Note 11 - Business Segment Information

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note

11

.

Business Segment Information

In determining the segment information, Avalon considered its operating and management structure and the types of information subject to regular review by its “chief operating decision maker.” Using the criteria of FASB Accounting Standard Codification (“ASC”)

280

Segment Reporting

, Avalon’s reportable segments include waste management services and golf and related operations. Avalon accounts for intersegment net operating revenues as if the transactions were to

third

parties. The segment disclosures are presented on this basis for all periods presented.

Avalon’s primary business segment, the waste management services segment, provides hazardous and nonhazardous brokerage and management services to industrial, commercial, municipal and governmental customers, captive landfill management for an industrial customer and salt water injection well operations.

Avalon’s golf and related operations segment consists of

three

golf courses and associated clubhouses which provide dining and banquet facilities, a hotel which provides lodging, dining, banquet and conference facilities and a travel agency. Revenue for the golf and related operations segment consists primarily of membership dues, greens fees, cart rentals, room rentals, merchandise sales, tennis and fitness activities, spa services and food and beverage sales. Revenue related to annual membership dues are recognized proportionately over the membership period. The unrecognized or deferred revenues relating to membership dues at

June 30, 2017

and

December 31, 2016

were

$4.2

million and

$2.7

million, respectively.

Avalon does

not

have significant operations located outside the United States and, accordingly, geographical segment information is

not

presented.

For the

six

months ended

June 30, 2017,

one

customer accounted for

10%

of the waste management services segment’s net operating revenues to external customers and

7%

of the consolidated net operating revenues. For the

six

months ended

June 30, 2016,

no

one

customer accounted for

10%

of Avalon’s consolidated or reportable segment net operating revenues.

The accounting policies of the segments are consistent with those described for the consolidated financial statements in the summary of significant accounting policies included in Avalon’s

2016

Annual Report to Shareholders. Avalon measures segment profit for internal reporting purposes as income (loss) before taxes.

Business segment information including the reconciliation of segment income before taxes to income (loss) before taxes is as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Net operating revenues from:
Waste management services:
External customer revenues	$	9,490		$	10,756		$	17,103		$	19,032
Intersegment revenues		-			-			-			-
Total waste management services		9,490			10,756			17,103			19,032
Golf and related operations:
External customer revenues		5,087			4,886			8,176			7,609
Intersegment revenues		11			11			37			27
Total golf and related operations		5,098			4,897			8,213			7,636
Segment operating revenues		14,588			15,653			25,316			26,668
Intersegment eliminations		(11	)		(11	)		(37	)		(27	)
Total net operating revenues	$	14,577		$	15,642		$	25,279		$	26,641
Income (loss) before income taxes:
Waste management services	$	685		$	712		$	1,228		$	1,085
Golf and related operations		221			376			(376	)		(140	)
Segment income before income taxes		906			1,088			852			945
Corporate interest expense		(164	)		(89	)		(328	)		(171	)
Corporate other income, net		2			1			4			5
General corporate expenses		(703	)		(633	)		(1,486	)		(1,403	)
Income (loss) before income taxes	$	41		$	367		$	(958	)	$	(624	)

	June 30,			December 31,
	2017			2016
Identifiable assets:
Waste management services	$	23,472		$	25,015
Golf and related operations		47,126			44,728
Corporate		50,328			51,937
Subtotal		120,926			121,680
Elimination of intersegment receivables		(54,925	)		(53,782	)
Total	$	66,001		$	67,898

In comparing the total assets at

June 30, 2017

with those at

December 31, 2016,

the decrease in total assets of the waste management services segment of

$1.5

million is primarily a result of a decrease in accounts receivable and to a lesser extent a lower net book value of property and equipment as a result of current year depreciation on the salt water injection wells partially offset by an increase in intersegment transactions, which are eliminated in consolidation. The increase in total assets of the golf and related operations segment of

$2.4

million is primarily due to golf course maintenance equipment acquired under capital lease agreements, capital expenditures related to the continued renovation and expansion of The Avalon Inn and an increase in accounts receivable related to membership dues partially offset by current year depreciation on property and equipment. The decrease in corporate total assets of

$1.6

million is primarily due to a decrease in cash and cash equivalents utilized for the renovation and expansion of The Avalon Inn and required monthly payments made on the term loan facility and a decrease in intersegment transactions, which are eliminated in consolidation.