Note

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 Standards 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

March

31,

2017

and

December

31,

2016

were

$3.2

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 both the

three

months ended

March

31,

2017

and

2016

, respectively,

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
	March 31,
	2017			2016
Net operating revenues from:
Waste management services:
External customer revenues	$	7,613		$	8,276
Intersegment revenues		-			-
Total waste management services		7,613			8,276

Golf and related operations:
External customer revenues		3,089			2,723
Intersegment revenues		26			16
Total golf and related operations		3,115			2,739

Segment operating revenues		10,728			11,015
Intersegment eliminations		(26	)		(16	)
Total net operating revenues	$	10,702		$	10,999

Income (loss) before income taxes:
Waste management services	$	543		$	373
Golf and related operations		(597	)		(516	)
Segment loss before income taxes		(54	)		(143	)
Corporate interest expense		(164	)		(82	)
Corporate other income, net		2			4
General corporate expenses		(783	)		(770	)
Loss before income taxes	$	(999	)	$	(991	)

	March 31,			December 31,
	2017			2016
Identifiable assets:
Waste management services	$	23,024		$	25,015
Golf and related operations		46,338			44,728
Corporate		50,155			51,937
Subtotal		119,517			121,680
Elimination of intersegment receivables		(54,610	)		(53,782	)
Total	$	64,907		$	67,898

In comparing the total assets at

March

31,

2017

with those at

December

31,

2016,

the decrease in total assets of the waste management services segment of

$2.0

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

$1.6

million is primarily due to golf course maintenance equipment acquired under a capital lease agreement, 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

$1.8

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 to a lesser extent a decrease in intersegment transactions.