Note 9 - Business Segment Information

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 9. 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

.

The golf and related operations segment includes the operations of golf courses, country clubs and related facilities, a hotel and travel agency. Revenue for the golf and related operations segment consists primarily of membership dues, greens fees, cart rentals, room rentals, merchandise sales, tennis, spa services and food and beverage sales. Revenue related to membership dues are recognized proportionately over twelve months. The unrecognized or deferred revenues relating to membership dues at September 30, 2015 and December 31, 2014 were $2.7 million and $2.3 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, 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. For the nine months ended September 30, 2014, one customer accounted for approximately 7.4% of Avalon’s consolidated net operating revenues and 10.1% 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 2014 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 September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net operating revenues from:
Waste management services:
External customer revenues	$	9,679		$	10,391		$	27,821		$	27,567
Intersegment revenues		-			-			-			-
Total waste management services		9,679			10,391			27,821			27,567
Golf and related operations:
External customer revenues		4,898			4,046			11,411			9,869
Intersegment revenues		27			26			64			59
Total golf and related operations		4,925			4,072			11,475			9,928
Segment operating revenues		14,604			14,463			39,296			37,495
Intersegment eliminations		(27	)		(26	)		(64	)		(59	)
Total net operating revenues	$	14,577		$	14,437		$	39,232		$	37,436
Income (loss) before income taxes:
Waste management services	$	560		$	996		$	1,171		$	2,186
Golf and related operations		509			(68	)		55			(721	)
Segment income before taxes		1,069			928			1,226			1,465
Corporate interest expense		(51	)		(16	)		(54	)		(16	)
Corporate interest income		-			1			-			1
Corporate other income, net		3			7			20			24
General corporate expenses		(586	)		(758	)		(2,089	)		(2,120	)
Income (loss) before income taxes	$	435		$	162		$	(897	)	$	(646	)

	September 30,			December 31,
	2015			2014
Identifiable assets:
Waste management services	$	20,871		$	19,381
Golf and related operations		42,667			36,449
Corporate		47,039			44,613
Subtotal		110,577			100,443
Elimination of intersegment receivables		(49,437	)		(42,599	)
Total	$	61,140		$	57,844

In comparing the identifiable assets at September 30, 2015 with those at December 31, 2014, the increase in identifiable assets of the waste management services segment of $1.5 million is primarily due to 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 identifiable assets of the golf and related operations segment of $6.2 million is primarily due to the renovation and expansion of The Avalon Inn. The increase in corporate identifiable assets is primarily due to an increase in intersegment transactions partially offset by a decrease in cash and cash equivalents as a result of monies expended for the construction on The Avalon Inn.