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 March 31, 2003
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 by check mark whether the registrant is an accelerated filer (as
defined in 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 April 25, 2003: 28,617,903 shares of $.10 par value
common stock.
FLORIDA ROCK INDUSTRIES, INC.
FORM 10-Q
QUARTER ENDED MARCH 31, 2003
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 16
Item 4. Controls and Procedures 16
Part II. Other Information
Item 4. Submission of Matters to a Vote of Stockholders 16
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 18
Exhibit 11. Computation of Earnings Per Common Share 26
Exhibit 99. Certification under 906 of Sarbanes-Oxley Act of 2002 27
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FLORIDA ROCK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, September 30,
2003 2002
ASSETS
Current assets:
Cash and cash equivalents $ 10,598 3,845
Accounts and notes receivable, less
allowance for doubtful accounts of
$1,983 ($1,694 at September 30, 2002) 82,159 82,919
Inventories 34,780 31,571
Prepaid expenses and other 10,311 8,252
Total current assets 137,848 126,587
Other assets 66,059 61,326
Goodwill, at cost less accumulated amortization
of $8,590 54,702 54,702
Property, plant and equipment, at cost:
Land 167,538 168,512
Plant and equipment 781,343 764,653
Construction in process 14,297 10,860
963,178 944,025
Less accumulated depreciation,
depletion and amortization 477,127 453,291
Net property, plant and equipment 486,051 490,734
$ 744,660 733,349
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term notes payable to banks $ 3,500 6,900
Accounts payable 35,436 42,521
Dividends payable 2,860 2,861
Federal and state income taxes 5,373 2,557
Accrued payroll and benefits 11,071 18,060
Accrued insurance reserve 5,818 3,331
Accrued liabilities, other 9,115 10,564
Long-term debt due within one year 517 387
Total current liabilities 73,690 87,181
Long-term debt 44,143 43,695
Deferred income taxes 61,432 62,430
Accrued employee benefits 17,555 17,026
Long-term accrued insurance reserves 8,281 8,281
Other accrued liabilities 4,932 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
(28,578,383 shares at September 30, 2002) 2,861 2,858
Capital in excess of par value 16,373 15,902
Retained earnings 515,193 491,887
Total shareholders' equity 534,627 510,647
$ 744,660 733,349
See accompanying notes.
FLORIDA ROCK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
2003 2002 2003 2002
Net sales $160,367 167,187 321,108 341,149
Freight revenues 3,248 3,490 6,753 8,141
Total sales 163,615 170,677 327,861 349,290
Cost of sales 118,734 128,259 243,442 259,468
Freight expense 3,244 3,490 6,762 8,141
Total cost of sales 121,978 131,749 250,204 267,609
Gross profit 41,637 38,928 77,657 81,681
Selling, general and administrative 19,194 18,841 36,571 37,098
Gain on sale of real estate (2,448) - (2,448) (530)
Operating profit 24,891 20,087 43,534 45,113
Interest expense (443) (1,178) (912) (2,330)
Interest income 524 201 1,053 531
Other income (expense), net 185 (101) 608 763
Income before income taxes 25,157 19,009 44,283 44,077
Provision for income taxes 8,857 6,691 15,587 15,515
Income before cumulative effect of
accounting change 16,300 12,318 28,696 28,562
Cumulative effect of accounting
change, net of income taxes of $181 - - 333 -
Net income $ 16,300 12,318 29,029 28,562
Earnings per share:
Basic
Income before cumulative effect
of accounting change $ .57 .43 1.00 1.01
Cumulative effect of accounting
change - - .01 -
Net income $ .57 .43 1.01 1.01
Diluted
Income before cumulative effect of
accounting change $ .56 .43 .99 .99
Cumulative effect of accounting
change - - .01 -
Net income $ .56 .43 1.00 .99
Cash dividends per common share $ .10 .085 .20 .17
Weighted average shares used
in computing earnings per share:
Basic 28,605 28,352 28,595 28,298
Diluted 29,005 28,937 29,029 28,885
See accompanying notes.
FLORIDA ROCK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 2003 AND 2002
(In thousands)
(Unaudited)
2003 2002
Cash flows from operating activities:
Net income $29,029 28,562
Cumulative effect of accounting change (333) -
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation, depletion and amortization 32,157 32,325
Gain on disposition of property, plant and
equipment (3,091) (1,745)
Net changes in operating assets and
liabilities:
Accounts receivable 273 5,907
Inventories (3,209) (1,224)
Prepaid expenses and other (2,343) (620)
Accounts payable and accrued liabilities (10,059) (14,885)
Deferred income taxes (731) 611
Other, net 824 (422)
Net cash provided by operating activities 42,535 49,353
Cash flows from investing activities:
Purchases of property, plant and equipment (26,693) (17,584)
Proceeds from the sale of property, plant and
equipment 4,054 3,078
Additions to other assets (5,774) (23,603)
Collections of notes receivable 503 244
Net cash used in investing activities (27,910) (37,865)
Cash flows from financing activities:
Proceeds from long-term debt 722 2,330
Decrease in short-term debt (3,400) -
Repayment of long-term debt (144) (17,507)
Exercise of employee stock options 674 4,089
Repurchase of Company stock - (3)
Payment of dividends (5,724) (4,809)
Net cash used in financing activities (7,872) (15,900)
Net increase (decrease) in cash and cash equivalents 6,753 (4,412)
Cash and cash equivalents at beginning of year 3,845 29,108
Cash and cash equivalents at end of period $10,598 $24,696
See accompanying notes.
FLORIDA ROCK INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31,2003
(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 and six months ended March 31, 2003, 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. Certain amounts
have been reclassified for presentation adopted in fiscal 2003.
(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 and first six months
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 six months ended
March 31, 2003 is as follows:
Initial liability on adoption of
the new standard $8,385
Accretion of expenses 172
Additional liabilities 150
Payment of obligations (378)
Balance at end of period $8,329
If the provisions of Statement 143 had been adopted effective October 1,
2001 earnings before income taxes and net income would have been reduced
by $2,000 and $1,000, respectively, for the three months ended March 31,
2002 and increased $20,000 and $13,000, respectively, for the six months
ended March 31, 2002.
(3) New Accounting Pronouncements
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 and
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. The
statement changes the earnings statement classification of gain(losses)
on sale of real estate to a component of operating profit rather than
other income.
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
implemented SFAS No. 146 on January 1, 2003. The adoption of this
statement did 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 Condensed Consolidated Financial
Statements, while the recognition provisions will be applied 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.
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-
Based Compensation - Transition and Disclosure". SFAS 148 amends SFAS
No. 123, "Accounting for Stock-Based Compensation", and provides
alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation.
SFAS 148 also amends the disclosure requirements of SFAS 123 to require
prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and
the effect of the method used on reported results. The Company has
adopted the amendments to SFAS 123 disclosure provisions required under
SFAS 148, but will continue to use intrinsic value method under APB 25 to
account for stock-based compensation. As such, the adoption of this
statement has not had a significant impact on the Company's financial
position, results of operations or cash flows.
(4) Stock Option Plan
The Company accounts for stock options under the intrinsic value method
of APB Opinion No. 25. If the fair value based method had been used the
following table summarizes the proforma effect:
Three Months Ended Six Months Ended
March 31, March 31,
2003 2002 2003 2002
Reported net income $16,300 12,318 29,029 28,562
Compensation cost
determined under fair
value based method, net
of income taxes (419) (353) (749) (705)
Proforma net income $15,881 11,965 28,280 27,857
Basic earnings per share:
Reported net income $ .57 .43 1.01 1.01
Compensation cost, net
of income taxes (.01) (.01) (.02) (.02)
Proforma $ .56 .42 .99 .99
Diluted earnings per share:
Reported net income $ .56 .43 1.00 .99
Compensation cost, net
of income taxes (.01) (.01) (.02) (.02)
Proforma $ .55 .42 .98 .97
(5) Inventories
Inventories consisted of the following (in thousands):
March 31, September 30,
2003 2002
Finished products $ 23,343 21,473
Raw materials 4,460 4,094
Work in progress 2,235 1,450
Parts and supplies 4,742 4,554
$ 34,780 31,571
(6) Gain on Sale of Real Estate
During March 2003, the Company sold two parcels of land and recognized a
pre-tax gain of $2,448,000 which is included in the results of operations
for the three and six months ended March 31, 2003.
During the first quarter of fiscal 2002, the Company sold land and
recognized a pre-tax gain of $530,000, which is included in the results
of operations for the six months ended March 31, 2002.
(7) 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 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 Six Months Ended
March 31, March 31,
2003 2002 2003 2002
Net sales, excluding
freight
Aggregates $ 54,906 56,195 109,760 115,768
Concrete products 112,702 117,748 223,716 239,329
Cement and calcium 14,837 13,722 29,251 24,261
Intersegment sales (22,078) (20,478) (41,619) (38,209)
Total net sales,
excluding freight $160,367 167,187 321,108 341,149
Operating profit
Aggregates $ 14,383 9,182 26,054 22,556
Concrete products 6,573 10,086 11,578 22,479
Cement and calcium 5,995 3,983 9,325 4,803
Corporate overhead (2,060) (3,164) (3,423) (4,725)
Total operating $ 24,891 20,087 43,534 45,113
Profit
Identifiable assets, at quarter end
Aggregates $ 328,807 330,297
Concrete products 218,815 210,712
Cement and calcium 112,793 119,712
Unallocated corporate
assets 56,967 52,209
Cash items 10,598 24,696
Investments in affiliates 16,680 16,061
Total identifiable assets $ 744,660 753,488
(8) Supplemental Disclosures of Cash Flow Information
Cash paid during the six months ended March 31, 2003 and 2002 for
certain expense items are as follows (in thousands):
2003 2002
Interest expense, net of
amount capitalized $ 881 4,232
Income taxes $13,297 10,240
The following schedule summarizes non-cash investing and
financing activities for the six months ended March 31,
2003 and 2002 (in thousands):
2003 2002
Additions to property, plant
and equipment from:
Exchanges $ 762 25
Addition to receivables from selling
property, plant and equipment
for a note $ 20 -
(9) Contingent Liabilities
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 $3,500,000. At
March 31, 2003, $276,000 was outstanding of which the Company's
guarantee was $23,000.
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. The Company expensed planned maintenance of $1,878,000 in
the first quarter and first six months 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 and first six months of fiscal
2003 and four weeks in the first quarter of fiscal 2002 for planned
maintenance and four days in the second quarter of fiscal 2002 for
unplanned maintenance. During the third quarter of 2003, a planned
maintenance has been scheduled for six days.
For the second quarter of fiscal 2003, ended March 31, 2003,
consolidated sales decreased 4.1% to $163,615,000 from $170,677,000 in
the same quarter last year. The decrease in sales for the second
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
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 offset by higher average sales
prices. Revenues increased in the cement and calcium segment due to
higher volumes and sales prices.
For the six months of fiscal 2003, consolidated sales, decreased 6.1%
to $327,861,000 from $349,290,000 last year. The decrease in sales
was due to decreased concrete and aggregate revenues partially offset
by increased revenues from the cement and calcium segment. Revenues
in the concrete products segment were lower due to decreased volumes
of ready mix sales partially offset by 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 partially offset by higher average sales prices.
Revenues of the cement and calcium segment increased due to increased
volumes of cement and higher sales prices.
For the contribution made to net sales and operating profit from each
business segment, see Note 7 to the Condensed Consolidated Financial
Statements.
Gross profit for the second quarter increased 7.0% to $41,637,000 from
$38,928,000 for the same quarter last year. Gross profit margin for
the second quarter increased to 25.4% from 22.8% last year. Gross
profit and margin improved in the aggregates and cement and calcium
segments while decreasing in the concrete products segment. The
improvement in the aggregates segment was due to decreased
depreciation expense, reduced outside services and lower operating
costs per ton partially offset by increased fuel costs and repairs.
In addition, start up losses of new operations and shut down costs of
a quarry were approximately $1,500,000 lower this year. The
improvement in the cement and calcium segment is due to lower repair
costs and lowering the cost per unit as a result of increasing volumes
while maintaining a stable expense level. The decrease in repair
cost was the result of no unplanned maintenance at the plant this year
as compared to four days in the second quarter of last year. The
reduction in gross profit in the concrete products segment was due to
lower volumes, higher cost of maintenance, fuel, insurance and
depreciation. Depreciation was higher due to additional depreciation
of $506,000 resulting from early termination of a lease at one
location.
For the six months of 2003, gross profit decreased 4.9% to $77,657,000
from $81,681,000 last year. Gross profit and margin improved in the
aggregates and cement and calcium segments while decreasing in the
concrete products segment. The improvement in the aggregates segment
was due to decreased depreciation expense, reduced outside services
and lower operating costs per ton partially offset by increased fuel
costs and repairs. In addition start up losses of new operations and
shut down cost of a quarry were approximately $2,900,000 lower this
year. The improvement in the cement and calcium segment is due to
lower repair costs and lowering the cost per unit as a result of
increasing volumes while maintaining a stable expense level. The
decrease in repair cost was the result of reduced planned unplanned
maintenance at the plant as compared to last year. For the six months
of 2003, gross margin increased to 23.7% from 23.4% last year
primarily due to lower operating costs per ton as compared to last
year.
Selling, general and administrative expenses for the second quarter
increased to $19,194,000 from $18,841,000 last year constituting 11.7%
of sales as opposed to 11.0% last year.
For the first six months of 2003, selling, general and administrative
decreased to $36,571,000 from $37,098,000 last year constituting 11.2%
of sales as compared to 10.6% last year. The actual dollar decrease
for the six months was primarily attributable to lower profit sharing
expense (which is linked to profitability before real estate gains).
During March 2003, the Company sold two parcels of land and recognized
a pre-tax gain of $2,448,000 which is included in the three and six
months ended March 31, 2003. During the first quarter of fiscal 2002,
the Company sold land and recognized a pre-tax gain of $530,000, which
is included in the six months ended March 31, 2002.
Interest expense for the second quarter decreased to $443,000 from
$1,178,000 for the same quarter last year. For the six months ended
March 31, 2003, interest expense decreased to $912,000 from $2,330,000
last year. These declines are attributable to reduced debt
outstanding under the Company's revolver and lower interest rates.
Interest income for the second quarter increased to $524,000 as
compared to $201,000 for the same quarter last year and for the first
six months of 2003 was $1,053,000 as compared to $531,000 for the same
period last year.
Included in other income is the Company's equity in operating results
of 50% owned joint ventures. The equity in these ventures was a loss
of $326,000 for the second quarter of fiscal 2003 as compared to a
loss of $730,000 for the same period last year. For the six months
ended March 31, 2003 and 2002, the equity in affiliates was a loss of
$314,000 and $378,000, respectively.
Income tax expense increased $2,166,000 for the second quarter of
fiscal 2003 and $72,000 for the first six months of fiscal 2003.
This is due to higher income before taxes. The effective tax rate is
35.2% for all periods.
Liquidity and Capital Resources. For the first six months of
fiscal 2003, cash provided by operating activities of $42,535,000,
exercise of stock options of $674,000 and proceeds from sale of
property, plant and equipment of $4,054,000 funded the repayment of
$3,400,000 of short-term overnight lines; purchases of property, plant
and equipment of $26,693,000 and payment of dividends of $5,724,000.
For the first six months of fiscal 2002, cash provided by operating
activities of $49,353,000, exercise of stock options of $4,089,000 and
proceeds from the sales of property, plant and equipment of $3,078,000
funded the repayment of debt of $3,078,000, payment of insurance
policy loans of $18,771,000, purchases of property, plant and
equipment of $17,584,000 and payment of dividends of $4,809,000. 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 March 31, 2003, there was available $200,000,000 under
long-term revolver and $41,500,000 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 March 31, 2003 was $64,158,000 as compared to
$39,406,000 at September 30, 2002. This increase was due to excess
cash flow generated during 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.
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 $ 460 383 2,094 2,764 5,043 4,048 29,868 44,660
Operating leases 1,225 1,519 1,236 968 671 671 4,452 10,742
Total $1,685 1,902 3,330 3,732 5,714 4,719 34,320 55,402
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 Discussion and 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 are based on internal estimates of production during
the period. Semi-annually an outside consultant measures the volume
of aggregates inventory. Aggregates inventories 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 the 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. This sale is still pending.
In April 2003, Patriot agreed to sell land for $1,836,000 to the
Company. The Company has 120 days to inspect and investigate the
property and may, in its sole discretion, terminate the Agreement
during the inspection period without penalty. If the Agreement is not
terminated during the inspection period or valid extension thereof,
closing is to occur no later than December 15, 2003. This transaction
was reviewed and approved on behalf of the Company by a committee of
independent directors after receipt of an appraisal and consultation
with management.
In April 2002, the Company purchased for $67,000 a parcel of land in
which an officer had an undivided 80% 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. The statement changes the earnings statement
classification of gain(losses) on sale of real estate to a component
of operating profit rather than other income.
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 implemented SFAS No. 146 on January 1,
2003. The adoption of this statement did 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.
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-
Based Compensation - Transition and Disclosure". SFAS 148 amends
SFAS No. 123, "Accounting for Stock-Based Compensation", and provides
alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee
compensation. SFAS 148 also amends the disclosure requirements of
SFAS 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported
results. The Company has adopted the amendments to SFAS 123
disclosure provisions required under SFAS 148, but will continue to
use intrinsic value method under APB 25 to account for stock-based
compensation. As such, the adoption of this statement has not had a
significant impact on the Company's financial position, results of
operations or cash flows.
Outlook. Strong home building continues to buoy up a very slow
commercial construction scenario. Low interest rates remain the key
to prolonging this strength. Road building is coming under the ax in
many of the Company's markets, though the strong backlog of work let
to contract in Florida should offset the weaker state spending in
Virginia and Maryland for the balance of the fiscal year.
Risk Insurance. 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. The evaluation conducted by, the
Company's President and Chief Executive Officer, Chief Financial
Officer and Chief Accounting Officer has provided them with
reasonable assurance 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 4. Submission of Matters to a Vote of Stockholders
On February 5, 2003, the Company held its annual shareholders meeting.
At the meeting, the shareholders elected the following directors by
the vote shown.
Term Votes Votes Brokers
Ending For Withheld Non-Votes
Edward L. Baker 2006 24,735,991 1,748,704 -
J. Dix Druce, Jr. 2006 25,004,924 1,479,771 -
John D. Milton, Jr. 2006 25,004,970 1,479,725 -
Martin E. Stein, Jr. 2006 25,644,260 840,435 -
The directors whose terms of office as a director have continued after
the meeting are Thompson S. Baker, II, Luke E. Fichthorn, III and
Tillie K. Fowler, for terms expiring in 2004 and A.R. Carpenter, John
D. Baker, II, and G. Kennedy Thompson for terms expiring in 2005. At
the Board of Directors meeting following the annual stockholders
meeting Francis X. Knott and C. J. Shepherdson retired as directors.
The shareholders also approved an amendment to the Company's 2000
stock option plan to increase the authorized shares that may be issued
thereunder by 700,000 from 1,125,000 to 1,825,000 by votes for
25,498,399, votes withheld 895,757 and abstentions 90,539.
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 23 of this Form
10-Q.
(b) Reports on Form 8-K. During the three months ended March 31,
2003, 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.
April 29, 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
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: April 29, 2003
JOHN D. BAKER, II
JOHN D. BAKER, II
President and Chief
Executive Officer
I, John D. Milton, Jr., certify that:
7. I have reviewed this quarterly report on Form 10-Q of Florida Rock
Industries, Inc.
8. 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;
9. 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;
10. 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;
11. 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
12. 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: April 29, 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: April 29, 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 MARCH, 2003
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. 1996 Stock
Option Plan, incorporated by reference to an
appendix to the Company's Proxy Statement
dated December 18, 1995. File No. 1-7159.
(10)(l) Florida Rock Industries, Inc. 2000 Stock
Option Plan, incorporated by reference to an
exhibit previously filed with the Proxy
Statement dated December 20, 2000. File No.
1-7159.
(10)(m) Amendment to Florida Rock Industries, Inc. 2000
Stock Option Plan.
(11) Computation of Earnings Per Common Share.
(99) Certification under Section 906 of Sarbanes-Oxley
Act of 2002
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