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 both the

three

months ended

March 31, 2019

and

2018,

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

2018

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,
	2019			2018
Net operating revenues from:
Waste management services:
External customer revenues	$	11,434		$	8,458
Intersegment revenues		-			-
Total waste management services		11,434			8,458

Golf and related operations:
External customer revenues		3,174			3,058
Intersegment revenues		21			25
Total golf and related operations		3,195			3,083

Segment operating revenues		14,629			11,541
Intersegment eliminations		(21	)		(25	)
Total net operating revenues	$	14,608		$	11,516

Income (loss) before income taxes:
Waste management services	$	1,000		$	547
Golf and related operations		(644	)		(381	)
Segment income before income taxes		356			166
Corporate interest expense		(152	)		(159	)
Corporate other income, net		2			2
General corporate expenses		(819	)		(904	)
Income (loss) before income taxes	$	(613	)	$	(895	)

	March 31,			December 31,
	2019			2018
Identifiable assets:
Waste management services	$	27,356		$	27,383
Golf and related operations		50,698			48,074
Corporate		49,841			47,394
Subtotal		127,895			122,851
Elimination of intersegment receivables		(59,261	)		(58,082	)
Total	$	68,634		$	64,769

The total assets of the waste management services segment were approximately

$27.4

million at both

March 31, 2019

and

December 31, 2018.

For the waste management services segment, a decrease in accounts receivable of approximately

$1.4

million was offset by the right-of-use assets relating to operating leases and an increase in intersegment transactions, which are eliminated in consolidation. The increase in total assets of the golf and related operations segment of

$2.6

million was due to capital expenditures related to the expansion of The Avalon Inn and the right-of-use assets related to operating leases, and to a lesser extent, an increase in accounts receivable, partially offset by current year depreciation on property and equipment. The increase in corporate total assets of approximately

$2.5

million is primarily due to an increase in restricted cash relating to the proceeds from our

$3.0

million term loan facility and, to a lesser extent, an increase in intersegment transactions, which are eliminated in consolidation. Such increase was partially offset by a decrease in operating cash and cash equivalents and cash released from restriction to fund expenditures relating to The Avalon Inn.