FORM 10-Q
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 Quarter Ended December 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-7159
FLORIDA ROCK INDUSTRIES, INC.
(exact name of registrant as specified in its charter)
Florida 59-0573002
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
155 East 21st Street, Jacksonville, Florida 32206
(Address of principal executive offices)
(Zip Code)
904/355-1781
(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 the number of shares outstanding of each of the issuer's classes
of common stock, as of February 3, 2003: 28,561,448 shares of $.10 par
value common stock.
FLORIDA ROCK INDUSTRIES, INC.
FORM 10-Q
QUARTER ENDED DECEMBER 31, 2002
CONTENTS
Page No.
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Income 2
Condensed Consolidated Statements of Cash Flows 3
Notes to Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 15
Item 4. Controls and Procedures 15
Part II. Other Information
Item 1. Legal Proceedings 16
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 18
Exhibit 11. Computation of Earnings Per Common Share 26
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FLORIDA ROCK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, September 30,
2002 2002
ASSETS
Current assets:
Cash and cash equivalents $ 3,239 3,845
Accounts and notes receivable, less
allowance for doubtful accounts of
$1,905 ($1,694 at September 30, 2002) 70,107 82,919
Inventories 32,189 31,571
Prepaid expenses and other 10,161 8,252
Total current assets 115,696 126,587
Other assets 61,171 61,326
Goodwill, at cost less accumulated amortization
of $8,590 54,702 54,702
Property, plant and equipment, at cost:
Land 168,442 168,512
Plant and equipment 778,515 764,653
Construction in process 10,219 10,860
957,176 944,025
Less accumulated depreciation,
depletion and amortization 467,144 453,291
Net property, plant and equipment 490,032 490,734
$ 721,601 733,349
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term notes payable to banks $ 900 6,900
Accounts payable 33,714 42,521
Dividends payable 2,863 2,861
Federal and state income taxes 5,538 2,557
Accrued payroll and benefits 8,641 18,060
Accrued insurance reserve 5,017 3,331
Accrued liabilities, other 6,779 10,564
Long-term debt due within one year 374 387
Total current liabilities 63,826 87,181
Long-term debt 43,750 43,695
Deferred income taxes 62,430 62,430
Accrued employee benefits 17,276 17,026
Long-term accrued insurance reserves 8,281 8,281
Other accrued liabilities 5,117 4,089
Shareholders' equity:
Preferred stock, no par value; 10,000,000
shares authorized, none issued - -
Common stock, $.10 par value; 50,000,000
shares authorized, 28,597,163 shares issued 2,860 2,858
(28,578,383 shares at September 30, 2002)
Capital in excess of par value 16,309 15,902
Retained earnings 501,752 491,887
Total shareholders' equity 520,921 510,647
$ 721,601 733,349
See accompanying notes.
FLORIDA ROCK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)
Three Months Ended
December 31,
2002 2001
Net sales $160,741 173,962
Freight revenues 3,505 4,651
Total sales 164,246 178,613
Cost of sales 124,708 131,209
Freight expense 3,518 4,651
Total cost of sales 128,226 135,860
Gross profit 36,020 42,753
Selling, general and administrative 17,377 18,257
Operating profit 18,643 24,496
Interest expense (469) (1,152)
Interest income 529 330
Other income (expense), net 423 1,394
Income before income taxes 19,126 25,068
Provision for income taxes 6,730 8,824
Income before cumulative effect of 12,396 16,244
accounting change
Cumulative effect of accounting change, 333 -
net of income taxes of $181
Net income $ 12,729 16,244
Earnings per share:
Basic
Income before cumulative effect
of accounting change $ .43 .58
Cumulative effect of accounting
change .01 -
Net income $ .44 .58
Diluted
Income before cumulative effect of
accounting change $ .43 .56
Cumulative effect of accounting
change .01 -
Net income $ .44 .56
Cash dividends per common share $ .10 .085
Weighted average shares used
in computing earnings per share:
Basic 28,586 28,246
Diluted 29,037 28,789
See accompanying notes.
FLORIDA ROCK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
(In thousands)
(Unaudited)
2002 2001
Cash flows from operating activities:
Net income $12,729 16,244
Cumulative effect of accounting change (333) -
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation, depletion and amortization 17,405 15,949
Gain on disposition of property, plant and
equipment (321) (1,545)
Net changes in operating assets and
liabilities:
Accounts receivable 12,713 11,964
Inventories (618) (1,613)
Prepaid expenses and other (1,909) (2,454)
Accounts payable and accrued liabilities (17,127) (14,927)
Other, net (14) (308)
Net cash provided by operating activities 22,525 23,310
Cash flows from investing activities:
Purchase of property, plant and equipment (13,982) (7,563)
Proceeds from the sale of property, plant and
equipment 352 2,860
Additions to other assets (1,190) (21,242)
Collections of notes receivable 99 146
Net cash used in investing activities (14,721) (25,799)
Cash flows from financing activities:
Proceeds from long-term debt 118 1,737
Increase (decrease)in short-term debt (6,000) 1,600
Repayment of long-term debt (76) (17,122)
Exercise of employee stock options 409 669
Repurchase of Company stock - (2)
Payment of dividends (2,861) (2,406)
Net cash used in financing activities (8,410) (15,524)
Net decrease in cash and cash equivalents (606) (18,013)
Cash and cash equivalents at beginning of year 3,845 29,108
Cash and cash equivalents at end of period $ 3,239 $11,095
See accompanying notes.
FLORIDA ROCK INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31,2002
(Unaudited)
(1) Basis of Presentation
The accompanying condensed consolidated financial statements include the
accounts of the Company and its more than 50% owned subsidiaries. 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 (consisting of
normal recurring accruals) considered necessary for a fair presentation
of the results for the interim period have been included. Operating
results for the three months ended December 31, 2002, are not necessarily
indicative of the results that may be expected for the fiscal year ended
September 30, 2003. The accompanying condensed consolidated financial
statements and the information included under the heading "Management's
Discussion and Analysis" should be read in conjunction with the
consolidated financial statements and related notes of Florida Rock
Industries, Inc. for the year ended September 30, 2002.
(2) Change in Accounting Principle
Effective October 1, 2002, the Company adopted SFAS No. 143, "Accounting
for Asset Retirement Obligations." The statement applies to legal
obligations associated with the retirement of long-lived assets that
result from the acquisition, construction, development and (or) normal
use of the asset.
Statement No. 143 requires that the fair value of a liability for an
asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The fair
value of the liability is added to the carrying amount of the associated
asset and this additional carrying amount is depreciated over the life of
the asset. The liability is accreted at the end of each period through
charges to operating expenses. If the obligation is settled for other
than the carrying amount of the liability, the Company will recognize a
gain or loss on settlement.
All legal obligations for asset retirement obligations were identified
and the fair value of these obligations were determined as of October 1,
2002. Previously, the Company accrued for such costs on the units of
production basis over the estimated reserves. Upon the adoption of the
new standard, the Company recorded the current fair value of its expected
cost of reclamation. The cumulative effect of the change on prior years
resulted in income recognized in the first quarter of fiscal 2003 of
$514,000 before income taxes and $333,000 after income taxes.
The Company cannot reasonably estimate the fair value of the asset
retirement obligation related to substantially all of its concrete
products segment and all of the cement segment since the Company is
unable to estimate the date the obligation would be incurred or the cost
of the obligation. For the aggregates segment, an asset retirement
obligation was provided where the Company has a legal obligation to
reclaim the mining site.
The analysis of asset retirement obligation for the three months ended
December 31, 2002 is as follows:
2002
Initial liability on adoption of
the new standard $8,385
Accretion of expenses 88
Payment of obligations (128)
Balance at end of period $8,345
If the provisions of Statement 143 had been adopted for the first quarter
of fiscal 2002, earnings before income taxes and net income would have
been increased by $22,000 and $14,000, respectively.
(3) New Accounting Pronouncements
Financial Accounting Standards Board Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("FIN 45"), requires the guarantor
to recognize a liability for the fair value of the obligation at the
inception of the guarantee. The disclosure requirements of FIN 45 have
been incorporated into these Notes to Consolidated Financial Statements,
while the recognition provisions will be applied on a prospective basis
to guarantees issued after December 31, 2002.
FIN 46, "Consolidation of Variable Interest Entities", clarified the
application of Accounting Research Bulletin No. 51, "Consolidated
Financial Statements", to certain entities in which equity investors do
not have the characteristics of a controlling financial interest or do
not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other
parties. FIN 46 is applicable immediately for variable interest
entities created after January 31, 2003. For variable interest entities
created prior to January 31, 2003, the provisions of FIN 46 are
applicable no later than July 1, 2003. The Company does not expect this
Interpretation to have an effect on the Consolidated Financial
Statements.
(4) Inventories
Inventories consisted of the following (in thousands):
December 31, September 30,
2002 2002
Finished products $ 22,121 21,473
Raw materials 4,307 4,094
Work in progress 1,343 1,450
Parts and supplies 4,418 4,554
$ 32,189 31,571
(5) Other Income
During the first quarter of fiscal 2002, the Company sold land and
recognized a pre-tax gain of $530,000, which is included in other income
for the three months ended December 2001.
(6) Business Segments
The Company has identified three business segments, each of which is
managed separately along product lines. All of the Company's operations
are in the Southeastern and Mid-Atlantic States. The Aggregates segment
mines, processes and sells construction aggregates. The Concrete
products segment produces and sells ready-mix concrete and other concrete
products. The Cement and Calcium products segment produces and sells
cement and calcium products to customers in Florida, Georgia and
Maryland.
Operating results and certain other financial data for the Company's
business segments are as follows (in thousands):
Three Months Ended
December 31,
2002 2001
Net sales, excluding
freight
Aggregates $ 54,854 59,573
Concrete products 111,014 121,581
Cement and calcium 14,414 10,539
Intersegment sales (19,541) (17,731)
Total net sales,
excluding freight $160,741 173,962
Operating profit
Aggregates $ 11,671 13,374
Concrete products 5,005 11,863
Cement and calcium 3,330 820
Corporate overhead (1,363) (1,561)
Total operating $ 18,643 24,496
Profit
Identifiable assets, at quarter end
Aggregates $319,500 328,502
Concrete products 212,557 211,638
Cement and calcium 113,924 119,400
Unallocated corporate assets 55,373 53,403
Cash items 3,239 11,097
Investments in affiliates 17,008 16,875
Total identifiable assets $721,601 740,915
(7) Supplemental Disclosures of Cash Flow Information
Cash paid during the three months ended December 31, 2002 and
2001 for certain expense items are as follows (in thousands):
2002 2001
Interest expense, net of
amount capitalized $ 451 3,142
Income taxes $ 3,608 561
The following schedule summarizes non-cash investing and
financing activities for the three months ended December 31,
2002 and 2001 (in thousands):
2002 2001
Additions to property, plant
and equipment from:
Exchanges $ 729 6
(8) Contingent Liabilities
In November 2000, the United States Environmental Protection
Agency through the offices of the United States Attorney for
the District of Columbia commenced an investigation of DC
Materials, Inc. and Cardinal Concrete Company, both
subsidiaries of Florida Rock Industries, Inc., with respect to
a parcel of real property leased by DC Materials, Inc. in the
District of Columbia. The investigation consists of looking
into possible violations of the Clean Water Act in connection
with the discharge of runoff water at the aforementioned site.
Florida Rock Industries and its subsidiaries are cooperating
fully with the investigation, which is still continuing. Based
in part on advice of counsel in the opinion of management, the
outcome is not expected to have a material adverse effect on
the Company' consolidated financial statements.
A lawsuit was filed by three national environmental groups on
August 20, 2002 challenging federal agency decisions to
authorize continued limestone mining in Miami-Dade County,
Florida "Lake Belt." Specifically, the environmental
plaintiffs challenge the U.S. Army Corps of Engineers' ("the
Corps") April 2002 decision to issue twelve new mining permits
pursuant to Section 404 of the federal Clean Water Act, and the
U.S. Fish and Wildlife Service's June 2001 decision not to
require formal consultation under the federal Endangered
Species Act regarding those permits. The environmental
plaintiffs claim that the two federal agencies violated the
Clean Water Act, the Endangered Species Act, the Migratory Bird
Treaty Act, and the National Environmental Policy Act. They
ask the court to set aside the April 2002 permits and to enjoin
the Corps from "authorizing any further mining within the Lake
Belt project area unless and until the Corps fully complies
with the requirements of the Clean Water Act, Migratory Bird
Treaty Act, and National Environmental Policy Act."
The mining companies holding the April 2002 permits were not
named as defendants in the lawsuit by the environmental
plaintiffs; however, since the mining companies would be
adversely affected if the environmental group were to obtain all
of the relief they seek, on September 18, 2002, two Motions to
Intervene were filed on behalf of several of the mining
companies, including the Company. The court has not yet ruled on
the Motions to Intervene.
The Company is unable to assess at this time, with any degree of
certainty, the impact on the Company and its future financial
performance of an adverse judgment in this lawsuit.
On January 25, 1999 the City Commissioners of Newberry, Florida
voted 4-0 to annex the Company's cement plant site into the city.
The Company anticipates that future land use and zoning matters
relating to the cement plant will be under the jurisdiction of
the City of Newberry. The annexation of the land into the town
of Newberry has been challenged by an individual, though the
Company is not party to the litigation. In addition, various
cases have been filed challenging amendments to the City of
Newberry's comprehensive plan. The Company is not a party to the
litigation. Alachua County has filed suit to seek to enforce
the terms of the Developer's Agreement between the County and the
Company. This action does not claim damages against the
Company. On November 15, 2001, final summary judgment was
entered in the Company's favor dismissing the County's complaint.
The decision was appealed by the County. On January 14, 2003,
the First District Court of Appeals affirmed the Summary Judgment
thereby denying the County the authority to enforce the
Developer's Agreement.
The Company and its subsidiaries are involved in other litigation
on a number of matters and are subject to certain claims which
arise in the normal course of business, none of which, in the
opinion of management, are expected to have a materially adverse
effect on the Company's consolidated financial statements.
The Company has retained certain self-insurance risks with
respect to losses for third party liability and property damage.
The Company has an 8% investment in a joint venture. In
conjunction with its investment agreement, the Company has
guaranteed 8% of the revolving credit agreement of the joint
venture. The maximum amount of the loan is $20,000,000. At
December 31, 2002, $1,542,000 was outstanding of which the
Company's guarantee was $123,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating Results
The Company's operations are influenced by a number of external and
internal factors. External factors include weather, competition,
levels of construction activity in the Company's markets, the cost and
availability of money, appropriations and construction contract
lettings by federal and state governments, fuel costs, transportation
costs, driver availability, labor costs and inflation. Internal
factors include sales mix, plant location, quality and quantities of
aggregates reserves, capacity utilization and other operating factors.
Financial results of the Company for any individual quarter are not
necessarily indicative of results to be expected for the year, due
primarily to the effect that weather has on the Company's sales and
production volume. Normally, the highest sales and earnings of the
Company are attained in the Company's third and fourth quarters and
the lowest sales and earnings are attained in the Company's first and
second quarters. In addition, quarterly results will be affected by
planned maintenance at the cement plant. The Company expenses
maintenance costs at the cement plant, which can be significant, when
incurred. For planned maintenance at the cement plant the Company
expensed $1,878,000 in the first quarter of fiscal 2003 as compared to
$1,520,000 in the first quarter of fiscal 2002. The plant was shut
down for 9 days in the first quarter of fiscal 2003 and four weeks in
the first quarter of fiscal 2002 for planned maintenance.
For the first quarter of fiscal 2003, ended December 31, 2002,
consolidated net sales excluding freight decreased 7.6% to
$160,741,000 from $173,962,000 in the same quarter last year. The
decrease in sales for the first quarter was due to decreased concrete
and aggregates revenues. These decreases were partially offset by
increased revenues of cement and calcium products. Revenues in the
concrete products segments were lower due to decreased volumes of
ready mix sales partially offset by slightly higher volumes of block
and building materials and an increase in the average selling price.
Revenues in the aggregates segment were lower as a result of a
decrease in volumes slightly offset by higher average sales prices.
Revenues increased in the cement and calcium segment due to higher
volumes and sales prices.
For the contribution made to net sales and operating profit from each
business segment, see Note 6 to the Condensed Consolidated Financial
Statements.
Gross profit for the first quarter decreased 15.7% to $36,020,000 from
$42,753,000 for the same quarter last year. Gross profit margin for
the first quarter decreased to 22.4% from 24.6% last year. Gross
profit and margin were adversely affected by a decrease in gross
profit of the Aggregates and Concrete products segment. Gross profit
in the Cement and Calcium products increased partially offsetting the
decrease in the other segments. The reduction in gross profit of the
Aggregates segment was the result of lower volumes, higher cost of
maintenance and higher fuel costs. The reduction in gross profit in
the Concrete products segment was due to lower volumes, higher cost of
maintenance, fuel, insurance and depreciation. Gross profit in the
cement and calcium segment improved as a result of higher volumes.
Gross profit was adversely effective as the result of higher planned
maintenance at the cement plant for which the Company recorded
expenses of $1,878,000 as compared to $1,520,000 for the same quarter
last year.
Selling, general and administrative expenses for the first quarter
decreased to $17,377,000 from $18,257,000 last year constituting 10.8%
of net sales as opposed to 10.5% last year. The decrease in the
dollar amount for the first quarter is primarily due to lower profit
sharing expense (which is linked to profitability) and a slight
decrease in salary expense.
Interest expense for the first quarter decreased to $469,000 from
$1,152,000 for the same quarter last year. This decline is
attributable to the elective application during fiscal 2002 to use
cash flows to reduce debt outstanding under the Company's revolver.
Interest income for the first quarter increased to $529,000 as
compared to $330,000 for the same quarter last year. Included in
other income for the first quarter of fiscal 2002 is a gain of
$530,000 recognized from sales of real estate during the first quarter
of fiscal 2002. There were no gains on the sale of real estate in the
first quarter of this year. Also included in other income is the
Company's equity in operating results of the 50% owned joint ventures.
The equity in these ventures was income of $13,000 for the first
quarter of fiscal 2003 as compared to $352,000 for last year.
Income tax expense decreased $2,094,000 for first quarter of fiscal
2003. This is due to lower income before taxes. The effective tax
rate is 35.2% for both periods.
Liquidity and Capital Resources. For the first three months of
fiscal 2003, cash provided by operating activities of $22,525,000,
exercise of stock options of $409,000 and proceeds from sale of
property, plant and equipment of $352,000 funded the repayment of
$6,000,000 of short-term overnight lines; purchases of property, plant
and equipment of $13,982,000 and payment of dividends of $2,861,000.
For the first quarter of fiscal 2002, cash provided by operating
activities of $23,310,000 and short-term investment of $25,300,000 at
September 30, 2001, funded the repayment of debt of $17,122,000,
payment of insurance policy loans of $18,771,000, purchases of
property, plant and equipment of $7,563,000 and payment of dividends
of $2,406,000. The payment of the policy loans increased other
assets since the loans were netted against the cash surrender value of
the policies.
Based on current expectations, management believes that its internally
generated cash flow and access to existing credit facilities are
sufficient to meet the liquidity requirements necessary to fund
operations, capital requirements, debt service and future dividend
payments. At December 31, 2002, there was available $200,000,000
under long-term revolver and $44,100,000 available under overnight
lines of credit. In addition, there is approximately $20,000,000
that could be re-borrowed under insurance policies. It may be
necessary to obtain additional levels of financing in the event
opportunities arise for the Company to make a strategic acquisition.
Working capital at December 31, 2002 was $51,870,000 as compared to
$39,406,000 at September 30, 2002. This increase was due to excess
cash flow generated during the first quarter of fiscal 2003.
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 except as otherwise
disclosed in Part II, Item 1. "Legal Proceedings". Additional
information concerning environmental matters is presented in Part II,
Item 1 "Legal Proceedings" in this Form 10-Q and such information is
incorporated herein by reference.
The following table summarizes the Company's contractual obligations and
commitments.
Balance
of There-
2003 2004 2005 2006 2007 2008 after Total
Long-term debt $ 311 234 1,960 2,764 5,043 4,048 29,764 44,124
Operating leases 1,196 1,572 1,236 968 671 671 4,442 10,756
Total $1,507 1,806 3,196 3,732 5,614 4,719 34,206 54,880
Critical Accounting Policies. The Consolidated Financial
Statements and Notes to Consolidated Financial Statements included in
the Company's Form 10-K for the year ended September 30, 2002 contain
information that is pertinent to Management's Discussion and Analysis.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions about future events that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities. Future events and their effects
cannot be estimated with absolute certainty. Therefore, the
determination of estimates requires the exercise of judgment based on
various assumptions and other factors such as historical experience,
current and expected economic conditions, and in some cases, actuarial
calculations. We constantly review these significant factors and make
adjustments where facts and circumstances dictate. Actual results
could differ from those estimates. Historically, actual results have
not significantly deviated from estimated results determined using the
factors described above.
Note 1 to the Consolidated Financial Statements included in the
Company's Form 10-K for the year ended September 30, 2002 provides
details on the application of these and other accounting policies.
These critical accounting policies and Note 1 should be read in
conjunction with this Management's Analysis of Financial Condition and
Results of Operations.
The following is a discussion of the accounting policies
considered to be most critical to the Company. These accounting
policies are both most important to the portrayal of the financial
condition and results, and require management's most difficult,
subjective or complex judgments often as a result of the need to make
estimates about the effect of matters that are inherently uncertain.
Self-insurance reserves. It is our policy to self insure for
certain insurable risks consisting primarily of physical loss to
property, business interruptions, workers' compensation, comprehensive
general liability, product liability and auto liability. Insurance
coverage is obtained for catastrophic property and casualty exposures
as well as those risks required to be insured by law or contract.
Based on an independent actuary's estimate of the aggregate liability
for claims incurred, a provision for claims under the self-insured
program is recorded and revised annually. The actuarial estimates are
subject to uncertainty from various sources, including changes in claim
reporting patterns, claims settlement patterns, judicial decisions,
legislation, and economic conditions. Although the Company believes
that the actuarial estimates are reasonable, significant differences
related to the items noted above could materially affect the Company's
self-insurance obligations and future expense.
Long-lived assets. The Company periodically evaluates the
period of depreciation or amortization for long-lived assets to
determine whether current circumstances warrant revised estimates of
useful lives. The Company reviews its property, plant and equipment
for impairment whenever events or changes in circumstances indicate
the carrying value of an asset may not be recoverable. Recoverability
is measured by a comparison of the carrying amount to the net
undiscounted cash flows expected to be generated by the asset. An
impairment loss would be recorded for the excess of net carrying value
over the fair value of the asset impaired. The fair value is
estimated based on expected discounted future cash flows. The
results of impairment tests are subject to management's estimates and
assumptions of projected cash flows and operating results. The
Company believes that, based on current conditions, materially
different reported results are not likely to result from long-lived
asset impairments. However, a change in assumptions or market
conditions could result in a change in estimated future cash flows and
the likelihood of materially different reported results.
Intangible assets and goodwill. In July 2001, the Financial
Accounting Standards Board issued Statement of Financial Accounting
Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible
Assets." SFAS 142 requires companies to cease amortizing goodwill
that existed at the time of adoption and establish a new method for
testing goodwill for impairment on an annual basis at the reporting
unit level (or an interim basis if an event occurs that might reduce
the fair value of a reporting unit below its carrying value). The
Company has determined that it has three reporting units and the
annual impairment test will be performed for these three reporting
units. For identifiable intangible assets with indefinite lives, the
SFAS also requires that the carrying value be determined by using a
fair value based approach.
The valuation of goodwill and intangibles with indefinite useful
lives for impairment requires management to use significant judgments
and estimates including, but not limited to, projected future revenue
and cash flows. The Company believes that, based on current
conditions, materially different reported results are not likely to
result from goodwill and intangible impairments. However, a change
in assumptions or market conditions could result in a change in
estimated future cash flows and the likelihood of materially different
reported results.
Inventories. Inventories for the aggregates segment on a
quarterly basis is based on internal estimates of production during
the period. Semi-annually an outside consultant measures the volume
of aggregates inventory. Aggregates inventory are adjusted to the
amounts shown in the report of the outside consultant.
Assessments, Claims and Litigation. From time to time, the
Company is involved with assessments, claims and litigation. The
Company uses both in-house and outside legal counsel to assess the
probability of loss. The Company establishes an accrual when the
claims and litigation represent a probable loss and the cost can be
reasonably estimated. Accruals for remediation efforts are recorded
no later than the time a feasibility study is undertaken and the
Company commits to a formal plan of action. Additionally, legal fees
associated with these matters are accrued at the time such claims are
made. There can be no assurance that the ultimate resolution of
these assessments, claims and litigation will not differ materially
from the Company estimates.
Employee Benefits. Under the provisions of SFAS No.87,
"Employer's Accounting for Pensions" and SFAS No. 106, "Employer's
Accounting for Postretirement Benefits Other Than Pensions,"
measurement of the obligations under employee benefits plans are
subject to a number of assumptions. These include the rate of return
on plan assets, health care cost trend rates and the rate at which the
future obligations are discounted to the value of the liability.
Related Party Transactions. Patriot Transportation Holding,
Inc. ("Patriot"), a related party, hauls diesel fuel and other
supplies for the Company. Charges for such services are based on
prevailing market prices. The Company also leases various aggregate
mining and other properties paying rent or royalties based on long-
term contracts entered into during mid 1980's and early 1990's. In
addition, the Company provides administrative services to Patriot and
Patriot provides construction management services to the Company.
These services are provided at market prices. During fiscal 2002,
Patriot agreed to sell land for $15,000,000 to the Company. This
transaction was reviewed and approved on behalf of the Company by a
committee of independent directors.
In April 2002, the Company purchased for $67,000 a parcel of land in
which an officer had an undivided 12/15ths interest.
New Accounting Pronouncements. In June 2001, the FASB issued
SFAS No. 143, "Accounting for Asset Retirement Obligations," which
addresses financial accounting and reporting for obligations with the
retirement of tangible long-lived assets and the associated asset
retirement costs. The standard applies to legal obligations associated
with the retirement of long-lived assets that result from the
acquisition, construction, development and (or) normal use of the
asset.
Statement No. 143 requires that the fair value of a liability for an
asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The
fair value of the liability is added to the carrying amount of the
associated asset and this additional carrying amount is depreciated
over the life of the asset. The liability is accreted at the end of
each period through charges to operating expenses. If the obligation
is settled for other than the carrying amount of the liability, the
Company will recognize a gain or loss on settlement.
The provisions of Statement No. 143 were adopted as of October 1, 2002
for the first quarter ending December 31, 2002. (see Note 2,Change in
Accounting Principle).
In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". This statement
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of". SFAS No. 144,
which retains the fundamental provisions of SFAS No. 121 for (a)
recognition and measurement of the impairment of long-lived assets to
be held and used and (b) measurement of long-lived assets to be
disposed of by sales was adopted effective October 1, 2002 and had no
impact on the Company.
In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs
Associated with Exit or Disposal Activities." This statement
nullifies Emerging Issues Task Force (EITF) issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." This statement requires that a liability for a cost
associated with an exit or disposal activity be recognized when the
liability is incurred rather than the date of an entity's commitment
to an exit plan. The Company is required to implement SFAS No. 146
on January 1, 2003. The adoption of this statement will not have an
impact on the consolidated financial position or results of operations
of the Company.
Financial Accounting Standards Board Interpretation No. 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others" ("FIN 45"),
requires the guarantor to recognize a liability for the fair value of
the obligation at the inception of the guarantee. The disclosure
requirements of FIN 45 have been incorporated into these Notes to
Consolidated Financial Statements, while the recognition provisions
will be applied on a prospective basis to guarantees issued after
December 31, 2002. FIN 46, "Consolidation of Variable Interest
Entities", clarified the application of Accounting Research Bulletin
No. 51, "Consolidated Financial Statements", to certain entities in
which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at
risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 is
applicable immediately for variable interest entities created after
January 31, 2003. For variable interest entities created prior to
January 31, 2003, the provisions of FIN 46 are applicable no later
than July 1, 2003. The Company does not expect this Interpretation
to have an effect on the Consolidated Financial Statements.
Outlook. The state of the Company's markets for the balance of
the year remains uncertain. Commercial construction remains
significantly below 2002 levels and highway construction spending in
the Company's Mid-Atlantic markets is clearly reduced from the prior
year. Counter balancing these trends is the strong construction
spending in the Company's Florida markets.
The current volatility in the U.S. Capital markets current poses a
threat to the overall U.S. economic outlook. While the Company is
comfortable that its financial condition provides it the strength to
weather this short-term volatility, if these volatile conditions
continue into the longer term, demand for the Company's products and
consequently cash flow from operations may be negatively affected.
Due to dramatically increasing insurance premiums for automobile and
general liability insurance programs, the Company has increased its
self-insurance retention to $2,000,000 for general liability and to
$3,000,000 for automobile liability. In addition, the Company has
formed a captive insurance company and will pay premiums to the
captive insurance company to insure the claims up to $3,000,000.
Assuming no significant increase in the Company's loss experience,
this higher risk retention should result in a lower cost to the
Company than outside insurance.
Fuel Oil Price Risk. To manage the impact on operations of an
increase in the price of diesel fuel the Company hedged a portion of
the projected annual diesel fuel requirements for fiscal 2003. A
heating oil derivative contract was entered into because heating oil
prices have a high correlation to diesel fuel prices. The intent was
to reduce the risk of increasing diesel fuel prices. In September
2002, a one-time payment of $270,000 was made to purchase a contract
that would reimburse the Company if the average monthly price of
heating oil exceeds 85 cents for any month during fiscal 2003. This
contract was for approximately 55% of our diesel fuel requirements.
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," "project," "continuing," "ongoing," "expects," "management
believes," "the Company believes," "the Company intends" and similar
words or phrases. The following factors are among the principal
factors that could cause actual results to differ materially from
the forward-looking statements: availability and terms of financing;
the weather; competition; levels of construction activity in the
Company's markets; cement shipments; fuel costs; transportation costs;
inflation; quality and quantities of the Company's aggregates
reserves; residential and nonresidential construction; public spending
for highways and infrastructure; governmental regulations and
management's ability to determine appropriate sales mix, plant
location and capacity utilization.
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 risks factors may be
found in the Company's other filings made from time to time with the
Securities and Exchange Commission.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There are no material changes to the disclosures made in Form 10-K for
the fiscal year ended September 30, 2002 on this matter.
Item 4. Controls and Procedures.
(a) Evaluation of disclosure controls and procedures.
As required by Rule 13a-15 under the Exchange Act, within the 90
days prior to the filing date of this report, the Company carried
out an evaluation of the effectiveness of the design and operation
of the Company's disclosure controls and procedures. This
evaluation was carried out under the supervision and with the
participation of the Company's management, including the Company's
President and Chief Executive Officer, Chief Financial Officer and
Chief Accounting Officer. Based upon that evaluation, the
Company's President and Chief Executive Officer, Chief Financial
Officer and Chief Accounting Officer have concluded that the
Company's disclosure controls and procedures are effective in
alerting them in a timely manner to material information required
to be included in periodic SEC filings.
Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required
to be disclosed in Company reports filed or submitted under the
Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in Company
reports filed under the Exchange Act is accumulated and
communicated to management, including the Company's Chief
Executive Officer, Chief Financial Officer and Chief Accounting
Officer, as appropriate, to allow timely decisions regarding
required disclosures.
(b) Changes in internal controls. There have been no changes in
internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
In November 2000, the United States Environmental Protection Agency
through the offices of the United States Attorney for the District of
Columbia commenced an investigation of DC Materials, Inc. and Cardinal
Concrete Company, both subsidiaries of the Company, with respect to a
parcel of real property leased by DC Materials, Inc. in the District
of Columbia. The investigation consists of looking into possible
violations of the Clean Water Act in connection with the discharge of
runoff water at the aforementioned site. The Company including its
subsidiaries is cooperating fully with the investigation, which is
still continuing. In the opinion of management, the outcome is not
expected to have a material adverse effect on the Company's
consolidated financial statements.
A lawsuit was filed by three national environmental groups on August
20, 2002 challenging federal agency decisions to authorize continued
limestone mining in the Miami-Dade County, Florida "Lake Belt."
Specifically, the environmental plaintiffs challenge the U.S. Army
Corps of Engineers' (the "Corp") April 2002 decision to issue twelve
new mining permits pursuant to Section 404 of the federal Clean Water
Act, and the U.S. Fish and Wildlife Service's June 2001 decision not
to require formal consultation under the federal Endangered Species
Act regarding those permits. The environmental plaintiffs claim that
the two federal agencies violated the Clean Water Act, the Endangered
Species Act, the Migratory Bird Treaty Act, and the National
Environmental Policy Act. They ask the court to set aside the April
2002 permits and to enjoin the Corps from "authorizing any further
mining within the Lake Belt project area unless and until the Corps
fully complies with the requirements of the Clean Water Act, Migratory
Bird Treaty Act, and National Environmental Policy Act."
The mining companies holding the April 2002 permits were not named as
defendants in the lawsuit by the environmental plaintiffs; however,
since the mining companies would be adversely affected if the
environmental groups were to obtain all of the relief they seek, on
September 18, 2002, two Motions to Intervene were filed on behalf of
several of the mining companies, including the Company. The court has
not yet ruled on the Motions to Intervene.
The Company is unable to assess at this time, with any degree of
certainty, the impact on the Company and its future financial
performance of an adverse judgment in this lawsuit.
On January 25, 1999 the City Commissioners of Newberry, Florida voted
4-0 to annex the Company's cement plant site into the city. The
Company anticipates that future land use and zoning matters relating
to the cement plant will be under the jurisdiction of the City of
Newberry. The annexation of the land into the town of Newberry has
been challenged by an individual, though the Company is not party to
the litigation. In addition, various cases have been filed
challenging amendments to the City of Newberry's comprehensive plan.
The Company is not a party to the litigation. Alachua County has
filed suit to seek to enforce the terms of the Developer's Agreement
between the County and the Company. This action does not claim
damages against the Company. On November 15, 2001, final summary
judgment was entered in the Company's favor dismissing the County's
complaint. The decision was appealed by the County. On January 14,
2003, the First Court of Appeals affirmed the Summary Judgment thereby
denying the County the authority to enforce the Developer's Agreement.
The Company and its subsidiaries are involved in other litigation on a
number of matters and are subject to certain claims which arise in the
normal course of business, none of which, in the opinion of
management, are expected to have a materially adverse effect on the
Company's consolidated financial statements.
The Company has retained certain self-insurance risks with respect to
losses for third party liability and property damage.
Note 8 to the Consolidated Condensed Financial Statements included in
this Form 10-Q is incorporated by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The response to this item is submitted as a separate
section entitled "Exhibit Index" starting on page 13 of this Form
10-Q.
(b) Reports on Form 8-K. During the three months ended December 31,
2002, the Company did not file any reports on Form 8-K.
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 5, 2003 FLORIDA ROCK INDUSTRIES, INC.
JOHN D. BAKER, II
John D. Baker, II
President and Chief Executive
Officer
JOHN D. MILTON, JR.
John D. Milton, Jr.
Executive Vice President,
Treasurer and Chief Financial
Officer
WALLACE A PATZKE, JR.
Wallace A. Patzke, Jr.
Vice President, Controller
and Chief Accounting Officer
CERTIFICATION UNDER SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each
of the undersigned certifies that this periodic report fully
complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and that information contained in
this periodic report fairly presents, in all material respects,
the financial condition and results of operations of Florida Rock
Industries, Inc.
JOHN D. BAKER, II
John D. Baker, II
President and Chief Executive
Officer
JOHN D. MILTON,JR.
John D. Milton, Jr.
Executive Vice President,
Treasurer and Chief Financial
Officer
WALLACE A PATZKE, JR.
Wallace A. Patzke, Jr.
Vice President, Controller
and Chief Accounting Officer
CERTIFICATIONS
I, John D. Baker II, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Florida Rock
Industries, Inc.
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 officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15-d-14) for the registrant and 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 officers 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 functions):
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
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether 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: February 5, 2003
JOHN D. BAKER, II
JOHN D. BAKER, II
President and Chief
Executive Officer
I, John D. Milton, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Florida Rock
Industries, Inc.
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 officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15-d-14) for the registrant
and 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 officers 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 functions):
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
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether 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: February 5, 2003
JOHN D. MILTON, JR.
JOHN D. MILTON, JR.
Executive Vice President,
Treasurer and Chief
Financial Officer
I, Wallace A. Patzke, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Florida Rock
Industries, Inc.
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 officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15-d-14) for the registrant
and 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 officers 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 functions):
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
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether 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: February 5, 2003
WALLACE A. PATZKE, JR.
WALLACE A. PATZKE, JR.
Vice President, Controller
and Chief Accounting Officer
FLORIDA ROCK INDUSTRIES, INC.
FORM 10-Q FOR THE QUARTER ENDED DECEMBER, 2002
EXHIBIT INDEX
(3)(a)(1) Restated Articles of Incorporation of Florida
Rock Industries, Inc., filed with the Secretary
of State of Florida on May 9, 1986, incorporated
by reference to an exhibit previously filed with
Form 10-Q for the quarter ended December 31,
1986. File No. 1-7159.
(3)(a)(2) Amendment to the Articles of Incorporation of
Florida Rock Industries, Inc. filed with the
Secretary of State of Florida on February 19,
1992, incorporated by reference to an exhibit
previously filed with Form 10-Q for the quarter
ended September 30, 1993. File No. 1-7159.
(3)(a)(3) Amendments to the Articles of Incorporation of
Florida Rock Industries, Inc. filed with the
Secretary of the State of Florida on February 7,
1995, incorporated by reference to an appendix
to the Company's Proxy Statement dated December
15, 1994.
(3)(a)(4) Amendment to the Articles of Incorporation of
Florida Rock Industries, Inc. filed with the
Secretary of State of Florida on February 4,
1998, incorporated by reference to an exhibit
previously filed with Form 10-Q for the quarter
ended March 31, 1998. File No. 1-7159.
(3)(a)(5) Amendment to the Articles of Incorporation of
Florida Rock Industries, Inc. filed with the
Secretary of State of Florida on May 5, 1999.
A form of such amendment was previously filed
as Exhibit 4 to the Company Form 8-K dated May
5, 1999 and is incorporated by reference
herein. File No.1-7159.
(3)(b)(1) Restated Bylaws of Florida Rock Industries,
Inc., adopted December 1, 1993, incorporated by
reference to an exhibit previously filed with
Form 10-K for the fiscal year ended September
30, 1993. File No. 1-7159.
(3)(b)(2) Amendment to the Bylaws of Florida Rock
Industries, Inc. adopted October 5, 1994,
incorporated by reference to an exhibit
previously filed with Form 10-K for the fiscal
year ended September 30, 1994. File No. 1-
7159.
(3)(b)(3) Amendment to the Bylaws of Florida Rock
Industries, Inc. adopted February 4, 1998,
incorporated by reference to an exhibit
previously filed with Form 10-Q for the quarter
ended March 31, 1998. File No. 1-7159.
(3)(b)(4) Amendment to the Bylaws of Florida Rock
Industries, Inc. adopted December 5, 2001.
incorporated by reference to an exhibit
previously filed with Form 10-Q for the quarter
ended December 31, 2001. File No. 1-7159.
(4)(a) Articles III, VII, and XIII of the Articles of
Incorporation of Florida Rock Industries, Inc.
incorporated by reference to exhibits previously
filed with Form 10-Q for the quarter ended
December 31, 1986 and Form 10-K for the fiscal
year ended September 30, 1993 and Articles XIV
and XV, of the Articles of Incorporation of
Florida Rock Industries, Inc. incorporated by
reference as appendix to the Company's Proxy
Statement dated December 15, 1994. File No. 1-
7159.
(4)(b) Credit Agreement dated as of June 28, 2000 among
Florida Rock Industries, Inc.; First Union
National Bank; Bank of America, N.A.; SunTrust
Bank; and First Union Securities, Inc.;
incorporated by reference to an exhibit
previously filed with Form 10-Q for the quarter
ended June 30, 2000. File No. 1-7159.
(4)(c) The Company and its consolidated subsidiaries
have other long-term debt agreements which do
not exceed 10% of the total consolidated assets
of the Company and its subsidiaries, and the
Company agrees to furnish copies of such
agreements and constituent documents to the
Commission upon request.
(4)(d) Rights Agreements, dated as of May 5, 1999
between the Company and First Union National
Bank, incorporated by reference to Exhibit 4 to
the Company's Form 8-K dated May 5, 1999. File
No. 1-7159.
(10)(a) Employment Agreement dated June 12, 1972 between
Florida Rock Industries, Inc. and Charles J.
Shepherdson, Sr. and form of Addendum thereto,
incorporated by reference to an exhibit
previously filed with Form S-1 dated June 29,
1972. File No. 2-44839.
(10)(b) Addendums dated April 3, 1974 and November 18,
1975 to Employment Agreement dated June 12, 1972
between Florida Rock Industries, Inc., and
Charles J. Shepherdson, Sr., incorporated by
reference to an exhibit previously filed with
Form 10-K for fiscal year ended September 30,
1975. File No. 1-7159.
(10)(c) Amended Medical Reimbursement Plan of Florida
Rock Industries, Inc., effective May 24, 1976,
incorporated by reference to an exhibit
previously filed with Form 10-K for the fiscal
year ended September 30, 1980. File No. 1-7159.
(10)(d) Amendment No. 1 to Amended Medical Reimbursement
Plan of Florida Rock Industries, Inc. effective
July 16, 1976, incorporated by reference to an
exhibit previously filed with Form 10-K for the
fiscal year ended September 30, 1980. File No.
1-7159.
(10)(e) Tax Service Reimbursement Plan of Florida Rock
Industries, Inc. effective October 1, 1976,
incorporated by reference to an exhibit
previously filed with Form 10-K for the fiscal
year ended September 30, 1980. File No. 1-
7159.
(10)(f) Amendment No. 1 to Tax Service Reimbursement
Plan of Florida Rock Industries, Inc.,
incorporated by reference to an exhibit
previously filed with Form 10-K for the fiscal
year ended September 30, 1981. File No. 1-
7159.
(10)(g) Amendment No. 2 to Tax Service Reimbursement
Plan of Florida Rock Industries, Inc.,
incorporated by reference to an exhibit
previously filed with Form 10-K for the fiscal
year ended September 30, 1985. File No. 1-
7159.
(10)(h) Summary of Management Incentive Compensation
Plan as amended effective October 1, 1992.
Previously filed with Form 10-K for the fiscal
year ended September 30, 1993. File No. 1-7159.
(10)(i) Florida Rock Industries, Inc. Management
Security Plan, incorporated by reference to an
exhibit previously filed with Form 10-K for the
fiscal year ended September 30, 1985. File No.
1-7159.
(10)(j) Various mining royalty agreements with Patriot
Transportation Holding, Inc. or its subsidiary,
none of which are presently believed to be
material individually, but all of which may be
material in the aggregate, incorporated by
reference to exhibits previously filed with Form
10-K for the fiscal year ended September 30,
1986. File No. 1-7159.
(10)(k) Florida Rock Industries, Inc. 1991 Stock Option
Plan. Previously filed with Form 10-K for the
fiscal year ended September 30, 1992; and
February 1, 1995 Amendment to Florida Rock
Industries, Inc. 1991 Stock Option Plan,
incorporated by reference to an appendix
previously filed as appendix to the Company's
Proxy Statement dated December 15, 1994. File
No. 1-7159.
(10)(l) Form of Split Dollar Insurance Agreement and
Assignment of Life Insurance Policy as
collateral between Florida Rock Industries,
Inc. and each of Edward L. Baker and John D.
Baker, II with aggregate face amounts of $5.4
million and $8.0 million, respectively,
incorporated by reference to an exhibit
previously filed with Form 10-Q for the quarter
ended December 31, 1996. File No. 1-7159.
(11) Computation of Earnings Per Common Share.
1
25