11-K 1 form11k.txt FORM 11-K 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, 2007 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. 1801 Art Museum Drive Jacksonville, Florida 32207 --------------------------------------------------------------------------- TABLE OF CONTENTS Page(s) Report of Independent Registered Public Accounting Firm 3 Financial Statements Statements of Net Assets Available for Benefits 4 Statement of Changes in Net Assets Available for Benefits 5 Notes to Financial Statements 6-12 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, 2007 and 2006, and the related statement of changes in net assets available for benefits for the year ended December 31, 2007. 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 audit 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, 2007 and 2006, and the changes in net assets available for benefits for the year ended December 31, 2007, in conformity with accounting principles generally accepted in the United States. Our audits were 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, 2007 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 19, 2008 Patriot Transportation Holding, Inc. Profit Sharing and Deferred Earnings Plan Statements of Net Assets Available for Benefits December 31, 2007 and 2006 -------------------------------------------------------------------------- 2007 2006 ---- ---- ASSETS Investments, at fair value Investments $ 27,062,954 $ 24,487,680 Participant loans 1,473,251 1,363,947 --------------- ------------- Total investments, at fair value 28,536,205 25,851,627 Contributions receivable Employer 15,651 13,504 Employee 38,289 31,586 -------------- ------------ Total contributions receivable 53,940 45,090 -------------- ------------ Net assets available for benefits at fair value 28,590,145 25,896,717 Adjustment from fair value to contract value for fully benefit-responsive contracts (8,750) 10,048 ---------- ----------- Net assets available for benefits $ 28,581,395 $ 25,906,765 ============= =========== Patriot Transportation Holding, Inc. Profit Sharing and Deferred Earnings Plan Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 2007 ------------------------------------------------------------------------- ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment income Dividend and interest income $ 1,132,516 Net appreciation in fair value of investments 1,583,325 Other income - loan interest 99,069 --------------- Total investment income 2,814,910 Contributions Employer 845,880 Employee 2,003,900 Rollovers 103,465 -------------- Total contributions 2,953,245 -------------- Total additions 5,768,155 DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Distributions to participants 3,093,134 Administrative expenses 391 -------------- Total deductions 3,093,525 -------------- Net increase 2,674,630 Net assets available for benefits Beginning of year 25,906,765 -------------- End of year $ 28,581,395 =============== Patriot Transportation Holding, Inc. Profit Sharing and Deferred Earnings Plan Notes to Financial Statements December 31, 2007 and 2006 -------------------------------------------------------------------------- 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 2006 or 2007 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 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 under the following schedules based on years of service. 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, 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 $121,900 and $195,860 at December 31, 2007 and 2006, respectively. Amounts allocated were $196,180 in 2007. 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. Loans 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. 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 The Plan accounts for investment contracts in accordance with the Financial Accounting Standards Board (FASB) Staff Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP). The FSP 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 in defined contribution health and welfare and pension plans. As required by the FSP, 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 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 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. Recent Accounting Pronouncements In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of SFAS 157 are effective for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued FASB Staff Position No. FAS 157-2, "Effective Date of FASB Statement No.157" ("FSP FAS 157-2"), that delays the effective date of SFAS 157's fair value measurement requirements for nonfinancial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis. Fair value measurements identified in FSP FAS 157-2 will be effective for the fiscal year beginning January 1, 2009. The adoption of SFAS 157 will primarily impact the valuation of the financial instruments, as discussed a bove, which we do not expect to materially impact the statement of net assets available for plan benefits or statement of changes in net assets available for plan benefits. 3. Investments Investments which exceeded 5% or more of the Plan's net assets at December 31 are summarized as follows: 2007 2006 STI Classic Prime Quality Money Market Fund $ 9,269,613 $ 7,036,042 Florida Rock Industries Inc. Common Stock * 3,306,107 T. Rowe Price Growth Stock Fund-R 2,353,436 2,546,424 Vanguard 500 Index Fund * 2,162,239 Vanguard 500 Index Signal 2,452,000 * SunTrust Retirement Stable Asset Fund 1,671,418** * Participant Loans 1,473,251 1,363,947 Longleaf Partners Fund 1,449,894 1,309,409 Patriot Transportation Holding, Inc. Common Stock 1,447,556 1,409,231 *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 $1,662,668 at December 31, 2007. During 2007 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 $1,449,457 Mutual funds 75,811 Common/collective trust 58,057 --------- Net appreciation in fair value of investments $ 1,583,325 ========== 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. To reduce the risk of market losses on these investments, the Fund enters into guaranteed investment contracts (GICs) or 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 investment contracts earn 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, 2007 was 4.47% and the average yield of the underlying assets at December 31, 2007 was 4.75%. In certain events, the amounts withdrawn from investment contracts may be payable at fair value rather than contract value. These events include termination of the Plan or the investment contracts 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. 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. 6. Plan Termination While the Company has not expressed any intent to do so, it may terminate the Plan at any time. In the event of such 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. 7. Amendments The Plan was amended to adopt a new Plan document, the Defined Contribution Plan and Trust, a prototype plan, sponsored by SunTrust Bank, on September 18, 2006. This adoption did not significantly change any features of the Plan and did not retroactively eliminate any optional form of benefits that were available under the predecessor plan. Effective April 1, 2007, the Plan was amended to allow in-service distributions for eligible employees who have reached the age of 59 1/2 and to change the definition of included compensation for purposes of calculating the employer matching contribution to include compensation for the entire period regardless of when the participant became eligible to participate in the Plan. 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 and the Plan's tax counsel believe 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. These financial instruments consist of the SunTrust investment accounts, Company stock, Vulcan Materials Company common stock and contributions receivable. 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 plan sponsor. In November 2007, Vulcan Materials Company acquired all of the common stock of Florida Rock Industries, Inc. All investments in Florida Rock Industries, Inc. common stock were exchanged for shares of 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. Subsequent Event The Plan was amended effective January 1, 2008 to comply with the final IRS Code Section 415 regulations. This amendment did not significantly change any features of the Plan and did not retroactively eliminate any optional form of benefits that were available under the predecessor plan. Description of investment including maturity date, rate Identity of issue borrower of interest, collateral, par or Current or similar party maturity date Cost ** value ----------------------------------------------------------------------- *STI Classic Prime Quality Money Market TSU-PMM Money Market $ 9,269,613 *Vulcan Materials Co Common Stock Common Stock 844,088 *Patriot Transportation Common Stock Common Stock 1,447,556 T. Rowe Price Growth Stock Fund - R Mutual Fund 2,353,436 Vanguard 500 Index Signal Mutual Fund 2,452,000 T. Rowe Price Capital Appreciation Mutual Fund 949,165 Longleaf Partners Fund Mutual Fund 1,449,894 T. Rowe Price Retirement 2010 Fund - R Mutual Fund 76,357 T. Rowe Price New Horizon Mutual Fund 660,008 T. Rowe Price Retirement 2020 Fund - R Mutual Fund 150,658 Chase Growth fund Mutual Fund 1,013,841 T. Rowe Price US Treasury Intermediate Mutual Fund 285,209 T. Rowe Price Retirement 2030 Fund - R Mutual Fund 983,859 T. Rowe Price Retirement 2040 Fund - R Mutual Fund 881,879 T. Rowe Price Equity Income Fund A Mutual Fund 455,397 MFS Research Bond Fund - A Mutual Fund 157,326 Fidelity Advisor Inflation Protected Bond Mutual Fund 96,637 Federated Mid Cap Index IS Mutual Fund 531,102 AllianceBernstein International Growth A Mutual Fund 1,064,669 AllianceBernstein International Value A Mutual Fund 26,170 Janus Adviser Small Company Value CI S Mutual Fund 242,672 *SunTrust Retirement Stable Asset Fund Common/ Collective Trust 1,671,418 --------- 27,062,954 *Participant loans Loans with interest ranging 1,473,251 from 5.00% ---------- to 9.25% $ 28,536,205 ------------ * 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. Milton, Jr. ------------------------------ John D. Milton, Jr. Vice President, Chief Financial Officer, and Secretary of Patriot Transportation Holding, Inc. (Principal Financial Officer) EXHIBIT 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-125099) pertaining to the Patriot Transportation Holding, Inc. Profit Sharing and Deferred Earnings Plan of our report dated June 19, 2008, with respect to the financial statements and supplemental schedule of the Patriot Transportation Holding, Inc. Profit Sharing and Deferred Earnings Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2007. June 19, 2008