SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 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)
Registrant's telephone number, including area code: 904/355-1781
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock $.10 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.[ ]
Indicate by check mark whether the registrant is an accelerated
filed (as defined in Rule 12b-2 of the Act). Yes X No
At December 17, 2003 the aggregate market value of the shares of
Common Stock held by non-affiliates of the registrant was
approximately $1,485,901,289. At such date there were 28,735,115
shares of the registrant's Common Stock outstanding.
Documents Incorporated by Reference
Portions of the Florida Rock Industries, Inc. 2003 Annual Report to
Shareholders are incorporated by reference in Parts I and II.
Portions of the Florida Rock Industries, Inc. Proxy Statement dated
December 29, 2003 are incorporated by reference into Part III.
PART I
Item 1. BUSINESS.
Florida Rock Industries, Inc., whose predecessors began business in 1929,
was incorporated in Florida in 1945. Florida Rock Industries, Inc. and
its subsidiaries (the "Company"), are principally engaged in three
business segments: construction aggregates, concrete products and cement
and calcium products. The construction aggregates segment is engaged in
the mining, processing, distribution and sale of sand, gravel and crushed
stone. The concrete products segment is engaged in production and sale
of ready mix concrete, concrete block, prestressed concrete as well as
sales of other building materials. The cement and calcium products
segment is engaged in the production and sale of portland and masonry
cement, importation of cement and slag which is either sold, ground or
blended and then sold and sale of calcium products to the animal feed and
roofing industries. Substantially all operations are conducted in
Florida, Virginia, Georgia, Maryland, Washington D.C., Tennessee, North
Carolina and Delaware. The Company also has an investment in a crushed
stone plant and a sand and gravel plant in Charlotte County, New
Brunswick, Canada.
On August 12, 2003, the Company purchased from Lafarge North America,
Inc. ("Lafarge") all of the capital stock of Lafarge Florida, Inc. for
$123,951,000 in cash, pursuant to the Stock Purchase Agreement dated July
2, 2003, between the Company and Lafarge. The purchase price is subject
to adjustment based on final working capital at the date of acquisition.
The operations acquired import cement and granulate blast furnace slag
into Tampa, Florida. Some of the cement is sold and the balance is
either blended or bagged. The slag is ground and either sold or blended
and then sold. Clinker, which is an unground cement, is imported into
Port Manatee, Florida and is ground into cement and sold.
Information as to business and new developments is presented under the
caption "Operating Review" on pages 4 and 5 of the accompanying 2003
Annual Report to Shareholders and such information is incorporated herein
by reference.
Information as to business segments is presented in Note 14 of the Notes
to Consolidated Financial Statements in the accompanying 2003 Annual
Report to Shareholders and such information is incorporated herein by
reference.
Sales are subject to factors affecting the level of general construction
activity including the level of interest rates, consumer confidence,
availability of funds for construction, appropriations by federal and
state governments for construction, past overbuilding, labor relations in
the construction industry, energy shortages, material shortages, weather,
climate, and other factors affecting the construction industry in
general. Labor disputes in the construction industry may result in work
stoppages which may interrupt sales in the affected area. Precipitation
or freezing temperatures may cause a reduction in construction activity
and related demand for the Company's products. During the winter months,
sales and income of the Company's Maryland, Virginia, North Carolina,
Washington, D.C., Georgia, Tennessee, Delaware and New Brunswick
operations are adversely affected by the impact of inclement weather on
the construction industry. The Company's Florida operations usually are
not similarly affected. A decrease in the level of general construction
activity in any of the Company's market areas caused by any of the above
factors may have a material adverse effect on sales and income derived
therefrom.
During 2003 the construction aggregates segment operated three crushed
stone plants, two baserock plants, nine sand plants and one industrial
sand plant in Florida. It operates six crushed stone plants, three sand
plants and owns a two-thirds interest in one crushed stone plant in
Georgia; one crushed stone plant in Tennessee; two sand and gravel plants
and two crushed stone plants in Maryland; and two crushed stone plants
and two sand plants in Virginia. A crushed stone plant was constructed
during 2003 near Auburn, Alabama and will begin sales in 2004. The
Company also operates aggregates distribution terminals in Central and
Northern Florida; Coastal Georgia; Northern Virginia; Norfolk-Virginia
Beach, Virginia; Baltimore, Maryland; the Eastern Shore of Maryland,
Delaware and Washington, D.C. Construction aggregates are sold
throughout most of Florida with the principal exception of the panhandle.
In Georgia the Company primarily serves the regional construction
markets around Griffin, Macon, Columbus, Rome and the southern and
western portions of the Atlanta market and all of South Georgia. In
Virginia the Company primarily serves the Richmond, Norfolk-Virginia
Beach, Williamsburg and Northern Virginia markets. In Maryland the
principal markets served are the greater Baltimore area, Frederick and
Montgomery Counties and the Eastern Shore of Maryland. In Delaware the
principal market served is south central Delaware. In Florida and
Georgia shipments are made by rail and truck. In Virginia and Maryland
the Company primarily serves the regional construction markets around
Richmond, Virginia and the greater Baltimore area by truck; and the
Company's marine division ships materials by barge throughout the
Chesapeake Bay area, along the James River between Richmond and Norfolk-
Virginia Beach and as far north as Woodbridge, Virginia on the Potomac
River and Washington D. C. on the Anacostia River. One joint venture
sells products by ship from the Canadian operations in New York, South
Carolina, Georgia, Florida and the Caribbean.
In fiscal 2003 approximately 59% of the coarse aggregates and 54% of the
sand used in the Company's concrete operations were produced by the
Company. The remaining aggregates were purchased from other suppliers
whose geographic locations coupled with transportation costs make it more
economical to serve certain of the Company's plants. At the present
time, there is an adequate supply of construction aggregates in the areas
in which the Company's concrete operations are located.
The concrete products segment manufactures and markets ready mixed
concrete, concrete block, precast and prestressed concrete. It also
markets other building materials. The concrete operations serve most of
Florida with the principal exception of the panhandle; southern and
southwest Georgia; the greater Baltimore, Maryland area; the Richmond-
Petersburg-Hopewell; Williamsburg; Hampton-Newport News; and
Norfolk/Virginia Beach areas of Virginia along with northern Virginia and
Washington, D.C.
Since ready mixed concrete hardens rapidly, delivery is time constrained
and generally confined to a radius of approximately 20 to 25 miles from
the producing plant.
The Company's annual capacity at its 11 operating concrete block plants
is approximately 65 million 8x8x16 equivalent units of block based on
current operating schedules.
At most of the Florida and Georgia concrete facilities, the Company
purchases and resells building material items related to the use of ready
mixed concrete and concrete block. Prestressed concrete products for
commercial developments and bridge and highway construction are produced
in Wilmington, North Carolina. Precast concrete lintels and other
building products are produced in Kissimmee, Florida.
The cement and calcium products segment produces portland and masonry
cement in Newberry, Florida which is sold in both bulk and bags to the
concrete and concrete products industry. Calcium products for the animal
feed industry are produced in Brooksville, Florida and for the roofing
industry in Fredrick, Maryland. Cement and slag is imported into Tampa,
Florida and some of the cement sold and the balance is either blended or
bagged. The slag is ground and either sold or blended and then sold.
Clinker is imported into Port Manatee, Florida and is ground into cement
and sold.
During fiscal 2003, the Company's concrete operations purchased cement
from 10 suppliers, the three largest of which supplied approximately 40%
of the cement used by the Company in its ready mixed concrete, concrete
block, and prestressed concrete operations. In addition, the cement
segment supplied approximately 25% of the cement used by the Company's
concrete operations. At the present time there is an adequate supply of
cement in the areas in which the Company operates.
The Company's cement, construction aggregates and concrete products are
sold in competition with other producers of the same type of cement,
construction aggregates and concrete products as well as in competition
with other types of cement, construction aggregates and concrete
products. The Company's concrete products compete with other building
materials such as asphalt, brick, lumber, steel and other products. The
Company believes that price, plant location, transportation costs,
service, product quality and reputation are the major factors that affect
competition within a given market. Because of the relatively high
transportation costs associated with construction aggregates, concrete,
cement and calcium products, competition is often limited to products or
competitors in relatively close proximity to production facilities.
Exceptions exist for areas that may be served by river barges, ocean-
going vessels or rail lines.
The Company does not believe that backlog information accurately reflects
anticipated annual revenue or profitability from year to year.
The Company's operations are subject to and affected by federal, state
and local laws and regulations relating to the environment, health and
safety and other regulatory matters. Certain of the Company's
operations may from time to time involve the use of substances that are
classified as toxic or hazardous substances within the meaning of these
laws and regulations. Environmental operating permits are, or may be,
required for certain of the Company's operations and such permits are
subject to modification, renewal and revocation. The Company regularly
monitors and reviews its operations, procedures and policies for
compliance with these laws and regulations. Despite these compliance
efforts, risk of environmental liability is inherent in the operation of
the Company's businesses. Such regulations have not had a material
adverse impact in recent years and are not expected to have a material
adverse effect on the Company's capital expenditures or operating results
over the next year. However, as is the case with other companies
engaged in similar businesses, there can be no assurance that
environmental liabilities or subsequent changes in environmental
regulations will not have a material adverse effect on the Company in the
future. Additional information concerning environmental matters is
presented in Item 3 "Legal Proceedings" of this Form 10-K and such
information is incorporated herein by reference.
Employees. The Company employed 3,127 persons at September 30, 2003.
EXECUTIVE OFFICERS OF THE COMPANY
Name Age Office Position Since
Edward L. Baker 68 Chairman of the Board May 1989
John D. Baker II 55 President and Chief February 1996
Executive Officer
John D. Milton, Jr. 58 Executive Vice President, January 2001
Treasurer and Chief
Financial Officer
C. J. Shepherdson 87 Vice President September 1972
Thompson S. Baker II 45 Vice President August 1991
George J. Hossenlopp 60 Vice President May 2002
Clarron E. Render, Jr. 61 Vice President August 1991
Wallace A. Patzke, Jr. 56 Vice President, Controller August 1997
and Chief Accounting Officer
H. W. Walton 58 Vice President, Human May 2001
Resources and Quality
Scott L. McCaleb 51 Vice President, Corporate December 2002
Development
Dennis D. Frick 61 Secretary October 1992
John W. Green 51 Assistant Secretary October 1988
John D. Milton, Jr. joined the Company in January 2001 and was elected
Executive Vice President, Treasurer and Chief Financial Officer. Prior to
joining the Company he was a partner in the law firm of Martin, Ade,
Birchfield & Mickler, PA.
George J. Hossenlopp has been employed by the Company since February 1980 and
has held various positions. Most recently, he was division president for
concrete operations in the Richmond-Tidewater areas of Virginia.
H. W. Walton has been employed by the Company since August 1985 and has held
various positions. Most recently, he was Director of Quality since April
1998 and prior to that date was Director of Safety for the Aggregates Group
of the Company.
Scott L. McCaleb has been employed by the Company since June 1994 and has
held various positions. He has been Director of Corporate Development since
January 2000. Prior to that date he was division president for the Georgia
Aggregates operation since June 1997.
All other officers have been employed by the Company in their respective
positions for the past five years.
Edward L. Baker and John D. Baker II are brothers. Thompson S. Baker II is
the son of Edward L. Baker.
All executive officers of the Company are elected by the Board of Directors.
Item 2. PROPERTIES.
The Company's principal properties are located in Florida, Georgia,
Tennessee, Alabama, North Carolina, Virginia, Washington, D.C., Maryland and
Delaware. The following table summarizes the Company's principal construction
aggregates production and cement and calcium production facilities and
estimated reserves at September 30, 2003.
Tons Tons of
Delivered in Estimated Approximate
Year Ended Reserves Acres
9/30/03 9/30/03 (L-Leased)(a) Lease
(000's) (000's) (O-Owned) Description
The Company has three
crushed stone plants in
Florida located at Gulf
Hammock (which also
produces agricultural
limestone), Ft. Myers
(which also produces
baserock), and Miami 5 leases
(which also produces L- 5,480 expiring from
baserock) 7,583 362,300 O- 7,196 2004 to 2046
The Company has seven
crushed stone plants
in Georgia located at
Griffin, Forest Park,
Macon, Tyrone, Columbus, 9 leases
Six Mile and Paulding L- 1,908 expiring from
County 8,552 430,500 O- 1,483 2005 to 2046
The Company has one crushed
stone plant located
in Chattanooga, Tennessee 949 51,200 O- 248
The Company has two
crushed stone plants
located at Havre de
Grace and Frederick,
Maryland, two
located near Richmond,
Virginia and one joint 1 lease
venture plant in Charlotte L- 106 expiring
County, New Brunswick, 8,330 287,100 O- 1,232 2018
Canada
The Company has two
baserock plants 3 leases
located at Ft. Pierce expiring
and Sunniland 662 13,500 L-13,620 2004 to 2041
The Company has nine
sand plants located
at Keystone Heights,
Astatula, Lake County,
Marion County (two
locations), Keuka,
Grandin, LaBelle and
Lake Wales, Florida;
three sand plants located
at Albany, Leesburg and Bainbridge,
Georgia; sand and gravel
plants located at
Tons Tons of
Delivered in Estimated Approximate
Year Ended Reserves Acres
9/30/03 9/30/03 (L-Leased)(a) Lease
(000's) (000's) (O-Owned) Description
Goose Bay, Maryland;
two sand plants at
Charles City, Virginia
and one joint venture sand
and gravel plant in 18 leases
Charlotte County, 10,828 289,800 L-12,871 expiring from
New Brunswick, Canada O- 2,489 2005 to 2046
The Company has a Portland
cement plant located at
Newberry, Florida two fine
grind plants located at
Brooksville, Florida and
Frederick, Maryland, a cement
grinding plant at Port Manatee,
Florida and a cement grinding
and blending plant at Tampa
Florida 1,502 144,700 O- 876 2 leases
L- 6,951 expiring from
2020 to 2046
Future reserves:
Sand:
Lake County, Florida(c) 22,700 L- 1,290
(two locations) O- 654
Polk County, Florida
(two locations) 36,000 O- 924
Putnam County, Florida
(two locations) 114,100(b) O- 494
Limerock:
Brooksville, Florida 91,000(b)
Newberry, Florida 69,400(b)
Crushed Stone:
Muscogee County 33,000 L- 142 1 lease
Georgia expiring in 2019
Lamar County, Georgia 57,000 O- 588
Auburn, Alabama (d) 65,000 L- 400 1 lease
expiring in 2041
Havre de Grace, Maryland(c) 121,600(b)
Carroll County, Maryland 41,250 O- 413
Port Deposit, Maryland (c) 185,700 O- 427
Miami, Florida 49,600 O- 442
(a) Leased acreage includes all properties not owned by the Company as to
which the Company has at least the right to mine construction aggregates
for the terms specified.
(b) Acres are included in the first line of the above table.
(c) All the required zoning or permits for these locations have not yet
been obtained.
(d) Sales will commence in fiscal 2004 at this site.
The Company operates thirteen construction aggregates distribution terminals
located in Florida (four), Georgia (two), Maryland (four), Virginia (one),
Delaware (one) and Washington D. C. (one) comprising approximately 152 acres,
of which the Company owns 99 and leases 53 acres.
The Company has 108 sites for its ready mixed concrete, concrete block and
prestressed concrete plants in Florida, Georgia, North Carolina, Virginia and
Maryland aggregating approximately 820 acres. Of these acres, the Company owns
approximately 661 and leases approximately 159. The lease terms vary from
month-to-month to expiring in 2019.
The Company leases, from Patriot Transportation Holding, Inc., ("Patriot")
approximately six acres with two office buildings in Jacksonville, Florida,
which are used for its executive offices. A subsidiary leases from Patriot
administrative office space in Sparks, Maryland. A subsidiary leases
administrative office space in Springfield, Virginia. A subsidiary owns
administrative offices in Richmond, Virginia. In addition, the Company owns
approximately 19 acres, which are used for shop facilities.
The Company owns certain other properties which are summarized as follows:
Approximate
Type Property (1) State Acres
Industrial/Commercial Virginia 93
Industrial/Commercial Florida 2,506
Industrial/Commercial Maryland 1,159
Industrial/Commercial North Carolina 9
(1) The properties owned by the Company are grouped by current or proposed
use. Such use may be subject to obtaining appropriate rezoning, zoning
variances, subdivision approval, permits, licenses, and to comply with various
zoning, building, environmental and other regulations of various federal,
state, and local authorities.
At September 30, 2003 certain property, plant and equipment with a carrying
value of $16,177,000 were pledged to secure industrial development revenue
bonds and certain other notes and contracts with an outstanding principal
balance totaling $30,006,000 on such date.
Item 3. 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 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. On September 10, 2003, a former employee of this facility was convicted
of violating the Clean Water Act. As a result, he has been barred from
receiving federal government contracts or benefits at this facility. Neither
the Company nor its subsidiaries have been barred from receiving government
contracts or benefits at this facility. 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'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 "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 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.
A lawsuit was filed by three environmental organizations on June 26, 2003,
challenging federal agency decisions to authorize the Company's proposed
limestone mine in Ft. Myers, Florida. Specifically, the environmental
plaintiffs challenge the U.S. Army Corps of Engineers' (the "Corps") April 2003
decision to issue a new mining permit pursuant to Section 404 of the federal
Clean Water Act, and the U.S. Fish and Wildlife Service's January 30, 2002,
biological opinion concluding that this limestone mining would not jeopardize
the continued existence of the Florida panther. The environmental plaintiffs
claim that the two federal agencies violated the Clean Water Act, the
Endangered Species Act, the Administrative Procedures Act, and the National
Environmental Policy Act. They ask the court to invalidate that the U.S. Fish
and Wildlife Service's January 30, 2002, biological opinion, set aside the
April 2003 Corps permit, and to remand U.S. Fish and Wildlife Service's January
30, 2002, biological opinion so that the Service can prepare "a complete and
adequate" biological opinion.
The Company was not named as defendant in the lawsuit by the environmental
plaintiffs; however, since the Company would be adversely affected if the
environmental groups were to obtain all of the relief they seek, on September
2, 2003, the Company filed a Motion to Intervene. The court has not yet ruled
on the Motion to Intervene. The federal defendants to this lawsuit have filed
a Motion to Transfer Venue to the Middle District of Florida. The Court
denied this Motion to Transfer Venue.
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 and that appeal
is still pending.
Note 16 to the Consolidated Financial Statements included in the accompanying
2003 Annual Report to Shareholders is incorporated herein by reference.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No reportable events.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
There were approximately 845 holders of record of Florida Rock Industries, Inc.
common stock, $.10 par value, as of December 17, 2003. The Company's common
stock is traded on the New York Stock Exchange (Symbol: FRK). Information
concerning stock prices and dividends paid during the past two years is
included under the caption "Quarterly Results" on page 13 of the Company's 2003
Annual Report to Shareholders and such information is incorporated herein by
reference. Information concerning restrictions on the payment of cash
dividends is included in Note 7 captioned "Lines of credit and debt" on page 22
of the Company's 2003 Annual Report to Shareholders and such information is
incorporated herein by reference.
Item 6. SELECTED FINANCIAL DATA.
Information required in response to this Item 6 is included under the caption
"Five Year Summary" on page 7 of the Company's 2003 Annual Report to
Shareholders, and such information is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Information required in response to this Item 7 is included under the captions
"Management Analysis" on pages 8 through 12; and in Notes 1 through 18 to the
Consolidated Financial Statements included in the accompanying 2003 Annual
Report to Shareholders and in Item 3 "Legal Proceedings" of this Form 10-K.
Such information is incorporated herein by reference.
Item 7.A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's operations are subject to factors affecting the level of general
construction activity including the level of interest rates, availability of
funds for construction and other factors affecting the construction industry. A
significant decrease in the level of general construction activity in any of
the Company's market areas may have a material adverse effect on the Company's
sales and income derived thereof.
The Company is exposed to market risk from changes in interest rates. For its
cash and cash equivalents a change in interest rates affects the amount of
interest income that can be earned. For its debt instruments changes in
interest rates affect the amount of interest expense incurred.
The following table provides information about the Company's financial
instruments and the maturity dates thereof that are sensitive to changes in
interest rates (in thousands):
There- Fair
2004 2005 2006 2007 2008 after Total Value
Long-term debt at
fixed rates $ 518 136 78 68 173 459 1,432 1,536
Weighted average
interest rate 8.1% 7.5 7.5 7.5 7.6 7.1
Long-term debt at
variable interest
rate $ 0 76,900 2,700 4,975 3,975 29,500 118,050 118,050
Weighted average
interest 1.9%
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Information required in response to this Item 8 is included under the
caption "Quarterly Results" on page 13 and on pages 14 through 27 of the
Company's 2003 Annual Report to Shareholders. Such information is
incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
No reportable events.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding the executive officers of the Company is set forth
under the caption "Executive Officers of the Company" in Part I of this
Form 10-K.
Information concerning directors required in response to this Item 10 is
included under the captions "Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" in the Company's Proxy
Statement dated December 29, 2003, and such information is incorporated
herein by reference.
Information regarding the corporate governance practices of the Company,
including information regarding which members of the audit committee are
audit committee financial experts and the code of conduct applicable to
principal executive officers, principal financial officers and principal
accounting officers (a copy of which is included as an exhibit to this
Form 10-K), is included under the caption "Election of Directors" in the
Company's Proxy Statement dated December 29, 2003, and such information is
incorporated herein by reference.
Item 11. EXECUTIVE COMPENSATION.
Information required in response to this Item 11 is included under the
captions "Executive Compensation," "Compensation Committee Report,"
"Compensation Committee Interlocks and Insider Participation," and
"Shareholder Return Performance" in the Company's Proxy Statement dated
December 29, 2003, and such information is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
And Related Stockholder Matters.
The following table summarizes certain information concerning the
Company's equity compensation plans:
Number of securities Number of securities
to be issued upon available for future
exercise of Weighted average issuance under equity
outstanding exercise price of compensation plans
options, warrants outstanding options, (excluding securities
Plan Category and rights(A) warrants and right reflected in column a)
Equity compen-
sation plans
approved by
security holders 1,565,081 $ 22.04 986,900
Equity compen-
sations plans
not approved
by security
holders - - -
Total 1,565,081 $ 22.04 986,900
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required in response to this Item 13 is included under the
captions "Compensation Committee Interlocks and Insider Participation" and
"Certain Relationships and Related Transactions" in the Company's Proxy
Statement dated December 29, 2003.
Item 14. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
As required by Rule 13a-15 under the Exchange Act, as of the end
period covered by 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 IV
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)(1)and (2)Financial Statements and Financial Statement Schedules.
The response to this item is submitted as a separate section. See
Index to Financial Statements and Financial Statement Schedules on
page 19 of this Form 10-K.
(3)Exhibits
The response to this item is submitted as a separate section. See
Exhibit Index on pages 16 through 18 of this Form 10-K.
(b) Reports on Form 8-K.
During the three months ended September 30, 2003, the Company
filed the following reports on Form 8-K.
1) On July 10, 2003, reporting the proposed acquisition of Lafarge,
Florida, Inc. under Item 5 "Other Events" and a copy of the
press release under Item 7 "Financial Statements, Pro Forma
Financial Statements and Exhibits".
2) On July 23, 2003, filing a copy of the Company's press release
on earnings for the quarter ended June 30, 2003 under Item 7
"Financial Statements and Exhibits", Item 9 "Regulation FD
Disclosures" and Item 12 "Results of Operations and Financial
Conditions."
3) On August 27, 2003, reporting the acquisition of Lafarge
Florida, Inc. under Item 2, "Acquisition or Disposition of
Assets" and a copy of the Stock Purchase Agreement, dated July
2, 2003 between Florida Rock Industries, Inc. and Lafarge North
America, Inc. under Item 7, "Financial Statements, Pro Forma
Financial Statements and Exhibits."
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.
DECEMBER 23, 2003 FLORIDA ROCK INDUSTRIES, INC.
By JOHN D. BAKER, II
John D. Baker, II
President and Chief
Executive Officer
By JOHN D. MILTON, JR.
John D. Milton, Jr.
Executive Vice President
Treasurer and Chief
Financial Officer
By WALLACE A. PATZKE, JR.
Wallace A. Patzke, Jr.
Vice President, Controller
and Chief Accounting
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on December 23, 2003.
JOHN D. BAKER, II J. DIX DRUCE, JR.
John D. Baker, II J. Dix Druce, Jr.
Director, President and Chief Director
Executive Officer
(Principal Executive Officer) LUKE E. FICHTHORN, III
Luke E. Fichthorn, III
JOHN D. MILTON, JR. Director
John D. Milton, Jr.
Executive Vice President, Treasurer TILLIE K. FOWLER
and Chief Financial Officer Tillie K. Fowler
(Principal Financial Officer) Director
WALLACE A. PATZKE, JR. EDWARD L. BAKER
Wallace A. Patzke, Jr. Edward L. Baker
Vice President, Controller and Director
Chief Accounting Officer
(Principal Accounting Officer) THOMPSON S. BAKER, II
Thompson S. Baker, II
MARTIN E. STEIN, JR. Director
Martin E. Stein, Jr.
Director G. KENNEDY THOMPSON
G. Kennedy Thompson
ALVIN R. CARPENTER Director
Alvin R. Carpenter
Director
FLORIDA ROCK INDUSTRIES, INC.
FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2003
EXHIBIT INDEX
[Item 14(a)(3)]
(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-K
for the fiscal year 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 State
of Florida on February 7, 1995, incorporated by
reference to an appendix to the Company's Proxy
Statement dated December 15, 1994. File No. 1-7159.
(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 6, 1999. A form of such amendment was
previously filed as Exhibit 4 to the Company's 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.
(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, 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 Agreement, 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.,
incorporate by reference to an exhibit previously filed
with Form 10-K for the 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, incorporated by
reference to an exhibit 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 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.
(11) Computation of Earnings Per Common Share.
(13) The Company's 2003 Annual Report to Shareholders,
portions of which are incorporated by reference in this
Form 10-K. Those portions of the 2003 Annual Report to
Shareholders, which are not incorporated by reference,
shall not be deemed to be filed as part of this Form 10-
K.
(14) Financial Code of Ethical Conduct.
(21) Subsidiaries of the Company.
(23) Consent of Deloitte & Touche LLP, Independent Certified
Public Accountants, appears on page 20 of this Form 10-
K.
(31)(a) Certification of John D. Baker, II
(31)(b) Certification of John D. Milton, Jr.
(31)(c) Certification of Wallace A. Patzke, Jr.
(32) Certification under Section 906 of Sarbanes-Oxley Act
of 2002
FLORIDA ROCK INDUSTRIES, INC.
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
(Item 14(a)(1) and (2))
Page
Consolidated Financial Statements:
Consolidated balance sheets at September 30, 2003 and 2002 15(a)
For the years ended September 30, 2003, 2002 and 2001:
Consolidated statements of income 14(a)
Consolidated statements of shareholders' equity 17(a)
Consolidated statements of cash flows 16(a)
Notes to consolidated financial statements 18-26(a)
Independent Auditors' Report on Financial Statements 27(a)
Selected quarterly financial data (unaudited) 13(a)
Independent Auditors' Consent 20(b)
Independent Auditors' Report on Financial Statement Schedules 21(b)
Consolidated Financial Statement Schedules:
II - Valuation and qualifying accounts 22(b)
(a) Refers to the page number in the Company's 2003 Annual Report to
Shareholders. Such information is incorporated by reference in Item 8
of this Form 10-K.
(b) Refers to the page number in this Form 10-K.
All other financial statement schedules have been omitted, as they are not
required under the related instructions, are inapplicable, or because the
information required is included in the footnotes to the consolidated financial
statements.
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Post Effective Amendments
No. 1 to the Registration Statements Nos. 2-68961 and 2-76401 and in
Registration Statements Nos. 33-56430, 33-56428, 33-55128, 33-56322, 33-26775,
33-18873 and 33-47618 of Florida Rock Industries, Inc. on Forms S-8 of our
reports dated November 21, 2003, incorporated by reference and included in this
Annual Report on Form 10-K of Florida Rock Industries, Inc. for the year ended
September 30, 2003.
DELOITTE & TOUCHE LLP
Jacksonville, Florida
December 23, 2003
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
Florida Rock Industries, Inc.
Jacksonville, Florida
We have audited the consolidated financial statements of Florida Rock
Industries, Inc. and subsidiaries ("FRI") as of September 30, 2003 and 2002,
and for each of the three years in the period ended September 30, 2003, and
have issued our report thereon dated November 21, 2003; such consolidated
financial statements and report are included in your 2003 Annual Report to
Shareholders and are incorporated herein by reference. Our audits also
included the financial statement schedules of FRI, listed in Item 15. These
financial statement schedules are the responsibility of FRI's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Certified Public Accountants
Jacksonville, Florida
November 21, 2003
FLORIDA ROCK INDUSTRIES, INC.
SCHEDULE II (CONSOLIDATED) - VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED SEPTEMBER 30, 2003, 2002, AND 2001
Additions
Balance at Charged to Charged Balance
Beginning Costs and to Other at End
Description of Year Expenses Accounts Deductions of Year
Year ended
September 30,
2003:
Allowance for
doubtful
accounts $ 1,694,319 1,170,229 1,250,000 c 695,191a 3,419,357
Accrued risk
insurance
reserves $11,486,667 8,238,673 6,578,010b 13,147,330
Asset
retirement
obligations(d) $ - 363,421 8,824,958 e 539,803b 8,648,576
Year ended
September 30,
2002:
Allowance for
doubtful
accounts $ 1,993,186 1,025,453 1,324,320a 1,694,319
Accrued risk
insurance
reserves $ 9,496,916 8,372,389 6,382,638b 11,486,667
Accrued
reclamation
costs (d) $ 7,133,396 671,537 596,726b 7,208,207
Year ended
September 30,
2001:
Allowance for
doubtful
accounts $ 1,864,139 1,253,765 1,124,718a 1,993,186
Accrued risk
insurance
reserves $11,396,355 5,013,056 6,912,495b 9,496,916
Accrued
reclamation
costs $ 8,844,176 1,398,723 3,109,503b 7,133,396
a) Accounts written off less recoveries
b) Payments
c) Allowance for doubtful receivables established in an acquisition
d) Effective October 1, 2003, the Company adopted FASB 143 and Accounting for
Accrued Reclamation was changed.
e) Initial liability recorded upon adoption of FASB 143 plus new obligations
established in fiscal 2003.
22
66