SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2013

SEGMENT INFORMATION

SEGMENT INFORMATION

(4)  SEGMENT INFORMATION

The Partnership is one of the leading growers and processors of macadamia nuts in the world, processing and marketing macadamia nuts in-shell, in bulk kernel form and as better for you snack products marketed under the Royal Hawaiian Orchards® brand name.  The Partnership has three reportable segments which are organized on the basis of revenues and assets:  owned orchards, contract farming and branded products.  The owned-orchard segment derives its revenues primarily from the sale of wet-in-shell macadamia nuts grown in orchards owned or leased by the Partnership.  This segment also has a portion of its wet-in-shell nuts processed into macadamia kernel for sale to the branded products segment. The contract farming segment derives its revenues from the farming of macadamia orchards it owns and the orchards owned by other growers.  The contracts provide for reimbursement of actual farming costs incurred plus a mark-up fee which is a percentage of farming costs or a fixed amount per acre.  Contract farming revenues tend to be less variable than revenues from the owned-orchard segment.  The branded products segment derives its revenues from the sale of branded macadamia nut snack products and sale of bulk macadamia nut kernel.

Management evaluates the performance of each segment on the basis of operating income.  The Partnership accounts for intersegment sales and transfers at cost and intersegment sales and transfers are eliminated in consolidation. The Partnership’s reportable segments are distinct business enterprises that offer different products or services.

The following tables summarize each reportable segment’s revenues, operating income, assets and other information as of and for the three months ended March 31, 2013 and 2012.  Due to the seasonality of crop patterns and the timing of nut purchase contract fulfillment, interim results are not necessarily indicative of annual performance.

	Three months ended March 31, 2013  (in thousands)
	Owned Orchards			Farming		Branded Products			Consolidation/ Reconciliation			Total
Revenues
External customers	$	1,414		$	375	$	206		$	—		$	1,995
Intersegment revenue	355			1,308		—			(1,663		)	—
Total revenue	$	1,769		$	1,683	$	206		$	(1,663	)	$	1,995
Operating income
External customers	$	(57	)	$	27	$	(522	)	$	—		$	(552	)
Intersegment operating income	95			—		—			(95		)	—
Total operating income	$	38		$	27	$	(522	)	$	(95	)	$	(552	)
Depreciation	$	199		$	113	$	4		$	—		$	316
Expenditures for property & equipment	$	9		$	22	$	4		$	—		$	35
Segment assets
Segment assets	$	42,889		$	7,573	$	1,710		$	—		$	52,172
Intersegment eliminations	3,159			—		95			(3,254		)	—
Total segment assets	$	46,048		$	7,573	$	1,805		$	(3,254	)	$	52,172

	Three months ended March 31, 2012  (in thousands)
	Owned Orchards		Farming		Branded Products			Consolidation/ Reconciliation			Total
Revenues
External customers	$	3,203	$	319	$	—		$	—		$	3,522
Intersegment revenue	—		2,586		—			(2,586		)	—
Total revenue	$	3,203	$	2,905	$	—		$	(2,586	)	$	3,522
Operating income	$	321	$	33	$	(170	)	$	—		$	184
Depreciation	$	309	$	101	$	—		$	—		$	410
Expenditures for property & equipment	$	13	$	14	$	—		$	—		$	27
Segment assets	$	46,357	$	7,823	$	—		$	—		$	54,180

All revenues are from sources within the United States of America.

The Partnership has reclassified its segment information for March 31, 2012 to conform to the current year presentation.