PART I - FINANCIAL INFORMATION |
Page
No.
|
Item
1. Financial Statements
|
|
September 30, 2008 (Unaudited) and December 31, 2007
|
3
|
Three Months and Nine Months ended September 30, 2008 and 2007
|
|
(Unaudited)
|
4
|
|
|
Comprehensive Income
|
|
Nine Months Ended September 30, 2008
|
|
(Unaudited)
|
5
|
Nine
Months Ended September 30, 2008 and 2007
|
|
(Unaudited)
|
6
|
7-11
|
|
12-15
|
|
15
|
|
16
|
|
16
|
|
16
|
|
16
|
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Exhibit 3.1
Exhibit 3.2
|
|
17
|
CONSOLIDATED
TOMOKA LAND CO.
|
||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited)
|
||||||||
September
30,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
ASSETS
|
||||||||
Cash
|
$ | 211,080 | $ | 863,826 | ||||
Restricted
Cash
|
460,555 | 10,387,550 | ||||||
Investment
Securities
|
5,173,172 | 10,193,094 | ||||||
Notes
Receivable
|
4,203,693 | 5,164,421 | ||||||
Land
and Development Costs
|
17,435,972 | 15,654,456 | ||||||
Intangible
Assets
|
5,115,113 | 4,717,699 | ||||||
Other
Assets
|
6,785,188 | 7,899,810 | ||||||
39,384,773 | 54,880,856 | |||||||
Property,
Plant and Equipment:
|
||||||||
Land,
Timber and Subsurface Interests
|
11,908,674 | 7,793,594 | ||||||
Golf
Buildings, Improvements & Equipment
|
11,746,179 | 11,713,046 | ||||||
Income
Properties Land, Buildings and Improvements
|
116,504,886 | 104,819,695 | ||||||
Other
Furnishings and Equipment
|
3,226,949 | 2,910,009 | ||||||
Construction
in Process
|
661,773 | -- | ||||||
Total
Property, Plant and Equipment
|
144,048,461 | 127,236,344 | ||||||
Less,
Accumulated Depreciation and Amortization
|
(11,928,203 | ) | (10,284,670 | ) | ||||
Net
- Property, Plant and Equipment
|
132,120,258 | 116,951,674 | ||||||
TOTAL
ASSETS
|
$ | 171,505,031 | $ | 171,832,530 | ||||
LIABILITIES
|
||||||||
Accounts
Payable
|
$ | 840,562 | $ | 452,090 | ||||
Accrued
Liabilities
|
8,752,305 | 8,684,175 | ||||||
Accrued
Stock Based Compensation
|
1,725,728 | 3,277,821 | ||||||
Income
Taxes Payable
|
101,640 | 3,058,049 | ||||||
Deferred
Income Taxes
|
34,019,605 | 32,882,399 | ||||||
Notes
Payable
|
8,579,550 | 6,807,388 | ||||||
TOTAL
LIABILITIES
|
54,019,390 | 55,161,922 | ||||||
SHAREHOLDERS'
EQUITY
|
||||||||
Common
Stock
|
5,727,515 | 5,725,806 | ||||||
Additional
Paid in Capital
|
5,217,955 | 5,130,574 | ||||||
Retained
Earnings
|
107,726,516 | 107,012,038 | ||||||
Accumulated
Other Comprehensive Loss
|
(1,186,345 | ) | (1,197,810 | ) | ||||
TOTAL
SHAREHOLDERS' EQUITY
|
117,485,641 | 116,670,608 | ||||||
TOTAL
LIABILITIES AND
|
||||||||
SHAREHOLDERS'
EQUITY
|
$ | 171,505,031 | $ | 171,832,530 |
CONSOLIDATED-TOMOKA LAND CO. | ||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Three
Months Ended
|
Nine Months Ended | |||||||||||||||
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Income
|
||||||||||||||||
Real
Estate Operations:
|
||||||||||||||||
Real
Estate Sales
|
||||||||||||||||
Sales
and Other Income
|
$ | 97,735 | $ | 2,994,820 | $ | 2,358,789 | $ | 8,860,680 | ||||||||
Costs
and Other Expenses
|
(345,055 | ) | (627,262 | ) | (1,231,908 | ) | (4,833,438 | ) | ||||||||
(247,320 | ) | 2,367,558 | 1,126,881 | 4,027,242 | ||||||||||||
Income
Properties
|
||||||||||||||||
Leasing
Revenues and Other Income
|
2,380,052 | 2,207,308 | 6,874,518 | 6,537,982 | ||||||||||||
Costs
and Other Expenses
|
(515,425 | ) | (520,110 | ) | (1,409,361 | ) | (1,373,192 | ) | ||||||||
1,864,627 | 1,687,198 | 5,465,157 | 5,164,790 | |||||||||||||
Golf
Operations
|
||||||||||||||||
Sales
and Other Income
|
814,067 | 930,164 | 3,481,770 | 3,907,346 | ||||||||||||
Costs
and Other Expenses
|
(1,531,483 | ) | (1,577,723 | ) | (4,917,257 | ) | (5,236,862 | ) | ||||||||
(717,416 | ) | (647,559 | ) | (1,435,487 | ) | (1,329,516 | ) | |||||||||
Total
Real Estate Operations
|
899,891 | 3,407,197 | 5,156,551 | 7,862,516 | ||||||||||||
Profit
on Sales of Other
|
||||||||||||||||
Real
Estate Interests
|
590,439 | 816,235 | 794,696 | 1,400,979 | ||||||||||||
Interest
and Other Income
|
91,089 | 149,627 | 535,839 | 450,420 | ||||||||||||
Operating
Income
|
1,581,419 | 4,373,059 | 6,487,086 | 9,713,915 | ||||||||||||
General
and Administrative Expenses
|
(1,410,864 | ) | (1,044,337 | ) | (2,555,806 | ) | (5,525,328 | ) | ||||||||
Income Before
Income Taxes
|
170,555 | 3,328,722 | 3,931,280 | 4,188,587 | ||||||||||||
Income
Taxes
|
(65,309 | ) | (1,226,158 | ) | (1,498,718 | ) | (1,553,895 | ) | ||||||||
Net
Income
|
$ | 105,246 | $ | 2,102,564 | $ | 2,432,562 | $ | 2,634,692 | ||||||||
Per
Share Information:
|
||||||||||||||||
Basic
and Diluted Income Per Share
|
$ | 0.02 | $ | 0.37 | $ | 0.42 | $ | 0.46 | ||||||||
Dividends
|
$ | 0.10 | $ | 0.10 | $ | 0.30 | $ | 0.28 |
CONSOLIDATED-TOMOKA LAND CO. | |||||||||||||||||||
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY | |||||||||||||||||||
AND COMPREHENSIVE INCOME
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
Additional
|
Accumulated
|
Total
|
|||||||||||||||||
Common
|
Paid-
In
|
Retained
|
Other
Comprehensive
|
Shareholders'
|
Comprehensive
|
||||||||||||||
Stock
|
Capital
|
Earnings
|
Income
|
Eqity
|
Income
|
||||||||||||||
Balance
December 31, 2007
|
$ | 5,725,806 | $ | 5,130,574 | $ | 107,012,038 | $ | (1,197,810 | ) | $ | 116,670,608 | ||||||||
Net
Income
|
-- | -- | 2,432,562 | -- | 2,432,562 | $ | 2,432,562 | ||||||||||||
Other
Comprehensive Income: Cash Flow
|
|||||||||||||||||||
Hedging
Derivative, Net of Tax
|
-- | -- | -- | 11,465 | 11,465 | 11,465 | |||||||||||||
Comprehensive
Income
|
-- | -- | -- | -- | -- | $ | 2,444,027 | ||||||||||||
Stock
Options
|
1,709 | 87,381 | -- | -- | 89,090 | ||||||||||||||
Cash
Dividends ($.30 per share)
|
-- | -- | (1,718,084 | ) | -- | (1,718,084 | ) | ||||||||||||
Balance
September 30, 2008
|
$ | 5,727,515 | $ | 5,217,955 | $ | 107,726,516 | $ | (1,186,345 | ) | $ | 117,485,641 |
NOTE 2. COMMON STOCK AND EARNINGS PER
SHARE
|
||||||||||||||||
Basic
earnings per common share were computed by dividing net
income by the weighted average number of shares of common stock
outstanding during the year.
|
||||||||||||||||
Diluted
earnings per common share are based on the assumption of the conversion of
stock options at the beginning
of each period using the treasury stock method at
|
||||||||||||||||
average
cost for the periods. The conversion of stock options were
anti-dilutive for the three-months and nine-months ended September 30,
2008, and the
|
||||||||||||||||
three-months ended September 30, 2007, thus were not included in the calculation of diluted earnings per share for those periods. | ||||||||||||||||
Three
Months Ended
|
Nine Months Ended | |||||||||||||||
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Income
Available to Common Shareholders:
|
||||||||||||||||
Net
Income
|
$ | 105,246 | $ | 2,102,564 | $ | 2,432,562 | $ | 2,634,692 | ||||||||
Weighted
Average Shares Outstanding
|
5,727,515 | 5,720,219 | 5,727,072 | 5,713,450 | ||||||||||||
Common
Shares Applicable to Stock
|
||||||||||||||||
Options
Using the Treasury Stock Method
|
-- | -- | -- | 14,738 | ||||||||||||
Total
Shares Applicable to Diluted Earnings Per Share
|
5,727,515 | 5,720,219 | 5,727,072 | 5,728,188 | ||||||||||||
Per
Share Information:
|
||||||||||||||||
Basic
& Diluted Income Per share
|
||||||||||||||||
Net
Income
|
$ | 0.02 | $ | 0.37 | $ | 0.42 | $ | 0.46 |
NOTE 3. NOTES
PAYABLE
|
||||||||
Notes
payable consist of the following:
|
||||||||
September 30, 2008 | ||||||||
Due
Within
|
||||||||
Total
|
One
Year
|
|||||||
$20,000,000
Line of Credit
|
$ | 1,976,911 | $ | -- | ||||
Notes
Payable
|
6,602,639 | 263,882 | ||||||
$ | 8,579,550 | $ | 263,882 | |||||
Payments
applicable to reduction of principal amounts will be required as
follows:
|
||||||||
Year Ending September 30,
|
||||||||
2009
|
$ | 263,882 | ||||||
2010
|
2,285,735 | |||||||
2011
|
332,303 | |||||||
2012
|
5,697,630 | |||||||
2013
& Thereafter
|
-- | |||||||
$ | 8,579,550 | |||||||
For
the first nine months of 2008, interest expense was $256,522, net of
$131,864 interest capitalized to
|
||||||||
land
and development costs and construction in process, with interest of
$388,386 paid during the period.
|
||||||||
For
the first nine months of 2007, interest expense was $290,313, net of
$94,344 interest capitalized to land
|
||||||||
and
development costs, with interest of $384,657 paid during
the period.
|
NOTE 4. STOCK OPTION
PLAN
|
||||||||||||||||
The
Company maintains a stock option plan ("the Plan") pursuant to which 500,000
shares of the Company's common stock may be issued. A summary of
share option
|
||||||||||||||||
activity
under the Plan as of September 30, 2008 and changes during the nine
months then ended is presented below:
|
||||||||||||||||
Wtd
Avg
|
||||||||||||||||
STOCK
OPTIONS FOR THE NINE MONTHS
|
Remaining
|
|||||||||||||||
ENDED
SEPTEMBER 30, 2008
|
Contractual
|
Aggregate
|
||||||||||||||
Wtd
Avg
|
Term
|
Intrinsic
|
||||||||||||||
Shares
|
Ex Price
|
(Years)
|
Value
|
|||||||||||||
Outstanding
at December 31, 2007
|
179,800 | $ | 59.04 | |||||||||||||
Granted
|
63,000 | $ | 54.45 | |||||||||||||
Exercised
|
(3,200 | ) | $ | 25.88 | ||||||||||||
Expired
|
-- | -- | ||||||||||||||
Oustanding
at September 30, 2008
|
239,600 | $ | 58.27 | 7.66 | $ | 453,996 | ||||||||||
Exercisable
at September 30, 2008
|
61,600 | $ | 52.02 | 6.50 | $ | 331,328 | ||||||||||
Wtd
Avg
|
||||||||||||||||
STOCK
APPRECIATION RIGHTS FOR THE NINE MONTHS
|
Remaining
|
|||||||||||||||
ENDED
SEPTEMBER 30, 2008
|
Contractual
|
Aggregate
|
||||||||||||||
Wtd
Avg
|
Term
|
Intrinsic
|
||||||||||||||
Shares
|
Fair Value
|
(Years)
|
Value
|
|||||||||||||
Outstanding
at December 31, 2007
|
179,800 | $ | 13.60 | |||||||||||||
Granted
|
63,000 | $ | 5.61 | |||||||||||||
Exercised
|
(3,200 | ) | $ | 10.52 | ||||||||||||
Expired
|
-- | -- | ||||||||||||||
Oustanding
at September 30, 2008
|
239,600 | $ | 4.54 | 7.66 | $ | 244,459 | ||||||||||
Exercisable
at September 30, 2008
|
61,600 | $ | 5.23 | 6.50 | $ | 178,407 | ||||||||||
In
connection with the exercise of 3,200 option shares, 1,709 shares of stock
were issued and
|
||||||||||||||||
1,491
shares of stock were withheld via net exercise to relieve the stock option
liability by $84,000. Cash
|
||||||||||||||||
proceeds
of $5,090 were received on the exercise of the stock
options.
|
NOTE 5. PENSION
PLAN
|
||||||||||||||||
The
Company maintains a defined benefit pension plan for all employees who
have attained the
age of 21 and completed one year of service.
|
||||||||||||||||
The
pension benefits are based primarily on age, years of service and the
average compensation for the highest five years during the final ten years
of employment.
|
||||||||||||||||
The
benefit formula generally provides for a life annuity benefit.
During the three-months ended September 30, 2008, the fair market value of
the pension assets declined
|
||||||||||||||||
$41,030 (exclusive of any contributions and withdrawls). | ||||||||||||||||
Following
are the components of the Net Perodic Benefit Cost:
|
||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Service
Cost
|
$ | 84,092 | $ | 72,716 | $ | 252,276 | $ | 218,148 | ||||||||
Interest
Cost
|
108,800 | 100,683 | 326,400 | 302,049 | ||||||||||||
Expected
Return on Plan Assets
|
(130,116 | ) | (126,296 | ) | (390,348 | ) | (378,888 | ) | ||||||||
Net
Amortization
|
19,879 | 12,497 | 59,637 | 37,491 | ||||||||||||
Net
Periodic Benefit Cost
|
$ | 82,655 | $ | 59,600 | $ | 247,965 | $ | 178,800 | ||||||||
The
Company has made contributions totaling $770,893 in 2008 .
|
NOTE 7. BUSINESS SEGMENT
DATA
|
|||||||||||||||
The
Company primarily operates in three business segments: real
estate, income properties, and golf. Real estate operations include
commercial real estate,
|
|||||||||||||||
land
sales and development, agriculture and leasing properties for oil and
mineral exploration.
|
|||||||||||||||
|
|||||||||||||||
The
Company evaluates performance based on income or loss from operations
before
income taxes. The Company's reportable segments are strategic
business units that
|
|||||||||||||||
offer
differents products. They are managed separately because each segment
requires
different management techniques, knowledge, and
skills.
|
|||||||||||||||
Information
about the Company's operations in different segments is
as follows (amounts in thousands):
|
|||||||||||||||
|
|||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September
30,
|
September
30,
|
September
30,
|
September
30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||||
Revenues:
|
|||||||||||||||
Real
Estate
|
$ | 98 | $ | 2,995 | $ | 2,359 | $ | 8,861 | |||||||
Income
Properties
|
2,380 | 2,207 | 6,875 | 6,538 | |||||||||||
Golf
|
814 | 930 | 3,482 | 3,907 | |||||||||||
General,
Corporate, and Other
|
681 | 966 | 1,330 | 1,851 | |||||||||||
$ | 3,973 | $ | 7,098 | $ | 14,046 | $ | 21,157 | ||||||||
Income
(Loss):
|
|||||||||||||||
Real
Estate
|
$ | (247 | ) | $ | 2,368 | $ | 1,127 | $ | 4,027 | ||||||
Income
Properties
|
1,865 | 1,687 | 5,465 | 5,165 | |||||||||||
Golf
|
(718 | ) | (648 | ) | (1,436 | ) | (1,329 | ) | |||||||
General,
Corporate, and Other
|
(729 | ) | (78 | ) | (1,225 | ) | (3,674 | ) | |||||||
$ | 171 | $ | 3,329 | $ | 3,931 | $ | 4,189 | ||||||||
Identifiable
Assets
|
|||||||||||||||
Real
Estate
|
$ | 36,038 | |||||||||||||
Income
Properties
|
116,910 | ||||||||||||||
Golf
|
8,008 | ||||||||||||||
General,
Corporate, and Other
|
10,549 | ||||||||||||||
$ | 171,505 | ||||||||||||||
Depreciation
and Amortization
|
|||||||||||||||
Real
Estate
|
$ | 296 | |||||||||||||
Income
Properties
|
1,208 | ||||||||||||||
Golf
|
374 | ||||||||||||||
General,
Corporate, and Other
|
88 | ||||||||||||||
$ | 1,966 | ||||||||||||||
Capital
Expenditures
|
|||||||||||||||
Real
Estate
|
$ | 2,903 | |||||||||||||
Income
Properties
|
12,347 | ||||||||||||||
Golf
|
32 | ||||||||||||||
General, Corporate, and Other
|
1,558 | ||||||||||||||
$ | 16,840 | ||||||||||||||
Income
represents income (loss) from continuing operations before income
taxes.
|
|||||||||||||||
Identifiable
assets by segment are those assets that are used in the Company's
operations in each segment.
|
|||||||||||||||
General
corporate
assets and assets used in the Company's other operations consist primarily
of cash, investment securities, and property, plant, and
equipment.
|
Three
Months Ended
|
||||||||
September
30,
|
September
30,
|
|||||||
2008
|
2007
|
|||||||
Net
Income
|
$
|
105,246
|
$
|
2,102,564
|
||||
Add
Back:
|
||||||||
Depreciation
and Amortization
|
676,733
|
616,964
|
||||||
Deferred
Taxes
|
321,607
|
445,854
|
||||||
Earnings
before Depreciation,
|
||||||||
Amortization
and Deferred Taxes
|
$
|
1,103,586
|
$
|
3,165,382
|
Nine
Months Ended
|
||||||||
September
30,
|
September
30,
|
|||||||
2008
|
2007
|
|||||||
Net
Income
|
$
|
2,432,562
|
$
|
2,634,692
|
||||
Add
Back:
|
||||||||
Depreciation
and Amortization
|
1,966,494
|
1,848,214
|
||||||
Deferred
Taxes
|
1,137,206
|
636,391
|
||||||
Earnings
before Depreciation,
|
||||||||
Amortization
and Deferred Taxes
|
$
|
5,536,262
|
$
|
5,119,297
|
November 10, 2008 By: | /s/William H. McMunn |
William
H. McMunn, President and
Chief Executive
Officer
|
November 10, 2008 By: | /s/Bruce W. Teeters |
Bruce W.
Teeters, Senior Vice President
Finance and
Treasurer
|