UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2009
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.)
501 Riverside Ave. Ste 500, Jacksonville, Florida 32202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 904/396-5733
Securities registered pursuant to Section 12(b) of the Act:
Common Stock $.10 par value NASDAQ
Title of class Name of each exchange on which registered
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes No X
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. Yes No X
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 has submitted electronically
and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T
during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of "large accelerated filer," "accelerated filer"
and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer[ ] Accelerated filer[X]
Non-accelerated filer[ ] Smaller reporting company [ ]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Act). Yes No X
The number of shares of the registrant's stock outstanding as of November
25, 2009 was 3,053,036. The aggregate market value of the shares of Common
Stock held by non-affiliates of the registrant as of March 31, 2009, the
last day of business of our most recently completed second fiscal quarter,
was $79,731,273. Solely for purposes of this calculation, the registrant
has assumed that all directors, officers and ten percent (10%) shareholders
of the Company are affiliates of the registrant.
Documents Incorporated by Reference
Portions of the Patriot Transportation Holding, Inc. 2009 Annual Report to
Shareholders are incorporated by reference in Parts I and II.
Portions of the Patriot Transportation Holding, Inc. Proxy Statement which
will be filed with the Securities and Exchange Commission not later than
December 31, 2009 are incorporated by reference in Part III.
Preliminary Note Regarding 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 those 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: freight demand for petroleum products
including recessionary and terrorist impacts on travel in the Company's
markets; levels of construction activity in the markets served by our
mining properties; fuel costs and the Company's ability to recover fuel
surcharges; accident severity and frequency; risk insurance markets; driver
availability and cost; the impact of future regulations regarding the
transportation industry; availability and terms of financing; competition;
interest rates, inflation and general economic conditions; demand for
flexible warehouse/office facilities in the Baltimore-Washington-Northern
Virginia area; and ability to obtain zoning and entitlements necessary for
property development. 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.
PART I
Item 1. BUSINESS.
Patriot Transportation Holding, Inc., which was incorporated in
Florida in 1988, and its subsidiaries (the "Company") are engaged
in the transportation and real estate businesses.
Our transportation business is conducted through Florida Rock &
Tank Lines, Inc. ("Tank Lines") which operates in the Southeastern
United States. Tank Lines hauls petroleum and other bulk liquids
and dry bulk commodities by tank trailers.
The Company's real estate activities are conducted through two
wholly owned subsidiaries: Florida Rock Properties, Inc.
("Properties") and FRP Development Corp. ("Development").
Properties owns mining properties and other properties held for
investment or future development. Development owns, manages and
develops commercial warehouse/office rental properties in the
Baltimore-Washington-Northern Virginia area. Substantially all of
the real estate operations are conducted within the Southeastern
and Mid-Atlantic United States.
Transportation. The transportation segment primarily serves
customers in the petroleum industries in the Southeastern U.S.
During fiscal 2009, Tank Lines operated from terminals in
Jacksonville, Orlando, Panama City, Pensacola, Port Everglades,
Tampa and White Springs, Florida; Albany, Atlanta, Augusta,
Bainbridge, Columbus, Dalton, Macon and Savannah, Georgia;
Knoxville, Tennessee; Montgomery, Alabama; and Wilmington, North
Carolina.
Tank Lines has from two to six major tank truck competitors in each
of its markets. Price, service, and location are the major factors
which affect competition in the transportation segment within a
given market.
During fiscal 2009, the transportation segment's ten largest
customers accounted for approximately 63.6% of the transportation
segment's revenue. One of these customers, Murphy Oil Corporation,
accounted for 24.7% 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.
During fiscal 2009, the transportation group purchased 24 new
tractors and 4 trailers. In fiscal 2008 and 2007, the Company
purchased 137 new tractors accelerating its normal tractor
replacement cycle in response to stricter engine emission standards
on new trucks.
Our fiscal 2010 capital budget includes 68 new tractors and 20 new
trailers including binding commitments to purchase 65 tractors at
September 30, 2009. Maintaining a modern fleet has resulted in
reduced maintenance expenses, improved operating efficiencies and
enhanced driver recruitment and retention. At September 30, 2009,
the Company owned and operated a fleet of 394 trucks and 516
trailers plus 2 additional trucks that were being prepared for
sale.
Real Estate. We own real estate in Florida, Georgia, Virginia,
Maryland, Delaware and Washington, D.C. The real estate owned
generally falls into one of three categories: (i) land and/or
buildings leased under rental agreements or being developed for
rental; (ii) land with construction aggregates deposits, a
substantial portion of which is leased to Vulcan Materials Company
under long-term mining royalty agreements; and (iii) land held for
future appreciation or development. Real estate revenues in fiscal
2009 were divided approximately 72% from rentals on developed
properties and 28% from mining royalties.
A significant part of our real estate strategy has been to develop
high quality, flexible warehouse/office space. Average occupancy
for the fiscal year for buildings in service more than 12 months
was 90.7%. At September 30, 2009, 75.1% of the total
warehouse/office portfolio of approximately 2.8 million square feet
was occupied.
Price, location, rental space availability, flexibility of design,
and property management services are the major factors that affect
competition in the flexible warehouse/office rental market. The
Company experiences considerable competition in all of its markets.
Tenants of flexible warehouse/office properties are not
concentrated in any one particular industry.
Relationship with Vulcan Materials Company. The Company was spun
off from Florida Rock Industries, Inc. ("FRI") in 1986. FRI merged
with Vulcan Materials Company ("Vulcan") in November 2007. Nearly
all of our mining properties are leased to Vulcan under long-term
mining leases entered into in the 1980s. We haul diesel fuel and
cement for the Florida Rock Division of Vulcan. We also are a
party to a joint venture agreement with Vulcan to develop
approximately 4,300 acres of property located near Brooksville,
Florida.
Vulcan accounted for approximately 19.8% of our real estate
revenues and 1.8% of our transportation revenues for fiscal 2009.
On a consolidated basis, Vulcan accounted for 5.5% of our fiscal
2009 revenues.
Segment Information. The Company has two business segments:
transportation and real estate. Industry segment information is
presented in Notes 2 and 10 to the consolidated financial
statements included in the accompanying 2009 Annual Report to
Shareholders and is incorporated herein by reference.
Environmental Matters. 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. Revised EPA regulations decrease the amount of
permitted air emissions that can be released by tractor engines and
affect tractors produced after the effective date of the
regulations. Compliance with these regulations has increased the
cost of our new tractors and lowered fuel mileage. This will
increase our capital expenses and our operating expenses. The
Company's mining leases contain a provision making the lessee
responsible for reclamation of mining sites at least to the extent
required by law.
Seasonality. The Company's business is subject to limited
seasonality due to the cyclical nature of our customers'
businesses, with revenues generally declining slightly during
winter months.
Employees. The Company employed 736 people in its transportation
group, 16 people in its real estate group and 9 people in its
corporate offices at September 30, 2009.
Company Website. The Company's website may be accessed at
www.patriottrans.com. All of our filings with the Securities and
Exchange Commission can be accessed through our website promptly
after filing. This includes annual reports on Form 10-K, proxy
statements, quarterly reports on Form 10-Q, current reports filed
or furnished on Form 8-K and all related amendments.
EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Office Position Since
Edward L. Baker 74 Chairman of the Board May 3, 1989
John D. Baker II 61 President & Chief Feb. 7, 2008
Executive Officer
David H.
deVilliers, Jr. 58 Vice President of the Feb. 28, 1994
Company and President
of the Company's Real
Estate Group
John D. Milton, Jr. 64 Exec. Vice President, June 16, 2008
Treasurer, Secretary
and Chief Financial
Officer
John D. Klopfenstein 46 Controller and Chief Feb. 16, 2005
Accounting Officer
Robert E. Sandlin 48 President of Florida March 1, 2003
Rock & Tank Lines, Inc.
All of the above officers have been employed in their respective
positions for the past five years except as follows: John D. Baker
II served as President and Chief Executive Officer of Florida Rock
Industries, Inc. from 1996 to November 2007; John D. Milton, Jr.
served as Executive Vice President and Chief Financial Officer of
Florida Rock Industries, Inc. from 2001 to November 2007; and John
D. Klopfenstein served as Director, Business Development and
Planning of the Company, from June 2003 to February 2005, and as
Manager, Corporate Development of the Company, from July 1996 to
May 2003.
John D. Baker II, who is the brother of Edward L. Baker, and
Thompson S. Baker II, who is the son of Edward L. Baker, are
directors of the Company.
All executive officers of the Company are elected by the Board of
Directors annually and serve until their resignation or removal.
Item 1A. RISK FACTORS.
Our future results may be affected by a number of factors over
which we have little or no control. The following issues,
uncertainties, and risks, among others, should be considered in
evaluating our business and outlook. Also, note that additional
risks not currently identified or known to us could also negatively
impact our business or financial results.
We face significant uncertainty regarding the continued demand for
our transportation services during the current economic climate.
The transportation segment produces approximately 80% of our gross
revenues and 65% of our gross profit. The current economic climate
could adversely affect the demand for our transportation services.
These adverse economic conditions may result in reductions in our
revenue, increased price competition and increased operating costs,
which could have an adverse effect our business, results of
operation and financial condition.
We would be adversely affected by a decline in demand for hauling
ethanol.
In addition to other products, our tank lines subsidiary hauls
ethanol which is blended with other petroleum products. The
ethanol industry is highly dependent upon federal and state
legislation and changes in such legislation could adversely affect
the demand for ethanol products and the resulting demand for our
transportation services. In addition, we would be adversely
affected by the future construction of pipelines to transport
ethanol, which also would reduce demand for our transportation
services.
Our operating results may be adversely impacted by volatility in
fuel costs or by fuel shortages.
The crude oil and petroleum products markets are extremely
volatile. Fuel prices are affected by a number of economic and
political factors, including general political conditions, acts of
war or terrorism, political instability in oil producing regions
and capacity at United States oil refineries. Our operating
results are impacted by our ability to recover fuel surcharges from
customers. In light of the volatility of fuel prices, it may be
difficult for us to recover fuel surcharges from customers at
levels that will allow us to maintain current levels of
profitability. In addition, increased fuel prices reduce consumer
demand for the petroleum products hauled by our tank lines
subsidiary, adversely impacting revenues. Our operations may also
be adversely affected by any limit on the availability of fuel.
Our business may be adversely affected by seasonal factors and
harsh weather conditions.
Our business is subject to seasonal trends common in the refined
petroleum products delivery industry. We typically face increased
demand for fuels delivery services in Florida during the spring
months. Our real estate group is adversely affected by reduced
construction activity during periods of inclement weather. These
factors can cause our operating results to fluctuate from quarter
to quarter. An occurrence of unusually harsh or long-lasting
inclement weather such as hurricanes, tornadoes and heavy snowfalls
could have an adverse effect on our operations and profitability.
Our revenues depend in part on construction sector activity levels,
which tend to be cyclical.
Our real estate group receives part of its revenues from royalties
on construction aggregates mined on our properties. Thus, our
results depend in part on residential, commercial and
infrastructure construction activity and spending levels. The
construction industry in our markets tends to be cyclical.
Construction activity and spending levels vary across our markets
and are influenced by interest rates, inflation, consumer spending
habits, demographic shifts, environmental laws and regulations,
employment levels and the availability of funds for public
infrastructure projects. Economic downturns may lead to recessions
in the construction industry, either in individual markets or
nationally.
We face difficulty in recruiting and retaining qualified drivers.
In some years the transportation industry has had difficulty
attracting and retaining qualified drivers (including independent
contractors), and competition for drivers sometimes can be intense.
To compete for drivers, we may be forced to increase driver
compensation. We cannot be certain that we could pass along the
increased compensation costs to our customers. If we are unable to
continue to attract drivers and contract with independent
contractors, we could be required to suffer downtime and lost
revenue miles.
New tractors are more expensive and less fuel efficient.
New tractors are more expensive, primarily due to higher commodity
prices, better pricing power among equipment manufacturers, and
government regulations applicable to newly manufactured tractors
and diesel engines. Revised EPA regulations decrease the amount of
permitted air emissions that can be released by tractor engines and
affect tractors produced after the effective date of the
regulations. Compliance with these regulations has increased the
cost of our new tractors and lowered fuel mileage. This will
increase our capital expenses and our operating expenses. These
adverse effects combined with the uncertainty as to the reliability
of the vehicles equipped with the newly designed diesel engines and
the residual values that will be realized from the disposition of
these vehicles could increase our costs or otherwise adversely
affect our business or operations.
We have significant ongoing capital requirements.
Our transportation business requires substantial ongoing capital
investment, particularly for tractors, trailers, terminals and
technology. For the past few years, we have depended on cash from
operations and our credit facilities to fund our revenue equipment.
We expect to continue to pay for projected capital expenditures
with cash flows from operations and borrowings under our line of
credit. If we are unable to generate sufficient cash from
operations and obtain financing on favorable terms in the future,
we may have to limit our growth, enter into less favorable
financing arrangements, or operate our revenue equipment for longer
periods, any of which could have a material adverse effect on our
profitability.
The loss of one of our major transportation customers could have a
materially adverse effect on our business.
A significant portion of our transportation revenue is generated
from our major customers. For 2009, our top 10 customers, based on
revenue, accounted for approximately 63.6% of our transportation
segment's revenue and one customer accounted for 24.7% of the
segment's revenue. A reduction in or termination of our services
by one or more of our major customers could have a materially
adverse effect on our business and operating results.
The trucking industry is extremely competitive and fragmented.
The trucking industry is extremely competitive and fragmented. No
single truckload carrier has a significant market share. We
compete with many other truckload carriers of varying sizes,
customers' private fleets, and, to a lesser extent, with railroads
which may limit our growth opportunities and reduce profitability.
Some of our competitors periodically reduce their freight rates to
gain business, especially during times of reduced growth rates in
the economy, which may limit our ability to maintain or increase
freight rates or maintain our profit margins. Many customers
reduce the number of carriers they use by selecting so-called "core
carriers" as approved transportation service providers, and in some
instances we may not be selected. Historically, competition has
created downward pressure on the truckload industry's pricing
structure.
Our operations are subject to various environmental laws and
regulations, the violation of which could result in substantial
fines or penalties.
We are subject to various environmental laws and regulations
dealing with the handling of hazardous materials, fuel storage
tanks, air emissions from our vehicles and facilities, and engine
idling. Our operations involve the risks of fuel spillage or
seepage, environmental damage, and hazardous waste disposal, among
others. We also maintain bulk fuel storage and fuel islands at
several of our facilities. Although we have instituted programs to
monitor and control environmental risks and promote compliance with
applicable environmental laws and regulations, the failure to
comply with applicable laws or regulations could subject us to
liabilities, including substantial fines or penalties or civil and
criminal liability, that could have a materially adverse effect on
our business and operating results.
Uninsured losses could significantly reduce our earnings.
We self-insure for a portion of our claims exposure resulting from
workers' compensation, auto liability, general liability, cargo and
property damage claims, as well as employees' health insurance. We
also are responsible for our legal expenses relating to such
claims. We maintain insurance above the amounts for which we self-
insure with licensed insurance carriers. Although we believe the
aggregate insurance limits should be sufficient to cover reasonably
expected claims, it is possible that one or more claims could
exceed our aggregate coverage limits. Also, there are some types
of losses such as from hurricanes, terrorism, wars, or earthquakes
where insurance is limited and/or not economically justifiable. If
an uninsured loss occurs, we could lose both the invested capital
and anticipated revenues. We accrue currently for estimated
incurred losses and expenses. We periodically evaluate and adjust
our claims accrued liability to reflect our experience. However,
ultimate results may differ from our estimates, which could result
in losses over our accrued amounts.
Rising insurance costs could significantly reduce our earnings.
Insurance carriers sometimes raise premiums for many businesses,
including trucking companies. As a result, our insurance and
claims expense could increase, or we could raise our self-insured
retention when our policies are renewed. If we are unable to pass
along this cost increase to customers, our earnings may be
significantly reduced.
Compliance with new or future transportation regulations may
significantly reduce earnings.
Our transportation operations are regulated and licensed by various
U.S. agencies. While the costs of compliance with existing
regulations generally is reflected in our prior results, new
regulations (such as the new tractor air emissions regulations) and
future laws and regulations may be more stringent and require
changes in our operating practices, influence the demand for
transportation services, or require us to incur significant
additional costs. Higher costs incurred by us could adversely
affect our results of operations.
We may be unable to renew leases or relet space as leases expire.
When a lease expires, a tenant may elect not to renew it. We may
not be able to relet the property on similar terms. The terms of
renewal or re-lease (including the cost of required renovations
and/or concessions to tenants) may be less favorable than the prior
lease. If we are unable to relet all or a substantial portion of
our properties, or if the rental rates upon such reletting are
significantly lower than expected rates, our cash generated before
debt repayments and capital expenditures may be adversely affected.
As of September 30, 2009, leases at our properties representing
approximately 12%, 10% and 10% of the total square footage of
buildings completed prior to September 2009 were scheduled to
expire in fiscal year 2010, 2011 and 2012, respectively.
We may be unable to lease newly constructed space.
We completed two buildings in September 2008 comprising 135,872
square feet and a third building in April 2009 with 148,425 square
feet. At present, none of this newly constructed space is
occupied. If we are unable to obtain leases sufficient to cover
carrying costs then our cash flows may be adversely affected.
The bankruptcy or insolvency of significant tenants with long-term
leases may adversely affect income produced by our properties.
We have ten buildings in our business parks that are single-tenant
occupied representing 43% of developed property rentals under long-
term leases. We have eight other tenants with leases in excess of
five years. Should tenants default on their obligations, our cash
flow would be adversely affected and we may not be able to find
another tenant to occupy the space under similar terms or have to
make expenditures to retrofit and/or divide the space. In addition
we may have to incur a non-cash expense for a significant amount of
deferred rent revenue generated from the accounting requirement to
straight-line rental revenues. The bankruptcy or insolvency of a
major tenant may also adversely affect the income produced by a
property. If any of our tenants becomes a debtor in a case under
the U.S. Bankruptcy Code, we cannot evict that tenant solely
because of its bankruptcy. The bankruptcy court may authorize the
tenant to reject and terminate its lease with us. Our claim
against such a tenant for unpaid future rent would be subject to a
statutory limitation that might be substantially less than the
remaining rent actually owed to us under the tenant's lease. Any
shortfall in rent payments could adversely affect our cash flow.
A decline in the economic conditions in Baltimore-Washington-
Northern Virginia area could adversely affect our business.
All of our office/warehouse properties are located in the
Baltimore-Washington-Northern Virginia area. As a result of our
geographic concentration, we depend upon the local conditions in
these markets, including local real estate conditions. We are,
therefore, subject to increased exposure (positive or negative) to
economic and other competitive factors specific to markets in
confined geographic areas. Our operations may also be affected if
too many competing properties are built in these markets. An
economic downturn in these markets could adversely affect our
operation. We cannot assure you that these markets will continue
to grow or will continue to provide favorable demand for our
office/warehouse product.
Our inability to obtain necessary approvals for property
development could adversely affect our profitability.
We may be unable to obtain, or incur delays in obtaining, necessary
zoning, land-use, building, occupancy and other required
governmental permits and authorizations, which could result in
increased costs or abandonment of these projects. Before we can
develop a property, we must obtain a variety of approvals from
local and state governments with respect to such matters as zoning,
density, parking, subdivision, site planning and environmental
issues. Legislation could impose moratoriums on new real estate
development and/or land-use conversions from mining to development.
These factors may reduce our profit or growth and may limit the
value of these properties.
Real estate investments are not as liquid as other types of assets.
The illiquid nature of real estate investments may limit our
ability to react promptly to changes in economic or other
conditions. In addition, significant expenditures associated with
real estate investments, such as mortgage payments, real estate
taxes and maintenance costs, are generally not reduced when
circumstances cause a reduction in income from the investments.
Thus, the illiquid nature of our real estate investments could
adversely affect our profitability under certain economic
conditions.
Our debt service obligations may have adverse consequences on our
business operations.
We use debt to finance our operations, including acquisitions of
properties. Our use of debt may have adverse consequences,
including the following:
? Our cash flows from operations may not be sufficient to
meet required payments of principal and interest.
? We may be forced to dispose of one or more of our
properties, possibly on disadvantageous terms, to make
payments on our debt.
? We may default on our debt obligations, and the lenders
may foreclose on our properties that collateralize those
loans.
? A foreclosure on one of our properties could create
taxable income without any accompanying cash proceeds to
pay the tax.
? A default under a mortgage loan that has cross default
provisions may cause us to automatically default on
another loan.
? We may not be able to refinance or extend our existing
debt.
? The terms of any refinancing or extension may not be as
favorable as the terms of our existing debt.
? We may not be able to issue debt on unencumbered
properties under reasonable terms to finance growth of
our portfolio of properties.
? We may be subject to a significant increase in the
variable interest rates on our unsecured line of credit
or unsecured term loan, which could adversely impact our
operations.
As of September 30, 2009, we had outstanding non-recourse mortgage
indebtedness of $76,153,000, secured by developed real estate
properties having a carrying value of $80,656,000.
Our uncollateralized revolving credit agreement restricts our
ability to engage in some business activities.
Our uncollateralized revolving credit agreement contains customary
negative covenants and other financial and operating covenants
that, among other things:
? restricts our ability to incur certain additional
indebtedness;
? restricts our ability to make certain investments;
? restricts our ability to merge with another company;
? restricts our ability to pay dividends;
? requires us to maintain financial coverage ratios; and
? requires us to not encumber certain assets except as
approved by the lenders.
These restrictions could cause us to default on our unsecured line
of credit or negatively affect our operations.
Our real estate segment faces competition from numerous sources.
As a developer of flexible warehouse/office space, we compete with
numerous developers, owners and operators of real estate, many of
which own properties similar to ours in the same submarkets in
which our properties are located. If our competitors offer space
at rental rates below current market rates, or below the rental
rates we currently charge our tenants, we may lose potential
tenants and we may be pressured to reduce our rental rates below
those we currently charge in order to retain tenants when our
tenants' leases expire. As a result, our financial condition,
results of operations, cash flow and ability to satisfy our debt
service obligations could be materially adversely affected.
Construction costs may be higher than anticipated.
Our long-term business plan includes a number of construction
projects. The construction costs of these projects may exceed
original estimates and possibly make the completion of a property
uneconomical. Building material commodity shortages, construction
delays/stoppages and/or rapidly escalating construction costs may
out-pace market rents, adversely affecting profits. The market
environment and existing lease commitments may not allow us to
raise rents to cover these higher costs.
Certain shareholders have effective control of nearly a majority of
our common stock and likely will control the outcome of any
shareholder vote.
As of November 25, 2009, three of our directors, Edward L. Baker,
John D. Baker II and Thompson S. Baker II, beneficially own
approximately 45% of the outstanding shares of our common stock. As
a result, these individuals effectively may have the ability to
direct the election of all members of our Board of Directors and to
exercise a controlling influence over our business and affairs,
including any determinations with respect to mergers or other
business combinations involving us, our acquisition or disposition
of assets, our borrowing of monies, our issuance of any additional
securities, our repurchase of common stock and our payment of
dividends.
Our charter and bylaws contain anti-takeover provisions that may
hinder a takeover or negatively affect our stock price.
Our articles of incorporation and bylaws contain several provisions
that may make it more difficult and expensive for a third party to
acquire control of us without the approval of our board of
directors. Our articles of incorporation and bylaws contain
provisions dividing our board of directors into four classes of
directors serving four-year terms and providing that directors may
only be removed for cause. Our articles of incorporation also
provide that our shareholders can take action only at a duly called
annual or special meeting of shareholders and require a
supermajority vote to approve certain matters. In addition, our
board of directors is authorized to issue additional shares of
common stock or preferred stock and to determine the rights and
preferences of any shares of preferred stock to be issued.
Our cash and cash equivalents at times exceed FDIC insurance limits
exposing us to possible losses.
In the current financial climate, the Company is monitoring the
financial stability of its lending banks as well as its depository
institutions. At present the Company does not foresee the
necessity for changing any of these relationships but will continue
to monitor conditions particularly with respect to the depository
for its liquid funds. The Company places its cash and cash
equivalents with high credit quality institutions. At times such
amounts may exceed FDIC insurance limits.
Item 2. PROPERTIES.
The Company's principal properties are located in Florida, Georgia,
Virginia, Washington, D.C., Delaware and Maryland.
Real Estate Segment Properties. Principal properties held by the
Real Estate segment are discussed below under the captions
Developed Properties, Future Planned Development, Construction
Aggregates Properties, and Other Properties.
At September 30, 2009 certain developed real estate properties
having a carrying value of $80,656,000 were pledged on long-term
non-recourse notes with an outstanding principal balance totaling
$76,153,000. In addition, certain other properties having a
carrying value at September 30, 2009 of $98,000 were encumbered by
$1,300,000 of industrial revenue bonds that are the liability of
Vulcan. Vulcan has agreed to pay such debt when due (or sooner if
Vulcan cancels its lease of such property), and further has agreed
to indemnify and hold harmless the Company on account of such debt.
Developed Properties. At September 30, 2009, the Company owned 11
developed parcels of land containing 261 usable acres in the Mid-
Atlantic region of the United States as follows:
1) Hillside Business Park in Anne Arundel County, Maryland consists
of 49 usable acres. A total of 504,740 square feet existed on the
property at the beginning of 2008 and it is 97% occupied.
Construction of the final building with 66,398 square feet of
office space was completed September 30, 2008. The addition of
this as yet unoccupied building resulted in a decline in average
occupancy from 97% to 86%.
2) Lakeside Business Park in Harford County, Maryland consists of
84 usable acres. Eight warehouse/office buildings, totaling
745,297 square feet, were in place at the beginning of 2009 and are
100% occupied. Construction of the ninth building with 148,425
warehouse/office space was completed in April 2009. The addition
of this as yet unoccupied building resulted in a decline in average
occupancy from 100% to 83%. The remaining 14 acres are available
for future development and have the potential to offer an
additional 210,230 square feet of comparable product.
3) 6920 Tudsbury Road in Baltimore County, Maryland contains 5.3
acres with 86,100 square feet of warehouse/office space that is
100% leased.
4) 8620 Dorsey Run Road in Howard County, Maryland contains 5.8
acres with 85,100 square feet of warehouse/office space that is
100% leased.
5) Rossville Business Center in Baltimore County, Maryland contains
approximately 10 acres with 190,517 square feet of warehouse/office
space and is 100% leased.
6) 34 Loveton Circle in suburban Baltimore County, Maryland
contains 8.5 acres with 30,006 square feet of office space, which
is 76% leased including 23% of the space occupied by the Company.
7) Oregon Business Center in Anne Arundel County, Maryland contains
approximately 17 acres with 195,615 square feet of warehouse/office
space, which is 71% leased.
8) Arundel Business Center in Howard County, Maryland contains
approximately 11 acres with 162,796 square feet of warehouse/office
space, which is 70% leased.
9) 100-400 Interchange Boulevard in New Castle County, Delaware
contains approximately 17 acres with 303,006 square feet of
warehouse/office space, which is 8% leased. Chrysler and General
Motors plant closings have reduced demand for space in this market.
The remaining 8.8 acres are available for future development and
have the potential to offer an additional 93,600 square feet of
comparable product.
10) 1187 Azalea Garden Road in Norfolk, Virginia contains
approximately 12 acres with 188,093 square feet of warehouse/office
space, which is 100% leased.
11) Windlass Run Business Park in Baltimore County, Maryland
contains 69,474 square feet of warehouse/office space completed
September 30, 2008. The building is as yet unoccupied. This
building is contained within a larger parcel containing
approximately 42 acres when complete is estimated to include
519,824 square feet of total build-out.
Future Planned Developments. At September 30, 2009 the Company
owned the following future development parcels:
1) Windlass Run Residential (previously Bird River), located in
southeastern Baltimore County, Maryland, is a 121 acre tract of
land adjacent to and west of our Windlass Run Business Park. The
property was rezoned in September 2007 to allow for additional
density and plans are being pursued to obtain an appropriate
product mix. In July 2008, the Company entered into an agreement
to sell the property. The purchase price for the property is
$25,265,000, subject to certain potential purchase price
adjustments. The agreement of sale is subject to certain
contingencies including government approvals and the closing may be
two or more years away. The purchaser has placed non-refundable
deposits of $1,000,000 under this contract in escrow. Preliminary
approval for the development as originally contemplated under the
agreement's pricing contingencies has now been received and the
time for any appeals from that approval expired during the last
days of July 2009.
2) Patriot Business Park, located in Prince William County,
Virginia, is a 73 acre tract of land which is immediately adjacent
to the Prince William Parkway providing access to I-66. The
Company plans to develop and lease approximately 733,650 square
feet of warehouse/office buildings on the property. Land
development efforts commenced in the summer of 2008 but were placed
on hold in April 2009.
3) Brooksville Quarry LLC. On October 4, 2006, a subsidiary of the
Company (FRP) entered into a Joint Venture Agreement with Vulcan
Materials Company (formerly Florida Rock Industries, Inc.) to form
Brooksville Quarry, LLC, a real estate joint venture to develop
approximately 4,300 acres of land near Brooksville, Florida. The
property does not yet have the necessary entitlements for real
estate development. Approval to develop real property in Florida
entails an extensive entitlements process involving multiple and
overlapping regulatory jurisdictions and the outcome is inherently
uncertain. The Company currently expects that the outcome will be
resolved within the next year.
4) Anacostia River. The Company owns a 5.8 acre parcel of
undeveloped real estate in Washington D.C. that fronts the
Anacostia River and is adjacent to the recently opened Washington
Nationals Baseball Park. The Company also owns a nearby 2.1 acre
tract on the same bank of the Anacostia River. Currently, the 5.8
acre tract is leased to a subsidiary of Vulcan Materials Company
under a short-term lease. In May 2008, the Company received final
approval from the Zoning Commission of the District of Columbia of
its planned unit development application. The approved planned
unit development permits the Company to develop a four building,
mixed use project, containing approximately 545,800 square feet of
office and retail space and approximately 569,600 square feet of
additional space for residential and hotel uses. The approved
development would include numerous publicly accessible open spaces
and a waterfront esplanade along the Anacostia River. In November
2009, the Company received a two-year extension for commencement of
this project, moving the construction commencement date to June
2013. The Company sought this extension because of negative
current market indications.
5) Commonwealth Avenue in Jacksonville, Florida is a 50 acre, rail
accessible site near the western beltway of Interstate-295 capable
of supporting approximately 500,000 square feet of warehouse/office
build-out.
6) Leister property in Hampstead, Carroll County, Maryland is a 117
acre parcel located adjacent to State Route 30 bypass. The parcel
was acquired for future commercial development and is projected to
contain 900,000 square feet of space when complete. This parcel is
currently in a predevelopment planning stage.
Construction Aggregates Properties. The following table summarizes
the Company's principal construction aggregates locations and
estimated reserves at September 30, 2009, a substantial portion of
which are leased to Vulcan.
Tons of
Tons Sold Estimated
in Year Reserves
Ended at
9/30/09 9/30/09 Approximate
(000's) (000's) Acres Owned
The Company owns seven
locations currently being
mined in Grandin, Keuka,
Newberry, Florida; Columbus,
Macon, and Tyrone, Georgia;
and Manassas, Virginia. 5,413 350,929 10,423
The Company owns six locations
not currently being mined in
Ft. Myers, Gulf Hammock,
Airgrove/Lake County(temporary),
Marion County, Astatula/Lake
County, Florida; and
Forest Park, Georgia. 52 95,230 5,454
These figures exclude Brooksville, Florida as the property was
transferred October 4, 2006 to a joint venture with Vulcan for
development. Brooksville tons sold in fiscal 2009 were 351,000 and
estimated reserves were 6,651,000 at September 30, 2009.
Other Properties. In addition to the development, mining and rental
sites, the Company owns approximately 2,222 acres of investment and
other real estate. This includes a 1,844-acre timberland site
located in Caroline County, Virginia.
The Company owns an office building with approximately 69,000
square feet situated on approximately 6 acres in Jacksonville,
Florida, which is leased to Vulcan.
Transportation Segment Properties. The Company has 20 sites for its
trucking terminals in Alabama, Florida, Georgia, North Carolina,
and Tennessee. The Company owns 13 of these sites and leases 7.
Item 3. LEGAL PROCEEDINGS.
Note 12 to the Consolidated Financial Statements included in the
accompanying 2009 Annual Report to Shareholders is incorporated
herein by reference.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No reportable events.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES.
There were approximately 543 holders of record of Patriot
Transportation Holding, Inc. common stock, $.10 par value, as of
September 30, 2009. The Company's common stock is traded on the
Nasdaq Stock Market (Symbol PATR). Information concerning stock
prices is included under the caption "Quarterly Results" on page 6
of the Company's 2009 Annual Report to Shareholders, and such
information is incorporated herein by reference. The Company has
not paid a cash dividend in the past and it is the present policy
of the Board of Directors not to pay cash dividends. Information
concerning restrictions on the payment of cash dividends is
included in Note 3 to the consolidated financial statements
included in the accompanying 2009 Annual Report to Shareholders and
such information is incorporated herein by reference. Information
regarding securities authorized for issuance under equity
compensation plans is included in Item 12 of Part III of this
Annual Report on Form 10-K and such information is incorporated
herein by reference.
Purchases of Equity Securities by the Issuer and Affiliated
Purchasers
(c)
Total
Number of
Shares (d)
Purchased Approximate
(a) As Part of Dollar Value of
Total (b) Publicly Shares that May
Number of Average Announced Yet Be Purchased
Shares Price Paid Plans or Under the Plans
Period Purchased per Share Programs or Programs (1)
July 1
through
July 31 0 $ 0 0 $ 5,625,000
August 1
through
August 31 0 $ 0 0 $ 5,625,000
September 1
through
September 30 0 $ 0 0 $ 5,625,000
Total 0 $ 0 0
(1) In December, 2003, the Board of Directors authorized management
to expend up to $6,000,000 to repurchase shares of the Company's
common stock from time to time as opportunities arise. On February
19, 2008, the Board of Directors authorized management to expend up
to an additional $5,000,000 to repurchase shares of the Company's
common stock from time to time as opportunities arise.
Item 6. SELECTED FINANCIAL DATA.
Information required in response to this Item 6 is included under
the caption "Five Year Summary" on page 6 of the Company's 2009
Annual Report to Shareholders and such information is incorporated
herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION.
Information required in response to Item 7 is included under the
caption "Management Analysis" on pages 7 through 13 of the
Company's 2009 Annual Report to Shareholders and such information
is incorporated herein by reference.
Item 7.A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
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.
The Company prepared a sensitivity analysis of its cash and cash
equivalents 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 cash and cash equivalents.
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
cash and cash equivalents would have an immaterial impact on the
Company's results of operations and cash flows.
For its debt instruments with variable interest rates, changes in
interest rates affect the amount of interest expense incurred. The
Company did not have any variable rate debt outstanding at
September 30, 2009. The following table provides information about
the Company's long-term debt (dollars in thousands):
There Fair
Liabilities: 2010 2011 2012 2013 2014 after Total Value
Scheduled
maturities of
long-term debt:
Fixed Rate $ 4,293 $4,588 $4,902 $5,239 $5,308 $51,823 $76,153 $72,750
Average
interest rate 6.4% 6.3% 6.3% 6.3% 6.3% 6.3%
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Information required in response to this Item 8 is included under
the caption "Quarterly Results" on page 6 and on pages 14 through
26 of the Company's 2009 Annual Report to Shareholders. Such
information is incorporated herein by reference.
Item 9A. CONTROLS AND PROCEDURES.
CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND
PROCEDURES
Under the supervision and with the participation of our management,
including our principal executive officer, principal financial
officer and chief accounting officer, we conducted an evaluation of
our disclosure controls and procedures, as such terms is defined
under Rule 13a-15(e) promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Based on this
evaluation, our principal executive officer, our principal
financial officer and our chief accounting officer concluded that
our disclosure controls and procedures were effective as of the end
of the period covered by this Annual Report.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is
defined in Exchange Act Rule 13a-15(f). Under the supervision and
with the participation of our management, including our principal
executive officer and principal financial officer, we conducted an
evaluation of the effectiveness of our internal control over
financial reporting based on the framework in Internal Control-
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on our evaluation
under the framework in Internal Control-Integrated Framework, our
management concluded that our internal control over financial
reporting was effective as of September 30, 2009.
Hancock Askew & Co., LLP, the independent registered certified
public accounting firm that audited the consolidated financial
statements included in this Annual Report on Form 10-K, has also
audited the effectiveness of our internal control over financial
reporting as of September 30, 2009, as stated in their report which
appears in Item 8.
INHERENT LIMITATIONS OVER INTERNAL CONTROLS
Our internal control over financial reporting is designed to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of consolidated financial statements
for external purposes in accordance with generally accepted
accounting principles. Our internal control over financial
reporting includes those policies and procedures that:
i. pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions
and dispositions of our assets;
ii. provide reasonable assurance that transactions are
recorded as necessary to permit preparation of
consolidated financial statements in accordance with
generally accepted accounting principles, and that our
receipts and expenditures are being made only in
accordance with authorizations of our management and
directors; and
iii. provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or
disposition of our assets that could have a material
effect on the consolidated financial statements.
Internal control over financial reporting cannot provide absolute
assurance of achieving financial reporting objectives because of
its inherent limitations, including the possibility of human error
and circumvention by collusion or overriding of controls.
Accordingly, even an effective internal control system may not
prevent or detect material misstatements on a timely basis. Also,
projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because
of changes in conditions or that the degree of compliance with the
policies or procedures may deteriorate.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding the Company's executive officers is set forth
under the caption "Executive Officers of the Registrant" in Part I
of this Form 10-K. Information concerning directors (including the
disclosure regarding audit committee financial experts), required
in response to this Item 10, is included under the captions
"Election of Directors", "Board Structure and Committee Membership
- - Audit Committee" and "Section 16(a) Beneficial Ownership
Reporting Compliance" in the Company's Proxy Statement and such
information is incorporated herein by reference. The Proxy
Statement will be filed with the Securities and Exchange Commission
not later than December 31, 2009.
The Company has adopted a Financial Code of Ethical Conduct
applicable to its principal executive officers, principal financial
officers and principal accounting officers. A copy of this
Financial Code of Ethical Conduct is filed as Exhibit 14 to this
Form 10-K. The Financial Code of Ethical Conduct is available on
our web site at www.patriottrans.com under the heading Corporate
Governance.
Item 11. EXECUTIVE COMPENSATION.
Information required in response to this Item 11 is included under
the captions "Executive Compensation," "Compensation Committee
Report," "Board Structure and Committee Membership - Compensation
Committee," and "Shareholder Return Performance" in the Company's
Proxy Statement and such information is incorporated herein by
reference. The Proxy Statement will be filed with the Securities
and Exchange Commission not later than December 31, 2009.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Information required in response to this Item 12 is included under
the captions "Common Stock Ownership of Certain Beneficial Owners"
and "Common Stock Ownership by Directors and Executive Officers" in
the Company's Proxy Statement and such information is incorporated
herein by reference. The Proxy Statement will be filed with the
Securities and Exchange Commission not later than December 31,
2009.
Equity Compensation Plan Information
Number of
Securities
remaining
available
for
Number of future
Securities Weighted issuance
to be Average under equity
issued upon exercise compensation
exercise of price of plans
outstanding outstanding (excluding
options, options, securities
warrants warrants reflected in
and rights and rights column (a))
Plan Category (a) (b) (c)
Equity compensation
plans approved by
security holders 237,930 $36.70 241,000
Equity compensation
plans not approved
by security holders 0 0 0
Total 237,930 $36.70 241,000
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required in response to this Item 13 is included under
the caption "Related Party Transactions" in the Company's Proxy
Statement and such information is incorporated herein by reference.
The Proxy Statement will be filed with the Securities and Exchange
Commission not later than December 31, 2009.
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Information required in response to this Item 14 is included under
the captions "Independent Auditor" and "Ratification of Independent
Registered Certified Public Accounting Firm" in the Company's Proxy
Statement and such information is incorporated herein by reference.
The Proxy Statement will be filed with the Securities and Exchange
Commission not later than December 31, 2009.
PART IV
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) (1) and (2) Financial Statements and Financial Statement
Schedules.
The response to this item is submitted as a separate
section. See Index to Financial Statements and Financial
Statement Schedules on page 29 of this Form 10-K.
(3) Exhibits.
The response to this item is submitted as a separate
section. See Exhibit Index on pages 26 through 28 of this
Form 10-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Patriot Transportation Holding, Inc.
Date: December 2, 2009 By JOHN D. BAKER II
John D. Baker II
President and Chief Executive
Officer (Principal Executive Officer)
By JOHN D. MILTON, JR._____________
John D. Milton, Jr.
Executive Vice President, Treasurer,
Secretary and Chief Financial Officer
(Principal Financial Officer)
By JOHN D. KLOPFENSTEIN____________
John D. Klopfenstein
Controller and Chief Accounting
Officer(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on December 2, 2009.
JOHN D. BAKER II CHARLES E. COMMANDER III______
John D. Baker II Charles E. Commander III
Director, President, and Chief Director
Executive Officer
(Principal Executive Officer)
LUKE E. FICHTHORN III _____
Luke E. Fichthorn III
JOHN D. MILTON, JR. ___ Director
John D. Milton, Jr.
Executive Vice President, Treasurer,
Secretary and Chief Financial ROBERT H. PAUL III _
Officer(Principal Financial Officer) Robert H. Paul III
Director
JOHN D. KLOPFENSTEIN ____________
John D. Klopfenstein H. W. SHAD III_________________
Controller and Chief Accounting H. W. Shad III
Officer (Principal Accounting Officer) Director
EDWARD L. BAKER__________________ MARTIN E. STEIN, JR.___________
Edward L. Baker Martin E. Stein, Jr.
Chairman of the Board Director
JOHN E. ANDERSON_________________ JAMES H. WINSTON_______________
John E. Anderson James H. Winston
Director Director
THOMPSON S. BAKER II_ ________
Thompson S. Baker II
Director
PATRIOT TRANSPORTATION HOLDING, INC.
FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
EXHIBIT INDEX
[Item 14(a)(3)]
(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.
And 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 lease backs 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. 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)(2) 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) Amended and Restated Revolving Credit Agreement dated
September 30, 2008 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
October 7, 2008. File No. 33-26115.
(10)(i) 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)(j) 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)(k) Joint Venture Agreement between Florida Rock Industries, Inc.
and Florida Rock Properties, incorporated by reference to an
exhibit filed with Form 10-K for the fiscal year ended
September 30, 2006. File No. 33-26115.
(10)(l) Letter Agreement between the Company and David H.
deVilliers, Jr., incorporated by reference to an exhibit
filed with Form 10-Q for the quarter ended December 31, 2007.
File No. 33-26115.
(10)(m) Letter Agreement between the Company and Robert E.
Sandlin, incorporated by reference to an exhibit filed with
Form 10-Q for the quarter ended December 31, 2007. File No.
33-26115.
(10)(n) Letter Agreement between the Company and John D.
Klopfenstein, incorporated by reference to an exhibit filed
with Form 10-Q for the quarter ended December 31, 2007. File
No. 33-26115.
(10)(o) Agreement of Sale between FRP Bird River, LLC. and Mackenzie
Investment Group, LLC. and related amendments, incorporated by
reference to an exhibit filed with Form 10-K for the year
ended September 30, 2009. File No. 33-26115.
(13) The Company's 2009 Annual Report to shareholders, portions of
which are incorporated by reference in this Form 10-K. Those
portions of the 2009 Annual Report to Shareholders which are
not incorporated by reference shall not be deemed to be filed
as part of this Form 10-K.
(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.
(21) Subsidiaries of Registrant at September 30, 2009: Florida
Rock & Tank Lines, Inc. (a Florida corporation); Florida Rock
Properties, Inc. (a Florida corporation); FRP Development
Corp. (a Maryland corporation); FRP Maryland, Inc. (a Maryland
corporation); 34 Loveton Center LLC (a Maryland limited
liability company); FRTL, Inc. (a Florida corporation);
SunBelt Transport, Inc. (a Florida corporation); Oz LLC(a
Maryland limited liability company); 1502 Quarry, LLC(a
Maryland limited liability company); FRP Lakeside LLC #1 (a
Maryland limited company); FRP Lakeside LLC #2 (a Maryland
limited liability company); FRP Lakeside LLC #3 (a Maryland
limited liability company); FRP Lakeside LLC #4 (a Maryland
limited liability company); FRP Lakeside LLC #5 (a Maryland
limited liability company); FRP Hillside LLC (a Maryland
limited liability company); FRP Hillside LLC #2 (a Maryland
limited liability company); FRP Hillside LLC #3 (a Maryland
limited liability company); FRP Hillside LLC #4 (a Maryland
limited liability company); FRP Windsor LLC (a Maryland
limited liability company); FRP Dorsey LLC (a Maryland limited
liability company); FRP Bird River LLC (a Maryland limited
liability company); FRP Interchange LLC (a Maryland limited
liability company); FRP Azalea LLC (a Maryland limited
liability company); FRP Manassas LLC (a Maryland limited
liability company); FRP Hampstead LLC (a Maryland limited
liability company).
(23)(a) Consent of Hancock Askew & Co., Inc., Independent Registered
Certified Public Accounting Firm, appears on page 30 of this
Form 10-K.
(31)(a) Certification of John D. Baker II.
(31)(b) Certification of John D. Milton, Jr..
(31)(c) Certification of John D. Klopfenstein.
(32) Certification of Chief Executive Officer, Chief Financial
Officer, and Chief Accounting Officer under Section 906 of the
Sarbanes-Oxley Act of 2002.
PATRIOT TRANSPORTATION HOLDING, INC.
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
(Item 15(a) (1) and 2))
Page
Consolidated Financial Statements:
Consolidated balance sheets at September 30, 2009
and 2008 13(a)
For the years ended September 30, 2009, 2008 and 2007:
Consolidated statements of income 12(a)
Consolidated statements of cash flows 14(a)
Consolidated statements of shareholders' equity 15(a)
and comprehensive income
Notes to consolidated financial statements 16-23(a)
Report of Independent Registered Certified Public
Accounting Firm 25-26(a)
Selected quarterly financial data (unaudited) 6(a)
Consent of Independent Registered Certified Public
Accounting Firm 30(b)
Report of Independent Registered Certified Public
Accounting Firm on Financial Statement Schedules 30(b)
Consolidated Financial Statement Schedules:
II - Valuation and qualifying accounts 31(b)
III - Real estate and accumulated depreciation and
depletion 32-33(b)
(a) Refers to the page number in the Company's 2009 Annual
Report to Shareholders. Such information is incorporated by
reference in Item 8 of this Form 10-K.
(b) Refers to the page number in this Form 10-K.
All other schedules have been omitted, as they are not required under
the related instructions, are inapplicable, or because the information
required is included in the consolidated financial statements.
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-55132, 333-125099 and 333-131475) of
Patriot Transportation Holding, Inc. of our report dated December 2,
2009 relating to the consolidated financial statements and the
effectiveness of Patriot Transportation Holding, Inc's internal control
over financial reporting which appears in the Annual Report to
Shareholders incorporated by reference herein. We also consent to the
incorporation by reference of our report dated December 2, 2009,
relating to the financial statement schedules, which appear in this Form
10-K.
Hancock Askew & Co., LLP
Savannah, Georgia
December 2, 2009
____________________
REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of
Patriot Transportation Holding, Inc.:
Our audit of the consolidated financial statements referred to in our
report dated December 2, 2009 appearing in the 2009 Annual Report to
Shareholders of Patriot Transportation Holding, Inc. (which report and
consolidated financial statements are incorporated by reference in this
Annual Report on Form 10-K) also included an audit of the financial
statement schedules listed in Item 15(a)(2) of this Form 10-K. These
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statement schedules based on our audit. In our opinion,
these financial statement schedules present fairly, in all material
respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.
Hancock Askew & Co., LLP
Savannah, Georgia
December 2, 2009
____________________
PATRIOT TRANSPORTATION HOLDING, INC.
SCHEDULE II (CONSOLIDATED) - VALUATION
AND QUALIFYING ACCOUNTS
YEARS ENDED SEPTEMBER 30, 2009, 2008 AND 2007
ADDITIONS ADDITIONS
BALANCE CHARGED TO CHARGED TO BALANCE
AT BEGIN. COST AND OTHER AT END
OF YEAR EXPENSES ACCOUNTS DEDUCTIONS OF YEAR
Year Ended
September 30, 2009:
Allowance for
doubtful accounts $ 264,999 $ 165,702 $ - $ 234,684(a) $ 196,017
Accrued risk
insurance $8,215,064 $ 3,546,297 $ - $ 3,464,304(b) $8,297,057
Accrued health
insurance 1,125,160 3,772,482 44,934(c) 3,879,250(b) 1,063,326
Totals -
insurance $9,340,224 $ 7,318,779 $ 44,934 $ 7,343,554 $9,360,383
Year Ended
September 30, 2008:
Allowance for
doubtful accounts $ 206,868 $ 146,375 $ - $ 88,244(a) $ 264,999
Accrued risk
insurance $7,611,683 $ 3,914,380 $ - $ 3,310,999(b) $8,215,064
Accrued health
insurance 1,071,216 3,742,041 (8,727)(c) 3,679,370(b) 1,125,160
Totals -
insurance $8,682,899 $ 7,656,421 $ (8,727) $ 6,990,369 $9,340,224
Year Ended
September 30, 2007:
Allowance for
doubtful accounts $ 359,227 $ (22,155) $ - $ 130,204(a) $ 206,868
Accrued risk
insurance $8,208,570 $ 2,319,782 $ - $ 2,916,669(b) $7,611,683
Accrued health
insurance 1,192,939 3,662,082 (142,628)(c) 3,641,177(b) 1,071,216
Totals -
insurance $9,401,509 $ 5,981,864 $(142,628) $ 6,557,846 $8,682,899
(a) Accounts written off less recoveries
(b) Payments
(c) Other comprehensive income (ASC Topic 715).
PATRIOT TRANSPORTATION HOLDING, INC.
SCHEDULE III (CONSOLIDATED)-REAL ESTATE & ACCUMULATED DEPRECIATION AND
DEPLETION (dollars in thousands)
SEPTEMBER 30, 2008
Cost capi- Gross amount Year Deprecia-
Encumb- Initial cost talized at which Accumulated Of Date tion Life
County rances to subsequent carried at Depreciation Constr- Acquired Computed
Company to acqui- end of period tion on:
sition (a)
Construction Aggregates
Alachua, FL $ 1,442 $ 0 $ 1,442 $ 118 n/a 4/86 unit
Clayton, GA 369 0 369 5 n/a 4/86 unit
Fayette, GA 685 0 685 60 n/a 4/86 unit
Lake, FL 403 0 403 146 n/a 4/86 unit
Lee, FL 4,690 6 4,696 6 n/a 4/86 unit
Monroe, GA 792 0 792 271 n/a 4/86 unit
Muscogee, GA 369 (45) 324 207 n/a 4/86 unit
Prince Wil. VA 299 0 299 299 n/a 4/86 unit
Putnam, FL 15,002 32 15,034 4,032 n/a 4/86 unit
0 24,051 (7) 24,044 5,144
Other Rental Property
Wash D.C. 2,956 11,822 14,778 2,716 n/a 4/86 15 yr.
Wash D.C. 3,811 0 3,811 0 n/a 10/97
Putnam, FL 302 19 321 303 n/a 4/86 5 yr.
Spalding, GA 20 0 20 0 n/a 4/86
Lake, FL 1,083 0 1,083 968 n/a 4/86 unit
Marion, FL 1,180 4 1,184 599 n/a 4/86 unit
0 9,352 11,845 21,197 4,586
Commercial Property
Baltimore, MD 2,351 439 3,841 4,280 2,135 2009 10/89 39 yr.
Baltimore, MD 5,853 950 6,422 7,372 3,423 2009 12/91 39 yr.
Baltimore, MD 2,005 690 2,837 3,527 946 2000 7/99 39 yr.
Baltimore, MD 0 5,634 11,955 17,589 137 2009 12/02 39 yr.
Duval, FL 0 2,416 529 2,945 2,646 n/a 4/86 25 yr.
Harford, MD 1,936 31 3,826 3,857 1,439 1998 8/95 39 yr.
Harford, MD 3,455 50 5,552 5,602 1,623 1999 8/95 39 yr.
Harford, MD 4,971 85 6,665 6,750 2,290 2001 8/95 39 yr.
Harford, MD 0 92 1,479 1,571 0 n/a 8/95 39 yr.
Harford, MD 3,668 88 10,133 10,221 2,144 2007 8/95 39 yr.
Harford, MD 2,829 155 11,500 11,655 1,671 2009 8/95 39 yr.
Howard, MD 2,872 2,859 4,364 7,223 3,044 2009 9/88 39 yr.
Howard, MD 1,812 2,473 922 3,395 936 2006 3/00 39 yr.
Anne Arun, MD 1,822 715 7,740 8,455 4,363 2009 9/88 39 yr.
Anne Arun, MD 10,277 950 13,055 14,005 2,555 2005 5/98 39 yr.
Anne Arun, MD 9,767 1,525 10,762 12,287 1,419 2005 8/04 39 yr.
Anne Arun, MD 4,692 737 5,163 5,900 564 2006 1/03 39 yr.
Anne Arun, MD 0 0 147 147 0 2009 n/a 15 yr.
Anne Arun, MD 0 667 6,798 7,465 264 2008 7/07 39 yr.
Norfolk, VA 6,522 7,512 0 7,512 1,112 n/a 10/04 39 yr.
Prince Wil. VA 0 7,324 6,069 13,393 0 n/a 12/05 39 yr.
Newcastle Co. DE 11,321 11,559 1,222 12,781 1,892 2009 4/04 39 yr.
Carroll, MD 0 4,720 923 5,643 0 n/a 3/08 n/a
76,153 51,671 121,904 173,575 34,603
Investment Property 2,451 318 2,769 646 n/a 4/86 n/a
GRAND
TOTALS $76,153 $87,525 $134,060 $221,585 $44,979
(a) The aggregate cost for Federal income tax purposes is $205,346.
PATRIOT TRANSPORTATION HOLDING, INC.
SCHEDULE III (CONSOLIDATED) - REAL ESTATE AND
ACCUMULATED DEPRECIATION AND DEPLETION
YEARS ENDED SEPTEMBER 30, 2009, 2008 AND 2007
(In thousands)
2009 2008 2007
Gross Carrying Cost of Real Estate:
Balance at beginning of period $210,919 190,030 184,735
Additions during period:
Amounts capitalized 10,800 24,221 5,295
Deductions during period:
Cost of real estate sold (45) (3,326) -
Other (abandonments) (89) (6) -
Balance at close of period $221,585 210,919 190,030
Accumulated Depreciation & Depletion:
Balance at beginning of period $ 40,578 36,539 33,671
Additions during period:
Charged to cost & expense 4,446 4,045 2,868
Deductions during period:
Real estate sold (45) (6) -
Balance at close of period $44,979 40,578 36,539