Note 7. Business Segment Information

9 Months Ended

Sep. 30, 2011

Segment Reporting Disclosure [Text Block]

Note 7.  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.”  On this basis, 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 years presented.

Avalon’s primary business segment, the waste management services segment, provides hazardous and nonhazardous waste disposal brokerage and management services to industrial, commercial, municipal and governmental customers, manages a captive landfill for an industrial customer and sells construction mats.  The golf and related operations segment includes the operations of golf courses, clubhouses that provide recreational activities, dining and banquet facilities, spa services and a travel agency.  Revenue for the golf and related operations segment consists primarily of membership dues, food and beverage sales, green fees, cart rentals, merchandise sales and spa services.  Revenue related to membership dues are recognized proportionately over twelve months.  The unrecognized or deferred revenues relating to membership dues at September 30, 2011 and December 31, 2010 were $2.3 million and $2.0 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, 2011, one customer accounted for 12% of the waste management services segment’s net operating revenues to external customers and 9% of Avalon’s consolidated net operating revenues.  For the nine months ended September 30, 2010, one customer accounted for 10% of the waste management services segment’s net operating revenues to external customers and 8% of Avalon’s consolidated net operating revenues. In addition, Avalon’s captive landfill management business is dependent upon a single customer as its sole source of revenue.

The accounting policies of the segments are consistent with those described for the consolidated financial statements in the summary of significant accounting policies.  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,
	2011			2010			2011			2010
Net operating revenues from:
Waste management services:
External customers revenues	$	12,264		$	8,696		$	28,873		$	24,667
Intersegment revenues		2			—			2			—
Total waste management services		12,266			8,696			28,875			24,667
Golf and related operations:
External customers revenues		3,571			3,093			8,231			7,503
Intersegment revenues		11			14			44			44
Total golf and related operations		3,582			3,107			8,275			7,547
Segment operating revenues		15,848			11,803			37,150			32,214
Intersegment eliminations		(13	)		(14	)		(46	)		(44	)
Total net operating revenues	$	15,835		$	11,789		$	37,104		$	32,170
Income (loss) before taxes:
Waste management services	$	901		$	670		$	2,275		$	1,931
Golf and related operations		35			72			(473	)		(435	)
Segment income before taxes		936			742			1,802			1,496
Corporate interest income		1			5			4			21
Corporate other income, net		11			2			135			6
General corporate expenses		(620	)		(743	)		(1,852	)		(2,099	)
Income (loss) before taxes	$	328		$	6		$	89		$	(576	)
Interest income:
Waste management services	$	—		$	—		$	—		$	—
Golf and related operations		—			—			—			—
Corporate		1			5			4			21
Total	$	1		$	5		$	4		$	21

	September 30,			December 31,
	2011			2010
Identifiable assets:
Waste management services	$	15,826		$	11,648
Golf and related operations		30,919			30,233
Corporate		40,292			40,006
Subtotal		87,037			81,887
Elimination of intersegment receivables		(35,341	)		(34,550	)
Total	$	51,696		$	47,337

In comparing the identifiable assets at September 30, 2011 with those at December 31, 2010, the increase in identifiable assets of the waste management services segment of $4.2 million is primarily due to an increase in accounts receivable as a result of higher net operating revenues in the third quarter of 2011 compared with the fourth quarter of 2010. The increase in the identifiable assets of $.7 million of the golf and related operations segment is primarily the result of capital expenditures. The increase in identifiable assets of corporate is primarily due to an increase in cash and cash equivalents, partially offset by a decrease in property and equipment as a result of the sale of an asset.