Note 5 - Capital Leased Assets

9 Months Ended

Sep. 30, 2016

Debt and Capital Leases Disclosures [Text Block]

Note 5

. Capital Leased Assets

In November 2003, Avalon entered into a long-term agreement with Squaw Creek Country Club to lease and operate its golf course and related facilities. The lease has an initial term of ten (10) years with four (4) consecutive ten (10) year renewal term options unilaterally exercisable by Avalon. Under the lease, Avalon is obligated to pay $15,000 in annual rent and make leasehold improvements of $150,000 per year. Amounts expended by Avalon for leasehold improvements during a given year in excess of $150,000 will be carried forward and applied to future leasehold improvement obligations. Based upon the amount of leasehold improvements already made and leasehold improvements anticipated to be made in the future, Avalon expects to exercise all its remaining renewal options.

In addition, the captive landfill operations lease a piece of equipment that was determined to be a capital lease. During 2016, the golf and related operations entered into a lease agreement for a vehicle that was determined to be a capital lease. The amounts capitalized in the Condensed Consolidated Balance Sheets under the caption “Leased property under capital leases, net” relating to these assets were approximately $0.1 million at September 30, 2016 and December 31, 2015, respectively.

Leased property under capital leases at September 30, 2016 and December 31, 2015 consists of the following (in thousands):

	September 30,			December 31,
	2016			2015
Leased property under capital leases	$	10,538		$	10,352
Less accumulated amortization		(4,637	)		(4,310	)
Leased property under capital leases, net	$	5,901		$	6,042