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Business Segment Information | 6 Months Ended
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Jun. 30, 2017
Segment Reporting [Abstract] |
Business Segment Information | Business Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by a company's chief operating decision maker ("CODM"), or a decision making group, in deciding how to allocate resources and in assessing financial performance. As of June 30, 2017, the Company's CODM was the Company's CEO. The Company's operating and reportable segments are organized by products and services provided. As of June 30, 2017, the Company has two reportable segments: (1) Refined Coal ("RC"); and (2) Emissions Control ("EC"). The business segment measurements provided to and evaluated by the CODM are computed in accordance with the principles listed below:
• | The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies in the 2016 Form 10-K, except as described below.
• | Segment revenue includes the Company's equity method earnings and losses from the Company's equity method investments. Segment revenue also includes the Company's royalty earnings from Tinuum Group.
• | Segment operating income (loss) includes the Company's equity method earnings and losses from the Company's equity method investments, royalty earnings from Tinuum Group (including depreciation and amortization expense), gains related to sales of equity method investments and allocation of certain "Corporate general and administrative expenses," which include Payroll and benefits, Rent and occupancy, Legal and professional fees, and General and administrative.
• | All items not included in operating income, except as noted below, are excluded from the RC and EC segments.
As of June 30, 2017 and December 31, 2016, substantially all of the Company's material assets are located in the U.S. and all significant customers are either U.S. companies or the U.S. Government. The following table presents the Company's operating segment results for the three and six months ended June 30, 2017 and 2016:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
(in thousands) |  | 2017 |  | 2016 |  | 2017 |  | 2016
Revenues: |  |  |  |  |  |  |  |
Refined Coal: |  |  |  |  |  |  |  |
Earnings in equity method investments |  | $ | 10,155 |  |  | $ | 13,754 |  |  | $ | 23,969 |  |  | $ | 19,331 |
Royalties |  | 1,866 |  |  | 669 |  |  | 3,621 |  |  | 1,859 |
|  | 12,021 |  |  | 14,423 |  |  | 27,590 |  |  | 21,190 |
Emissions Control: |  |  |  |  |  |  |  |
Equipment sales |  | 24,619 |  |  | 8,213 |  |  | 29,727 |  |  | 29,919 |
Chemicals |  | 846 |  |  | 613 |  |  | 3,127 |  |  | 1,047 |
Consulting services |  | — |  |  | 125 |  |  | — |  |  | 320 |
|  | 25,465 |  |  | 8,951 |  |  | 32,854 |  |  | 31,286 |
Total segment reporting revenues |  | 37,486 |  |  | 23,374 |  |  | 60,444 |  |  | 52,476 |
Adjustments to reconcile to reported revenues: |  |  |  |  |  |  |  |
Refined Coal: |  |  |  |  |  |  |  |
Earnings in equity method investments |  | (10,155 | ) |  | (13,754 | ) |  | (23,969 | ) |  | (19,331 | )
Royalties |  | (1,866 | ) |  | (669 | ) |  | (3,621 | ) |  | (1,859 | )
|  | (12,021 | ) |  | (14,423 | ) |  | (27,590 | ) |  | (21,190 | )
Total reported revenues |  | $ | 25,465 |  |  | $ | 8,951 |  |  | $ | 32,854 |  |  | $ | 31,286 |
Segment operating income: |  |  |  |  |  |  |  |
Refined Coal (1) |  | $ | 11,133 |  |  | $ | 14,199 |  |  | $ | 26,158 |  |  | $ | 22,061 |
Emissions Control |  | 1,887 |  |  | 2,118 |  |  | 2,160 |  |  | 6,700 |
Total segment operating income |  | $ | 13,020 |  |  | $ | 16,317 |  |  | $ | 28,318 |  |  | $ | 28,761 |
(1) Included within the RC segment operating income for the three months ended June 30, 2016 is a $2.1 million gain on the sale of RCM6 and for the three months ended June 30, 2017 and 2016, 453A interest expense of $0.6 million and $0.4 million, respectively. Included within the RC segment operating income for the six months ended June 30, 2017 and 2016, are 453A interest expense of $1.0 million and $1.1 million, respectively, and interest expense related to the RCM6 note payable of zero and $0.3 million, respectively. A reconciliation of reportable segment operating income to the Company's consolidated net income is as follows:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
(in thousands) |  | 2017 |  | 2016 |  | 2017 |  | 2016
Segment operating income |  | $ | 13,020 |  |  | $ | 16,317 |  |  | $ | 28,318 |  |  | $ | 28,761 |
Adjustments to reconcile to net income attributable to ADES |  |  |  |  |  |  |  |
Corporate payroll and benefits |  | (1,343 | ) |  | (2,866 | ) |  | (3,153 | ) |  | (5,912 | )
Corporate rent and occupancy |  | (91 | ) |  | (272 | ) |  | (117 | ) |  | (501 | )
Corporate legal and professional fees |  | (1,129 | ) |  | (1,982 | ) |  | (2,127 | ) |  | (4,909 | )
Corporate general and administrative |  | (797 | ) |  | (1,373 | ) |  | (1,656 | ) |  | (2,146 | )
Corporate depreciation and amortization |  | (51 | ) |  | (128 | ) |  | (258 | ) |  | (258 | )
Corporate interest (expense) income, net |  | (59 | ) |  | (1,214 | ) |  | (283 | ) |  | (2,121 | )
Other income (expense), net |  | 500 |  |  | (523 | ) |  | 3,400 |  |  | (526 | )
Income tax expense |  | (3,642 | ) |  | (99 | ) |  | (9,028 | ) |  | (152 | )
Net income |  | $ | 6,408 |  |  | $ | 7,860 |  |  | $ | 15,096 |  |  | $ | 12,236 |
Corporate general and administrative expenses listed above include certain costs that benefit the business as a whole but are not directly related to one of the Company's segments. Such costs include, but are not limited to, accounting and human resources staff, information systems costs, legal fees, facility costs, audit fees and corporate governance expenses. Segment assets were as follows as of the dates presented:
|  | As of
(in thousands) |  | June 30, 2017 |  | December 31, 2016
Refined Coal |  | $ | 5,069 |  |  | $ | 6,310 |
Emissions Control |  | 31,067 |  |  | 24,551 |
All Other and Corporate |  | 58,021 |  |  | 76,435 |
Consolidated |  | $ | 94,157 |  |  | $ | 107,296 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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