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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.