CONSOLIDATED TOMOKA LAND CO - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

X QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
___ OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

___ TRANSITION REPORT PURSUANT TO SECTIONS 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___

Commission file number 0-5556

CONSOLIDATED-TOMOKA LAND CO.

(Exact name of registrant as specified in its charter)

Florida 59-0483700
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

149 South Ridgewood Avenue
Daytona Beach, Florida 32114
(Address of principal executive offices) (Zip Code)

(386) 255-7558
(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 and
(2) has been subject to such filing requirements for the past 90 days.

Yes X No
----- -----
Indicate by check mark whether the registrant is an accelerated filer
(as defined by rule 12b-2 of the Exchange Act).

Yes X No
------ ------

Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

Class of Common Stock Outstanding
May 1, 2003

$1.00 par value 5,615,579
1

CONSOLIDATED-TOMOKA LAND CO.

INDEX

Page No.
--------

PART I - FINANCIAL INFORMATION

Consolidated Condensed Balance Sheets -
March 31, 2003 and December 31, 2002 3

Consolidated Condensed Statements of Income -
Three Months Ended March 31, 2003 and 2002 4

Consolidated Statement of Shareholders' Equity -
Three Months Ended March 31, 2003 5

Consolidated Condensed Statements of Cash Flows -
Three Months Ended March 31, 2003 and 2002 6

Notes to Consolidated Condensed Financial Statements 7-10

Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-16

PART II -- OTHER INFORMATION 17

SIGNATURES 18

CERTIFICATIONS 19-22

2

PART I -- FINANCIAL INFORMATION
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)
March 31, December 31,
2003 2002
--------------------------

ASSETS
Cash 71,181 1,019,976
Restricted Cash 2,734,293 12,339,527
Investment Securities 4,823,416 5,013,224
Notes Receivable 9,486,806 9,640,676
Real Estate Held for Development and Sale 8,913,025 7,453,628
Refundable Income Taxes 718,858 815,503
Other Assets 3,286,593 3,684,860
---------- ----------
$30,034,172 $39,967,394
---------- ----------
Property, Plant and Equipment:
Land, Timber and Subsurface Interests $ 1,994,628 $ 1,958,550
Golf Buildings, Improvements and Equipment 11,259,631 11,259,631
Income Properties Land, Buildings and Improvements 36,013,571 22,964,712
Other Furnishings and Equipment 889,847 886,767
---------- ----------
Total Property, Plant and Equipment 50,157,677 37,069,660
Less Accumulated Depreciation and Amortization (3,003,344) (2,710,992)
---------- ----------
Net - Property, Plant and Equipment 47,154,333 34,358,668
---------- ----------
TOTAL ASSETS $77,188,505 $74,326,062
========== ==========
LIABILITIES
Accounts Payable $ 131,566 $ 304,480
Accrued Liabilities 3,140,766 3,085,131
Deferred Income Taxes 9,803,990 8,843,728
Notes Payable 9,752,061 9,235,072
---------- ----------
TOTAL LIABILITIES 22,828,383 21,468,411
---------- ----------
SHAREHOLDERS' EQUITY
Common Stock 5,615,579 5,615,579
Additional Paid in Capital 887,547 835,750
Retained Earnings 48,623,369 47,171,449
Accumulated Other Comprehensive Loss ( 766,373) ( 765,127)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 54,360,122 52,857,651
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $77,188,505 $74,326,062
========== ==========

See accompanying Notes to Consolidated Condensed Financial Statements.
3

CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited)
Three Months Ended
---------------------------
March 31, March 31,
2003 2002
---------------------------

$ $
INCOME:

Real Estate Operations:
Real Estate Sales
Sales and Other Income 3,318,469 726,832
Costs and Expenses ( 662,861) ( 474,960)
--------- ---------
2,655,608 251,872
--------- ---------
Income Properties
Leasing Revenues and Other Income 715,737 464,984
Costs and Other Expenses ( 130,470) ( 102,751)
--------- ---------
585,267 362,233
--------- ---------
Golf Operations
Sales and Other Income 1,272,718 1,290,212
Costs and Other Expenses (1,361,788) (1,322,594)
--------- ---------
( 89,070) ( 32,382)
--------- ---------
Total Real Estate Operations 3,151,805 581,723

Profit on Sales of Other Real Estate Interests 359,112 --

Interest and Other Income 257,007 228,973
--------- ---------
Operating Income 3,767,924 810,696

General and Administrative Expenses ( 977,534) ( 998,754)
--------- ---------

Income (Loss) Before Income Taxes 2,790,390 ( 188,058)
Income Taxes (1,057,691) 68,829
--------- ---------
Net Income (Loss) 1,732,699 ( 119,229)
========= =========
PER SHARE INFORMATION:
Basic and Diluted
Net Income (Loss) $0.31 $(0.02)
========= =========
Dividends $0.05 $ 0.05
========= =========

See accompanying Notes to Consolidated Condensed Financial Statements.

4
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

Accumulated
Additional Other Total
Common Paid-In Retained Comprehensive Shareholders' Comprehensive
Stock Capital Earnings Loss Equity Income
--------- -------- ----------- ----------- ------------ -----------

Balance,
December 31, 2002 $5,615,579 $835,750 $47,171,449 $ ( 765,127)$ 52,857,651 $

Net Income 1,732,699 1,732,699 1,732,699

Other Comprehensive
Loss:
Cash Flow Hedging
Derivative,
Net of Tax ( 1,246) ( 1,246) ( 1,246)

---------
Comprehensive Income $1,731,453
=========

Stock Options 51,797 51,797

Cash Dividends
($.05 per share) ( 280,779) ( 280,779)

--------- ------- ---------- ---------- -----------
Balance,
March 31, 2003 $5,615,579 $887,547 $48,623,369 $( 766,373) $54,360,122
========= ======= ========== ========== ==========

See accompanying Notes to Consolidated Condensed Financial Statements.
5

CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)
Three Months Ended
--------------------------
March 31, March 31,
2003 2002
---------- -----------

$ $
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) 1,732,699 (119,229)

Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided By Operating Activities:
Depreciation and Amortization 292,352 198,622
Non Cash Compensation 51,797 --

Decrease (Increase) in Assets:
Notes Receivable 153,870 390,924
Real Estate Held for Development ( 1,459,397) 68,538
Refundable Income Taxes 96,645 16,145
Other Assets 398,267 (375,689)

(Decrease) Increase in Liabilities:
Accounts Payable ( 172,914) ( 49,921)
Accrued Liabilities 54,389 376,218
Deferred Income Taxes 960,262 ( 84,975)
--------- ---------
Net Cash Provided By Operating Activities 2,107,970 420,633
--------- ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of Property, Plant, and Equipment (13,088,017) ( 70,051)
Decrease (Increase) in Restricted Cash for Acquisitions
Through the Like-Kind Exchange Process 9,605,234 (415,605)
Net Decrease (Increase) in Investment Securities 189,808 (244,300)
---------- ----------
Net Cash Used In Investing Activities ( 3,292,975) (729,956)
---------- ----------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Notes Payable 1,364,000 --
Payments on Notes Payable ( 847,011) (137,831)
Dividends Paid ( 280,779) (280,779)
---------- ----------
Net Cash Provided by (Used in) Financing Activities 236,210 (418,610)
---------- ----------
Net Decrease In Cash ( 948,795) (727,933)
Cash, Beginning of Year 1,019,976 2,042,631
---------- ---------
Cash, End of Period 71,181 1,314,698
========== =========

See accompanying Notes to Consolidated Condensed Financial Statements.
6
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1. Principles of Interim Statements. The following unaudited
consolidated condensed financial statements have been prepared
pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and note disclosures
which are normally included in annual financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to those
rules and regulations. The consolidated condensed financial
statements reflect all adjustments which are, in the opinion of
the management, necessary to present fairly the Company's
financial position and the results of operations for the interim
periods. The consolidated condensed format is designed to be
read in conjunction with the last annual report. For further
information refer to the consolidated financial statements and
the notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 2002.

The consolidated condensed financial statements include the
accounts of the Company and its wholly owned subsidiaries.
Inter-company balances and transactions have been eliminated
in consolidation.

Certain reclassifications were made to the 2002 accompanying
consolidated financial statements to conform to the 2003
presentation.

2. Basic earnings per common share are computed by dividing net
income (loss) by the weighted average number of shares of common
stock outstanding during the period. Diluted earnings per common
share are determined based on the assumption of the conversion of
stock options at the beginning of each period using the treasury
stock method at average cost for the periods.

7

2. Common Stock and Earnings Per Common Share (Continued)

Three Months Ended
March 31, March 31,
2003 2002
---------- ----------

Income (Loss) Available to Common Shareholder:
Net Income (Loss) $1,732,699 $( 119,229)
========= =========
Weighted Average Shares Outstanding 5,615,579 5,615,579

Common Shares Applicable to Stock
Options Using the Treasury Stock Method 12,718 13,494
--------- ---------
Total Shares Applicable to Diluted Earnings Per Share 5,628,297 5,629,073
========= =========
Basic and Diluted Loss Per Share:
Net Income (Loss) $0.31 $(0.02)
========= =========

3. Notes Payable. Notes payable consist of the following:

March 31, 2003
------------------------------
Due Within
Total One Year
------------------------------

$ 7,000,000 Line of Credit $ 593,310 $ 593,310
Mortgage Notes Payable 9,064,267 192,780
Industrial Revenue Bond 94,484 94,484
---------- ---------
$ 9,752,061 $ 880,574
========== =========

Payments applicable to reduction of principal amounts will be
required as follows:

Year Ending March 31, 2003
---------------------

2004 $ 880,574
2005 207,651
2006 1,423,459
2007 240,626
2008 & Thereafter 6,999,751
---------
$9,752,061
=========
In the first three months of 2003 and 2002, interest totaled $177,131
and $204,936 respectively.

8

4. Stock Options.

In December 2002, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure"
(SFAS 148). SFAS 148 provides alternative methods of accounting for
stock-based employee compensation. In addition, SFAS 148 amends the
disclosure requirements of SFAS No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123), to require more prominent and frequent
disclosures in financial statements about the effects of stock-based
compensation. The transition guidance and annual disclosure
provisions of SFAS 148 are effective for fiscal years ending after
December 15, 2002, and interim disclosure provisions are effective for
periods beginning after December 15, 2002. As permitted under SFAS
123 and SFAS 148, the Company will continue to follow the accounting
guidelines pursuant to Accounting Principles Board Option No. 25,
"Accounting for Stock Issued to Employees" (APB 25), for stock-based
compensation and to furnish the pro forma disclosures as required
under SFAS 148. The Company accounts for its stock-based compensation
plans under the recognition and measurement principles of APB 25, and
related interpretations, requiring that compensation expense be
recorded equal to the intrinsic value of the award at the measurement
date.

Had compensation expense for these options been determined in
accordance with SFAS No. 123, the Company's net income (loss) and
income (loss) per share would have been as follows:

9

5. Other Recent Accounting Pronouncements.

In November 2002, the FASB issued FASB Interpretation No. 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others" ("FIN 45").
FIN 45 elaborates on the disclosures to be made by the guarantor in
its interim and annual financial statements about its obligations
under certain guarantees that it has issued. It also clarifies that a
guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing
the guarantee. FIN 45 does not prescribe a specific approach for
subsequently measuring the guarantor's recognized liability over the
term of the related guarantee. It also incorporates, without change,
the guidance in FASB Interpretation No. 34, "Disclosure of Indirect
Guarantees of Indebtedness of Others," which is being superseded. The
Company will apply the recognition and measurement provisions of FIN
45 on a prospective basis to guarantees issued or modified after
December 31, 2002.

10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The Management's Discussion and Analysis of Financial Condition and
Results of Operations is designed to be read in conjunction with the
financial statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations in the last annual
report.

"Safe Harbor"
STATEMENT UNDER THE SECURITIES REFORM ACT OF 1995

Certain statements contained in this report (other than the financial
statements and statements of historical fact), are forward-looking
statements. The words "believe," "estimate," "expect," "intend,"
"anticipate," "will," "could," "may," "should," "plan," "potential,"
"predict," "forecast," and similar expressions and variations thereof
identify certain of such forward-looking statements, which speak only
as of the dates on which they were made. Forward-looking statements
are made based upon management's expectations and beliefs concerning
future developments and their potential effect upon the Company.
There can be no assurance that future developments will be in
accordance with management's expectations or that the effect of future
developments on the Company will be those anticipated by management.

The Company wishes to caution readers that the assumptions which form
the basis for forward-looking statements with respect to or that may
impact earnings for the year ended December 31, 2003, and thereafter
include many factors that are beyond the Company's ability to control
or estimate precisely. These risks and uncertainties include, but
are not limited to, the market demand for the Company's real estate
parcels, golf activities, income properties, timber and other
products; the impact of competitive real estate; changes in pricing by
the Company or its competitors; the costs and other effects of
complying with environmental and other regulatory requirements; losses
due to natural disasters; and changes in national, regional or local
economic and political conditions, such as inflation, deflation, or
fluctuation in interest rates.

While the Company periodically reassesses material trends and
uncertainties affecting its results of operations and financial
condition, the Company does not intend to review or revise any
particular forward-looking statement referenced herein in light of
future events.

RESULTS OF OPERATIONS
2003 Compared to 2002

Real Estate Operations
- ----------------------
Real Estate Sales
- -----------------
Net operating income from real estate sales totaled $2,655,608 for
the first three months of 2003, compared to $251,872 for the same
period in 2002.

11

The sale of 374 acres of property during the quarter ended March 31,
2003 produced gross profits approximating $2,880,000. These gross
profits represent a substantial improvement over gross profits of
$525,0000 posted in the first three months of 2002 on the sale of 20
acres of land.

Income Properties
- -----------------
Revenues from income properties increased 54% to $715,737 for the
first quarter of 2003, with operating income rising 62% during the
period to $585,267. During the first quarter of 2002 operating
income totaling $362,233 was recorded on revenues of $464,984.
These increases can be attributed to the acquisition of four
properties, through the like-kind exchange process, during 2003's
first quarter, and the acquisition of a fifth property in 2002's
fourth quarter. Income properties costs and expenses rose 27% for
the three months when compared to the prior year's quarter due to
additional depreciation associated with the properties acquired.

Golf Operations
- -----------------
For the first three months of 2003 golf operations posted a loss of
$89,070. This loss compares to a loss of $32,382 recorded in 2002's
first quarter. Results from golf activities were down 3% on a 2%
decrease in rounds played and stable average green fees. The decline
in rounds played, to a large extent, was due to the increase in rain
days, particularly in the month of March. Losses from food and
beverage operations increased approximately $20,000 during the
period, despite a 7% increase in revenues as food cost of sales and
compensation expenses rose.

General Corporate and Other
- ---------------------------
Profits on the sale of other real estate interests totaled $359,112
for the first three months of 2003 on the release of subsurface
interests on 2,950 acres. There were no sales of other real estate
interests or releases of subsurface interests during the first quarter
of 2002.

Interest and other income increased to $257,007, a 12% gain when
compared to the prior year's first quarter interest and other income
of $228,973. This gain was primarily attributed to higher interest on
funds held for investment in income properties and income earned on
the sale of fill dirt.

General and administrative expenses were lowered 2% during 2003's
first quarter when compared to prior year's same period as the result
of decreased interest and compensation expenses.

Net Income and Earnings Before Depreciation and Deferred Taxes
- --------------------------------------------------------------
Net income of $1,732,699, equivalent to $.31 per share, was recorded
in 2003's first quarter. This income represents a significant
turnaround from 2002's first quarter loss of $119,229, equivalent to
$.02 per share. The turnaround was primarily achieved on higher
profits from commercial land sales and increased earnings from income
properties with the addition of the new properties.

12

The Company also uses Earnings Before Depreciation and Deferred Taxes
("EBDDT") as a performance measure. The Company's strategy of
investing in income properties through the deferred tax like-kind
exchange process produces significant amounts of depreciation and
deferred taxes. This measure tracks results in this area.

Following is the calculation of EBDDT:

EBDDT is not a measure of operating results or cash flows from
operating activities as defined by generally accepted accounting
principles. Further, EBDDT is not necessarily indicative of cash
availability to fund cash needs and should not be considered as an
alternative to cash flow as a measure of liquidity. The Company
believes, however, that EBDDT provides relevant information about
operations and is useful, along with net income, for an understanding
of the Company's operating results.

EBDDT is calculated by adding depreciation and deferred
income taxes to net income as they represent non-cash charges.

EBDDT improved notably for the first quarter of 2003, not
only due to the improved operating results, but also due to a
significant change in deferred taxes. The change in deferred taxes
was predominantly the result of deferring gains on land sales closed
during the period for income tax purposes through the like-kind
exchange process.

Liquidity and Capital Resources
- -------------------------------
Cash and investment securities on hand at March 31, 2003 totaled
$7,628,890, including $2,734,293 cash held by an intermediary for the
acquisition of income properties through the like-kind exchange
process. This cash and investment securities on hand is significantly
lower than the cash and investment securities amounting to $18,372,727
held at December 31, 2002. The primary uses of these funds was the
acquisition of four income properties along with the acquisition of
950 acres of mitigation lands at a cost approximating $14,000,000.
Offsetting these cash uses was cash provided by operations.

13

Capital expenditures for the remainder of 2003 are projected to
approximate $6,000,000. These expenditures include $2,200,000 for
site development of the Cornerstone Office Park at the Interstate 95
interchange at LPGA Boulevard, and $3,300,000 for road construction on
Company owned lands adjacent to Interstate 95. Capital to fund these
requirements will be provided by cash and investment securities on
hand, operating activities and financing sources in place.
Additionally, as funds become available from qualified sales,
additional income properties will be acquired through the like-kind
exchange process. At March 31, 2003, $2,734,293 is held for this
purpose. Currently, the income properties owned by the Company are
free of debt. The Company has the ability to borrow against these
properties on a non-recourse basis.

At this time interest in Company owned land remains relatively strong,
with a backlog of contracts in place for closing in 2003 and
future years, although national and local economic and political
issues effect prospective development and sales. Management continues
to focus its efforts on converting its contract backlog to closings
while developing new contracts. As closings occur, gains which
qualify will continue to be deferred for income tax purposes with the
acquisition of triple-net-lease properties through the like-kind
exchange process. In the event such closings on replacement properties
do not occur within the required time frames, income taxes relative to
the gains experienced would become currently payable. As the
inventory of income properties grows management will look to continue
to diversify the Company through other real estate investments as
opportunities arise.

Critical Accounting Policies
- ----------------------------
The profit on sales of real estate is accounted for in accordance with
the provisions of SFAS No. 66 "Accounting for Sales of Real Estate."
The Company recognizes revenue from the sale of real estate at the
time the sale is consummated unless the property is sold on a deferred
payment plan and the initial payment does not meet criteria
established under SFAS 66, or the Company retains some form of
continuing involvement with the property. No income was deferred for
the first quarter of 2003 or 2002 as sales have met the established
criteria.

In accordance with SFAS 144,"Accounting for the Impairment or Disposal
of Long-Lived Assets," the Company has reviewed the recoverability of
long-lived assets, including real estate held for development and sale
and property, plant and equipment for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset
may or may not be recoverable. There has been no material impairment
of long-lived assets reflected in the consolidated financial
statements.

14

The Company refinanced certain long-term debt during 2002, and at that
time the Company entered into an interest rate swap agreement. This
swap arrangement changes the variable-rate cash flow exposure on the
debt obligations to fixed cash flows so that the Company can manage
fluctuations in cash flows resulting from interest rate risk. This
swap arrangement essentially creates the equivalent of fixed-rate
debt. The above referenced transaction is accounted for under SFAS
No. 133, "Accounting for Derivative Instruments and Certain Hedging
Activities" and SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activity, an Amendment of SFAS 133."
The accounting requires the derivative to be recognized on the balance
sheet at its fair value and the changes in fair value to be accounted
for as other comprehensive income or loss. At March 31, 2003, a
liability of $1,247,655 had been established on the Company's balance
sheet. Other comprehensive loss of $766,373 ($1,247,655 net of income
taxes of $481,282) has also been recorded to date.

Recent Accounting Pronouncements.
- ---------------------------------
In December 2002, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure"
(SFAS 148). SFAS 148 provides alternative methods of accounting for
stock-based employee compensation. In addition, SFAS 148 amends the
disclosure requirements of SFAS No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123), to require more prominent and frequent
disclosures in financial statements about the effects of stock-based
compensation. The transition guidance and annual disclosure
provisions of SFAS 148 are effective for fiscal years ending after
December 15, 2002, and interim disclosure provisions are effective for
periods beginning after December 15, 2002. As permitted under SFAS
123 and SFAS 148, the Company will continue to follow the accounting
guidelines pursuant to Accounting Principles Board Option No. 25,
"Accounting for Stock Issued to Employees" (APB25), for stock-based
compensation and to furnish the pro forma disclosures as required
under SFAS 148. The Company accounts for its stock-based compensation
plans under the recognition and measurement principles of APB 25, and
related Interpretations, requiring that compensation expense be
recorded equal to the intrinsic value of the award at the measurement
date.

In November 2002, the FASB issued FASB Interpretation No. 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others" ("FIN 45").
FIN 45 elaborates on the disclosures to be made by the guarantor in
its interim and annual financial statements about its obligations
under certain guarantees that it has issued. It also clarifies that a
guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing
the guarantee. FIN 45 does not prescribe a specific approach for
subsequently measuring the guarantor's recognized liability over the
term of the related guarantee. It also incorporates, without change,
the guidance in FASB Interpretation No. 34, "Disclosure of Indirect
Guarantees of Indebtedness of Others", which is being superseded. The
Company will apply the recognition and measurement provisions of FIN
45 on a prospective basis to guarantees issued or modified after
December 31, 2002.

15

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The principal market risk (i.e., the risk of loss arising from adverse
changes in market rates and prices) to which the Company is exposed is
interest rate risk.

The Company manages its debt, considering investment opportunities and
risk, tax consequences and overall financial strategies. The Company
is primarily exposed to interest rate risk on a $8,000,000 long-term
mortgage. The borrowing bears a variable rate of interest based on
market rates. Management's objective is to limit the impact of
interest rate changes on earnings and cash flows and to lower the
overall borrowing costs. To achieve this objective the Company
entered into an interest swap agreement during the second quarter of
2002.

CONTROLS AND PROCEDURES

Within the 90-day period prior to the filing of this report, an
evaluation was carried out under the supervision and with the
participation of the Company's management, including the Chief
Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the
effectiveness of our disclosure controls and procedures. Based on
that evaluation, the CEO and CFO have concluded that the Company's
disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it
files or submits under the Securities and Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods
specified in Securities and Exchange Commission rules and forms.
Subsequent to the date of their evaluation, there were no significant
changes in the Company's internal controls or in other factors that
could significantly affect the disclosure controls, including any
corrective actions with regard to significant deficiencies and
material weaknesses.

16

PART II -- OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceedings to which
the Company or its subsidiaries is a party.

Item 2 through 3.

Not Applicable

Item 4. Submission of matters to a vote of security holders.

The annual meeting of the Company's Shareholders was held
on April 23, 2003. The following votes were received for
each of the three nominees for Class III directors, each of
which was elected to a three-year term:

Number of Number of Votes
Nominee votes for Withheld
----------------- --------- ---------------
William O.E. Henry 4,744,046 147,234
H. Jay Skelton 4,809,493 81,787
William J. Voges 4,810,546 80,734

Item 5. Not Applicable

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

Exhibit 11 - Incorporated by Reference on Page 8
of this 10-Q report.

Exhibit 99.1 - Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act
Of 2002.

Exhibit 99.2 - Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act
Of 2002.

(b) Reports on Form 8-K

On April 17, 2003, a Form 8-K was furnished
reporting under Item 9 "Regulation FD Disclosure"
and Item 12 "Results of Operations and Financial
Condition," the Company's earning release for the
quarter ended March 31, 2003.

17

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.

CONSOLIDATED-TOMOKA LAND CO.
(Registrant)

Date: May 7, 2003 By:/s/ William H. McMunn
----------------------------
William H. McMunn, President
and Chief Executive Officer

Date: May 7, 2003 By:/s/ Bruce W. Teeters
----------------------------
Bruce W. Teeters, Senior
Vice President - Finance
and Treasurer

18

CERTIFICATIONS

I, William H. McMunn, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Consolidated-
Tomoka Land Co.;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material
weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

19

6. The registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date: May 7, 2003

By:/s/William H. McMunn
-----------------------
William H. McMunn
President and
Chief Executive Officer

20

CERTIFICATIONS

I, Bruce W. Teeters, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Consolidated-
Tomoka Land Co.;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material
weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

21

6. The registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date: May 7, 2003

By:/s/Bruce W. Teeters
--------------------------
Bruce W. Teeters
Sr. Vice President-Finance
and Treasurer

22

Exhibit 99.1

CERTIFICATION PURSUANT TO
18 U.S.C SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly report of Consolidated-Tomoka Land
Co. (The "Company") on Form 10-Q for the period ending March 31, 2003,
as filed with the Securities and Exchange Commission on the date
hereof (the "Report"), I, Bruce W. Teeters, Senior Vice President -
Finance and Treasurer of the Company, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

(1) The Report fully complies with the requirement of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and results of
operations of the Company.

/S/ Bruce W. Teeters
- --------------------
Bruce W. Teeters
Senior Vice President-Finance and Treasurer

May 7, 2003

EXHIBIT 99.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Consolidated-Tomoka Land
Co. (The "Company") on Form 10-Q for the period ending March 31, 2003,
as filed with the Securities and Exchange Commission on the date
hereof (the "Report"), I, William H. McMunn, President and Chief
Executive Officer of the Company, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

(1) The Report fully complies with the requirement of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and results of
operations of the Company.

/S/ William H. McMunn
- ---------------------
William H. McMunn
President and
Chief Executive Officer

May 7, 2003