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

four

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

six

months ended

June 30, 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						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
Net operating revenues from:
Waste management services:
External customer revenues	$	12,902		$	11,510		$	24,336		$	19,968
Intersegment revenues		-			-			-			-
Total waste management services		12,902			11,510			24,336			19,968

Golf and related operations:
External customer revenues		5,523			5,195			8,697			8,253
Intersegment revenues		14			16			35			41
Total golf and related operations		5,537			5,211			8,732			8,294

Segment operating revenues		18,439			16,721			33,068			28,262
Intersegment eliminations		(14	)		(16	)		(35	)		(41	)
Total net operating revenues	$	18,425		$	16,705		$	33,033		$	28,221

Income (loss) before income taxes:
Waste management services	$	1,221		$	977		$	2,221		$	1,524
Golf and related operations		181			381			(463	)		-
Segment income before income taxes		1,402			1,358			1,758			1,524
Corporate interest expense		(196	)		(161	)		(348	)		(320	)
Corporate other income, net		46			11			48			13
General corporate expenses		(750	)		(673	)		(1,569	)		(1,577	)
Income (loss) before income taxes	$	502		$	535		$	(111	)	$	(360	)

	June 30,			December 31,
	2019			2018
Identifiable assets:
Waste management services	$	29,014		$	27,383
Golf and related operations		54,795			48,074
Corporate		51,318			47,394
Subtotal		135,127			122,851
Elimination of intersegment receivables		(61,989	)		(58,082	)
Total	$	73,138		$	64,769

In comparing the total assets at

June 30, 2019

with those at

December 31, 2018,

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

$1.6

million is primarily a result of an increase in intersegment transactions, which are eliminated in consolidation, and to a lesser extent, the right-of-use assets relating to operating leases partially offset by a decrease in accounts receivable. The increase in total assets of the golf and related operations segment of

$6.7

million was primarily due to capital expenditures related to the expansion of The Avalon Inn, the real property acquired relating to New Castle Country Club, the right-of-use assets related to operating leases, and an increase in accounts receivable, partially offset by current year depreciation on property and equipment. The increase in corporate total assets of approximately

$3.9

million is primarily due to increases in both operating cash and intersegment transactions, which are eliminated in consolidation.