Note 11 - Business Segment Information

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 11

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Business Segment Information

Avalon’s reportable segments include waste management services and golf and related operations. 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 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, construction mats and salt water injection well operations

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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 twelve months. The unrecognized or deferred revenues relating to membership dues at September 30, 2016 and December 31, 2015 were $3.3 million and $2.4 million, respectively.

Avalon does not have significant operations located outside the United States and, accordingly, geographical segment information is not presented.

For the nine months ended September 30, 2016, no one customer accounted for 10% of Avalon’s consolidated or reportable segment net operating revenues. For the nine months ended September 30, 2015, one customer accounted for approximately 7.6% of Avalon’s consolidated net operating revenues and 10.7% of the waste management service segment’s 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 2015 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						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Net operating revenues from:
Waste management services:
External customer revenues	$	13,593		$	9,679		$	32,625		$	27,821
Intersegment revenues		-			-			-			-
Total waste management services		13,593			9,679			32,625			27,821
Golf and related operations:
External customer revenues		5,540			4,898			13,149			11,411
Intersegment revenues		23			27			50			64
Total golf and related operations		5,563			4,925			13,199			11,475
Segment operating revenues		19,156			14,604			45,824			39,296
Intersegment eliminations		(23	)		(27	)		(50	)		(64	)
Total net operating revenues	$	19,133		$	14,577		$	45,774		$	39,232

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Income (loss) before income taxes:
Waste management services	$	950		$	560		$	2,035		$	1,171
Golf and related operations		608			509			468			55
Segment income before income taxes		1,558			1,069			2,503			1,226
Corporate interest expense		(89	)		(51	)		(260	)		(54	)
Corporate other income, net		2			3			7			20
General corporate expenses		(693	)		(586	)		(2,096	)		(2,089	)
Income (loss) before income taxes	$	778		$	435		$	154		$	(897	)

	September 30,			December 31,
	2016			2015
Identifiable assets:
Waste management services	$	26,599		$	22,575
Golf and related operations		45,088			43,390
Corporate		47,947			47,800
Subtotal		119,634			113,765
Elimination of intersegment receivables		(52,826	)		(51,463	)
Total	$	66,808		$	62,302

In comparing the total assets at September 30, 2016 with those at December 31, 2015, the increase in total assets of the waste management services segment of $4.0 million is primarily due to an increase in accounts receivable and to a lesser extent an increase in intersegment transactions, which are eliminated in consolidation, partially offset by a lower net book value of property and equipment as a result of current year depreciation on the salt water injection wells. The increase in total assets of the golf and related operations segment of $1.7 million is primarily due to capital expenditures related to the renovation and expansion of The Avalon Inn and an increase in accounts receivable partially offset by current year depreciation on property and equipment. The increase in corporate total assets is primarily due to an increase in intersegment transactions partially offset by current year depreciation on property and equipment.