FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended March 31, 2006
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 33-26115
PATRIOT TRANSPORTATION HOLDING, INC.
(Exact name of registrant as specified in its charter)
Florida 59-2924957
(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification No.)
1801 Art Museum Drive, Jacksonville, Florida 32207
(Address of principal executive offices)
(Zip Code)
904/396-5733
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X
No___
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition
of "accelerated filer and large accelerated filer" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer[ ] Accelerated filer[ ] Non-accelerated
filer[X]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). YES___ NO_X_
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of March 31, 2005: 2,994,997 shares of $.10
par value common stock.
PATRIOT TRANSPORTATION HOLDING, INC.
FORM 10-Q
QUARTER ENDED MARCH 31, 2006
CONTENTS
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets 1
Consolidated Statements of Income 2
Consolidated Statements of Cash Flows 3
Condensed Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
Item 3. Quantitative and Qualitative Disclosures about Market Risks 20
Item 4. Controls and Procedures 22
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 6. Exhibits 22
Signatures 23
Exhibit 31 Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 28
Exhibit 32 Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. 31
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
March 31, September 30,
2006 2005
Assets
Current assets:
Cash and cash equivalents $ 481 2,966
Accounts receivable (including related party of
$467 and $288 and net of allowance for doubtful
accounts of $485 and $525, respectively) 10,906 11,731
Inventory of parts and supplies 769 799
Prepaid tires on equipment 2,137 1,959
Prepaid taxes and licenses 679 1,291
Prepaid insurance 1,178 259
Prepaid expenses, other 636 564
Total current assets 16,786 19,569
Property, plant and equipment, at cost 266,086 246,725
Less accumulated depreciation and depletion (83,365) (81,789)
Net property, plant and equipment 182,721 164,936
Real estate held for investment, at cost 1,093 1,093
Goodwill 1,087 1,087
Other assets 7,454 7,030
Total assets $209,141 193,715
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 4,152 5,674
Federal and state income taxes payable 1,393 642
Accrued payroll 2,348 3,247
Accrued insurance reserves 4,823 3,774
Accrued liabilities, other 309 452
Long-term debt due within one year 2,507 2,432
Total current liabilities 15,532 16,221
Long-term debt 60,412 48,468
Deferred income taxes 13,905 14,394
Accrued insurance reserves 4,993 4,993
Other liabilities 1,851 1,738
Commitments and contingencies (Note 9)
Shareholders' equity:
Preferred stock, no par value;
5,000,000 shares authorized; none issued - -
Common stock, $.10 par value;
25,000,000 shares authorized,
2,994,997 and 2,965,075 shares issued
and outstanding, respectively 300 297
Capital in excess of par value 28,041 27,100
Retained earnings 84,107 80,504
Total shareholders' equity 112,448 107,901
Total liabilities and shareholders' equity $209,141 193,715
See accompanying notes.
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)
THREE MONTHS SIX MONTHS
ENDED MARCH 31, ENDED MARCH 31,
2006 2005 2006 2005
(restated) (restated)
Revenues:
Transportation $ 30,345 27,496 60,645 54,531
Real estate 5,216 4,563 10,339 8,947
Total revenues (including revenue
from related parties of $2,066,
$1,662, $3,846 and $3,197,
respectively) 35,561 32,059 70,984 63,478
Cost of operations:
Transportation 26,234 24,289 52,358 47,892
Real estate 2,490 2,056 5,007 3,910
Gross profit 6,837 5,714 13,619 11,676
Selling, general and administrative
expense (including expenses paid
to a related party of $48, $23,
$96 and $90, respectively) 3,114 2,329 5,923 4,729
Operating profit 3,723 3,385 7,696 6,947
Interest income and other 82 5 97 15
Interest expense (1,055) (812) (1,982) (1,625)
Income before income taxes 2,750 2,578 5,811 5,337
Provision for income taxes (1,045) (1,005) (2,208) (2,080)
Net income $ 1,705 1,573 3,603 3,257
Earnings per common share:
Basic $ .57 .53 1.21 1.11
Diluted $ .56 .52 1.17 1.08
Number of shares (in thousands)
used in computing:
-basic earnings per common share 2,972 2,948 2,969 2,940
-diluted earnings per common share 3,070 3,037 3,069 3,019
See accompanying notes.
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 2006 AND 2005
(In thousands)
(Unaudited)
2006 2005
(restated)
Cash flows from operating activities:
Net income $ 3,603 3,257
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 6,643 6,219
Deferred income taxes (625) (4,065)
Gain on sale of equipment (721) (382)
Tax benefit from stock option exercise - 227
Stock-based compensation 586 -
Net changes in operating assets and liabilities:
Accounts receivable 914 248
Inventory of parts and supplies 30 (17)
Prepaid expenses and other current assets (421) (608)
Other assets (691) (864)
Accounts payable and accrued liabilities (1,515) 177
Income taxes payable 662 (3,708)
Long-term insurance reserves and other long-term
liabilities 113 80
Net cash provided by operating activities 8,578 564
Cash flows from investing activities:
Purchase of transportation group property and equipment (10,121) ( 7,179)
Purchase of real estate group property and equipment (14,427) (14,024)
Cash held in escrow - 16,553
Proceeds from sale of real estate held for investment
and property and equipment 1,108 823
Net cash used in investing activities (23,440) (3,827)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 2,084 3,776
Net increase (decrease)in revolving debt 11,003 (219)
Repayment of long-term debt (1,068) (877)
Excess tax benefits from exercise of stock options 105 -
Proceeds from exercised stock options 253 652
Net cash provided by financing activities 12,377 3,332
Net (decrease) increase in cash and cash equivalents (2,485) 69
Cash and cash equivalents at beginning of period 2,966 199
Cash and cash equivalents at end of the period $ 481 268
See accompanying notes.
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2006
(Unaudited)
(1) Basis of Presentation. The accompanying consolidated financial
statements include the accounts of Patriot Transportation Holding, Inc.
and its subsidiaries (the "Company"). These statements have been
prepared in accordance with accounting principles generally accepted in
the United States of America for interim financial information and the
instructions to Form 10-Q and do not include all the information and
footnotes required by accounting principles generally accepted in the
United States of America for complete financial statements. In the
opinion of management, all adjustments (primarily consisting of normal
recurring accruals) considered necessary for a fair statement of the
results for the interim periods have been included. Operating results
for the six months ended March 31, 2006 are not necessarily indicative
of the results that may be expected for the fiscal year ending September
30, 2006. The accompanying consolidated financial statements and the
information included under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" should be
read in conjunction with the Company's consolidated financial statements
and related notes included in the Company's Form 10-K for the year ended
September 30, 2005.
(2) Restatement of Prior Financial Information. The Company restated
its consolidated balance sheet as of September 30, 2004 and its
consolidated statement of shareholders' equity for the year then ended.
The Company also restated its consolidated statements of income,
shareholders' equity and cash flows for the year ended September 30,
2003. In addition, the Company restated its quarterly results of
operations for fiscal 2005. The restatement corrects our historical
accounting for recognizing rental revenue for scheduled rate increases
on operating leases. For information with respect to the restatement,
see Note 2 to the consolidated financial statements contained in the
Company's Annual Report on 10-K for fiscal 2005. Throughout this Form
10-Q, all referenced amounts for affected prior periods and prior period
comparisons reflect the balances and amounts on a restated basis. As a
result of this restatement, the Company's financial results have been
adjusted as follows (in thousands, except per share data):
Three Months Ended March 31, 2005
As Previously
Reported__ Adjustments As Restated_
Total revenues $ 32,014 45 32,059
Gross profit 5,669 45 5,714
Operating profit 3,340 45 3,385
Income before tax 2,533 45 2,578
Provision for income taxes 988 17 1,005
Net income 1,545 28 1,573
Earnings per common share:
Basic $ .52 .01 .53
Diluted $ .51 .01 .52
Six Months Ended March 31, 2005
As Previously
Reported__ Adjustments As Restated_
Total revenues $ 63,388 90 63,478
Gross profit 11,586 90 11,676
Operating profit 6,857 90 6,947
Income before tax 5,247 90 5,337
Provision for income taxes 2,046 34 2,080
Net income 3,201 56 3,257
Earnings per common share:
Basic $ 1.09 .02 1.11
Diluted $ 1.06 .02 1.08
Cash flows from
operating activities:
Net income $ 3,201 56 3,257
Deferred income taxes (4,099) 34 (4,065)
Net changes in operating
assets and liabilities:
Other assets (774) (90) (864)
Net cash provided by
operating activities 564 - 564
(3) Recent Accounting Pronouncements. In March 2005, the FASB issued
FASB Interpretation No. 47, "Accounting for Conditional Asset Retirement
Obligations" (FIN 47), which clarifies that the term "conditional asset
retirement obligation" as used in FASB Statement No. 143, "Accounting
for Asset Retirement Obligations", refers to a legal obligation to
perform an asset retirement activity in which the timing and/or method
of settlement are conditional on a future event that may or may not be
within the control of the entity. An entity is required to recognize a
liability for the fair value of a conditional asset retirement
obligation if the fair value of the liability can be reasonably
estimated. FIN 47 is effective for the Company no later than the end of
fiscal 2006. The impact of this new pronouncement is not expected to be
material to the Company's financial statements.
(4) Business Segments. The Company has identified two business segments,
each of which is managed separately along product lines. The Company's
operations are substantially in the Southeastern and Mid-Atlantic
states.
The transportation segment hauls liquid and dry bulk commodities and
constuction materials by motor carrier. The real estate segment owns
real estate of which a substantial portion is under mining royalty
agreements or leased. The real estate segment also holds certain other
real estate for investment and develops commercial and industrial
properties.
Operating results and certain other financial data for the Company's
business segments are as follows (in thousands):
Three Months ended Six Months ended
March 31, March 31,_ _
2006 2005 2006 2005
(restated) (restated)
Revenues:
Transportation $ 30,345 27,496 60,645 54,531
Real estate 5,216 4,563 10,339 8,947
$ 35,561 32,059 70,984 63,478
Operating profit
Transportation $ 1,920 1,364 3,891 2,813
Real estate 2,726 2,505 5,332 5,036
Corporate expenses (923) (484) (1,527) (902)
$ 3,723 3,385 7,696 6,947
Identifiable assets March 31, September 30,
2006 2005
Transportation $ 52,465 47,435
Real estate 154,262 141,646
Cash items 481 2,966
Unallocated corporate assets 1,933 1,668
$209,141 193,715
(5) Long-Term debt. Long-term debt is summarized as follows (in
thousands):
March 31, September 30,
2006 2005
Revolving credit (uncollateralized) $ 11,003 -
Construction loan - 9,716
5.7% to 9.5% mortgage notes
due in installments through 2021 51,916 41,184
62,919 50,900
Less portion due within one year 2,507 2,432
$ 60,412 48,468
The Company has a $37,000,000 uncollaterized Revolving Credit Agreement
(the Revolver) with four banks which is scheduled to terminate on
December 31, 2009. The Revolver currently bears interest at a rate of
1.25% over the selected LIBOR and may change quarterly based on the
Company's ratio of Consolidated Total Debt to Consolidated Total
Capital, as defined. A commitment fee of 0.20% per annum is payable
quarterly on the unused portion of the commitment. The commitment fee
may also change quarterly based upon the ratio described above. The
Revolver contains restrictive covenants including limitations on paying
cash dividends.
(6) Related Party Transactions. The Company, through its transportation
subsidiaries, hauls commodities by tank and flatbed trucks for Florida
Rock Industries, Inc. (FRI). Charges for these services are based on
prevailing market prices. The real estate subsidiaries lease certain
construction aggregates mining and other properties to FRI. The Company
also outsources certain administrative functions to FRI.
(7) Earnings per common share. The following details the computations of
the basic and diluted earnings per common share (In thousands, except
per share amounts).
THREE MONTHS SIX MONTHS
ENDED MARCH 31, ENDED MARCH 31,
2006 2005 2006 2005
(restated) (restated)
Weighted average common shares
outstanding during the
period - shares used for
basic earnings per share 2,972 2,948 2,969 2,940
Common shares issuable under
stock options which are
potentially dilutive 98 89 100 79
Common shares used for diluted
earnings per share 3,070 3,037 3,069 3,019
Net income $ 1,705 1,573 3,603 3,257
Earnings per common share
Basic $ .57 .53 1.21 1.11
Diluted $ .56 .52 1.17 1.08
For the six months ended March 31, 2006, all outstanding stock options
were included in the calculation of diluted earnings per common share
because the sum of the hypothetical amount of future proceeds from the
exercise price, unrecorded compensation, and tax benefits to be credited
to capital in excess of par for all grants of stock options were lower
than the average price of the common shares, and therefore were
dilutive. For the six months ended March 31, 2006, all outstanding
restricted shares were included in the calculation of diluted earnings
per common share because the unrecorded compensation and tax benefits to
be credited to capital in excess of par for all awards of restricted
stock were lower than the average price of the common shares, and
therefore were dilutive. For the six months ended March 31, 2005, all
outstanding stock options were included in the calculation of diluted
earnings per common share because the exercise prices of the stock
options were lower than the average price of the common shares, and
therefore were dilutive.
(8) Stock-Based Compensation Plan. Effective October 1, 2005, the
Company adopted SFAS 123R "Share-Based Payment" for its stock-based
employee compensation plans. Under SFAS 123R, compensation expense must
be measured and recognized for all share-based payments at the grant
date based on the fair value of the award and such costs must be
included in the statement of operations over the requisite service
period. Prior to October 1, 2005 the company followed APB Opinion No.
25, "Accounting for Stock Issued to Employees".
The Company has elected the modified prospective application transition
method whereby the provisions of the statement will apply going forward
only from the date of adoption to new share based payments, and for the
portion of any previously issued and outstanding stock option awards for
which the requisite service is rendered after the date of adoption. The
Company did not restate prior years for pro forma expense amounts. In
addition, compensation expense must be recognized for any awards
modified, repurchased or cancelled after the date of adoption. The
straight-line attribution model is used to measure compensation expense.
Prior to Feburary 2006, the Company had two Stock Option Plans (the 1995
Stock Option Plan and the 2000 Stock Option Plan) under which options
for shares of common stock were granted to directors, officers and key
employees. The options awarded under the two plans have similar
characteristics. All stock options are non-qualified and expire ten
years from the date of grant. Options awarded to directors are
exercisable immediately and options awarded to officers and employees
become exercisable in cumulative installments of 20% at the end of each
year following the date of grant. When stock options are exercised the
Company issues new shares after receipt of exercise proceeds and taxes
due, if any, from the grantee.
In February, 2006 the Shareholders approved the 2006 Stock Incentive
Plan which replaced the 2000 Stock Option Plan. The 2006 plan permits
the grant stock options, stock appreciation rights, restricted stock
awards, restricted stock units, or stock awards. In February, 2006
15,960 shares of restricted stock were granted subject to forfeiture
restrictions, tied to continued employment, that lapse 25% annually
beginning on January 1, 2007. The number of common shares authorized
for future issuance was 279,540 at March 31, 2006.
The Company utilized the Black-Scholes valuation model for estimating
fair value of stock compensation for options awarded to officers and
employees in prior periods with the following weighted-average
assumptions:
Six Months ended
March 31,
2006 2005
Dividend yield - -
Expected volatility 41% - 53% 41% - 53%
Average risk-free interest rate 3.2%-4.9% 3.2%-4.9%
Expected life (in years) 6.2 - 7.0 6.2 - 7.0
The dividend yield of zero is based on the fact that the Company does
not pay cash dividends and has no present intention to pay cash
dividends. Expected volatility is estimated based on the Company's
historical experience over a period equivalent to the expected life in
years. The risk-free interest rate is based on the U.S. Treasury
constant maturity interest rate with a term consistent with the expected
life of the options granted. The expected life calculation is based on
the observed and expected time to exercise options by the employees.
Under provisions of SFAS 123R, the Company recorded $459,000 of stock
compensation expense in its consolidated statement of income for the
three months ended March 31, 2006. This consisted of $286,000 for an
annual stock award of 4,500 shares to non-employee directors, $134,000
for stock options issued in prior years, and $39,000 for restricted
stock awards. Stock compensation expense was $284,000 net of deferred
income tax benefits. This represents $.09 per common share for both
basic and diluted earnings per common share. For the six months ended
March 31, 2006, the Company recorded $586,000 of stock compensation
expense in its consolidated statement of income. This consisted of
$286,000 for an annual stock award to non-employee directors, $261,000
for stock options issued in prior years, and $39,000 for restricted
stock awards. Stock compensation expense was $363,000 net of deferred
income tax benefits. This represents $.12 per common share for both
basic and diluted earnings per common share.
SFAS 123R also amends FASB Statement No. 95, Statement of Cash Flows, to
require that the benefits associated with the tax deduction in excess of
recognized compensation cost be reported as financing cash flows, rather
than as a reduction of taxes paid. This requirement will reduce net
operating cash flows and increase net financing cash flows in periods
after the effective date. Financing cash flows for the six months ended
March 31, 2006 included $105,000 of excess tax benefits from the
exercise of stock options.
A summary of changes in outstanding options is presented below (in
thousands, except per share amounts):
Weighted Weighted Weighted
Number Average Average Average
Of Exercise Remaining Grant Date
Options Shares Price Term (yrs) Fair Value
Outstanding at
October 1, 2005 337,900 $30.72 7.8
Granted 0 $ 0 $ 0
Exercised 9,462 $26.71 $ 131
Forfeited 6,700 $33.66
Outstanding at
March 31, 2006 321,738 $30.78 7.3 $ 4,988
Exerciseable at
March 31, 2006 217,538 $29.23 7.0 $ 3,296
Vested during
Six months ended
March 31, 2006 37,500 $ 555
The aggregate intrinsic value of exercisable in-the-money options was
$8,598,000 based on the market closing price of $68.76 on March 31, 2006
less exercise prices. The aggregate intrinsic value of all outstanding
options at March 31, 2006 was $12,221,000. Gains of $378,000 were
realized by option holders during the six months ended March 31, 2006.
The realized tax benefit from options exercised for the six months ended
March 31, 2006 was $142,000. Total compensation cost of options granted
but not yet vested as of March 31, 2006 was $1,424,000, which is
expected to be recognized over a weighted-average period of 2.7 years.
A summary of changes in restricted stock awards is presented below (in
thousands, except per share amounts):
Weighted Weighted Weighted
Number Average Average Average
Of Grant Remaining Grant Date
Restricted Stock Shares Price Term (yrs) Fair Value
Outstanding at
October 1, 2005 0
Granted 15,960 $63.64 $ 1,016
Vested 0 $ 0
Forfeited 0
Outstanding at
March 31, 2006 15,960 $63.64 3.8 $ 1,016
Total compensation cost of restricted stock granted but not yet vested
as of March 31, 2006 was $814,000 which is expected to be recognized
over a weighted-average period of 3.8 years.
SFAS 123R requires the presentation of pro forma information for the
comparative periods prior to its adoption as if all employee stock
options had been accounted for under the fair value method of the
original SFAS 123, "Accounting for Stock-Based Compensation." The
following table illustrates the effect on net income and earnings per
common share if SFAS 123 had been applied to stock-based employee
compensation to the prior-year periods (in thousands, except per share
amounts):
Three months ended Six months ended
March 31, 2005 March 31, 2005
(restated) (restated)
Net income
As reported $1,573 $3,257
Deduct: Total stock-based
employee compensation expense
determined under fair value
based method, net of tax effects 195 479
Pro forma $1,378 $2,778
Basic earnings per common share
As reported $ .53 $ 1.11
Pro forma $ .47 $ .94
Diluted earnings per common share
As reported $ .52 $ 1.08
Pro forma $ .45 $ .92
(9) Contingent liabilities. Certain of the Company's subsidiaries are
involved in litigation on a number of matters and are subject to certain
claims which arise in the normal course of business. The Company has
retained certain self-insurance risks with respect to losses for third
party liability and property damage. In the opinion of management none
of these matters are expected to have a material adverse effect on the
Company's consolidated financial condition, results of operations or
cash flows.
(10)Customer Concentration. During the first six months of fiscal
2006, the transportation segment's ten largest customers accounted for
approximately 47.9% of the transportation segment's revenue. One of
these customers accounted for 11.0% of the transportation segment's
revenue. The loss of any one of these customers could have a material
adverse effect on the Company's revenues and income.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview - The Company's operations are influenced by a number of
external and internal factors. External factors include levels of
economic and industrial activity in the United States and the Southeast,
driver availability and cost, petroleum product usage in the Southeast
which is driven in part by tourism and commercial aviation, fuel costs,
regulations regarding driver qualifications and hours of service,
construction activity, FRI's sales from the Company's mining properties,
interest rates, market conditions and attendant prices for casualty
insurance, demand for commercial warehouse space in the
Baltimore/Washington area, and ability to obtain zoning and entitlements
necessary for property development. Internal factors include revenue
mix, capacity utilization, auto and workers' compensation accident
frequencies and severity, other operating factors, administrative costs,
group health claims experience, and construction costs of new projects.
During the first six months of fiscal 2006, the transportation segment's
ten largest customers accounted for approximately 47.9% of the
transportation segment's revenue. One of those customers accounted for
11.0% of transportation segment's revenues. The loss of any one of
these customers could have a material adverse effect on the Company's
revenues and income.
Financial results of the Company for any individual quarter are not
necessarily indicative of results to be expected for the year.
Restatement of Prior Financial Information - The Company restated its
consolidated balance sheet as of September 30, 2004 and its
consolidated statement of shareholders' equity for the year then
ended. The Company also restated its consolidated statements of
income, shareholders' equity and cash flows for the year ended
September 30, 2003. In addition, the Company restated its quarterly
results of operations for fiscal 2005. The restatement corrects our
historical accounting for recognizing rental revenue for scheduled
rate increases on operating leases. For information with respect to
the restatement, see Note 2 to the consolidated financial statements
contained in the Company's Annual Report on 10-K for fiscal 2005.
Throughout this Form 10Q, all referenced amounts for affected prior
periods and prior period comparisons reflect the balances and amounts
on a restated basis.
Comparative Results of Operations for the Three Months Ended March 31,
2006 and 2005
Consolidated Results. - Net income for the second quarter of fiscal 2006
was $1,705,000, an increase of $132,000 or 8.4% compared to $1,573,000
for the same period last year. Diluted earnings per common share for the
second quarter of fiscal 2006 was $0.56 compared to $0.52 in the second
quarter of fiscal 2005.
Transportation
Three Months Ended March 31
(dollars in thousands) ___2006 % 2005 %_
Transportation revenue $ 26,657 88% 25,221 92%
Fuel surcharges 3,688 12% 2,275 8%
Revenues 30,345 100% 27,496 100%
Compensation and benefits 11,797 39% 10,920 40%
Fuel expenses 6,285 21% 5,025 18%
Insurance and losses 2,917 10% 3,284 12%
Depreciation expense 2,111 7% 2,007 7%
Other, net 3,124 10% 3,053 11%
Cost of operations 26,234 87% 24,289 88%
Gross profit $ 4,111 13% 3,207 12%
Transportation segment revenues were $30,345,000 in the second quarter
of 2006, an increase of $2,849,000 over the same quarter last year. Fuel
surcharges accounted for $1,413,000 of the increase, resulting from
higher diesel fuel costs during the quarter compared to the same quarter
last year. Excluding fuel surcharges, revenue per mile increased 5.0%,
reflecting better pricing for our services. Revenue miles in the current
quarter were up .6% compared to the second quarter of 2005 and were
hindered by low driver availability.
The Transportation segment's cost of operations in the second quarter of
2006 increased $1,945,000 to $26,234,000, as compared to $24,289,000 in
the same quarter last year. The primary factor for the increase was
higher diesel fuel costs. Average diesel fuel cost per gallon increased
21.7% in the second quarter of 2006 compared to the same quarter last
year. Compensation and benefits were higher as a result of higher
driver pay.
Real Estate
Three Months Ended March 31
(dollars in thousands) ___2006 % 2005 %_
(restated)
Royalties and rent $ 1,648 32% 1,457 33%
Developed property rentals 3,568 68% 3,106 67%
Total Revenue 5,216 100% 4,563 100%
Mining and land rent expenses 418 8% 274 6%
Developed property expenses 2,072 40% 1,782 39%
Cost of Operations 2,490 48% 2,056 45%
Gross profit $ 2,726 52% 2,507 55%
Real Estate segment revenues for the second quarter of fiscal 2006 were
$5,216,000, an increase of $653,000 or 14.3% over the same quarter last
year. Lease revenue from developed properties increased $462,000 or
14.9%, due to an increase in occupied square feet resulting from the
leasing of a 74,600 square foot building in January 2005 and the
completion of a pre-leased 145,180 square foot building in July 2005
along with higher rental rates on recently leased buildings. Royalties
from mining operations increased $191,000 as a result of increased
royalties per ton.
Real estate segment expenses increased to $2,490,000 during the second
quarter of fiscal 2006, compared to $2,056,000 for the same quarter last
year. Expenses related to development activities increased as a result
of the new building additions and increased staffing.
Consolidated Results
Gross Profit - Consolidated gross profit was $6,837,000 in the second
quarter of fiscal 2006 compared to $5,714,000 in the same period last
year, an increase of 19.7%. Gross profit in the transportation segment
increased $904,000 or 28.2%, primarily due to improved pricing as
compared to the same quarter last year. Gross profit in the real estate
segment increased $219,000 or 8.7% from the second quarter 2005, due to
the increased revenues mostly offset by increased staffing.
Selling, general and administrative expense - Selling, general and
administrative expenses increased $785,000 over the same quarter last
year. The increase included $459,000 from stock compensation expense as
required by SFAS 123R (see Note 8 of Condensed Notes to Consolidated
Financial Statements) and $234,000 of higher incentive compensation
accrual due to improved earnings. SG&A expense was 8.8% of revenue for
the second quarter of fiscal 2006 compared to 7.3% for the same period
last year.
Interest expense - Interest expense increased $243,000 over the same
quarter last year. This is due to higher debt levels resulting from
development of properties and the purchase of land for future
development combined with higher interest rates.
Income taxes - Income tax expense increased $40,000 over the same
quarter last year. This is due to higher earnings before taxes,
partially offset by a decrease in the effective tax rate to 38.0%
versus 39.0% for the same quarter last year.
Net income - Net income was $1,705,000 or $0.56 per diluted common share
in the second quarter of fiscal 2006, an increase of $132,000 or 8.4%
compared to $1,573,000 or $0.52 per diluted share in the same period
last year.
Comparative Results of Operations for the Six Months Ended March 31,
2006 and 2005
Consolidated Results - Net income for the first six months of fiscal
2006 was $3,603,000, an increase of $346,000 or 10.6% compared to
$3,257,000 for the same period last year. Diluted earnings per common
share for the first six months of fiscal 2006 was $1.17 compared to
$1.08 for the same period last year.
Transportation
Six Months Ended March 31
(dollars in thousands) ___2006 % 2005 %
Transportation revenue $ 52,619 87% 49,896 92%
Fuel surcharges 8,026 13% 4,635 8%
Revenues 60,645 100% 54,531 100%
Compensation and benefits 23,006 38% 21,606 40%
Fuel expenses 12,679 21% 9,924 18%
Insurance and losses 6,149 10% 6,517 12%
Depreciation expense 4,177 7% 3,988 7%
Other, net 6,347 10% 5,857 11%
Cost of operations 52,358 86% 47,892 88%
Gross profit $ 8,287 14% 6,639 12%
Transportation segment revenues were $60,645,000 in the first six months
of 2006, an increase of $6,114,000 over the same period last year. Fuel
surcharges accounted for $3,391,000 of the increase. Excluding fuel
surcharges, revenue per mile increased 6.0%, reflecting better pricing
for our services. Revenue miles in the first six months of 2006 were
down .5% compared to the first six months of 2005 and were hindered by
low driver availability.
The Transportation segment's cost of operations in the first six months
of 2006 increased $4,466,000 to $52,358,000, as compared to $47,892,000
in the same period last year. The primary factor for the increase was
higher diesel fuel costs. Average diesel fuel cost per gallon increased
23.2% in the first six months of 2006 compared to the same period last
year. Compensation and benefits were higher as a result of higher
driver pay.
Real Estate
Six Months Ended March 31
(dollars in thousands) ___2006 % 2005 %
(restated)
Royalties and rent $ 3,227 31% 2,882 32%
Developed property rentals 7,112 69% 6,065 68%
Total Revenue 10,339 100% 8,947 100%
Mining and land rent expenses 863 8% 631 7%
Developed property expenses 4,144 40% 3,279 37%
Cost of Operations 5,007 48% 3,910 44%
Gross profit $ 5,332 52% 5,037 56%
Real Estate segment revenues for the first six months of fiscal 2006
were $10,339,000, an increase of $1,392,000 or 15.6% over the same
period last year. Lease revenue from developed properties increased
$1,047,000 or 17.3%, due to an 9.4% increase in occupied square feet
resulting from the completion of a pre-leased 74,600 square foot
building in January 2005 and the completion of a pre-leased 145,180
square foot building in July 2005 along with higher rental rates on
recently leased buildings. Royalties from mining operations increased as
a result of increased royalties per ton.
Real estate segment expenses increased to $5,007,000 during the first
six months of fiscal 2006, compared to $3,910,000 for the same period
last year. Expenses related to development activities increased as a
result of the new building additions, increased staffing and
professional fees.
Consolidated Results
Gross Profit - Consolidated gross profit was $13,619,000 in the first
six months of fiscal 2006 compared to $11,676,000 in the same period
last year, an increase of 16.6%.
Selling, general and administrative expense - Selling, general and
administrative expenses increased $1,194,000 over the same period last
year. The increase included $586,000 from stock compensation expense as
required by SFAS 123R (see Note 8 of Condensed Notes to Consolidated
Financial Statements) and $389,000 of higher incentive compensation
accrual due to improved earnings. SG&A expense was 8.3% of revenue for
the first six months of fiscal 2006 compared to 7.4% for the same period
last year.
Interest expense - Interest expense increased $357,000 over the same
period last year. This is due to higher debt levels resulting from
development of properties and the purchase of land for future
development combined with higher interest rates.
Income taxes - Income tax expense increased $128,000 over the same
period last year. This is due to higher earnings before taxes,
partially offset by a decrease in the effective tax rate to 38.0% versus
39.0% for the same period last year.
Net income - Net income was $3,603,000 or $1.17 per diluted common share
in the first six months of fiscal 2006, an increase of $346,000 or 10.6%
compared to $3,257,000 or $1.08 per diluted common share in the same
period last year.
Liquidity and Capital Resources
For the first six months of fiscal 2006, the Company used cash provided
by operations, borrowings under its Revolver and secured borrowings to
finance its operating activities and the purchase of $24,548,000 in
property and equipment and to make scheduled payments on long-term debt.
Investing activities included $10,105,000 for the purchase of land for
future development, $4,322,000 for real estate development, and
$10,121,000 for the purchase of transportation group equipment.
The Company has a $37,000,000 revolving credit agreement (the Revolver)
of which $25,997,000 was available at March 31, 2006. In the quarter
ended December 31, 2005, the Company used $10,105,000 borrowed under the
Revolver to purchase 103 acres of undeveloped land located in Manassas,
Virginia. The balance of the funds borrowed under the Revolver was used
for other investment activities. The Revolver contains restrictive
covenants including limitations on paying cash dividends. The Revolver
will expire on December 31, 2009.
During the second quarter of fiscal 2006 the Company converted a
construction loan into a 15-year non-recourse mortgage of $11,800,000
with an interest rate of 6.17%. The construction loan was used to
develop a 145,000 square foot build-to-suit warehouse/office building
pursuant to a 15-year triple net lease.
The Company had $16,823,000 of irrevocable letters of credit outstanding
as of March 31, 2006. Most of the letters of credit are irrevocable for
a period of one year and are automatically extended for additional one-
year periods unless notified by the issuing bank not less than thirty
days before the expiration date. Substantially all of these were issued
for workers' compensation and liability insurance retentions. If these
letters of credit are not extended the Company will have to find
alternative methods of collateralizing or funding these obligations.
The Board of Directors has authorized Management to repurchase shares of
the Company's common stock from time to time as opportunities arise. As
of March 31, 2006, $3,490,000 was authorized to repurchase the Company's
common stock. No shares were repurchased during the first six months of
fiscal 2006.
The Company does not currently pay any dividends on common stock.
While the Company is affected by environmental regulations, such
regulations are not expected to have a major effect on the Company's
capital expenditures or operating results.
Management believes that the Company is financially postured to be able
to take advantage of external and internal growth opportunities in both
our real estate and transportation segments.
Adoption of SFAS 123R. Effective October 1, 2005, the Company adopted
SFAS 123R "Share-Based Payment" for its stock-based employee
compensation plans. Under SFAS 123R, compensation expense must be
measured and recognized for all share-based payments at the grant date
based on the fair value of the award and such costs must be included in
the statement of operations over the requisite service period. Prior to
October 1, 2005 the company followed APB Opinion No. 25, "Accounting for
Stock Issued to Employees".
The Company has elected the modified prospective application transition
method whereby the provisions of the statement will apply going forward
only from the date of adoption to new share based payments, and for the
portion of any previously issued and outstanding stock option awards for
which the requisite service is rendered after the date of adoption. The
Company did not restate prior years for pro forma expense amounts. In
addition, compensation expense must be recognized for any awards
modified, repurchased or cancelled after the date of adoption.
Under provisions of SFAS 123R, the Company recorded $459,000 of stock
compensation expense in its consolidated statement of income for the
three months ended March 31, 2006. This consisted of $286,000 for an
annual stock award to non-employee directors, $134,000 for stock options
issued in prior years, and $39,000 for restricted stock. Stock
compensation expense was $284,000 net of deferred income tax benefits.
This represents $.09 per common share for both basic and diluted
earnings per common share. For the six months ended March 31, 2006, the
Company recorded $586,000 of stock compensation expense in its
consolidated statement of income. This consisted of $286,000 for an
annual stock award to non-employee directors, $261,000 for stock options
issued in prior years, and $39,000 for restricted stock. Stock
compensation expense was $363,000 net of deferred income tax benefits.
This represents $.12 per common share for both basic and diluted
earnings per common share.
SFAS 123R also amends FASB Statement No. 95, Statement of Cash Flows, to
require that the benefits associated with the tax deduction in excess of
recognized compensation cost be reported as financing cash flows, rather
than as a reduction of taxes paid. This requirement will reduce net
operating cash flows and increase net financing cash flows in periods
after the effective date. Financing cash flows for the six months ended
March 31, 2006 included $105,000 of excess tax benefits from the
exercise of stock options.
Recent Accounting Pronouncements. In March 2005, the FASB issued FASB
Interpretation No. 47, "Accounting for Conditional Asset Retirement
Obligations" (FIN 47), which clarifies that the term "conditional
asset retirement obligation" as used in FASB Statement No. 143,
"Accounting for Asset Retirement Obligations", refers to a legal
obligation to perform an asset retirement activity in which the
timing and/or method of settlement are conditional on a future event
that may or may not be within the control of the entity. An entity is
required to recognize a liability for the fair value of a conditional
asset retirement obligation if the fair value of the liability can be
reasonably estimated. FIN 47 is effective for the Company no later
than the end of fiscal 2006. The impact of this new pronouncement is
not expected to be material to the Company's financial statements.
Related Party Transactions. The Company, through its transportation
subsidiaries, hauls commodities by tank and flatbed trucks for Florida
Rock Industries, Inc. (FRI). Charges for these services are based on
prevailing market prices. Other wholly owned subsidiaries lease certain
construction aggregates mining and other properties to FRI. In
addition, the Company outsources certain administrative functions to
FRI. The cost of these administrative functions was $48,000 and $23,000
for the quarters ending March 31, 2006 and 2005, respectively.
The Company's independent directors are considering a proposed 50-50
joint venture with FRI to develop approximately 4,300 acres of land near
Brooksville, Florida. As proposed, the Company would contribute to the
joint venture 3,443 acres that it owns and leases to FRI under a long
term mining lease that potentially runs until 2092. Patriot would also
contribute one-half of the acquisition costs of a 288 acre parcel
recently acquired by FRI. FRI would contribute its leasehold interest
in the 3,443 acres as well as 841 acres owned by FRI (inclusive of the
288 acre parcel). The property does not yet have the necessary
entitlements for development. The proposal under consideration would
allow continued mining by FRI on at least a portion of this property for
at least the next 15 years, with payment of royalties to the Company on
product mined and sold. Management believes that both the Company and
FRI ultimately would realize greater value from development of the
Brooksville property rather than continued operation of the property
under the long-term mining lease.
Summary and Outlook. The Company's real estate development business
continues to benefit from positive inquiry trends from prospective
tenants for its warehouse-office product. The Company continues to
explore opportunities for development of various properties owned by the
Company, including certain properties leased by the Company to FRI.
Favorable freight-hauling demands for its transportation business remain
challenged by an industry-wide, tight driver availability. Continuing
volatile crude oil and diesel fuel price fluctuations remain likely to
impact operating margins.
Forward-Looking Statements. Certain matters discussed in this report
contain forward-looking statements that are subject to risks and
uncertainties that could cause actual results to differ materially from
these indicated by such forward-looking statements.
These forward-looking statements relate to, among other things, capital
expenditures, liquidity, capital resources and competition and may be
indicated by words or phrases such as "anticipate", "estimate", "plans",
"projects", "continuing", "ongoing", "expects", "management believes",
"the Company believes", "the Company intends" and similar words or
phrases. The following factors and others discussed in the Company's
periodic reports and filings with the Securities and Exchange Commission
are among the principal factors that could cause actual results to
differ materially from the forward-looking statements: driver
availability and cost; regulations regarding driver qualification and
hours of service; availability and terms of financing; freight demand
for petroleum products including recessionary and terrorist impacts on
travel in the Company's markets; freight demand for building and
construction materials in the Company's markets; risk insurance markets;
competition; general economic conditions; demand for flexible
warehouse/office facilities in the Baltimore/Washington area; ability to
obtain zoning and entitlements necessary for property development;
interest rates; levels of construction activity in FRI's markets; fuel
costs; and inflation. However, this list is not a complete statement of
all potential risks or uncertainties.
These forward-looking statements are made as of the date hereof based on
management's current expectations, and the Company does not undertake an
obligation to update such statements, whether as a result of new
information, future events or otherwise. Additional information
regarding these and other risk factors may be found in the Company's
other filings made from time to time with the Securities and Exchange
Commission.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The Company is exposed to market risk from changes in interest rates.
For its cash and cash equivalents, a change in interest rates affects
the amount of interest income that can be earned. For its debt
instruments with variable interest rates, changes in interest rates
affect the amount of interest expense incurred. The Company prepared a
sensitivity analysis of its variable rate borrowings to determine the
impact of hypothetical changes in interest rates on the Company's
results of operations and cash flows. The interest-rate analysis assumed
a 50 basis point adverse change in interest rates on all borrowings
under the credit agreement. However, the interest-rate analysis did not
consider the effects of the reduced level of economic activity that
could exist in such an environment. Based on this analysis, management
has concluded that a 50 basis point adverse move in interest rates on
the Company's outstanding borrowings under the credit agreement would
have an immaterial impact on the Company's results of operations and
cash flows.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures. As required by Rule
13A-15 under the Exchange Act, as of the end of the period covered by
this report, the Company carried out an evaluation of the effectiveness
of the design and operation of the Company's disclosure controls and
procedures. This evaluation was carried out under the supervision and
with the participation of the Company's management, including the
Company's President and Chief Executive Officer, Chief Financial Officer
and Chief Accounting Officer. Based on this evaluation the Company's
President and Chief Executive Officer, Chief Financial Officer and Chief
Accounting Officer have concluded that the Company's disclosure controls
and procedures are effective in alerting them in a timely manner to
material information required to be included in periodic SEC filings.
Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed in
Company reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in
the Securities and Exchange Commission's rule and forms. Disclosure
controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed
in Company reports filed under the Exchange Act is accumulated and
communicated to management, including the Company's Chief Executive
Officer, Chief Financial Officer and Chief Accounting Officer as
appropriate, to allow timely decisions regarding required disclosures.
Changes in internal controls. There have been no changes in the
Company's internal controls over financial reporting during the second
quarter that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over financial
reporting.
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On February 1, 2006, the Company held its annual shareholders meeting.
At the meeting, the shareholders elected the following directors by
the vote shown.
Term Votes Votes Broker/
Ending For Withheld Non-Votes
Thompson S. Baker II 2010 2,585,028 220,831 -
Martin E. Stein Jr. 2010 2,711,408 94,451 -
John E. Anderson 2007 2,595,979 209,880 -
The directors whose terms of office as director have continued after
the meeting are John D. Baker II, Luke E. Fichthorn III, James H.
Winston, Robert H. Paul III, Charles E. Commander III, Edward L. Baker
and H. W. Shad III.
In addition, the shareholders of the Company approved the 2006 Stock
Incentive Plan (the 2006 Plan), an omnibus stock plan that permits the
grant of stock options, stock appreciation rights, restricted stock
awards, restricted stock units and stock awards. A maximum of 300,000
shares are available for grants of all equity awards under the 2006
Plan. The 2006 Plan replaces the Company's 2000 Stock Option Plan and
was approved by the votes shown:
Votes for: 1,990,581
Votes against: 315,197
Abstaining: 988
Item 6. EXHIBITS
(a) Exhibits. The response to this item is submitted as a
separate Section entitled "Exhibit Index", starting on page
24.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
May 3, 2006 PATRIOT TRANSPORTATION HOLDING, INC.
John E. Anderson
John E. Anderson
President and Chief Executive
Officer
Ray M. Van Landingham
Ray M. Van Landingham
Vice President, Treasurer,
Secretary and Chief
Financial Officer
John D. Klopfenstein
John D. Klopfenstein
Controller and Chief
Accounting Officer
PATRIOT TRANSPORTATION HOLDING, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2006
EXHIBIT INDEX
(3)(a)(1) Articles of Incorporation of Patriot Transportation
Holding Inc., incorporated by reference to the
corresponding exhibit filed with Form S-4 dated
December 13,1988. File No. 33-26115.
(3)(a)(2) Amendment to the Articles of Incorporation of
Patriot Transportation Holding, Inc. filed with the
Secretary of State of Florida on February 19, 1991
incorporated by reference to the corresponding
exhibit filed with Form 10-K for the fiscal year
ended September 30, 1993. File No. 33-26115.
(3)(a)(3) Amendments to the Articles of Incorporation of
Patriot Transportation Holding, Inc. filed with the
Secretary of State of Florida on February 7,1995,
incorporated by reference to an appendix to the
Company's Proxy Statement dated December 15, 1994.
File No. 33-26115.
(3)(a)(4) Amendment to the Articles of Incorporation of
Patriot Transportation Holding, Inc., filed with
the Florida Secretary of State on May 6, 1999
incorporated by reference to a form of such
amendment filed as Exhibit 4 to the Company's Form
8-K dated May 5, 1999. File No. 33-26115.
(3)(a)(5) Amendment to the Articles of Incorporation of
Patriot Transportation Holding, Inc. filed with the
Secretary of State of Florida on February 21, 2000,
incorporated by reference to the corresponding
exhibit filed with Form 10-Q for the quarter ended
March 31, 2000. File No. 33-26115.
(3)(b)(1) Amended and Restated Bylaws of Patriot
Transportation Holding, Inc. adopted August 3,
2005, incorporated by reference to Exhibit 3.1 to
the Company's Form 8-K dated August 3, 2005. File
No. 33-26115.
(4)(a) Articles III, VII and XII of the Articles of
Incorporation of Patriot Transportation Holding,
Inc., incorporated by reference to an exhibit filed
with Form S-4 dated December 13, 1988. An amended
Article III, incorporated by reference to an
exhibit filed with Form 10-K for the fiscal year
ended September 30, 1993. And Articles XIII and
XIV, incorporated by reference to an appendix filed
with the Company's Proxy Statement dated December
15, 1994. File No. 33-26115.
(4)(b) Specimen stock certificate of Patriot
Transportation Holding, Inc., incorporated by
reference to an exhibit filed with Form S-4 dated
December 13, 1988. File No. 33-26115.
(4)(c) Rights Agreement, dated as May 5, 1999 between the
Company and First Union National Bank, incorporated
by reference to Exhibit 4 to the Company's Form 8-K
dated May 5, 1999. File No. 33-26115.
(10)(a) Various mining leases and mining royalty agreements
with Florida Rock Industries, Inc., none of which
are presently believed to be material individually,
except for the Mining Lease Agreement dated
September 1, 1986, between Florida Rock Industries
Inc. and Florida Rock Properties, Inc., successor
by merger to Grandin Land, Inc. (see Exhibit
(10)(c)), but all of which may be material in the
aggregate, incorporated by reference to an exhibit
filed with Form S-4 dated December 13, 1988. File
No. 33-26115.
(10)(b) License Agreement, dated June 30, 1986, from
Florida Rock Industries, Inc. to Florida Rock &
Tank Lines, Inc. to use "Florida Rock" in corporate
names, incorporated by reference to an exhibit
filed with Form S-4 dated December 13, 1988. File
No. 33-26115.
(10)(c) Mining Lease Agreement, dated September 1, 1986,
between Florida Rock Industries, Inc. and Florida
Rock Properties, Inc., successor by merger to
Grandin Land, Inc., incorporated by reference to an
exhibit previously filed with Form S-4 dated
December 13, 1988. File No. 33-26115.
(10)(d) Summary of Medical Reimbursement Plan of Patriot
Transportation Holding, Inc., incorporated by
reference to an exhibit filed with Form 10-K for
the fiscal year ended September 30, 1993. File No.
33-26115.
(10)(e) Summary of Management Incentive Compensation Plans,
incorporated by reference to an exhibit filed with
Form 10-K for the fiscal year ended September 30,
1994. File No. 33-26115.
(10)(f) Management Security Agreements between the Company
and certain officers, incorporated by reference to
a form of agreement previously filed (as Exhibit
(10)(I)) with Form S-4 dated December 13, 1988.
File No. 33-26115.
(10)(g)(1) Patriot Transportation Holding, Inc. 1995 Stock
Option Plan, incorporated by reference to an
appendix to the Company's Proxy Statement dated
December 15, 1994. File No. 33-26115.
(10)(g)(2) Patriot Transportation Holding, Inc. 2000 Stock
Option Plan, incorporated by reference to an
appendix to the Company's Proxy Statement dated
December 15, 1999. File No. 33-26115.
(10)(g)(3) Patriot Transportation Holding, Inc. 2006 Stock
Incentive Plan, incorporated by reference to an
appendix to the Company's Proxy Statement dated
December 29, 2005. File No. 33-26115.
(10)(h) Agreement of Purchase and Sale dated October 21,
2003 between FRP Bird River, LLC and The Ryland
Group, Inc., incorporated by reference to an
exhibit filed with Form 10-K for the year ended
September 30, 2003. File No. 33-26115.
(10)(i) Amended and Restated Revolving Credit Agreement
dated November 10, 2004 among Patriot
Transportation Holding, Inc. as Borrower, the
Lenders from time to time party hereto and Wachovia
Bank, National Association as Administrative Agent,
incorporated by reference to the Company's Form 8-K
dated November 16, 2004. File No. 33-26115.
(10)(j) The Company and its consolidated subsidiaries have
other long-term debt agreements, none of which
exceed 10% of the total consolidated assets of the
Company and its subsidiaries, and the Company
agrees to furnish copies of such agreements and
constituent documents to the Commission upon
request.
(10)(k) Letter of Credit Facility between Patriot
Transportation Holding, Inc. and SunTrust Bank,
N.A. dated February 16, 2005, incorporated by
reference to the Company's Form 8-K dated February
16, 2005. File No. 33-26115.
(10)(l) Summary of compensation arrangements with non-
employee directors, incorporated by reference to
the corresponding exhibit filed with Form 8-K dated
October 11, 2005. File No. 33-26115.
(10)(m) Summary of compensation arrangements with Named
Executive Officers, incorporated by reference to
the corresponding exhibit filed with Form 10-Q for
the quarter ended March 31, 2005 and Form 8-K filed
December 2, 2005. File No. 33-26115.
(14) Financial Code of Ethical Conduct between the
Company, Chief Executive Officers and Financial
Managers, adopted December 4, 2002, incorporated by
reference to an exhibit filed with Form 10-K for
the year ended September 30, 2003. File No. 33-
26115.
(31)(a) Certification of John E. Anderson.
(31)(b) Certification of Ray M. Van Landingham.
(31)(c) Certification of John D. Klopfenstein.
(32) Certification of Chief Executive Officer, Chief
Financial Officer, and Chief Accounting Officer
pursuant to 18 U.S.C. Section 1350, adopted
pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.