11-K 1 patr11k.txt PATR 11K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------ FORM 11-K ----------------------- (Mark One) [X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2009 OR [ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the transition period from ____________ to ________________ Commission File Number 33-26115 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: PATRIOT TRANSPORTATION HOLDING, INC. PROFIT SHARING AND DEFERRED EARNINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Patriot Transportation Holding, Inc. 501 Riverside Avenue, Suite 500 Jacksonville, Florida 32202 ---------------------------------------------------------------------- TABLE OF CONTENTS Page(s) Report of Independent Registered Public Accounting Firm 2 Financial Statements Statements of Net Assets Available for Benefits 3 Statement of Changes in Net Assets Available for Benefits 4 Notes to Financial Statements 5-12 Supplemental Schedule Schedule H, Line 4i - Schedule of Assets (Held at End of Year) 13 Note: Other schedules required by 29 CFR 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable, or are not required for participant directed investment transactions. Report of Independent Registered Public Accounting Firm To the Participants and Administrator of Patriot Transportation Holding, Inc. Profit Sharing and Deferred Earnings Plan We have audited the accompanying statements of net assets available for benefits of the Patriot Transportation Holding, Inc. Profit Sharing and Deferred Earnings Plan (the Plan) as of December 31, 2009 and 2008, and the related statement of changes in net assets available for benefits for the year ended December 31, 2009. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis of designing audit procedures that are appropriate in the circumstances, but not for expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2009 and 2008, and the changes in net assets available for benefits for the year ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America. Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2009 is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. Savannah, Georgia June 29, 2010 Patriot Transportation Holding, Inc. Profit Sharing and Deferred Earnings Plan Statements of Net Assets Available for Benefits December 31, 2009 and 2008 2009 2008 ASSETS Investments, at fair value Investments $ 21,022,925 $ 20,705,159 Participant loans 1,170,626 1,394,988 Total investments, at fair value 22,193,551 22,100,147 Contributions receivable Employer 11,336 3,809 Employee 26,260 13,404 Total contributions receivable 37,596 17,213 Total assets, at fair value 22,231,147 22,117,360 LIABILITIES Distributions payable 90,000 - Total liabilities 90,000 - Net assets available for benefits, at fair value 22,141,147 22,117,360 Adjustment from fair value to contract value for fully benefit-responsive investment contracts (30,729) (2,020) Net assets available for benefits $ 22,110,418 $ 22,115,340 The accompanying notes are an integral part of these financial statements. Patriot Transportation Holding, Inc. Profit Sharing and Deferred Earnings Plan Statements of Net Assets Available for Benefits December 31, 2009 and 2008 ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment income Dividend and interest income $ 179,281 Net appreciation in fair value of investments 2,692,420 Other income - loan interest 81,965 Total investment income 2,953,666 Contributions Employer 714,833 Employee 1,703,879 Rollovers 34,095 Total contributions 2,452,807 Total additions 5,406,473 DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Distributions to participants (5,407,781) Administrative expenses (3,614) Total deductions (5,411,395) Net decrease (4,922) Net assets available for benefits Beginning of year 22,115,340 End of year $ 22,110,418 The accompanying notes are an integral part of these financial statements. 1. Description of the Plan The following description of the Patriot Transportation Holding, Inc. (the "Company") Profit Sharing and Deferred Earnings Plan (the "Plan") provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. General The Plan is a defined contribution plan available to all eligible employees of the Company, as defined in the Plan agreement. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Contributions Each year, participants may contribute up to 100% of pretax annual compensation, as defined in the Plan. Participants may also contribute amounts representing distributions from other qualified defined benefit plans, defined contribution or other qualified plans. The Company matches 50% of the first 6% of the participant's deferred earnings contributions. In addition, the Company may make a discretionary contribution to the Plan each year in an amount determined by the Board of Directors of the Company subject to certain limitations relating to the aggregate compensation of participants. No discretionary contributions were made by the Company for the 2008 or 2009 Plan years. Participant Accounts Each participant's account is credited with the participant's contributions, the employer's matching contribution, an allocation of the employer's discretionary contributions (if any) and Plan earnings. The benefit to which a participant is entitled is the benefit that is available in the participant's vested account. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers a money market fund, common/collective trust, mutual funds, and Company stock as investment options for participants. All participants who have not made an election are deemed to have elected to have contributions made to their accounts invested in the SunTrust Retirement Stable Asset Fund. Vesting Participants are fully vested in their voluntary contributions plus actual earnings thereon. If participants are employed on or after their retirement age, the company's matching and discretionary contributions are fully vested. In the event of termination by retirement, death or disability of the participant, 100% of the employer contributions will be distributed to the participant or the participant's designated beneficiary. Vesting (cont.) Vesting in the Company's matching and discretionary contributions plus actual earnings thereon is determined for each plan year based on years of service according to the following schedule. A year of service is defined by the Plan as any Plan year in which the participant worked more than 1,000 hours. Matching Contributions Vested Years of Service Percentage Less than 1 0% 1 20% 2 40% 3 60% 4 80% 5 100% Profit Sharing Contributions Vested Years of Service Percentage Less than 3 0% 3 20% 4 40% 5 60% 6 80% 7 100% Payment of Benefits On termination of employment, death or disability of a participant, or upon a participant election for an in-service distribution after age 59 1/2, benefits for distribution shall be determined based upon the participant's vested account balance on the date of distribution, which shall be made as soon as administratively feasible or later if so elected by the participant in amounts as provided in the Plan. Forfeited Accounts The non-vested portion of a terminated participant's account shall be forfeited and reallocated to the accounts of the remaining participants in the same manner as employer contributions were originally allocated to such participants. Any forfeiture from an employer discretionary account shall be allocated in the plan year in which the forfeiture occurs. Any forfeiture from an employer matching account shall be reallocated in the following plan year. Unallocated forfeitures totaled $227,026 and $117,294 at December 31, 2009 and 2008, respectively. $117,294 was reallocated to eligible participants in 2009. Participant Loans Participants may borrow from their accounts a minimum of $1,000 and a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loans bear interest at the prevailing rate used by commercial lending institutions. Participants may have only two loans outstanding at any time. Loans are secured by the participant's remaining vested account balance. Loan terms are limited to five years except residential loans, which are payable up to 15 years. Loan repayment will be deducted from the participant's payroll over the term of the loan. Upon termination of employment with the Company, the outstanding balance of the loan, including accrued interest, is due immediately and if not repaid, is considered a distribution. When a participant defaults on a loan obtained from the Plan, the Plan administrator will report the amount of default to the IRS as a distribution from the Plan. Loans in the amount of $128,741 defaulted and were included in participant distributions for the Plan year ended December 31, 2009. 2. Summary of Significant Accounting Policies Basis of Accounting The financial statements of the Plan are prepared under the accrual method of accounting in conformity with accounting principles generally accepted in the United States of America. Investments Valuation and Income Recognition Plan investments are reported at fair value. The relevant accounting standard for defined contribution plans defines the circumstances in which an investment contract is considered fully benefit responsive and provides certain reporting and disclosure requirements for fully benefit responsive investment contracts. As required by the standard, investments in the accompanying Statements of Net Assets Available for Benefits include fully benefit responsive investment contracts recognized at fair value in the Plan's Statement of Net Assets Available for Benefits with a corresponding adjustment to reflect these investments at contract value. Investments in common stock are stated at fair value based upon quoted market prices at year-end. Units or shares of mutual funds (registered investment companies) are stated at fair value based upon the net asset value of shares held by the Plan at year-end. The fair value of the underlying assets of the common/collective trust fund is based upon the fair value of the underlying assets of the trust according to the Trustee's valuation. The contract value of participation units owned in the common/collective trust fund are based on quoted redemption values, as determined by the Trustee, on the last business day of the Plan year. Loans to participants are recorded at the unpaid balance of the individual loans as of year-end, which approximate fair value. Net appreciation or depreciation in fair value of investments consists of the realized gains or losses and the unrealized appreciation or depreciation on these investments. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis when it is earned. Dividends are recorded on the basis of the ex-dividend date. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Benefit Payments Benefits are recorded when paid. 3. Investments Investments which exceeded 5% or more of the Plan's net assets at December 31 are summarized as follows: 2009 2008 Ridgeworth Prime Quality Money Market Fund $ 6,788,847 $ 8,877,206 Vanguard 500 Index Signal 1,589,017 1,268,531 SunTrust Retirement Stable Asset Fund 1,468,262** 1,642,938** Ridgeworth Select Large Cap Grth Stock 1,475,987 * Participant Loans 1,170,626 1,394,988 T. Rowe Price Growth Stock Fund-R * 1,134,212 *Investment did not represent 5% or more of Plan's net assets at the respective year end **SunTrust Stable Asset Fund is shown at fair value. The contract value is $1,437,533 at December 31, 2009 and $1,640,918 at December 31, 2008. During 2009 the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value as follows: Common stock $ 197,989 Mutual funds 2,458,515 Common/collective trust 35,916 Net appreciation in fair value of investments $ 2,692,420 4. Investment Contracts The Plan, through the SunTrust Stable Value Fund (the Fund), holds investments in fixed income securities, which consist of common collective trusts, short-term securities and bonds. The Fund is considered a traditional Guaranteed Investment Contract (GIC), as the participants hold interests in shares of the fund and not in the underlying assets. The Fund enters into wrapper contracts with financial institutions or insurance companies, which enable the participants to transact at a specified contract value by protecting the principal amount invested over a specified period of time. The Fund earns interest at interest crediting rates that are typically reset on a monthly or quarterly basis. These interest crediting rates use a formula that is based on the characteristics of the underlying fixed income portfolio. The minimum interest crediting rate for all investment contracts is zero percent. Factors that can influence the future average crediting rates are (i) the level of market interest rates; (ii) the amount and timing of participant contributions, transfers and withdrawals into/out of the investment contract; (iii) the investment returns generated by the fixed income investments that underlie the investment contracts; or (iv) the duration of the investments underlying the investment contracts. The crediting rate formula amortizes the realized and unrealized market value gains and losses over the duration of the underlying investments. The crediting yield earned by the participants at December 31, 2009 was 2.53% and the average yield of the underlying assets at December 31, 2009 was 1.92%. In certain events, the amounts withdrawn from investment contracts may be payable at fair value rather than contract value. These events may include termination of the Plan or a material adverse change to the provisions of the Plan. Based upon experience to date, the Company does not believe the events described above are probable of occurring. 5. Fair Value Measurement The fair value measurement standard establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 . Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 . Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly; Level 3 . Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table sets forth by level, within the fair value hierarchy, the Plan's assets at fair value as of December 31, 2009 and December 31, 2008. Investment assets at Fair Value as of December 31, 2009 ------------------------------------------------------- Level 1 Level 2 Level 3 Total ------------------------------------------------------- Assets: Money market $ 6,788,847 $ - $ - $ 6,788,847 Mutual funds 11,299,506 - - 11,299,506 Common stock 1,466,310 - - 1,466,310 Collective investment trusts - 1,468,262 - 1,468,262 Participant loans - 1,170,626 - 1,170,626 ----------- ---------- --------- ----------- Totals assets $19,554,663 $2,638,888 $ - $22,193,551 =========== ========== ========== =========== Investment assets at Fair Value as of December 31, 2008 ------------------------------------------------------- Level 1 Level 2 Level 3 Total ------------------------------------------------------- Assets: Money market $ 8,877,206 $ - $ - $ 8,877,206 Mutual funds 8,532,626 - - 8,532,626 Common stock 1,652,389 - - 1,652,389 Collective investment trusts - 1,642,938 - 1,642,938 Participant loans - 1,394,988 - 1,394,988 ----------- ---------- --------- ----------- Totals assets $19,062,221 $3,037,926 $ - $22,100,147 =========== ========== ========== =========== 6. Related Party Transactions Certain Plan investments are managed by SunTrust. SunTrust is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in- interest transactions. Fees to the trustee are deducted from investment income. Additionally, the plan holds an investment in the common stock of the Company. 7. Plan Termination While the Company has not expressed any intent to do so, it may cease matching contributions or terminate the Plan at any time. In the event of termination, the accounts of all participants would become fully vested and the Company, by written notice to the Trustee and the Committee, may direct either complete distribution of the assets in the Trust Fund to the participants or, continue the Trust and the distribution of benefits at such time and in such manner as though the Plan had not been terminated. 8. Income Tax Status The prototype Plan, adopted by the Company, obtained its latest determination letter on August 26, 2002, in which the Internal Revenue Service stated that the prototype Plan, was in compliance with the applicable requirements of the Internal Revenue Code ("IRC"). The Plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC. 9. Risks and Uncertainties The Plan provides for investment options in various investment securities. Investment securities are exposed to risks, such as interest rate, market risk and credit risk. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statement of net assets available for benefits and the statement of changes in net assets available for benefits. Certain financial instruments potentially subject the Plan to concentrations of credit risk. The Plan limits its credit risk by maintaining its accounts with what the plan administrator believes to be high quality financial institutions. 10. Common Stock Purchase The Plan previously allowed as an investment option, investment in the common stock of Florida Rock Industries, Inc., a related party to the Company. In November 2007, Vulcan Materials Company purchased the common stock of Florida Rock Industries, Inc. All investments in Florida Rock Industries, Inc. common stock were exchanged for shares of the Vulcan Materials Company common stock and any remaining cash balance was invested in the STI Classic Prime Quality Money Market fund. Effective December 31, 2007, the option to invest in Vulcan Materials Common Stock was frozen to new contributions. Any existing investments in Vulcan common stock may remain until the participant elects to make a transfer to another fund or elects a distribution. 11. Administrative Error The Employer identified an administrative error related to the Plan that constituted an operational failure as defined in the Employee Plans Compliance Resolutions Systems (EPCRS). Certain participants who terminated services and took distribution from the Plan received incorrect employer matching contributions because the vesting of such contributions was calculated incorrectly. The errors were noted to have occurred in the 2009 Plan year. The cumulative amount of the error as of December 31, 2009 is estimated to be $90,000 and has been included in the accompanying Plan financial statements. Management of the Plan and the Employer intend to correct all of the operational failures in accordance with the EPCRS for the respective Plan year. 12. Reconciliation of Financial Statements to Form 5500 The reconciliation of net assets available for benefits per the financial statements to the Form 5500 as of December 31, 2009, is as follows: December 31, 2009 Net assets available for benefits per the financial statements $ 22,110,418 Distributions payable 90,000 Net assets available for benefits per the Form 5500 $ 22,200,418 The reconciliation of distributions to participants per the financial statements to the Form 5500 as of December 31, 2009, is as follows: December 31, 2009 Distributions to participants per the financial statements $ 5,407,781 Distributions payable 90,000 Benefit payments to participants per the Form 5500 $ 5,317,781 Description of investment including maturity date, rate Identity of issue borrower of interest, collateral, par or Current or similar party maturity date Cost ** value *Ridgeworth Prime Quality Money Market 1SU-PMM Money Market $ 6,788,847 *Vulcan Materials Co Common Stock Common Stock 390,011 *Patriot Transportation Common Stock Common Stock 1,076,299 *Ridgeworth Select large Cap Grth Stock Mutual Fund 1,475,987 Vanguard 500 Index Signal Mutual Fund 1,589,017 *Ridgeworth Moderate Allocation Strat I Mutual Fund 746,187 AIM International Growth Fund Mutual Fund 479,939 T. Rowe Price Retirement 2010 Fund - R Mutual Fund 414,161 T. Rowe Price New Horizon Mutual Fund 474,458 T. Rowe Price Retirement 2020 Fund - R Mutual Fund 483,865 Chase Growth fund Mutual Fund 569,286 T. Rowe Price US Treasury Intermediate Mutual Fund 342,496 T. Rowe Price Retirement 2030 Fund - R Mutual Fund 993,936 T. Rowe Price Retirement 2040 Fund - R Mutual Fund 816,943 T. Rowe Price Equity Income Fund A Mutual Fund 494,259 Federated Capital Appreciation Fund - A Mutual Fund 524,469 American Century Inflat-Adj Bond Adv Mutual Fund 272,825 *Ridgeworth Investment Grade Bond I Mutual Fund 259,440 Federated Mid Cap Index IS Mutual Fund 1,008,220 MFS International Value Fund - A Mutual Fund 155,815 Perkins Small CapValues - S Mutual Fund 198,203 *SunTrust Retirement Stable Asset Fund Common/Collective Trust 1,468,262 21,022,925 *Participant loans Loans with interest ranging from 5.00% to 9.25% 1,170,626 $ 22,193,551 * Party-in-interest as defined by ERISA ** Cost not required for participant-directed investments SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed by the undersigned hereunto duly authorized. PATRIOT TRANSPORTATION HOLDING, INC., PROFIT SHARING AND DEFERRED EARNINGS PLAN By: /s/ John D. Klopfenstein Controller and Chief Accounting Officer EXHIBIT INDEX Exhibit No. 23.1 Consent of Independent Registered Public Accounting Firm dated June 29, 2010.