Note 7 - Business Segment Information

9 Months Ended

Sep. 30, 2012

Segment Reporting Disclosure [Text Block]

Note 7.  Business Segment Information

Avalon’s reportable segments include waste management services and golf and related operations. 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.”  On this basis, 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 years presented.

Avalon’s primary business segment, the waste management services segment, provides hazardous and nonhazardous waste disposal brokerage and management services to industrial, commercial, municipal and governmental customers, manages a captive landfill for an industrial customer and sells construction mats.  The golf and related operations segment includes the operations of golf courses, clubhouses that provide recreational activities, dining and banquet facilities, spa services and a travel agency.  Revenue for the golf and related operations segment consists primarily of membership dues, food and beverage sales, green fees, cart rentals, merchandise sales and spa services.  Revenue related to membership dues are recognized proportionately over twelve months.  The unrecognized or deferred revenues relating to membership dues at September 30, 2012 and December 31, 2011 were $2.5 million and $2.1 million, respectively. 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, 2012 and 2011, one customer accounted for 12% of the waste management services segment’s net operating revenues to external customers and 9% of Avalon’s consolidated net operating revenues.  In addition, Avalon’s captive landfill management business is dependent upon a single customer as its sole source of revenue.

The accounting policies of the segments are consistent with those described for the consolidated financial statements in the summary of significant accounting policies.  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 September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net operating revenues from:
Waste management services:
External customers revenues	$	9,561		$	12,264		$	27,613		$	28,873
Intersegment revenues		—			2			1			2
Total waste management services		9,561			12,266			27,614			28,875
Golf and related operations:
External customers revenues		3,669			3,571			9,164			8,231
Intersegment revenues		26			11			64			44
Total golf and related operations		3,695			3,582			9,228			8,275
Segment operating revenues		13,256			15,848			36,842			37,150
Intersegment eliminations		(26	)		(13	)		(65	)		(46	)
Total net operating revenues	$	13,230		$	15,835		$	36,777		$	37,104
Income (loss) before taxes:
Waste management services	$	680		$	901		$	2,203		$	2,275
Golf and related operations		87			35			(175	)		(473	)
Segment income before taxes		767			936			2,028			1,802
Corporate interest income		—			1			2			4
Corporate other income, net		8			11			25			135
General corporate expenses		(675	)		(620	)		(2,038	)		(1,852	)
Income (loss) before taxes	$	100		$	328		$	17		$	89
Interest income:
Waste management services	$	—		$	—		$	—		$	—
Golf and related operations		—			—			—			—
Corporate		—			1			2			4
Total	$	—		$	1		$	2		$	4

	September 30, 2012			December 31, 2011
Identifiable assets:
Waste management services	$	14,732		$	16,869
Golf and related operations		30,853			30,140
Corporate		40,951			41,840
Subtotal		86,536			88,849
Elimination of intersegment receivables		(36,383	)		(35,482	)
Total	$	50,153		$	53,367

In comparing the identifiable assets at September 30, 2012 with those at December 31, 2011, the decrease in identifiable assets of the waste management services segment of $2.1 million is primarily due to a decrease in accounts receivable as a result of lower net operating revenues of the waste brokerage and management services business in the third quarter of 2012 compared with the fourth quarter of 2011, partially offset by an increase in intersegment transactions which were eliminated in consolidation. Net operating revenues of the waste brokerage and management services business were $9.0 million in the third quarter of 2012 compared with $13.9 million in the fourth quarter of 2011. The increase in identifiable assets of the golf and related operations segment of $.7 million is primarily due to an increase in accounts receivable at September 30, 2012 compared with December 31, 2011and capital expenditures made during the first nine months of 2012. The decrease in identifiable assets of corporate is primarily due to a decrease in intersegment transactions which were eliminated in consolidation.