Item 1. BUSINESS.
Patriot Transportation Holding, Inc., which was incorporated in Florida in 1988, and its subsidiaries (the "Company") are engaged in the transportation and real estate businesses.
Our transportation business is conducted through two wholly owned subsidiaries, Florida Rock & Tank Lines, Inc. ("Tank Lines"), and SunBelt Transport, Inc. ("SunBelt"), both of which operate in the Southeastern United States. Tank Lines hauls petroleum and other bulk liquids and dry bulk commodities by tank trailers. SunBelt serves the flatbed portion of the trucking industry, hauling primarily construction materials.
The Company's real estate activities are conducted through two wholly owned subsidiaries. Florida Rock Properties, Inc. ("Properties") and FRP Development Corp. ("Development").
Properties owns mining properties and other properties held for investment or future development. Development owns, manages and develops commercial warehouse/office rental properties in the Baltimore-Washington-Northern Virginia area. Substantially all of the real estate operations are conducted within the Southeastern and Mid-Atlantic United States.
Revenues from royalties and from a portion of our trucking operations are subject to factors affecting the level of general construction activity. In fiscal 2008, our transportation revenues were adversely affected by the significant decline in residential construction in our markets.
Transportation. The transportation segment primarily serves customers in the petroleum and building and construction industries in the Southeastern U.S. Petroleum customers accounted for approximately 71% and building and construction customers accounted for approximately 29% of transportation segment revenues during fiscal 2008.
During fiscal 2008, Tank Lines operated from terminals in Jacksonville, Orlando, Panama City, Pensacola, Tampa and White Springs, Florida; Albany, Atlanta, Augusta, Bainbridge, Columbus, Dalton, Macon and Savannah, Georgia; Knoxville, Tennessee; Montgomery, Alabama; and Wilmington, North Carolina. SunBelt's flatbed fleet is based in Jacksonville, Florida; Savannah, Georgia; South Pittsburg, Tennessee; Tuscaloosa, Alabama and operated primarily in the Southeastern U.S.
Tank Lines has from two to six major tank truck competitors in each of its markets. There are at least ten major competitors in SunBelt's market area and numerous small competitors in the various states served. Price, service, and location are the major factors which affect competition in the transportation segment within a given market.
During fiscal 2008, the transportation segment's ten largest customers accounted for approximately 53.5% of the transportation segment's revenue. One of these customers, Murphy Oil Corporation, accounted for 16.5% of the transportation segment's revenue. The loss of any one of these customers could have a material adverse effect on the Company's revenues and income.
During fiscal 2008, the transportation group purchased 78 new tractors and 67 new trailers. In fiscal 2006 and 2007, the Company purchased 261 new tractors accelerating its normal tractor replacement cycle in response to stricter engine emission standards on new trucks.
Our fiscal 2009 capital budget includes 54 new tractors and 3 new trailers including binding commitments to purchase 24 tractors at September 30, 2008. Maintaining a modern fleet has resulted in reduced maintenance expenses, improved operating efficiencies and enhanced driver recruitment and retention. At September 30, 2008, the Company owned and operated a fleet of 637 trucks and 1,043 trailers plus 39 additional trucks that were either being prepared for sale or being placed into service.
Real Estate. We own real estate in Florida, Georgia, Virginia, Maryland, Delaware and Washington, D.C. The real estate owned generally falls into one of three categories: (i) land and/or buildings leased under rental agreements or being developed for rental; (ii) land with construction aggregates deposits, substantially all of which is leased to Vulcan Materials Company under long-term mining royalty agreements, (iii) land held for future appreciation or development. Real estate revenues in fiscal 2008 were divided approximately 69% from rentals on developed properties and 31% from mining royalties.
A significant part of our real estate strategy has been to develop high quality, flexible warehouse/office space. Average occupancy for the fiscal year for buildings in service more than 12 months was 96.4%. At September 30, 2008, 94.2% of the total warehouse/office portfolio of approximately 2.5 million square feet was occupied.
Price, location, rental space availability, flexibility of design, and property management services are the major factors that affect competition in the flexible warehouse/office rental market. The Company experiences considerable competition in all of its markets.
Tenants of flexible warehouse/office properties are not concentrated in any one particular industry.
Relationship with Vulcan Materials Company. The Company was spun off from Florida Rock Industries, Inc. ("FRI") in 1988. FRI merged with Vulcan Materials Company ("Vulcan") in November 2007. Nearly all of our mining properties are leased to Vulcan under long-term mining leases entered into in the 1980s. We haul diesel fuel and cement for the Florida Rock Division of Vulcan. We also are a party to a joint venture agreement with Vulcan to develop approximately 4,300 acres of property located near Brooksville, Florida. We have outsourced some administrative services to Vulcan.
Vulcan accounted for approximately 24% of our real estate revenues and 1.3% of our transportation revenues for fiscal 2008. On a consolidated basis, Vulcan accounted for 4.7% of our fiscal 2008 revenues.
Segment Information. The Company has two business segments: transportation and real estate. Industry segment information is presented in Notes 2 and 10 to the consolidated financial statements included in the accompanying 2008 Annual Report to Shareholders and is incorporated herein by reference.
Environmental Matters. 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. Starting in January 2007, more stringent engine emissions standards mandated by the Environmental Protection Agency became effective for all newly manufactured trucks. The engines produced under the 2007 standards have a higher acquisition cost than the previous engines. The Company's mining leases contain a provision making the lessee responsible for reclamation of mining sites at least to the extent required by law.
Seasonality. The Company's business is subject to limited seasonality due to the cyclical nature of our customers' businesses, with revenues generally declining slightly during winter months.
Employees. The Company employed 1,005 people in its transportation group, 25 people in its real estate group and 9 people in its corporate offices at September 30, 2008.
Company Website. The Company's website may be accessed at www.patriottrans.com. All of our filings with the Securities and Exchange Commission can be accessed through our website promptly after filing. This includes annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports filed or furnished on Form 8- K and all related amendments.
EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Office 	Position Since
Edward L. Baker 73 Chairman of the Board May 3, 1989
John D. Baker II 60 President & Chief Feb. 7, 2008 Executive Officer David H. deVilliers, Jr. 57 Vice President of the Feb. 28, 1994 Company and President of the Company's Real Estate Group
John D. Milton, Jr. 63 Exec. Vice President, June 16, 2008 Treasurer, Secretary and Chief Financial Officer
John D. Klopfenstein 45 Controller and Chief	Feb. 16, 2005 Accounting Officer
Terry S. Phipps 44 President of SunBelt April 5, 2004 Transport, Inc.
Robert E. Sandlin 47 President of Florida March 1, 2003 Rock & Tank Lines, Inc.
All of the above officers have been employed in their respective positions for the past five years except as follows: John D. Baker II served as President and Chief Executive Officer of Florida Rock Industries, Inc. from 1996 to November 2007; John D. Milton, Jr. served as Executive Vice President and Chief Financial Officer of Florida Rock Industries, Inc. from 2001 to November 2007; John D. Klopfenstein served as Director, Business Development and Planning of the Company, from June 2003 to February 2005, and as Manager, Corporate Development of the Company, from July 1996 to May 2003; and Terry S. Phipps was a Vice President of SunBelt from May 2003 to April 2004, and was employed with Coastal Transport, Inc. from 1990 to May 2003.
John D. Baker II, who is the brother of Edward L. Baker, and Thompson S. Baker II, who is the son of Edward L. Baker, are directors of the Company.
All executive officers of the Company are elected by the Board of Directors annually and serve until their resignation or removal.
Item 1A.
Item 1A. RISK FACTORS.
Our future results may be affected by a number of factors over which we have little or no control. The following issues, uncertainties, and risks, among others, should be considered in evaluating our business and outlook. Also, note that additional risks not currently identified or known to us could also negatively impact our business or financial results.
We face significant uncertainty regarding the continued demand for our transportation services during the current economic crisis. The transportation segment produces approximately 86% of our gross revenues and 58% of our gross profit. The current economic climate could adversely affect the demand for our transportation services. The continued decline in construction activity continues to impact the operations of our flatbed trucking company. These adverse economic conditions may result in reductions in our revenue, increased price competition and increased operating costs, which could have an adverse effect our business, results of operation and financial condition.
We would be adversely affected by a decline in demand for hauling ethanol. In addition to other products, our tank lines subsidiary hauls ethanol which is blended with other petroleum products. The ethanol industry is highly dependent upon federal and state legislation and changes in such legislation could adversely affect the demand for ethanol products and the resulting demand for our transportation services. In addition, we would be adversely affected by the future construction of pipelines to transport ethanol, which also would reduce demand for our transportation services.
Our operating results may be adversely impacted by volatility in fuel costs or by fuel shortages. The crude oil and petroleum products markets are extremely volatile. Fuel prices are affected by a number of economic and political factors, including general political conditions, acts of war or terrorism, political instability in oil producing regions and capacity at United States oil refineries. Our operating results are impacted by our ability to recover fuel surcharges from customers. In light of the volatility of fuel prices, it may be difficult for us to recover fuel surcharges from customers at levels that will allow us to maintain current levels of profitability. In addition, increased fuel prices reduce consumer demand for the petroleum products hauled by our tank lines subsidiary, adversely impacting revenues. Our operations may also be adversely affected by any limit on the availability of fuel.
Our business may be adversely affected by seasonal factors and harsh weather conditions. Our business is subject to seasonal trends common in the refined petroleum products delivery industry. We typically face increased demand for fuels delivery services in Florida during the spring months. Our real estate group and our flatbed trucking subsidiary are adversely affected by reduced construction activity during periods of inclement weather. These factors can cause our operating results to fluctuate from quarter to quarter. An occurrence of unusually harsh or long-lasting inclement weather such as hurricanes, tornadoes and heavy snowfalls could have an adverse effect on our operations and profitability.
Our revenues depend in part on construction sector activity levels, which tend to be cyclical. One of our transportation subsidiaries hauls construction materials. This subsidiary continues to be significantly affected by the decline in construction activity in our market. Our real estate group receives part of its revenues from royalties on construction aggregates mined on our properties. Thus, our results depend in part on residential, commercial and infrastructure construction activity and spending levels. The construction industry in our markets tends to be cyclical. Construction activity and spending levels vary across our markets and are influenced by interest rates, inflation, consumer spending habits, demographic shifts, environmental laws and regulations, employment levels and the availability of funds for public infrastructure projects. Economic downturns may lead to recessions in the construction industry, either in individual markets or nationally.
We face difficulty in recruiting and retaining qualified drivers. In recent years the transportation industry has had difficulty attracting and retaining qualified drivers (including independent contractors), and competition for drivers can be intense. To compete for drivers, we may be forced to increase driver compensation. We cannot be certain that we could pass along the increased compensation costs to our customers. If we are unable to continue to attract drivers and contract with independent contractors, we could be required to suffer downtime and lost revenue miles.
New tractors are more expensive and less fuel efficient. New tractors are more expensive, primarily due to higher commodity prices, better pricing power among equipment manufacturers, and government regulations applicable to newly manufactured tractors and diesel engines. Revised EPA regulations decrease the amount of permitted air emissions that can be released by tractor engines and affect tractors produced after the effective date of the regulations. Compliance with these regulations has increased the cost of our new tractors and lowered fuel mileage. This will increase our capital expenses and our operating expenses. These adverse effects combined with the uncertainty as to the reliability of the vehicles equipped with the newly designed diesel engines and the residual values that will be realized from the disposition of these vehicles could increase our costs or otherwise adversely affect our business or operations.
We have significant ongoing capital requirements. Our transportation business requires substantial ongoing capital investment, particularly for tractors, trailers, terminals and technology. For the past few years, we have depended on cash from operations and our credit facilities to fund our revenue equipment. We expect to continue to pay for projected capital expenditures with cash flows from operations and borrowings under our line of credit. If we are unable to generate sufficient cash from operations and obtain financing on favorable terms in the future, we may have to limit our growth, enter into less favorable financing arrangements, or operate our revenue equipment for longer periods, any of which could have a material adverse effect on our profitability.
The loss of one of our major transportation customers could have a materially adverse effect on our business. A significant portion of our transportation revenue is generated from our major customers. For 2008, our top 10 customers, based on revenue, accounted for approximately 53.5% of our revenue. A reduction in or termination of our services by one or more of our major customers could have a materially adverse effect on our business and operating results.
The trucking industry is extremely competitive and fragmented. The trucking industry is extremely competitive and fragmented. No single truckload carrier has a significant market share. We compete with many other truckload carriers of varying sizes, customers' private fleets, and, to a lesser extent, with railroads which may limit our growth opportunities and reduce profitability. Some of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth rates in the economy, which may limit our ability to maintain or increase freight rates or maintain our profit margins. Many customers reduce the number of carriers they use by selecting so-called "core carriers" as approved transportation service providers, and in some instances we may not be selected. Historically, competition has created downward pressure on the truckload industry's pricing structure.
Our operations are subject to various environmental laws and regulations, the violation of which could result in substantial fines or penalties. We are subject to various environmental laws and regulations dealing with the handling of hazardous materials, fuel storage tanks, air emissions from our vehicles and facilities, and engine idling. Our operations involve the risks of fuel spillage or seepage, environmental damage, and hazardous waste disposal, among others. We also maintain bulk fuel storage and fuel islands at several of our facilities. Although we have instituted programs to monitor and control environmental risks and promote compliance with applicable environmental laws and regulations, the failure to comply with applicable laws or regulations could subject us to liabilities, including substantial fines or penalties or civil and criminal liability, that could have a materially adverse effect on our business and operating results.
Uninsured losses could significantly reduce our earnings. We self-insure for a portion of our claims exposure resulting from workers' compensation, auto liability, general liability, cargo and property damage claims, as well as employees' health insurance. We also are responsible for our legal expenses relating to such claims. We maintain insurance above the amounts for which we self- insure with licensed insurance carriers. Although we believe the aggregate insurance limits should be sufficient to cover reasonably expected claims, it is possible that one or more claims could exceed our aggregate coverage limits. Also, there are some types of losses such as from hurricanes, terrorism, wars, or earthquakes where insurance is limited and/or not economically justifiable. If an uninsured loss occurs, we could lose both the invested capital and anticipated revenues. We reserve currently for anticipated losses and expenses. We periodically evaluate and adjust our claims reserves to reflect our experience. However, ultimate results may differ from our estimates, which could result in losses over our reserved amounts.
Rising insurance costs could significantly reduce our earnings. Insurance carriers sometimes raise premiums for many businesses, including trucking companies. As a result, our insurance and claims expense could increase, or we could raise our self-insured retention when our policies are renewed. If we are unable to pass along this cost increase to customers, our earnings may be significantly reduced.
Compliance with new or future transportation regulations may significantly reduce earnings. Our transportation operations are regulated and licensed by various U.S. agencies. While the costs of compliance with existing regulations generally is reflected in our prior results, new regulations (such as the new tractor air emissions regulations) and future laws and regulations may be more stringent and require changes in our operating practices, influence the demand for transportation services, or require us to incur significant additional costs. Higher costs incurred by us could adversely affect our results of operations.
We may be unable to renew leases or relet space as leases expire. When a lease expires, a tenant may elect not to renew it. We may not be able to relet the property on similar terms. The terms of renewal or re-lease (including the cost of required renovations and/or concessions to tenants) may be less favorable than the prior lease. If we are unable to relet all or a substantial portion of our properties, or if the rental rates upon such reletting are significantly lower than expected rates, our cash generated before debt repayments and capital expenditures may be adversely affected. As of September 30, 2008, leases at our properties representing approximately 12% of the total square footage of buildings completed prior to September 2008 were scheduled to expire in each fiscal year 2009 and 2010.
We may be unable to lease newly constructed space. We completed two buildings in September 2008 comprising 135,872 square feet. There is a building under construction scheduled for completion in the spring of 2009 with 148,995 square feet. If we are unable to obtain leases sufficient to cover carrying costs then our cash flows may be adversely affected.
The bankruptcy or insolvency of significant tenants with long-term leases may adversely affect income produced by our properties. We have ten buildings in our business parks that are single-tenant occupied representing 48% of developed property rentals under long- term leases. We have seven other tenants with leases in excess of five years. Should tenants default on their obligations, our cash flow would be adversely affected and we may not be able to find another tenant to occupy the space under similar terms or have to make expenditures to retrofit and/or divide the space. In addition we may have to incur a non-cash expense for a significant amount of deferred rent revenue generated from the accounting requirement to straight-line rental revenues. The bankruptcy or insolvency of a major tenant may also adversely affect the income produced by a property. If any of our tenants becomes a debtor in a case under the U.S. Bankruptcy Code, we cannot evict that tenant solely because of its bankruptcy. The bankruptcy court may authorize the tenant to reject and terminate its lease with us. Our claim against such a tenant for unpaid future rent would be subject to a statutory limitation that might be substantially less than the remaining rent actually owed to us under the tenant's lease. Any shortfall in rent payments could adversely affect our cash flow.
A decline in the economic conditions in Baltimore-Washington- Northern Virginia area could adversely affect our business. All of our office/warehouse properties are located in the Baltimore-Washington-Northern Virginia area. As a result of our geographic concentration, we depend upon the local conditions in these markets, including local real estate conditions. We are, therefore, subject to increased exposure (positive or negative) to economic and other competitive factors specific to markets in confined geographic areas. Our operations may also be affected if too many competing properties are built in these markets. An economic downturn in these markets could adversely affect our operation. We cannot assure you that these markets will continue to grow or will continue to provide favorable demand for our office/warehouse product.
Our inability to obtain necessary approvals for property development could adversely affect our profitability. We may be unable to obtain, or incur delays in obtaining, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations, which could result in increased costs or abandonment of these projects. Before we can develop a property, we must obtain a variety of approvals from local and state governments with respect to such matters as zoning, density, parking, subdivision, site planning and environmental issues. Legislation could impose moratoriums on new real estate development and/or land-use conversions from mining to development. These factors may reduce our profit or growth and may limit the value of these properties.
Real estate investments are not as liquid as other types of assets. The illiquid nature of real estate investments may limit our ability to react promptly to changes in economic or other conditions. In addition, significant expenditures associated with real estate investments, such as mortgage payments, real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investments. Thus, the illiquid nature of our real estate investments could adversely affect our profitability under certain economic conditions.
Our debt service obligations may have adverse consequences on our business operations. We use debt to finance our operations, including acquisitions of properties. Our use of debt may have adverse consequences, including the following:
?	Our cash flows from operations may not be sufficient to meet required payments of principal and interest. ?	We may be forced to dispose of one or more of our properties, possibly on disadvantageous terms, to make payments on our debt. ?	We may default on our debt obligations, and the lenders may foreclose on our properties that collateralize those loans. ?	A foreclosure on one of our properties could create taxable income without any accompanying cash proceeds to pay the tax. ?	A default under a mortgage loan that has cross default provisions may cause us to automatically default on another loan. ?	We may not be able to refinance or extend our existing debt. ?	The terms of any refinancing or extension may not be as favorable as the terms of our existing debt. ?	We may not be able to issue debt on unencumbered properties under reasonable terms to finance growth of our portfolio of properties. ?	We may be subject to a significant increase in the variable interest rates on our unsecured line of credit or unsecured term loan, which could adversely impact our operations.
As of September 30, 2008, we had outstanding non-recourse mortgage indebtedness of $80,172,000, secured by developed real estate properties having a carrying value of $83,584,000.
Our uncollateralized revolving credit agreement restricts our ability to engage in some business activities. Our uncollateralized revolving credit agreement contains customary negative covenants and other financial and operating covenants that, among other things:
?	restricts our ability to incur certain additional indebtedness; ?	restricts our ability to make certain investments; ?	restricts our ability to merge with another company; ?	restricts our ability to pay dividends; ?	requires us to maintain financial coverage ratios; and ?	requires us to not encumber certain assets except as approved by the lenders.
These restrictions could cause us to default on our unsecured line of credit or negatively affect our operations.
Our real estate segment faces competition from numerous sources. As a developer of flexible warehouse/office space, we compete with numerous developers, owners and operators of real estate, many of which own properties similar to ours in the same submarkets in which our properties are located. If our competitors offer space at rental rates below current market rates, or below the rental rates we currently charge our tenants, we may lose potential tenants and we may be pressured to reduce our rental rates below those we currently charge in order to retain tenants when our tenants' leases expire. As a result, our financial condition, results of operations, cash flow and ability to satisfy our debt service obligations could be materially adversely affected.
Construction costs may be higher than anticipated. Our business plan includes a number of construction projects. The construction costs of these projects may exceed original estimates and possibly make the completion of a property uneconomical. Building material commodity shortages, construction delays/stoppages and/or rapidly escalating construction costs may out-pace market rents, adversely affecting profits. The market environment and existing lease commitments may not allow us to raise rents to cover these higher costs.
Certain shareholders have effective control of nearly a majority of our common stock and likely will control the outcome of any shareholder vote. As of November 28, 2008, three of our directors, Edward L. Baker, John D. Baker II and Thompson S. Baker II, beneficially own approximately 46.8% of the outstanding shares of our common stock. As a result, these individuals effectively may have the ability to direct the election of all members of our Board of Directors and to exercise a controlling influence over our business and affairs, including any determinations with respect to mergers or other business combinations involving us, our acquisition or disposition of assets, our borrowing of monies, our issuance of any additional securities, our repurchase of common stock and our payment of dividends.
Our charter, bylaws and shareholder rights agreement contain anti- takeover provisions that may hinder a takeover or negatively affect our stock price. Our articles of incorporation, bylaws and shareholder rights agreement contain several provisions that may make it more difficult and expensive for a third party to acquire control of us without the approval of our board of directors. Our articles of incorporation and bylaws contain provisions dividing our board of directors into four classes of directors serving four-year terms and providing that directors may only be removed for cause. Our articles of incorporation also provide that our shareholders can take action only at a duly called annual or special meeting of shareholders and require a supermajority vote to approve certain matters. In addition, our board of directors is authorized to issue additional shares of common stock or preferred stock and to determine the rights and preferences of any shares of preferred stock to be issued. Our shareholder rights plan is designed to guard against coercive or unfair tactics to gain control of us. The rights will cause substantial dilution to any person or group who attempts to acquire a significant amount of common stock without approval of our board of directors. Because we can redeem the rights, the rights will not interfere with a merger or other business combination approved by our board.
Item 2.
Item 2. PROPERTIES.
The Company's principal properties are located in Florida, Georgia, Virginia, Washington, D.C., Delaware and Maryland.
Real Estate Segment Properties. Principal properties held by the Real Estate segment are discussed below under the captions Developed Properties, Future Planned Development, Construction Aggregates Properties, and Other Properties.
At September 30, 2008 certain developed real estate properties having a carrying value of $83,584,000 were pledged on long-term non-recourse notes with an outstanding principal balance totaling $80,172,000. In addition, certain other properties having a carrying value at September 30, 2008 of $98,000 were encumbered by $1,300,000 of industrial revenue bonds that are the liability of Vulcan. Vulcan has agreed to pay such debt when due (or sooner if Vulcan cancels its lease of such property), and further has agreed to indemnify and hold harmless the Company on account of such debt.
Developed Properties. At September 30, 2008, the Company owned 11 developed parcels of land containing 261 usable acres in the Mid- Atlantic region of the United States as follows:
1) Hillside Business Park in Anne Arundel County, Maryland consists of 49 usable acres. A total of 504,740 square feet existed on the property at the beginning of 2008 and it is 97% occupied. Construction of the final building with 66,398 square feet of office space was completed in September 2008. The addition of this as yet unoccupied building results in a decline in average occupancy from 97% to 86%.
2) Lakeside Business Park in Harford County, Maryland consists of 84 usable acres. Eight warehouse/office buildings, totaling 745,297 square feet, have been constructed and are 100% occupied. Construction of a 148,995 square foot building commenced in March 2008. The remaining 14 acres are available for future development and have the potential to offer an additional 210,230 square feet of comparable product.
3) 6920 Tudsbury Road in Baltimore County, Maryland contains 5.3 acres with 86,100 square feet of warehouse/office space that is 100% leased.
4) 8620 Dorsey Run Road in Howard County, Maryland contains 5.8 acres with 85,100 square feet of warehouse/office space that is 100% leased.
5) Rossville Business Center in Baltimore County, Maryland contains approximately 10 acres with 190,517 square feet of warehouse/office space and is 100% leased.
6) 34 Loveton Circle in suburban Baltimore County, Maryland contains 8.5 acres with 30,006 square feet of office space, which is 76% leased including 23% of the space occupied by the Company.
7) Oregon Business Center in Anne Arundel County, Maryland contains approximately 17 acres with 195,615 square feet of warehouse/office space, which is 68% leased. Following occupancy by an additional 17,796 square foot tenant in November 2008 this park is 76% occupied.
8) Arundel Business Center in Howard County, Maryland contains approximately 11 acres with 162,796 square feet of warehouse/office space, which is 78% leased.
9) 100-400 Interchange Boulevard in New Castle County, Delaware contains approximately 17 acres with 303,006 square feet of warehouse/office space, which is 92% leased. The remaining 8.8 acres are available for future development and have the potential to offer an additional 93,600 square feet of comparable product.
10) 1187 Azalea Garden Road in Norfolk, Virginia contains approximately 12 acres with 188,093 square feet of warehouse/office space, which is 100% leased.
11) Windlass Run Business Park in Baltimore County, Maryland contains 69,474 square feet of warehouse/office space newly completed in September 2008. The building is as yet unoccupied. This building is contained within a larger parcel containing approximately 42 acres when complete is estimated to include 519,824 square feet of total build-out
Future Planned Developments. At September 30, 2008 the Company owned the following future development parcels:
1) Windlass Run Residential, located in southeastern Baltimore County, Maryland, is a 121 acre tract of land adjacent to and west of our Windlass Run Business Park. The property was rezoned in September 2007 to allow for additional density and plans are being pursued to obtain a Planned Unit Development. In July 2008, the Company entered into an agreement to sell the property. The purchase price for the property is $25,265,000, subject to certain potential purchase price adjustments. The agreement of sale is subject to certain contingencies, including the satisfactory completion of the buyer's inspection period and additional government approvals, and the closing may be two or more years away.
2) Patriot Business Park, located in Prince William County, Virginia, is a 73 acre tract of land which is immediately adjacent to the Prince William Parkway providing access to I-66. The Company plans to develop and lease approximately 733,650 square feet of warehouse/office buildings on the property. Land development efforts commenced in the summer of 2008.
3) Brooksville Quarry LLC. On October 4, 2006, a subsidiary of the Company (FRP) entered into a Joint Venture Agreement with Vulcan Materials Company (formerly Florida Rock Industries, Inc.) to form Brooksville Quarry, LLC, a real estate joint venture to develop approximately 4,300 acres of land near Brooksville, Florida. The property does not yet have the necessary entitlements for real estate development. Approval to develop real property in Florida entails an extensive entitlements process involving multiple and overlapping regulatory jurisdictions and the outcome is inherently uncertain. The Company currently expects that the entitlement process will be completed within the next two years.
4) Anacostia River. The Company owns a 5.8 acre parcel of undeveloped real estate in Washington D.C. that fronts the Anacostia River and is adjacent to the new Washington Nationals Baseball Stadium which was completed in March, 2008. The Company also owns a nearby 2.1 acre tract on the same bank of the Anacostia River. Currently, the 5.8 acre tract is leased to Vulcan Materials Company on a month-to-month basis.
In May 2008, the Company received final approval from the Zoning Commission of the District of Columbia of its planned unit development application for the Company's 5.8 acre undeveloped waterfront site on the Anacostia River in Washington, D.C. The approved planned unit development permits the Company to develop a four building, mixed use project, containing approximately 545,800 square feet of office and retail space and approximately 569,600 square feet of additional space for residential and hotel uses. The approved development would include numerous publicly accessible open spaces and a waterfront esplanade along the Anacostia River.
5) Commonwealth Avenue in Jacksonville, Florida is a 50 acre, rail accessible site near the western beltway of Interstate-295 capable of supporting approximately 500,000 square feet of warehouse/office build-out.
6) Leister property in Hampstead, Carroll County, Maryland is a 117 acre parcel located adjacent to State Route 30 bypass. The parcel was acquired for future commercial development and is projected to contain 900,000 square feet of space when complete. This parcel is currently in a predevelopment planning stage.
Construction Aggregates Properties. The following table summarizes the Company's principal construction aggregates locations and estimated reserves at September 30, 2008, substantially all of which are leased to FRI. Tons of Tons Sold Estimated in Year Reserves Ended at 9/30/08 9/30/08 Approximate (000's) (000's) Acres Owned The Company owns ten locations currently being mined in Grandin, Gulf Hammock, Keuka, Newberry and Airgrove/ Lake County, Florida; Columbus, Macon, and Tyrone, Georgia; and Manassas, Virginia. 7,964(1) 362,587 12,994
The Company owns three locations not currently being mined in Ft. Myers, Marion County, Astatula/Lake County, and Forest Park, Georgia. - 88,931 2,881
(1) Tons sold in year ended 9/30/08 include Brooksville tons of 289,000. Tons of estimated reserves and acres owned do not include Brooksville as the property was transferred October 4, 2006 to a joint venture with Vulcan for development.
Other Properties. In addition to the development, mining and rental sites, the Company owns approximately 2,222 acres of investment and other real estate. This includes a 1,844-acre timberland site located in Caroline County, Virginia.
The Company owns an office building with approximately 69,000 square feet situated on approximately 6 acres in Jacksonville, Florida, which is leased to Vulcan.
Transportation Segment Properties. The Company has 20 sites for its trucking terminals in Alabama, Florida, Georgia, North Carolina, and Tennessee. The Company owns 13 of these sites and leases 7.
Item 3.
Item 3. LEGAL PROCEEDINGS.
Note 13 to the Consolidated Financial Statements included in the accompanying 2008 Annual Report to Shareholders is incorporated herein by reference.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No reportable events.
PART II
Item 5.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
There were approximately 549 holders of record of Patriot Transportation Holding, Inc. common stock, $.10 par value, as of September 30, 2008. The Company's common stock is traded on the Nasdaq Stock Market (Symbol PATR). Information concerning stock prices is included under the caption "Quarterly Results" on page 6 of the Company's 2008 Annual Report to Shareholders, and such information is incorporated herein by reference. The Company has not paid a cash dividend in the past and it is the present policy of the Board of Directors not to pay cash dividends. Information concerning restrictions on the payment of cash dividends is included in Note 3 to the consolidated financial statements included in the accompanying 2008 Annual Report to Shareholders and such information is incorporated herein by reference. Information regarding securities authorized for issuance under equity compensation plans is included in Item 12 of Part III of this Annual Report on Form 10-K and such information is incorporated herein by reference.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers (c) Total Number of Shares (d) Purchased Approximate (a) As Part of Dollar Value of Total (b) Publicly Shares that May Number of Average Announced Yet Be Purchased Shares Price Paid Plans or Under the Plans Period Purchased per Share Programs or Programs (1) July 1 through July 31 0 $ 0 0 $ 5,625,000
August 1 through August 31 0 $ 0 0 $ 5,625,000
September 1 through September 30 0 $ 0 0 $ 5,625,000
Total 0 $ 0 0
(1) In December, 2003, the Board of Directors authorized management to expend up to $6,000,000 to repurchase shares of the Company's common stock from time to time as opportunities arise. On February 19, 2008, the Board of Directors authorized management to expend up to an additional $5,000,000 to repurchase shares of the Company's common stock from time to time as opportunities arise.
Item 6.
Item 6. SELECTED FINANCIAL DATA.
Information required in response to this Item 6 is included under the caption "Five Year Summary" on page 6 of the Company's 2008 Annual Report to Shareholders and such information is incorporated herein by reference.
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
Information required in response to Item 7 is included under the caption "Management Analysis" on pages 7 through 11 of the Company's 2008 Annual Report to Shareholders and such information is incorporated herein by reference.
Item 7.A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
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. The Company prepared a sensitivity analysis of its cash and cash equivalents to determine the impact of hypothetical changes in interest rates on the Company's results of operations and cash flows. The interest-rate analysis assumed a 50 basis point adverse change in interest rates on all cash and cash equivalents. However, the interest-rate analysis did not consider the effects of the reduced level of economic activity that could exist in such an environment. Based on this analysis, management has concluded that a 50 basis point adverse move in interest rates on the Company's cash and cash equivalents would have an immaterial impact on the Company's results of operations and cash flows.
For its debt instruments with variable interest rates, changes in interest rates affect the amount of interest expense incurred. The Company did not have any variable rate debt outstanding at September 30, 2008. The following table provides information about the Company's long-term debt (dollars in thousands):
There Fair Liabilities: 2009 2010 2011 2012 2013 after Total Value
Scheduled
maturities of long-term debt:
Fixed Rate $ 4,019 $4,294 $4,587 $4,902 $5,239 $57,131 $80,172 $78,839 Average interest rate 6.4% 6.4% 6.3% 6.3% 6.3% 6.3%
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Information required in response to this Item 8 is included under the caption "Quarterly Results" on page 6 and on pages 12 through 23 of the Company's 2008 Annual Report to Shareholders. Such information is incorporated herein by reference.
Item 9A.
Item 9A. CONTROLS AND PROCEDURES.
CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including our principal executive officer, principal financial officer and chief accounting officer, we conducted an evaluation of our disclosure controls and procedures, as such terms is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on this evaluation, our principal executive officer, our principal financial officer and our chief accounting officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control-Integrated Framework, our management concluded that our internal control over financial reporting was effective as of September 30, 2008.
Hancock Askew & Co., LLP, the independent registered certified public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has also audited the effectiveness of our internal control over financial reporting as of September 30, 2008, as stated in their report which appears in Item 8.
INHERENT LIMITATIONS OVER INTERNAL CONTROLS
Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:
i.	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
ii.	provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
iii.	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility of human error and circumvention by collusion or overriding of controls. Accordingly, even an effective internal control system may not prevent or detect material misstatements on a timely basis. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
PART III
Item 10.
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding the Company's executive officers is set forth under the caption "Executive Officers of the Registrant" in Part I of this Form 10-K. Information concerning directors (including the disclosure regarding audit committee financial experts), required in response to this Item 10, is included under the captions "Election of Directors", "Board Structure and Committee Membership - - Audit Committee" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's Proxy Statement and such information is incorporated herein by reference. The Proxy Statement will be filed with the Securities and Exchange Commission not later than December 31, 2008.
The Company has adopted a Financial Code of Ethical Conduct applicable to its principal executive officers, principal financial officers and principal accounting officers. A copy of this Financial Code of Ethical Conduct is filed as Exhibit 14 to this Form 10-K. The Financial Code of Ethical Conduct is available on our web site at www.patriottrans.com under the heading Investor Relations - Corporate Governance.
Item 11.
Item 11. EXECUTIVE COMPENSATION.
Information required in response to this Item 11 is included under the captions "Executive Compensation," "Compensation Committee Report," "Board Structure and Committee Membership - Compensation Committee," and "Shareholder Return Performance" in the Company's Proxy Statement and such information is incorporated herein by reference. The Proxy Statement will be filed with the Securities and Exchange Commission not later than December 31, 2008.
Item 12.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Information required in response to this Item 12 is included under the captions "Common Stock Ownership of Certain Beneficial Owners" and "Common Stock Ownership by Directors and Executive Officers" in the Company's Proxy Statement and such information is incorporated herein by reference. The Proxy Statement will be filed with the Securities and Exchange Commission not later than December 31, 2008.
Equity Compensation Plan Information Number of Securities remaining available for Number of future Securities Weighted issuance to be Average under equity issued upon exercise compensation exercise of price of plans outstanding outstanding (excluding options, options, securities warrants warrants reflected in and rights and rights column (a)) Plan Category (a) (b) (c)
Equity compensation plans approved by security holders 232,080 $33.73 262,400
Equity compensation plans not approved by security holders 0 0 0
Total 232,080 $33.73 262,400
Item 13.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required in response to this Item 13 is included under the caption "Related Party Transactions" in the Company's Proxy Statement and such information is incorporated herein by reference. The Proxy Statement will be filed with the Securities and Exchange Commission not later than December 31, 2008.
Item 14.
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Information required in response to this Item 14 is included under the captions "Independent Auditor" and "Ratification of Independent Registered Certified Public Accounting Firm" in the Company's Proxy Statement and such information is incorporated herein by reference. The Proxy Statement will be filed with the Securities and Exchange Commission not later than December 31, 2008.
PART IV
Item 15.
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(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 29 of this Form 10-K.
(3) Exhibits.
The response to this item is submitted as a separate section. See Exhibit Index on pages 26 through 28 of this Form 10-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Patriot Transportation Holding, Inc.
Date: December 3, 2008 By JOHN D. BAKER II John D. Baker II President and Chief Executive Officer (Principal Executive Officer)
By JOHN D. MILTON, JR. John D. Milton, Jr. Executive Vice President, Treasurer, Secretary and Chief Financial Officer (Principal Financial Officer)
By JOHN D. KLOPFENSTEIN John D. Klopfenstein Controller and Chief Accounting Officer(Principal 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 03, 2008.
JOHN D. BAKER II THOMPSON S. BAKER II John D. Baker II Thompson S. Baker II 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, Secretary and Chief Financial CHARLES E. COMMANDER III Officer(Principal Financial Officer) Charles E. Commander III Director
JOHN D. KLOPFENSTEIN ____________ John D. Klopfenstein ROBERT H. PAUL III_ Controller and Chief Accounting Robert H. Paul III Officer (Principal Accounting Officer) Director
EDWARD L. BAKER__________________ H. W. SHAD III Edward L. Baker H. W. Shad III Chairman of the Board Director
JOHN E. ANDERSON_________________ MARTIN E. STEIN, JR. John E. Anderson Martin E. Stein, Jr. Director Director
JOHN D. BAKER II______	_______ JAMES H. WINSTON John D. Baker II	 James H. Winston Director 	 Director
	 PATRIOT TRANSPORTATION HOLDING, INC. 	FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2007 	EXHIBIT INDEX 	[Item 14(a)(3)]
(3)(a)(1) Articles of Incorporation of Patriot Transportation Holding, Inc., incorporated by reference to the corresponding exhibit filed with Form S-4 dated December 13, 1988. File No. 33- 26115.
(3)(a)(2)	Amendment to the Articles of Incorporation of Patriot Transportation Holding, Inc. filed with the Secretary of State of Florida on February 19, 1991 incorporated by reference to the corresponding exhibit filed with Form 10-K for the fiscal year ended September 30, 1993. File No. 33-26115.
(3)(a)(3)	Amendments to the Articles of Incorporation of Patriot Transportation Holding, 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. 33-26115.
(3)(a)(4)	Amendment to the Articles of Incorporation of Patriot Transportation Holding, Inc., filed with the Florida Secretary of State on May 6, 1999 incorporated by reference to a form of such amendment filed as Exhibit 4 to the Company's Form 8-K dated May 5, 1999. File No. 33-26115.
(3)(a)(5) 	Amendment to the Articles of Incorporation of Patriot Transportation Holding, Inc. filed with the Secretary of State of Florida on February 21, 2000, incorporated by reference to the corresponding exhibit filed with Form 10-Q for the quarter ended March 31, 2000. File No. 33-26115.
(3)(b)(1) Amended and Restated Bylaws of Patriot Transportation Holding, Inc. adopted August 3, 2005, incorporated by reference to Exhibit 3.1 to the Company's Form 8-K dated August 3, 2005. File No. 33-26115.
(4)(a) Articles III, VII and XII of the Articles of Incorporation of Patriot Transportation Holding, Inc, incorporated by reference to an exhibit filed with Form S-4 dated December 13, 1988. And amended Article III, incorporated by reference to an exhibit filed with Form 10-K for the fiscal year ended September 30, 1993. And Articles XIII and XIV, incorporated by reference to an appendix filed with the Company's Proxy Statement dated December 15, 1994. File No. 33-26115.
(4)(b) Specimen stock certificate of Patriot Transportation Holding, Inc, incorporated by reference to an exhibit filed with Form S-4 dated December 13, 1988. File No. 33-26115.
(4)(c) Rights Agreement, dated as 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. 33-26115.
(10)(a) Various lease backs and mining royalty agreements with Florida Rock Industries, Inc., none of which are presently believed to be material individually, except for the Mining Lease Agreement dated September 1, 1986, between Florida Rock Industries Inc. and Florida Rock Properties, Inc., successor by merger to Grandin Land, Inc. (see Exhibit (10)(c)), but all of which may be material in the aggregate, incorporated by reference to an exhibit filed with Form S-4 dated December 13, 1988. File No. 33-26115.
(10)(b)		License Agreement, dated June 30, 1986, from Florida Rock Industries, Inc. to Florida Rock & Tank Lines, Inc. to use "Florida Rock" in corporate names, incorporated by reference to an exhibit filed with Form S-4 dated December 13, 1988. File No. 33-26115.
(10)(c)		Mining Lease Agreement, dated September 1, 1986, between Florida Rock Industries, Inc. and Florida Rock Properties, Inc., successor by merger to Grandin Land, Inc., incorporated by reference to an exhibit previously filed with Form S-4 dated December 13, 1988. File No. 33-26115.
(10)(d)		Summary of Medical Reimbursement Plan of Patriot Transportation Holding, Inc., incorporated by reference to an exhibit filed with Form 10-K for the fiscal year ended September 30, 1993. File No. 33-26115.
(10)(e)		Summary of Management Incentive Compensation Plans, incorporated by reference to an exhibit filed with Form 10-K for the fiscal year ended September 30, 1994. File No. 33- 26115.
(10)(f) Management Security Agreements between the Company and certain officers, incorporated by reference to a form of agreement previously filed (as Exhibit (10)(I)) with Form S-4 dated December 13, 1988. File No. 33-26115.
(10)(g)(1) Patriot Transportation Holding, Inc. 1995 Stock Option Plan, incorporated by reference to an appendix to the Company's Proxy Statement dated December 15, 1994. File No. 33-26115.
(10)(g)(2) Patriot Transportation Holding, Inc. 2000 Stock Option Plan, incorporated by reference to an appendix to the Company's Proxy Statement dated December 15, 1999. File No. 33-26115.
(10)(g)(3)	Patriot Transportation Holding, Inc. 2006 Stock Incentive Plan, incorporated by reference to an appendix to the Company's Proxy Statement dated December 29, 2005. File No. 33-26115.
(10)(h) 	Amended and Restated Revolving Credit Agreement dated September 30, 2008 among Patriot Transportation Holding, Inc. as Borrower, the Lenders from time to time party hereto and Wachovia Bank, National Association as Administrative Agent, incorporated by reference to the Company's Form 8-K dated October 7, 2008. File No. 33-26115.
(10)(i) The Company and its consolidated subsidiaries have other long- term debt agreements, none of which 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.
(10)(j)		Letter of Credit Facility between Patriot Transportation Holding, Inc. and SunTrust Bank, N.A. dated February 16, 2005, incorporated by reference to the Company's Form 8-K dated February 16, 2005. File No. 33-26115.
(10)(k) 	Joint Venture Agreement between Florida Rock Industries, Inc. and Florida Rock Properties, incorporated by reference to an exhibit filed with Form 10-K for the fiscal year ended September 30, 2006. File No. 33-26115.
(10)(l) 	Letter Agreement between the Company and John E. Anderson, incorporated by reference to an exhibit filed with Form 10-Q for the quarter ended December 31, 2007. File No. 33-26115.
(10)(m)		Letter Agreement between the Company and David H. deVilliers, Jr., incorporated by reference to an exhibit filed with Form 10-Q for the quarter ended December 31, 2007. File No. 33-26115.
(10)(n)		Letter Agreement between the Company and Robert E. Sandlin, incorporated by reference to an exhibit filed with Form 10-Q for the quarter ended December 31, 2007. File No. 33-26115.
(10)(o)		Letter Agreement between the Company and Terry S. Phipps, incorporated by reference to an exhibit filed with Form 10-Q for the quarter ended December 31, 2007. File No. 33-26115.
(10)(p)		Letter Agreement between the Company and John D. Klopfenstein, incorporated by reference to an exhibit filed with Form 10-Q for the quarter ended December 31, 2007. File No. 33-26115.
(10)(q) 	Agreement of Sale between FRP Bird River, LLC. and Mackenzie Investment Group, LLC. and related amendments. Filed herein.
(13)	 The Company's 2008 Annual Report to shareholders, portions of which are incorporated by reference in this Form 10-K. Those portions of the 2008 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 between the Company, Chief Executive Officers and Financial Managers, adopted December 4, 2002, incorporated by reference to an exhibit filed with Form 10-K for the year ended September 30, 2003. File No. 33-26115.
(21)		Subsidiaries of Registrant at September 30, 2007: Florida Rock & Tank Lines, Inc. (a Florida corporation); Florida Rock Properties, Inc. (a Florida corporation); FRP Development Corp. (a Maryland corporation); FRP Maryland, Inc. (a Maryland corporation); 34 Loveton Center LLC (a Maryland limited liability company); FRTL, Inc. (a Florida corporation); SunBelt Transport, Inc. (a Florida Corporation); Oz LLC(a Maryland limited liability company); 1502 Quarry, LLC(a Maryland limited liability company); FRP Lakeside LLC #1 (a Maryland limited company); FRP Lakeside LLC #2 (a Maryland limited liability company); FRP Lakeside LLC #3 (a Maryland limited liability company); FRP Lakeside LLC #4 (a Maryland limited liability company); FRP Lakeside LLC #5 (a Maryland limited liability company); FRP Hillside LLC (a Maryland limited liability company); FRP Hillside LLC #2 (a Maryland limited liability company); FRP Hillside LLC #3 (a Maryland limited liability company); FRP Hillside LLC #4 (a Maryland limited liability company); FRP Windsor LLC (a Maryland limited liability company); FRP Dorsey LLC (a Maryland limited liability company); FRP Bird River LLC (a Maryland limited liability company); FRP Interchange LLC (a Maryland limited liability company); FRP Azalea LLC (a Maryland limited liability company); FRP Manassas LLC (a Maryland limited liability company); FRP Hampstead LLC (a Maryland limited liability company).
(23)(a) Consent of Hancock Askew & Co., Inc., Independent Registered Certified Public Accounting Firm, appears on page 30 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 John D. Klopfenstein.
(32)			Certification of Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
PATRIOT TRANSPORTATION HOLDING, INC. 	INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES 	(Item 15(a) (1) and 2))
Page
Consolidated Financial Statements: Consolidated balance sheets at September 30, 2008 and 2007 13(a)
For the years ended September 30, 2008, 2007 and 2006: Consolidated statements of income 12(a) Consolidated statements of cash flows 14(a) Consolidated statements of shareholders' equity 15(a) 	and comprehensive income Notes to consolidated financial statements 16-23(a)
Reports of Independent Registered Certified Public Accounting Firms 25-26(a) Selected quarterly financial data (unaudited) 6(a)
Consents of Independent Registered Certified Public Accounting Firms 31(b)
Reports of Independent Registered Certified Public Accounting Firms on Financial Statement Schedules 31(b)
Consolidated Financial Statement Schedules:
II - Valuation and qualifying accounts 32(b)
III - Real estate and accumulated depreciation and depletion 33-34(b)
(a)		Refers to the page number in the Company's 2008 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 schedules have been omitted, as they are not required under the related instructions, are inapplicable, or because the information required is included in the consolidated financial statements.
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-18875, 333-55132, 333-125099 and 333- 131475) of Patriot Transportation Holding, Inc. of our report dated December 03, 2008 relating to the consolidated financial statements and the effectiveness of Patriot Transportation Holding, Inc's internal control over financial reporting which appears in the Annual Report to Shareholders incorporated by reference. We also consent to the incorporation by reference of our report dated December 3, 2008, relating to the financial statement schedules, which appear in this Form 10-K.
Hancock Askew & Co., LLP
Savannah, Georgia December 3, 2008
____________________
REPORTS OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of Patriot Transportation Holding, Inc.:
Our audit of the consolidated financial statements referred to in our report dated December 3, 2008 appearing in the 2008 Annual Report to Shareholders of Patriot Transportation Holding, Inc. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audit. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
Hancock Askew & Co., LLP
Savannah, Georgia December 3, 2008
____________________
PATRIOT TRANSPORTATION HOLDING, INC. SCHEDULE III (CONSOLIDATED) - REAL ESTATE AND ACCUMULATED DEPRECIATION AND DEPLETION YEARS ENDED SEPTEMBER 30, 2008, 2007 AND 2006 (In thousands)
2008 2007 2006
Gross Carrying Cost of Real Estate:
Balance at beginning of period $190,030 184,735 164,233
Additions during period: Amounts capitalized 24,221 5,295 20,502
Deductions during period: Cost of real estate sold (3,326) - - Other (abandonments) (6) - -
Balance at close of period $210,919 190,030 184,735
Accumulated Depreciation & Depletion:
Balance at beginning of period $ 36,539 33,671 29,816
Additions during period: Charged to cost & expense 4,045 2,868 3,855
Deductions during period: Real estate sold (6) - -
Balance at close of period $40,578 36,539 33,671