FRPH FRP Holdings Inc

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 December 31, 2010

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., Suite 500, Jacksonville, Florida 32202

(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 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 (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes[ ] 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[X] Non- accelerated filer[ ]

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 the latest practicable date.

On December 31, 2010 there were 9,262,728 shares of Common Stock,
$.10 par value per share, outstanding (adjusted for 3-for-1 stock split).

PATRIOT TRANSPORTATION HOLDING, INC.
FORM 10-Q
QUARTER ENDED DECEMBER 31, 2010

CONTENTS

Page No.

Preliminary Note Regarding Forward-Looking Statements 3

Part I. Financial Information

Item 1. Financial Statements
 Consolidated Balance Sheets 4
 Consolidated Statements of Income 5
 Consolidated Statements of Cash Flows 6
 Condensed Notes to Consolidated Financial Statements 7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 14

Item 3. Quantitative and Qualitative Disclosures about Market Risks 21

Item 4. Controls and Procedures 22

Part II. Other Information

Item 1A. Risk Factors 23

Item 2. Purchase of Equity Securities by the Issuer 23

Item 6. Exhibits 23

Signatures 24

Exhibit 31 Certifications pursuant to Section 302 of the
 Sarbanes-Oxley Act of 2002 26

Exhibit 32 Certifications pursuant to Section 906 of the
 Sarbanes-Oxley Act of 2002. 29

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 in our markets; 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. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share data)

 December 31, September 30,
Assets 2010 2010
Current assets:
 Cash and cash equivalents $ 15,419 17,151
 Accounts receivable (net of allowance for
 doubtful accounts of $99 and $83, respectively) 6,479 5,940
 Federal and state income taxes receivable 519 930
 Notes receivable 1,259 1,238
 Inventory of parts and supplies 969 665
 Prepaid tires on equipment 1,272 1,246
 Prepaid taxes and licenses 1,290 1,813
 Prepaid insurance 1,696 2,185
 Prepaid expenses, other 73 62
 Assets of discontinued operations 533 542
 Total current assets 29,509 31,772

Property, plant and equipment, at cost 304,094 294,752
Less accumulated depreciation and depletion 99,581 96,636
 Net property, plant and equipment 204,513 198,116
Real estate held for investment, at cost 6,848 7,124
Investment in joint venture 7,456 7,344
Goodwill 1,087 1,087
Notes receivable, less current portion 4,052 4,382
Unrealized rents 3,400 3,357
Other assets 3,966 4,530
Total assets $260,831 257,712

Liabilities and Shareholders' Equity
Current liabilities:
 Accounts payable $ 2,926 3,384
 Deferred income taxes 174 174
 Accrued payroll and benefits 3,159 5,255
 Accrued insurance 2,817 2,373
 Accrued liabilities, other 1,038 994
 Long-term debt due within one year 4,664 4,588
 Liabilities of discontinued operations 1,610 1,327
 Total current liabilities 16,388 18,095
Long-term debt, less current portion 66,077 67,272
Deferred income taxes 16,165 16,084
Accrued insurance 2,483 2,483
Other liabilities 1,776 1,722
Commitments and contingencies (Note 8)
Shareholders' equity:
 Preferred stock, no par value;
 5,000,000 shares authorized; none issued - -
 Common stock, $.10 par value;
 25,000,000 shares authorized,
 9,262,728 and 9,278,088 shares issued
 and outstanding, respectively 926 928
 Capital in excess of par value 37,809 37,511
 Retained earnings 119,187 113,597
 Accumulated other comprehensive income, net 20 20
 Total shareholders' equity 157,942 152,056
Total liabilities and shareholders' equity $260,831 257,712

See accompanying notes.

PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)

(Unaudited)

THREE MONTHS
ENDED DECEMBER 31,

 2010 2009
Revenues:
 Transportation $ 22,991 22,081
 Mining royalty land 1,095 987
 Developed property rentals 4,177 4,432
Total revenues 28,263 27,500

Cost of operations:
 Transportation 21,003 20,437
 Mining royalty land 339 317
 Developed property rentals 3,146 3,215
 Unallocated corporate 587 489
Total cost of operations 25,075 24,458

Operating profit:
 Transportation 1,988 1,644
 Mining royalty land 756 670
 Developed property rentals 1,031 1,217
 Unallocated corporate (587) (489)
Total operating profit 3,188 3,042

Interest income and other 102 115
Equity in loss of joint venture - (1)
Interest expense (906) (1,026)

Income before income taxes 2,384 2,130
Provision for income taxes (916) (818)
Income from continuing operations 1,468 1,312

Income from discontinued operations, net 4,927 24

Net income $ 6,395 1,336

Earnings per common share:
 Income from continuing operations -
 Basic $ .16 .15
 Diluted $ .16 .14
 Discontinued operations (Note 11) -
 Basic $ .53 .00
 Diluted $ .52 .00

Net income - basic $ .69 .15
Net income - diluted $ .68 .14

Number of shares (in thousands)
 used in computing:
 -basic earnings per common share 9,273 9,153
 -diluted earnings per common share 9,460 9,411

See accompanying notes.

PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009
(In thousands)

 (Unaudited)
 2010 2009

Cash flows from operating activities:
 Net income $ 6,395 1,336
 Adjustments to reconcile net income to net cash
 provided by continuing operating activities:
 Depreciation, depletion and amortization 3,208 2,920
 Equity in loss of joint venture - 1
 (Gain) on sale of equipment (12) (43)
 (Income) from discontinued operations, net (4,927) (24)
 Stock-based compensation 132 247
 Net changes in operating assets and liabilities:
 Accounts receivable (539) (626)
 Inventory of parts and supplies (304) (66)
 Prepaid expenses and other current assets 975 1,288
 Other assets 363 (42)
 Accounts payable and accrued liabilities (2,066) (2,907)
 Income taxes payable and receivable 753 (1,007)
 Long-term insurance liabilities and other long-term
 liabilities 54 (110)
Net cash provided by operating activities of
 continuing operations 4,032 967
Net cash provided (used in) by operating activities of
 discontinued operations 293 (239)
Net cash provided by operating activities 4,325 728

Cash flows from investing activities:
 Purchase of transportation group property and equipment (1,796) (2,479)
 Investments in mining royalty land segment - (11)
 Investments in developed property rentals segment (2,719) (942)
 Investment in joint venture (114) (235)
 Proceeds from the sale of property, plant and equipment 23 47
 Proceeds received on note for sale of SunBelt 309 289
Net cash used in investing activities (4,297) (3,331)

Cash flows from financing activities:
 Repayment of long-term debt (1,119) (1,046)
 Repurchase of Company Stock (955) -
 Excess tax benefits from exercises of stock options
 and vesting of restricted stock 155 39
 Exercise of employee stock options 159 87

Net cash used in financing activities (1,760) (920)

Net (decrease) in cash and cash equivalents (1,732) (3,523)
Cash and cash equivalents at beginning of period 17,151 15,803
Cash and cash equivalents at end of the period $ 15,419 12,280

The Company recorded a non-cash transaction from an exchange of real estate of $4,941 in December 2010 along with a related deferred tax liability of $1,792 and a $2,053 permanent tax benefit on the value of donated minerals and aggregates which was recorded as a $342 receivable and $1,711 deferred tax.

See accompanying notes.

PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2010
(Unaudited)

(1) Basis of Presentation. The accompanying consolidated financial statements include the accounts of Patriot Transportation Holding, Inc. and its subsidiaries (the "Company"). Investment in the 50% owned Brooksville Joint Venture is accounted for under the equity method of accounting. 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 three months ended December 31, 2010 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2011. 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, 2010.

In connection with the presentation adopted in March, 2010 of our real estate operations as two reportable segments, two properties in Washington, D.C. and two properties in Duval County, Florida were reclassified out of the Royalties and rent division and the division was renamed the Mining royalty land segment. Historical results have been reclassified to conform to the new segment presentation.

(2) Stock Split. On December 1, 2010, the board of directors declared a 3-for-1 stock split of the Company's common stock in the form of a stock dividend. The record date for the split was January 3, 2011 and the new shares were issued on January 17, 2011. The total authorized shares remained 25 million and par value of common stock remained unchanged at $0.10 per share. All share and per share information presented has been adjusted to reflect this stock split.

(3) Business Segments. The Company operates in three reportable business segments. The Company's operations are substantially in the Southeastern and Mid-Atlantic states. The transportation segment hauls petroleum and other liquids and dry bulk commodities by tank trailers. The Company's real estate operations consist of two reportable segments. The Mining royalty land segment owns real estate including construction aggregate royalty sites and parcels held for investment. The Developed property rentals segment acquires, constructs, and leases office/warehouse buildings primarily in the Baltimore/Northern Virginia/Washington area and holds real estate for future development or related to its developments.

The Company's transportation and real estate groups operate independently and have minimal shared overhead except for corporate expenses. Corporate expenses are allocated in fixed quarterly amounts based upon budgeted and estimated proportionate cost by segment. Unallocated corporate expenses primarily include stock compensation and corporate aircraft expenses. Reclassifications to prior period amounts have been made to be comparable to the current presentation.

Operating results and certain other financial data for the Company's business segments are as follows (in thousands):

 Three Months ended
 December 31, ___

 2010 2009
Revenues:
 Transportation $ 22,991 22,081
 Mining royalty land 1,095 987
 Developed property rentals 4,177 4,432
 $ 28,263 27,500

Operating profit:
 Transportation $ 2,377 1,991
 Mining royalty land 909 812
 Developed property rentals 1,260 1,429
 Corporate expenses:
 Allocated to transportation (389) (347)
 Allocated to mining land (153) (142)
 Allocated to developed property (229) (212)
 Unallocated (587) (489)
 (1,358) (1,190)
 $ 3,188 3,042
Interest expense:
 Mining royalty land $ 9 12
 Developed property rentals ___897 _1,014
 $ 906 1,026

Capital expenditures:
 Transportation $ 1,796 2,479
 Mining royalty land - 11
 Developed property rentals:
 Capitalized interest 267 224
 Internal labor 111 44
 Real estate taxes 303 212
 Other costs (a) 2,038 462
 $ 4,515 3,432
 (a)Net of 1031 exchange of $4,941

Depreciation, depletion and
amortization:
 Transportation $ 1,535 1,561
 Mining royalty land 25 23
 Developed property rentals 1,301 1,277
 Other 347 59
 $ 3,208 2,920

Identifiable assets (less depreciation) December 31, September 30,
 2010 2010

 Transportation $ 42,939 43,100
 Discontinued Transportation Operations 533 542
 Mining royalty land 28,303 28,651
 Developed property rentals 170,622 164,601
 Cash items 15,419 17,151
 Unallocated corporate assets 3,015 3,667
 $260,831 257,712

(4) Long-Term debt. Long-term debt is summarized as follows (in thousands):

 December 31, September 30,
 2010 2010
5.6% to 8.6% mortgage notes
 due in installments through 2027 70,741 71,860
Less portion due within one year 4,664 4,588
 $ 66,077 67,272

The Company has a $37,000,000 uncollateralized Revolving Credit Agreement with three banks, which matures on December 13, 2013. The Revolver bears interest at a rate of 1.00% over the selected LIBOR, which may change quarterly based on the Company's ratio of Consolidated Total Debt to Consolidated Total Capital, as defined. A commitment fee of 0.15% 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 limitations on availability and restrictive covenants including limitations on paying cash dividends. Letters of credit in the amount of $13,294,000 were issued under the Revolver. As of December 31, 2010, $23,706,000 was available for borrowing and $46,321,000 of consolidated retained earnings would be available for payment of dividends. The Company was in compliance with all covenants as of December 31, 2010.

The fair values of the Company's mortgage notes payable were estimated based on current rates available to the Company for debt of the same remaining maturities. At December 31, 2010, the carrying amount and fair value of such other long-term debt was $70,741,000 and $72,360,000, respectively.

(5) Related Party Transactions. The Company previously may have been considered a related party to Vulcan Materials Company (Vulcan). One director of the Company was employed by Vulcan until September 17, 2010 and is related to two other Company directors. The Company, through its transportation subsidiaries, hauls commodities by tank trucks for Vulcan. Charges for these services are based on prevailing market prices. The real estate subsidiaries lease certain construction aggregates mining and other properties to Vulcan. Revenue from Vulcan for the first quarter of fiscal 2011 was $1,712,000 compared to $1,471,000 for the same period last year.

A subsidiary of the Company (FRP) has a Joint Venture Agreement with Vulcan Materials Company (formerly Florida Rock Industries, Inc.), Brooksville Quarry, LLC, to develop approximately 4,300 acres of land near Brooksville, Florida. The joint venture is jointly controlled by Vulcan and FRP, and they each have a mandatory obligation to fund additional capital contributions of up to $2.15 million. Capital contributions of $2,109,000 have been made by each party as of December 31, 2010. Distributions will be made on a 50-50 basis except for royalties and depletion specifically allocated to FRP. Other income for the three months ended December 31, 2009 includes a loss of $1,000, representing the Company's equity in the loss of the joint venture.

(6) Earnings per share. The following details the computations of the basic and diluted earnings per common share (dollars in thousands, except per share amounts):

THREE MONTHS ENDED DECEMBER 31,

 2010 2009
Weighted average common shares
 outstanding during the period
 - shares used for basic
 earnings per common share 9,273 9,153
Common shares issuable under
 share based payment plans
 which are potentially dilutive 187 258
Common shares used for diluted
 earnings per common share 9,460 9,411
Net income $ 6,395 1,336
Earnings per common share
 Basic $ .69 .15
 Diluted $ .68 .14

For the three months ended December 31, 2010, 132,870 shares attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the three months ended December 31 2009, 111,210 shares attributable to outstanding stock options were excluded from the calculation of diluted earnings per common share because their inclusion would have been anti-dilutive.

(7) Stock-Based Compensation Plans. As more fully described in Note 7 to the Company's notes to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended September 30, 2010, the Company's stock-based compensation plan permits the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, and stock awards. The number of common shares available for future issuance was 654,750 at December 31, 2010.

The Company recorded the following stock compensation expense in its consolidated statements of income (in thousands):

 Three Months ended
 December 31,
 2010 2009
Stock option grants $ 132 199
Restricted stock awards granted in 2006 - 48
 132 247

A summary of changes in outstanding options is presented below (in thousands, except share and 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, 2010 633,900 $14.00 4.1 $ 4,206
 Granted 29,160 $25.60 $ 293
 Exercised 20,640 $ 7.63 $ 86
Forfeited - $ - $ -
Outstanding at
 December 31, 2010 642,420 $14.73 4.2 $ 4,413
Exercisable at
 December 31, 2010 543,792 $12.53 3.4 $ 3,307
Vested during
 three months ended
 December 31, 2010 11,442 $ 113

The aggregate intrinsic value of exercisable in-the-money options was $10,049,000 and the aggregate intrinsic value of all outstanding in- the-money options was $10,473,000 based on the market closing price of $30.99 on December 31, 2010 less exercise prices. Gains of $405,000 were realized by option holders during the three months ended December 31, 2010. The realized tax benefit from options exercised for the three months ended December 31, 2010 was $155,000. Total compensation cost of options granted but not yet vested as of December 31, 2010 was $935,000, which is expected to be recognized over a weighted-average period of 3.0 years.

(8) 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. There is a reasonable possibility that the Company's estimate of vehicle and workers' compensation liability for the transportation group or discontinued operations may be understated or overstated but the possible range can not be estimated. The liability at any point in time depends upon the relative ages and amounts of the individual open claims. 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.

(9) Concentrations. The transportation segment primarily serves customers in the industries in the Southeastern U.S. Significant economic disruption or downturn in this geographic region or these industries could have an adverse effect on our financial statements.

During the first three months of fiscal 2011, the transportation segment's ten largest customers accounted for approximately 56.6% of the transportation segment's revenue. One of these customers accounted for 20.9% of the transportation segment's revenue. The loss of any one of these customers would have an adverse effect on the Company's revenues and income. Accounts receivable from the transportation segment's ten largest customers was $3,051,000 and $2,797,000 at December 31, 2010 and September 30, 2010 respectively.

The Company places its cash and cash equivalents with high credit quality institutions. At times such amounts may exceed FDIC limits.

(10) Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 means the use of quoted prices in active markets for identical assets or liabilities. Level 2 means the use of values that are derived principally from or corroborated by observable market data. Level 3 means the use of inputs that are unobservable and significant to the overall fair value measurement.

As of December 31, 2010 the Company had no assets or liabilities measured at fair value on a recurring basis and only one asset recorded at fair value on a non-recurring basis as it was deemed to be other-than-temporarily impaired. The fair value of the corporate aircraft of $1,550,000 is based on level 2 inputs for similar assets in the current market. The first quarter of fiscal 2011 includes $300,000 for the impairment to estimated fair value of the corporate aircraft due to indications of a decrease in value over the past quarter. The Company's decision to discontinue its regular use requires adjustment to the current estimated value as necessary.

The fair value of note receivable (see Note 11) approximates the unpaid principal balance based upon the interest rate and credit risk of the note. The fair value of all other financial instruments with the exception of mortgage notes (see Note 4) approximates the carrying value due to the short-term nature of such instruments.

(11) Discontinued operations. In August 2009 the Company sold its flatbed trucking company, SunBelt Transport, Inc. ("SunBelt"). Under the agreement, the Buyer purchased all of SunBelt's tractors and trailers, leased the SunBelt terminal facilities in Jacksonville, Florida for 36 months at a rental of $5,000 per month and leased the terminal facilities in South Pittsburgh, Tennessee for 60 months at a rental of $5,000 per month with an option to purchase the Tennessee facilities at the end of the lease for payment of an additional $100,000. The South Pittsburgh lease was recorded as a sale under bargain purchase accounting. The purchase price received for the tractors and trailers and inventories was a $1 million cash payment and the delivery of a Promissory Note requiring 60 monthly payments of $130,000 each including interest at 7%, secured by the assets of the business conveyed. In the quarter ending September 30, 2009 the Company recognized $283,000 in severance costs related to a change-in- control agreement triggered by the sale of SunBelt. The Company retained all pre-closing receivables and liabilities.

SunBelt has been accounted for as discontinued operations in accordance with ASC Topic 205-20 Presentation of Financial Statements
- Discontinued Operations. All periods presented have been restated accordingly.

In December 2010, a subsidiary of the Company, Florida Rock Properties, Inc., sold approximately 1,844 acres of land in Caroline County, Virginia, to the Commonwealth of Virginia, Board of Game and Inland Fisheries. The purchase price for the property was $5,200,000, subject to certain deductions. The Company also donated the $5,402,000 value of minerals and aggregates and recognized a $2,053,000 permanent tax benefit. The Company's book value of the property was $276,000.

A summary of discontinued operations is as follows (in thousands):

 Three months
 Ended December 31,
 2010 2009

Revenue $ 15 44
Operating expenses 14 6
Gain on property sale before taxes 4,665 -
Income before taxes $ 4,666 38
Income taxes 261 (14)
Income from
 Discontinued operations $ 4,927 24

The components of the balance sheet are as follows:

 December 31, September 30,
 2010 2010

Accounts receivable $ 2 8
Deferred income taxes 417 417
Property and equipment, net 114 117
Assets of discontinued operations $ 533 542

Accounts payable $ 436 154
Accrued payroll and benefits 2 2
Accrued liabilities, other 62 61
Insurance liabilities 1,110 1,110

Liabilities of discontinued operations $ 1,610 1,327

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview - Patriot Transportation Holding, Inc. (the Company) is a holding company engaged in the transportation and real estate businesses.

The Company's transportation business, Florida Rock & Tank Lines, Inc. is engaged in hauling primarily petroleum and other liquids and dry bulk commodities in tank trailers.

The Company's real estate operations consist of two reportable segments. The Mining royalty land segment owns real estate including construction aggregate royalty sites and parcels held for investment. The Developed property rentals segment acquires, constructs, and leases office/warehouse buildings primarily in the Baltimore/Northern Virginia/Washington area and holds real estate for future development or related to its developments. Substantially all of the real estate operations are conducted within the Southeastern and Mid-Atlantic United States.

In prior filings the Company's real estate operations were aggregated and reported as a single segment. The prior filings additionally included results by division. In connection with the new presentation of our real estate operations as two reportable segments, two properties in Washington, D.C. and two properties in Duval County, Florida were reclassified out of the Royalties and rent division and the division was renamed the Mining royalty land segment. Historical results have been reclassified to conform to the new segment presentation.

On December 1, 2010, the board of directors declared a 3-for-1 stock split of the Company's common stock in the form of a stock dividend. The record date for the split was January 3, 2011 and the new shares were issued on January 17, 2011. All share and per share information presented has been adjusted to reflect this stock split.

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, regulations regarding driver qualifications and hours of service, petroleum product usage in the Southeast which is driven in part by tourism and commercial aviation, fuel costs, construction activity, aggregates sales by lessees 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-Northern Virginia 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. There is a reasonable possibility that the Company's estimate of vehicle and workers' compensation liability for the transportation group or discontinued operations may be understated or overstated but the possible range can not be estimated. The liability at any point in time depends upon the relative ages and amounts of the individual open claims. Financial results of the Company for any individual quarter are not necessarily indicative of results to be expected for the year.

Discontinued Operation. In August 2009 the Company sold its flatbed trucking company, SunBelt Transport, Inc. ("SunBelt"). Under the agreement, the buyer purchased all of SunBelt's tractors and trailers, leased the SunBelt terminal facilities in Jacksonville, Florida for 36 months at a rental of $5,000 per month and leased the terminal facilities in South Pittsburgh, Tennessee for 60 months at a rental of $5,000 per month with an option to purchase the Tennessee facilities at the end of the lease for payment of an additional $100,000. The South Pittsburgh lease was recorded as a sale under bargain purchase accounting. The purchase price received for the tractors and trailers and inventories was a $1 million cash payment and the delivery of a Promissory Note requiring 60 monthly payments of $130,000 each including interest at 7%, secured by the assets of the business conveyed. The Company retained all pre-closing receivables and liabilities. SunBelt has been accounted for as discontinued operations in accordance with ASC Topic 205-20 Presentation of Financial Statements - Discontinued Operations. All periods presented have been restated accordingly.

In December 2010, a subsidiary of the Company, Florida Rock Properties, Inc., sold approximately 1,844 acres of land in Caroline County, Virginia, to the Commonwealth of Virginia, Board of Game and Inland Fisheries. The purchase price for the property was $5,200,000 and expenses of the sale were $259,000. The Company also donated the $5,402,000 value of minerals and aggregates and recognized a $2,053,000 permanent tax benefit. The Company's book value of the property was $276,000. Caroline County has been accounted for as discontinued operations in accordance with ASC Topic 205-20 Presentation of Financial Statements - Discontinued Operations. All periods presented have been restated accordingly.

Comparative Results of Operations for the Three Months Ended December 31, 2010 and 2009

Consolidated Results - Net income for the first quarter of fiscal 2011 was $6,395,000 compared to $1,336,000 for the same period last year. Diluted earnings per common share for the first quarter of fiscal 2011 were $0.68 compared to $0.14 for the same quarter last year. Income from discontinued operations favorably impacted net income due to an after tax gain of $4,926,000 from the exchange of property included in the first quarter of fiscal 2011. Transportation segment results were higher due to reduced health benefit claims. The mining royalty land segment's results were higher due to an increase in mined tons. The Developed property rentals segment's results were lower due to increased professional fees and property taxes.

Transportation Results
 Three Months Ended December 31
(dollars in thousands) ___2010 % 2009 %_

Transportation revenue $ 19,624 85% 19,467 88%
Fuel surcharges 3,367 15% 2,614 12%

Revenues 22,991 100% 22,081 100%

Compensation and benefits 8,454 37% 8,319 38%
Fuel expenses 4,746 20% 3,905 18%
Insurance and losses 1,649 7% 2,265 10%
Depreciation expense 1,506 6% 1,523 7%
Other, net 2,250 10% 2,218 10%
Sales, general & administrative 2,009 9% 1,860 8%
Allocated corporate expenses _____389 2% ___347 2%

Cost of operations 21,003 91% 20,437 93%

Operating profit $ 1,988 9% 1,644 7%

Transportation segment revenues were $22,991,000 in the first quarter of 2011, an increase of $910,000 over the same quarter last year. Revenue miles in the current quarter were up 5.7% compared to the first quarter of fiscal 2010 due to business growth and a longer average haul length. Fuel surcharge revenue increased $753,000. Excluding fuel surcharges, revenue per mile decreased 4.5% over the same quarter last year due to a longer average haul length and lower revenue per mile on certain replacement business. The average price paid per gallon of diesel fuel increased by $0.39 or 15.7% over the same quarter in fiscal 2010.

The Transportation segment's cost of operations was $21,003,000 in the first quarter of 2011, an increase of $566,000 over the same quarter last year. The Transportation segment's cost of operations in the first quarter of 2011 as a percentage of revenue was 91% compared to 93% in the first quarter of 2010. Compensation and benefits increased $135,000 or 1.6% compared to the same quarter last year primarily due to the increase in miles driven. Fuel surcharge revenue increased $753,000 while fuel cost increased by $841,000 leaving a negative impact to operating profit of $88,000 due to the increase in miles driven. Insurance and losses decreased $616,000 compared to the same quarter last year due to lower health claims. Depreciation expense decreased $17,000 due to fewer trucks in service and existing trailers becoming fully depreciated. Other expense increased $32,000 primarily due to lower gains on equipment sales. Selling general and administrative costs increased $149,000 or 8.0% compared to the same quarter last year. Allocated corporate expenses increased $42,000.

Mining Royalty Land Results
 Three Months Ended December 31
(dollars in thousands) ___2010 % 2009 %_

Mining royalty land revenue $ 1,095 100% 987 100%

Property operating expenses 124 11% 109 11%
Depreciation and depletion 25 2% 23 2%
Management Company indirect 37 4% 43 4%
Allocated corporate expense 153 14% 142 15%

Cost of operations 339 31% 317 32%

Operating profit $ 756 69% 670 68%

Mining royalty land segment revenues for the first quarter of fiscal 2011 were $1,095,000, an increase of $108,000 or 10.9% over the same quarter last year, due to an increase in mined tons.

The mining royalty land segment's cost of operations was $339,000 in the first quarter of 2011, an increase of $22,000 over the same quarter last year. Property operating expenses increased $15,000 due to higher property taxes. Depreciation and depletion expenses increased $2,000 due to an increase in mined tons. Management Company indirect expenses (excluding internal allocations for lease related property management fees) decreased $6,000. Allocated corporate expenses increased $11,000.

Developed Property Rentals Results

 Three Months Ended December 31
(dollars in thousands) ___2010 % 2009 %_

Developed property rentals revenue $ 4,177 100% 4,432 100%

Property operating expenses 1,281 31% 1,343 30%
Depreciation and amortization 1,301 31% 1,277 29%
Management Company indirect 335 8% 383 9%
Allocated corporate expense 229 5% 212 5%

Cost of operations 3,146 75% 3,215 73%

Operating profit $ 1,031 25% 1,217 27%

Developed property rentals segment revenues for the first quarter of fiscal 2011 were $4,177,000, a decrease of $255,000 or 5.8% due to reduced tenant reimbursements for snow removal.

Developed property segment's cost of operations was $3,146,000 in the first quarter of 2011, a decrease of $69,000 or 2.1% over the same quarter last year. Property operating expenses decreased $62,000 due to a $201,000 reduction in snow removal costs offset by higher professional fees. Depreciation and amortization increased $24,000 due to the purchase of a building. Management Company indirect expenses (excluding internal allocations for lease related property management fees) decreased $48,000. Allocated corporate expenses increased $17,000.

Consolidated Results

Operating Profit - Consolidated operating profit was $3,188,000 in the first quarter of fiscal 2011, an increase of $146,000 or 4.8% compared to $3,042,000 in the same period last year. Operating profit in the transportation segment increased $344,000 or 20.9% primarily due to lower health benefit claims. Operating profit in the mining royalty land segment increased $86,000 or 12.8% due to an increase in mined tons. Operating profit in the Developed property rentals segment decreased $186,000 or 15.3% due to higher professional fees and property taxes. Consolidated operating profit includes corporate expenses not allocated to any segment in the amount of $587,000 in the first quarter of fiscal 2011, an increase of $98,000 compared to the same period last year due to adjustment to the fair value of the corporate aircraft of $300,000 partially offset by lower stock compensation and professional fees.

Interest expense - Interest expense decreased $120,000 over the same quarter last year due to declining mortgage interest expense and higher capitalized interest.

Income taxes - Income tax expense increased $98,000 over the same quarter last year due to higher earnings.

Income from continuing operations - Income from continuing operations was $1,468,000 or $0.16 per diluted share in the first quarter of fiscal 2011, an increase of 11.9% compared to $1,312,000 or $.14 per diluted share for the same period last year. The $156,000 increase was primarily due to the $146,000 increase in operating profits and $120,000 reduction in interest expense offset by higher income taxes.

Discontinued operations - The after tax income from discontinued operations for the first quarter of fiscal 2011 was $4,927,000 versus $24,000 for the same period last year. Diluted earnings per share on discontinued operations for the first quarter of fiscal 2011 was $.52 compared to $.00 in the first quarter of fiscal 2010. The first quarter of fiscal 2011 included a book gain on the exchange of property of $4,926,000 after tax or $.52 per diluted share.

Net income - Net income for the first quarter of fiscal 2011 was $6,395,000 compared to $1,336,000 for the same period last year. Diluted earnings per common share for the first quarter of fiscal 2011 were $0.68 compared to $0.14 for the same quarter last year. Income from discontinued operations favorably impacted net income due to an after tax gain of $4,926,000 from the exchange of property included in the first quarter of fiscal 2011. Transportation segment results were higher due to reduced health benefit claims. The mining royalty land segment's results were higher due to an increase in mined tons. The Developed property rentals segment's results were lower due to increased professional fees and property taxes.

Liquidity and Capital Resources. For the first three months of fiscal 2011, the Company used cash provided by operating activities of continuing operations of $4,032,000, proceeds received on notes of $309,000, proceeds from the sale of plant, property and equipment of $23,000, proceeds from the exercise of employee stock options of $159,000, excess tax benefits from the exercise of stock options of $155,000 and cash balances to purchase $1,796,000 in transportation equipment, to purchase Hollander 95 Business Park $1,222,000 (net of 1031 exchange of $4,941,000), to expend $1,497,000 in real estate development, to invest $114,000 in the Brooksville Joint Venture, to make $1,119,000 scheduled payments on long-term debt and to repurchase Company stock for $955,000. Cash provided by the operating activities of discontinued operations was $293,000. Cash decreased $1,732,000.

In August 2009 the Company sold its flatbed trucking company, SunBelt Transport, Inc. ("SunBelt"). The purchase price received for the tractors and trailers and inventories was a $1 million cash payment and the delivery of a Promissory Note requiring 60 monthly payments of $130,000 each including 7% interest, secured by the assets of the business conveyed. The Company retained all pre-closing receivables and liabilities. SunBelt has been accounted for as discontinued operations. All periods presented have been restated accordingly.

In December 2010, a subsidiary of the Company, Florida Rock Properties, Inc., sold approximately 1,844 acres of land in Caroline County, Virginia, to the Commonwealth of Virginia, Board of Game and Inland Fisheries. The purchase price for the property was $5,200,000 and expenses of the sale were $259,000. The Company also donated the $5,402,000 value of minerals and aggregates and recognized a $2,053,000 permanent tax benefit. The $2,053,000 permanent tax benefit was recorded to income taxes receivable for $342,000 and offset to long-term deferred tax liabilities of $1,711,000. Actual realization of the $1,711,000 in deferred taxes will depend on taxable income, income tax rates, and income tax regulations over the 5 year carry forward period. The Company's book value of the property was $276,000. The Caroline County property has been accounted for as a discontinued operation and all periods presented have been restated accordingly. The Company used all the proceeds in a 1031 exchange to purchase Hollander 95 Business Park in a foreclosure sale auction through a qualified intermediary. Hollander 95 Business Park, in Baltimore City, Maryland, closed on October 22, 2010 by a 1031 intermediary for a purchase price totaling $5,750,000. This property consists of an existing 82,800 square foot warehouse building (52.9% occupied) with an additional 42 acres of partially developed land with a development capacity of 490,000 square feet (a mix of warehouse, office, hotel and flex buildings).

Cash flows from operating activities for the first three months of fiscal 2011 were $3,597,000 higher than the same period last year primarily due to large income tax payments in the same quarter last year related to the sale of SunBelt and lower insurance payments.

Cash flows used in investing activities for the first three months of fiscal 2011 were $966,000 higher primarily reflecting the purchase of Hollander 95 Business Park (net of 1031 exchange of $4,941,000).

Cash flows used in financing activities for the first three months of fiscal 2011 were $840,000 higher than the same period last year due to repurchases of Company stock for $955,000 partially offset by increased stock options exercised.

The Company has a $37,000,000 uncollateralized Revolving Credit Agreement with three banks, which matures on December 13, 2013. The Revolver contains limitations on availability and restrictive covenants including limitations on paying cash dividends. Letters of credit in the amount of $13,294,000 were issued under the Revolver. As of December 31, 2010, $23,706,000 was available for borrowing and $46,321,000 of consolidated retained earnings would be available for payment of dividends. The Company was in compliance with all covenants as of December 31, 2010.

The Company had $13,942,000 of irrevocable letters of credit outstanding as of December 31, 2010. Most of the letters of credit are irrevocable for a period of one year and are automatically extended for additional one-year periods until notice of non-renewal is received from the issuing bank not less than thirty days before the expiration date. These were issued for insurance retentions and to guarantee certain obligations to state agencies related to real estate development. The Company issued replacement letters of credit through the Revolver to reduce fees.

The Board of Directors has authorized Management to repurchase shares of the Company's common stock from time to time as opportunities arise. During the first three months of fiscal 2011 the Company repurchased 36,000 shares for $955,000. As of December 31, 2010, $4,669,000 was authorized for future repurchases of common stock. The Company does not currently pay any cash dividends on common stock.

The Company has committed to make additional capital contributions of up to $41,000 over the next 12 months to Brooksville Quarry, LLC in connection with a joint venture with Vulcan.

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.

Summary and Outlook. Transportation segment miles for this year's first quarter were 5.7% higher than the same quarter last year. The Company continues to succeed in replacing customers from the non- renewed contracts announced January 6, 2010 and has basically recovered from new customers substantially all the lost revenue miles, albeit at lower rates per mile for longer average hauls.

Operating profit from the leasing of developed buildings has been unfavorably impacted by three newer buildings brought into service since September 2008 along with two nearly vacant buildings in Delaware impacted by automobile plant closings and the residential housing downturn. Occupancy increased from 72.0% to 76.5% over last quarter as the market for new tenants appears to have bottomed and traffic for vacant space has increased. The Company is not presently engaged in the construction of any new buildings.

In July 2008, a subsidiary of the Company, FRP Bird River, LLC, entered into an agreement to sell approximately 121 acres of land in Baltimore County, Maryland to Mackenzie Investment Group, LLC. The purchase price for the property is $25,075,000, subject to certain potential purchase price adjustments. The agreement of sale is subject to certain contingencies including additional government approvals and closing may be one or more years away. The cost of the property of $5,808,000 is included in Real estate held for investment rather than held for sale because of the original and current expectation that the sale would not be completed within one year. The purchaser has placed non-refundable deposits of $1,000,000 under this contract in escrow including $650,000 in March 2009. 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 has expired.

In May 2008, the Company received final approval from the Zoning Commission of the District of Columbia of its planned unit development application for the Company's 5.8 acre undeveloped waterfront site on the Anacostia River in Washington, D.C. This site is located adjacent to the recently opened Washington Nationals Baseball Park. The site currently is leased to Vulcan Materials Company on a month-to-month basis. 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.

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 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.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the Company's Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO"), and Chief Accounting Officer ("CAO"), as appropriate, to allow timely decisions regarding required disclosure.

The Company also maintains a system of internal accounting controls over financial reporting that are designed to provide reasonable assurance to the Company's management and Board of Directors regarding the preparation and fair presentation of published financial statements.

All control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving the desired control objectives.

As of December 31, 2010, the Company, under the supervision and with the participation of the Company's management, including the CEO, CFO and CAO, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on this evaluation, the Company's CEO, CFO and CAO 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.

There have been no changes in the Company's internal controls over financial reporting during the first three months that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended September 30, 2010, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. PURCHASES OF EQUITY SECURITIES BY THE ISSUER

 (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)
October 1
through
October 31 0 $ 0 0 $ 5,625,000

November 1
through
November 30 0 $ 0 0 $ 5,625,000

December 1
through
December 31 36,000 $ 26.53 36,000 $ 4,670,000

Total 36,000 $ 26.53 36,000

(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. EXHIBITS

(a) Exhibits. The response to this item is submitted as a separate Section entitled "Exhibit Index", on page 25.

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.

February 2, 2011 PATRIOT TRANSPORTATION HOLDING, INC.


 Thompson S. Baker II
 Thompson S. Baker II
 President and Chief Executive
 Officer

John D. Milton, Jr.

John D. Milton
Executive 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 DECEMBER 31, 2010

EXHIBIT INDEX

(14) Financial Code of Ethical Conduct between the Company, Chief Executive Officers and Financial Managers, as revised on January 28, 2004, which is available on the Company's website at www.patriottrans.com.

(31)(a) Certification of Thompson S. 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.

Grafico Azioni FRP (NASDAQ:FRPH)
Storico
Da Giu 2024 a Lug 2024

Grafico Azioni FRP (NASDAQ:FRPH)
Storico
Da Lug 2023 a Lug 2024