$	253,465		$	347,185
Pekin Campus production		389,125			481,262
Other production		206,412			612,040
Intersegment eliminations		(4,838	)		(5,668	)
Cost of goods sold as reported	$	844,164		$	1,434,819

Income (loss) before benefit for income taxes:
Marketing and distribution	$	4,889		$	12,533
Pekin Campus production		53,898			(21,441	)
Other production		(54,677	)		(77,019	)
Corporate activities		(21,409	)		(15,375	)
	$	(17,299	)	$	(101,302	)

Depreciation:
Pekin Campus production	$	17,450	$	17,535
Other production		12,691		30,107
Corporate activities		127		267
	$	30,268	$	47,909

Interest expense:
Marketing and distribution	$	1,574	$	3,053
Pekin Campus production		6,038		7,556
Other production		334		13
Corporate activities		9,997		9,584
	$	17,943	$	20,206

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

	December 31,
	2020		2019
Total assets:
Marketing and distribution	$	89,337	$	129,664
Pekin Campus production		234,439		229,050
Other production		102,409		229,748
Corporate assets		50,633		24,033
	$	476,818	$	612,495