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 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, a recreation center 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.

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, 2018,

one

customer accounted for

10%

of Avalon’s consolidated or reportable segment net operating revenues. For the

nine

months ended

September 30, 2017,

one

customer accounted for

10%

of the waste management services segment’s net operating revenues to external customers and

of the consolidated 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

2017

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,
	2018			2017			2018			2017
Net operating revenues from:
Waste management services:
External customer revenues	$	12,557		$	10,831		$	32,525		$	27,934
Intersegment revenues		-			-			-			-
Total waste management services		12,557			10,831			32,525			27,934

Golf and related operations:
External customer revenues		5,591			5,533			13,844			13,709
Intersegment revenues		15			12			57			49
Total golf and related operations		5,606			5,545			13,901			13,758

Segment operating revenues		18,163			16,376			46,426			41,692
Intersegment eliminations		(15	)		(12	)		(57	)		(49	)
Total net operating revenues	$	18,148		$	16,364		$	46,369		$	41,643

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Income (loss) before income taxes:
Waste management services	$	1,244		$	624		$	2,768		$	1,852
Golf and related operations		455			674			455			298
Segment income before income taxes		1,699			1,298			3,223			2,150
Corporate interest expense		(154	)		(162	)		(474	)		(490	)
Corporate other income, net		1			2			14			6
General corporate expenses		(741	)		(739	)		(2,318	)		(2,225	)
Income (loss) before income taxes	$	805		$	399		$	445		$	(559	)

	September 30,			December 31,
	2018			2017
Identifiable assets:
Waste management services	$	29,290		$	26,449
Golf and related operations		47,819			45,188
Corporate		47,268			49,549
Subtotal		124,377			121,186
Elimination of intersegment receivables		(56,232	)		(55,808	)
Total	$	68,145		$	65,378

In comparing the total assets at

September 30, 2018

with those at

December 31, 2017,

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

$2.8

million is a result of an increase in intersegment transactions, which are eliminated in consolidation, and an increase in accounts receivable 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

$2.6

million is primarily due to the acquisition of the Boardman Tennis Center facility and capital expenditures related to the expansion of The Avalon Inn, and to a lesser extent, an increase in accounts receivable, partially offset by current year depreciation on property and equipment. The decrease in corporate total assets of

$2.3

million is primarily due to a decrease in restricted cash that was released from restriction and subsequently utilized to fund the acquisition of the Boardman Tennis Center facility and a decrease in intersegment transactions, which are eliminated in consolidation, partially offset by an increase in operating cash and cash equivalents.