<PAGE>


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                    FORM 10-Q



(X)      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

                 For the quarterly period ended March 31, 2002

                                       OR

( )      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

           For the transition period from             to
                                          -----------    -------------

                        Commission File Number 001-08723
                                               ---------

                       FLORIDA EAST COAST INDUSTRIES, INC.
                       -----------------------------------
             (Exact name of Registrant as specified in its charter)

             FLORIDA                                   59-2349968
             -------                                   ----------
(State or other jurisdiction of                       (IRS Employer
incorporation or organization)                     Identification No.)

ONE MALAGA STREET, ST. AUGUSTINE, FLORIDA                  32084
-----------------------------------------                  -----
 (Address of principal executive offices)               (Zip Code)

       Registrant's telephone number, including area code - (904) 829-3421
                                                            --------------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes (X) No ( )

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

              CLASS                          OUTSTANDING AT MARCH 31, 2002
              -----                          -----------------------------
Class A Common Stock-no par value                  16,922,420 shares
Class B Common Stock-no par value                  19,609,216 shares




<PAGE>



                       FLORIDA EAST COAST INDUSTRIES, INC.


                                     PART I

                              FINANCIAL INFORMATION




<TABLE>
<CAPTION>
                                      INDEX                                          PAGE NUMBERS
                                      -----                                          ------------
<S>      <C>                                                                         <C>

ITEM 1.  FINANCIAL STATEMENTS

              Consolidated Balance Sheets -
                  March 31, 2002 and December 31, 2001                                       2

              Consolidated Statements of Income -
                  Quarters ended March 31, 2002 and 2001                                     3

              Consolidated Statements of Cash Flows -
                  Quarters ended March 31, 2002 and 2001                                     4

              Notes to Consolidated Financial Statements                                     5-9

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS

              Comparison of First Quarter 2002 versus First Quarter 2001                     10-12

              Changes in Financial Condition, Liquidity and Capital Resources                13

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                          14



                                     PART II

                                OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS                                                                   14
ITEM 5.  OTHER INFORMATION                                                                   14-16
</TABLE>


                                       1
<PAGE>


                       FLORIDA EAST COAST INDUSTRIES, INC.
                           CONSOLIDATED BALANCE SHEETS
                             (dollars in thousands)


<TABLE>
<CAPTION>
                                                                                        MARCH 31          DECEMBER 31
                                                                                          2002               2001
                                                                                       ----------         ----------
                                                                                      (Unaudited)
<S>                                                                                   <C>                 <C>
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                                                 2,453             14,089
  Accounts receivable (net)                                                                32,253             31,219
  Income tax receivable                                                                     7,563             10,105
  Materials and supplies                                                                    3,795              3,703
  Other current assets                                                                     23,081             22,545
                                                                                       ----------         ----------
    Total current assets                                                                   69,145             81,661

PROPERTIES, LESS ACCUMULATED DEPRECIATION                                               1,062,220          1,064,899

OTHER ASSETS AND DEFERRED CHARGES                                                          51,550             54,110
                                                                                       ----------         ----------
TOTAL ASSETS                                                                            1,182,915          1,200,670
                                                                                       ==========         ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable                                                                         45,739             58,202
  Short-term debt                                                                           2,502              2,457
  Accrued casualty and other reserves                                                       2,160              1,987
  Other accrued liabilities                                                                20,434             16,746
                                                                                       ----------         ----------
    Total current liabilities                                                              70,835             79,392

DEFERRED INCOME TAXES                                                                     103,084            103,673

LONG-TERM DEBT                                                                            277,141            282,784

ACCRUED CASUALTY AND OTHER LONG-TERM LIABILITIES                                           48,923             50,652

SHAREHOLDERS' EQUITY:
  Common Stock:                                                                            66,579             66,533
  Class A Common Stock; no par value; 50,000,000 shares authorized; 17,721,504
   shares issued and 16,922,420 shares outstanding at March 31, 2002, and
   17,720,687 shares issued and 16,921,603 outstanding at December 31, 2001
  Class B Common Stock, no par value; 100,000,000 shares authorized; 19,609,216
   shares issued and outstanding at March 31, 2002 and at December 31, 2001
  Retained earnings                                                                       627,017            628,346
  Restricted stock deferred compensation                                                   (1,309)            (1,355)
  Treasury stock at cost (799,084 shares)                                                  (9,355)            (9,355)
                                                                                       ----------         ----------
    Total shareholders' equity                                                            682,932            684,169
                                                                                       ----------         ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                              1,182,915          1,200,670
                                                                                       ==========         ==========
</TABLE>

(See accompanying notes)


                                       2
<PAGE>


                       FLORIDA EAST COAST INDUSTRIES, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                (dollars in thousands, except per share amounts)
                                   (Unaudited)





<TABLE>
<CAPTION>
                                               Quarter Ended March 31
                                              2002                2001
                                          -----------         -----------

<S>                                       <C>                 <C>
Operating Revenues                             75,217              67,899

Operating Expenses                            (73,438)            (63,685)
                                          -----------         -----------

Operating Profit                                1,779               4,214

Interest Expense                               (4,715)               (141)
Other Income                                    2,260                 663

Income (loss) before Income Taxes                (676)              4,736
Provision for Income Taxes                        260              (1,866)
                                          -----------         -----------

Net Income (Loss)                                (416)              2,870
                                          ===========         ===========


Earnings (loss) per share-basic           $     (0.01)        $      0.08
Earnings (loss) per share-diluted         $     (0.01)        $      0.08

Average shares outstanding-basic           36,439,329          36,389,628
Average shares outstanding-diluted         36,439,329          36,684,572
</TABLE>


(See accompanying notes)


                                       3
<PAGE>


                       FLORIDA EAST COAST INDUSTRIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                       QUARTER ENDED MARCH 31
                                                                       -----------------------
                                                                         2002            2001
                                                                       -------         -------
<S>                                                                    <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                       (416)          2,870
  Adjustments to reconcile net income to cash generated
    by operating activities:
    Depreciation and amortization                                       16,410          11,483
    Gain on sales and other disposition of properties                   (1,973)         (1,182)
    Deferred taxes                                                        (589)         (1,453)
    Stock compensation plans                                               138             210
                                                                       -------         -------
                                                                        13,570          11,928

Changes in operating assets and liabilities:
  Accounts receivable                                                   (1,034)         (2,560)
  Other current assets                                                    (628)         (7,943)
  Other assets and deferred charges                                      1,787          (3,400)
  Accounts payable                                                     (12,463)          9,886
  Income taxes receivable/payable                                        2,542          (2,027)
  Other current liabilities                                              3,688           2,848
  Accrued casualty and other long-term liabilities                      (1,556)         (5,181)
                                                                       -------         -------
                                                                        (7,664)         (8,377)

Net cash generated by operating activities                               5,906           3,551

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment                            (14,101)        (94,371)
  Purchase of investments:
    Available-for-sale                                                      --           9,211
  Proceeds from disposition of assets                                    3,116           2,010
                                                                       -------         -------
Net cash used in investing activities                                  (10,985)        (83,150)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from exercise of options                                         --              11
  Purchase of common stock                                                 (46)            (89)
  Proceeds from line of credit                                              --          92,000
  Payment of mortgage debt                                                (598)             --
  Payment of long-term debt                                             (5,000)             --
  Payment of dividends                                                    (913)           (913)
                                                                       -------         -------
Net cash used in financing activities                                   (6,557)         91,009

NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS                     (11,636)         11,410
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                          14,089          18,444
                                                                       -------         -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                               2,453          29,854
                                                                       =======         =======

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash (received)/paid for income taxes                                 (2,542)          5,350
                                                                       =======         =======
  Cash paid for interest                                                 4,690           2,445
                                                                       =======         =======
</TABLE>

(See accompanying notes)


                                       4
<PAGE>



                       FLORIDA EAST COAST INDUSTRIES, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1.  General

In the opinion of the Company, the accompanying unaudited consolidated condensed
financial statements reflect all accruals and adjustments considered necessary
to present fairly the financial position as of March 31, 2002 and December 31,
2001, and the results of operations and cash flows for the three-month periods
ended March 31, 2002 and 2001. Results for interim periods may not necessarily
be indicative of the results to be expected for the year. These interim
financial statements should be read in conjunction with the Company's Annual
Report on Form 10-K for the year ended December 31, 2001 filed with the
Securities and Exchange Commission.

Certain prior year amounts have been reclassified to conform to the current
year's presentation.

NOTE 2. Commitments and Contingencies

The Company is a defendant and plaintiff in various lawsuits resulting from its
operations. In the opinion of management, adequate provision has been made in
the financial statements for the estimated liability, which may result from
disposition of such matters. The Company maintains comprehensive liability
insurance for bodily injury and property claims, but also maintains a
significant self-insured retention for these exposures, particularly at Florida
East Coast Railway (FECR).

The Company is subject to proceedings and consent decrees arising out of
historic disposal of fuel and oil used in the transportation business. It is the
Company's policy to accrue environmental cleanup costs when it is probable that
a liability has been incurred and an amount can be reasonably estimated. As
assessments and cleanups proceed, these accruals are reviewed and adjusted.

The Company is participating, together with several other potentially
responsible parties (PRPs), in the remediation of a site in Jacksonville,
Florida, pursuant to an agreement with the United States Environmental
Protection Agency (USEPA). The site previously accepted waste oil from many
businesses. The Company has accrued its estimated share of the total estimated
cleanup costs for the site. Based upon management's evaluation, the Company does
not expect to incur additional amounts, even though the Company may have joint
and several liability.

FECR is investigating sites where contaminants from historic railroad operations
may have migrated off-site through the movement of groundwater or contaminated
soil. FECR, if required as a result of the investigation, will develop an
appropriate plan of remediation, with possible alternatives including natural
attenuation and groundwater pumping and treatment. Historic railroad operations
at the Company's main rail facilities have resulted in soil and groundwater
impacts. In consultation with the Florida Department of Environmental Protection
(FDEP), the Company operates and maintains groundwater treatment systems at its
primary facilities.

FECR is one of several PRPs alleged to have contributed to the environmental
contamination at and near the Miami International Airport. The allegations are
contained in a lawsuit filed by Miami-Dade County but not officially served on
the Railway. The Company does not currently possess sufficient information to
reasonably estimate the amount of remediation liability, if any, it may have in
regard to this matter. While the ultimate results of the claim against FECR
cannot be predicted with certainty, based on information presently available,
management does not expect that resolution of this matter will have a material
adverse effect on the Company's financial position, liquidity or results of
operation.

The Company monitors a small number of sites leased to others, or acquired by
the Company or its subsidiaries. Based on management's ongoing review and
monitoring of the sites, and the ability to seek contribution or indemnification
from the PRPs, the Company does not expect to incur material additional costs,
if any.


                                       5
<PAGE>

EPIK Communications Incorporated (EPIK) owns a site in Jacksonville, Florida, at
which field investigation indicates some contamination of soil and groundwater
by petroleum products. EPIK is vigorously pursuing relief against PRPs,
including a large petroleum and gasoline service company. Based on the
information currently available, the Company does not believe the costs of
remediation, even if borne by the Company, will be material.

It is difficult to quantify future environmental costs as many issues relate to
actions by third parties or changes in environmental regulations. However, based
on information presently available, management believes that the ultimate
disposition of currently known matters will not have a material effect on the
financial position, liquidity or results of operations of the Company.

NOTE 3.  Comprehensive Income (Loss)

Comprehensive income (loss) for the three months ended March 31, 2002 and 2001
was ($0.4) and $3.1 million, respectively. The 2001 amount differs from net
income due to changes in the net unrealized holding gains/losses generated from
available-for-sale securities.

NOTE 4.  Earnings Per Share

The diluted weighted-average number of shares includes the net shares that would
be issued upon the exercise of "in the money" stock options using the treasury
stock method.

NOTE 5.  Dividends

On February 26, 2002, the Company declared a dividend of $0.025 (2 1/2 cents)
per share on its outstanding common stock, payable March 26, 2002, to
shareholders of record March 12, 2002.

NOTE 6.  Other Income

<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED
                                                ---------------------
         (dollars in thousands)                 3/31/02       3/31/01
                                                -------       -------
         <S>                                    <C>           <C>
         Pipe & Wire Crossings/Signboards         2,451          435
         Gain (Loss) on Investments                  --           (3)
         Other (net)                               (191)         231
                                                 ------         ----
                                                  2,260          663
                                                 ======         ====
</TABLE>

NOTE 7.  Debt

The Company has a $300 million revolving credit agreement with certain financial
institutions, for which the Company presently pays (quarterly) commitment fees,
as applicable under the agreement, at a range of 20-50 basis points. The
borrowings under the credit agreement are secured by the capital securities of
FECR, FLX and the Class A shares of EPIK. The Company's revolving credit
agreement contains various covenants which, among other things, require the
maintenance of certain financial ratios related to fixed charge coverage and
maximum leverage; establish minimum levels of net worth; establish limitations
on indebtedness, certain types of payments, including dividends, liens and
investments; and limit the use of proceeds of asset sales. Some of the above
covenants provide specific exclusion of EPIK's financial results, as well as
exclusion of certain financing and investing activities at Flagler Development
Company (Flagler). Borrowings under the credit agreement bear interest at
variable rates linked to the LIBOR Index. Interest on borrowings is due and
payable on the "rollover date" for each draw. Outstanding borrowings can be paid
at any time by the borrower, or at the conclusion of the facility's term (March
31, 2004). At March 31, 2002, there were $34 million of direct borrowings
outstanding under the facility at an average interest rate of approximately 2.65
percent.

During 2001, Flagler issued $247 million mortgage notes with $160 million due
July 2011 and $87 million due October 1, 2008. At March 31, 2002, $245.6 million
was outstanding on these notes. These notes are


                                       6
<PAGE>

collateralized by certain buildings and properties. Blended interest and
principal repayment on the notes is payable monthly based on a fixed 7.39
percent and 6.95 percent weighted-average interest rate, respectively, for each
note offering, on the outstanding principal amount of the mortgage notes and a
thirty-year amortization period. The net proceeds were used in 2001 to repay
existing indebtedness under the Company's revolving credit facility.

NOTE 8. Restructuring Charges

During the fourth quarter of 2001, EPIK recorded $12.1 million of restructuring
charges related to the termination benefits of 105 management and other
employees and termination costs of certain collocation and commercial realty
leases. At March 31, 2002, the restructuring liabilities were $8.2 million, the
decrease primarily resulting from payments of termination benefits.

NOTE 9.  Segment Information

The Company follows Statement of Financial Accounting Standards No. 131,
"Disclosure about Segments of an Enterprise and Related Information" (SFAS 131).
Under the provisions of SFAS 131, the Company has four reportable operating
segments all within the same geographic area. These are the railway segment,
trucking segment, realty segment, and the telecommunications segment.

The railway segment, a part of Florida East Coast Railway, L.L.C. (FECR),
provides rail freight transportation along the east coast of Florida between
Jacksonville and Miami. The trucking segment is operated by Florida Express
Carriers, Inc. (FLX), which provides truckload transportation for a wide range
of general commodities primarily in the southeast United States. The realty
segment, Flagler Development Company (Flagler), is engaged in the development,
leasing, management, operation and selected sale of commercial and industrial
property. EPIK Communications Incorporated (EPIK), based in Orlando, Florida,
operates as a carriers' carrier, providing wholesale carrier services including
bandwidth (private lines), wave services, Internet protocol services,
collocation and dark fiber.

The Company's railway subsidiary generates revenues from leases to other
telecommunications companies for the installation of fiber optic and other
facilities on the railroad right-of-way, which are included in the
telecommunications segment. Also, the railway subsidiary generates revenues and
expenses from the rental, leasing, and sale of buildings and properties that are
ancillary to the railroad's operations. These revenues and expenses are included
in the realty segment.

The Company evaluates the railway and trucking segments' performance based on
operating profit or loss from operations before other income and income taxes.
Operating profit is operating revenue less directly traceable costs and
expenses. The Company evaluates the realty segment based on EBITDA and operating
profit. The Company evaluates the telecommunications segment's performance,
specifically EPIK's, based on EBITDA and more broadly (i.e., the segment
inclusive of right-of-way leases) by operating profit or loss. EBITDA is defined
as earnings before net interest expense, income taxes, depreciation and
amortization.

Intersegment revenues for transactions between the railway and trucking segments
are based on quoted rates, which are believed to approximate the cost that would
have been incurred had similar services been obtained from or provided to an
unrelated third party.

The Company's reportable segments are strategic business units that offer
different products and services and that are managed separately.


                                       7
<PAGE>

INFORMATION BY INDUSTRY SEGMENT:

<TABLE>
<CAPTION>
 (dollars in thousands)                          3/31/02         3/31/01
                                                 -------         -------

<S>                                              <C>            <C>
OPERATING REVENUES
  Railway (a)                                     40,938          39,782
  Trucking                                         9,118           7,579
  Realty:
    Flagler Realty Rental (b)                     15,675          15,041
    Flagler Realty Sales                           2,551           2,009
    Other Rental                                     846             813
    Other Sales                                      565              --
                                                 -------         -------
  Total Realty                                    19,637          17,863
  Telecommunications:
     EPIK Communications                           5,441           2,597
     Right-of-way Leases                           1,572           1,569
                                                 -------         -------
  Total Telecommunications                         7,013           4,166
  Total Revenues (segment)                        76,706          69,390
     Intersegment Revenues                        (1,489)         (1,491)
                                                 -------         -------
  Total Revenues (consolidated)                   75,217          67,899

OPERATING EXPENSES
  Railway (c)                                     31,236          29,461
  Trucking (d)                                    10,875           8,554
  Realty:
    Flagler Realty Rental                         12,618          11,876
    Flagler Realty Sales                           1,143             853
    Other Rental                                   1,159             760
    Other Sales                                       --              --
                                                 -------         -------
  Total Realty                                    14,920          13,489
  Telecommunications:
     EPIK Communications                          15,925          12,105
     Right-of-way Leases                              38              34
                                                 -------         -------
  Total Telecommunications                        15,963          12,139
  Corporate General & Administrative (e)           1,933           1,533
                                                 -------         -------
  Total Expenses (segment)                        74,927          65,176
     Intersegment Expenses                        (1,489)         (1,491)
                                                 -------         -------
  Total Expenses (consolidated)                   73,438          63,685

OPERATING PROFIT (LOSS)
  Railway                                          9,702          10,321
  Trucking                                        (1,757)           (975)
  Realty                                           4,717           4,374
  Telecommunications                              (8,950)         (7,973)
  Corporate General & Administrative              (1,933)         (1,533)
                                                 -------         -------
  Segment & Consolidated Operating Profit          1,779           4,214

Interest Expense                                  (4,715)           (141)
Other Income (Expense)                             2,260             663
                                                 -------         -------
                                                  (2,455)            522
Income (loss) before Taxes                          (676)          4,736

Provision for Income Taxes                           260          (1,866)
                                                 -------         -------

NET INCOME (LOSS)                                   (416)          2,870
                                                 =======         =======
</TABLE>


                                       8
<PAGE>


EBITDA BY INDUSTRY SEGMENT: (f) (g)

<TABLE>
<CAPTION>
(dollars in thousands)                                                   3/31/02         3/31/01
                                                                         -------         -------

<S>                                                          <C>                         <C>
RAILWAY EBITDA**
FECR EBITDA                                                               18,961          16,906
Less:
  EBITDA from other realty rental and sales                                  998             607
  EBITDA from right-of-way leases                                          1,572           1,569
  EBITDA from FECR other income                                            2,455             650
                                                             -----------------------------------
Railway segment EBITDA (g)                                                13,936          14,080
                                                             ===================================

REALTY EBITDA
EBITDA from Flagler operating properties rents                            10,076          10,199
EBITDA from real estate services                                              --              --
EBITDA (loss) from Flagler land rents/holding costs                         (796)           (683)
Equity pickups on partnership rents                                          562             172
Less: unallocated corporate overhead                                      (1,225)         (1,257)
                                                             -----------------------------------
EBITDA from Flagler rental properties, net of overheads                    8,617           8,431

EBITDA from Flagler real estate sales, net of overheads                    1,408           1,156
                                                             -----------------------------------

Total EBITDA - Flagler (g)                                                10,025           9,587
                                                             -----------------------------------

EBITDA from other rental                                                    (303)             63
EBITDA from other real estate sales                                          565              --
                                                             -----------------------------------

Total EBITDA - real estate segment (g)                                    10,287           9,650
                                                             ===================================

TELECOMMUNICATIONS EBITDA
EPIK EBITDA (g)                                                           (4,910)         (7,717)
Telecommunications EBITDA (g)                                             (3,338)         (6,148)
</TABLE>

(Prior year results have been reclassified to conform to current year's
presentation.)

(a)      Included intersegment revenues of $1,428 and $1,441 for the three
         months ended March 31, 2002 and 2001, respectively.

(b)      Included intersegment revenues of $61 and $50 for the three months
         ended March 31, 2002 and 2001, respectively.

(c)      Included intersegment expenses of $44 and $30 for the three months
         ended March 31, 2002 and 2001, respectively.

(d)      Included intersegment expenses of $1,428 and $1,441 for the three
         months ended March 31, 2002 and 2001, respectively.

(e)      Included intersegment expenses of $17 and $20 for the three months
         ended March 31, 2002 and 2001, respectively.

(f)      EBITDA is defined as earnings before interest expense, income taxes,
         depreciation and amortization.

(g)      Railway segment EBITDA excludes depreciation of $4,234 and $3,759 for
         the three months ended March 31, 2002 and 2001, respectively. Total
         FECR EBITDA includes EBITDA from right-of-way leases, other realty
         rental, other realty sales and other income of $5,025 and $2,826 for
         the three months ended March 31, 2002 and 2001, respectively and in
         total, plus EBITDA from Railway operations. Excludes depreciation in
         total of $4,282 and $3,803 for the three months ended March 31, 2002
         and 2001, respectively. Total EBITDA-Flagler excludes depreciation and
         amortization of $5,560 and $5,266, for the three months ended March 31,
         2002 and 2001, respectively. Total EBITDA-real estate segment excludes
         depreciation and amortization in total of $5,570 and $5,276 for the
         three months ended March 31, 2002 and 2001, respectively. EPIK EBITDA
         excludes depreciation of $5,574 and $1,791, for the three months ended
         March 31, 2002 and 2001, respectively. Telecommunications EBITDA
         excludes depreciation in total of $5,612 and $1,825, for the three
         months ended March 31, 2002 and 2001, respectively.

**-This table is provided to reconcile total EBITDA from the legal entity,
Florida East Coast Railway, L.L.C., to EBITDA associated with the Railway
operations of FECR and included in the Railway segment.


                                       9
<PAGE>


ITEM 2.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS



FORWARD-LOOKING STATEMENTS

This Form 10-Q contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
include the Company's present expectations or beliefs concerning future events.
The Company cautions that such statements are necessarily based on certain
assumptions, which are subject to risks and uncertainties that could cause
actual results to materially differ from those contained in these
forward-looking statements. Important factors that could cause such differences
include but are not limited to, the Company's ability to enhance its
telecommunications service offerings within currently estimated time frames and
budgets; the ability to compete effectively in a rapidly evolving capital
constrained, volatile, and price competitive telecommunications marketplace and
to respond to customer demands and industry changes; the ability to achieve
revenue growth in uncertain telecommunications markets, particularly from
products and services that are in the early stages of development or operation;
credit risks associated with contractual obligations from customers, including
telecommunication customers; the ability to manage growth; changes in business
strategy (including replacing FLX's agency arrangements); legislative or
regulatory changes; technological changes; volatility of fuel prices; and
changing general economic conditions (particularly in the State of Florida) as
it relates to economically sensitive products in freight service and building
rental activities; industry competition; natural events such as weather
conditions, floods, earthquakes and forest fires; the ability of the company to
complete its financing plans; and the ultimate outcome of environmental
investigations or proceedings and other types of claims and litigation.

As a result of these and other factors, the Company may experience material
fluctuations in future operating results on a quarterly or annual basis, which
could materially and adversely affect its business, financial condition,
operating results and stock price.

Readers should not place undue reliance on forward-looking statements, which
reflect management's view only as of the date hereof. The Company undertakes no
obligation to publicly release revisions to these forward-looking statements
that reflect events or circumstances after the date hereof or reflect the
occurrence of unanticipated events.


RESULTS OF OPERATIONS

CONSOLIDATED RESULTS

FECI reported consolidated revenues of $75.2 million for the first quarter of
2002 compared to $67.9 million in the first quarter of 2001, an increase of
10.8%. The Company reported a net loss of $0.4 million, or $0.01 per diluted
share, compared with net income of $2.9 million, or $0.08 per diluted share, in
the first quarter of 2001.

RAILWAY

First quarter 2002 Railway segment revenues increased 2.9% to $40.9 million
compared to $39.8 million in the first quarter of 2001. Operating profit was
$9.7 million in the first quarter compared to $10.3 million in the prior year.
EBITDA remained stable at $13.9 million for the first quarter 2002 versus $14.1
million in 2001. The operating ratio was 76.3% compared to 74.1% in the first
quarter of 2001.

First quarter freight revenues were 3.6% higher than in the same period of 2001.
Revenues from carloads


                                       10
<PAGE>

were up 8.0% for the first quarter 2002. The primary driver for the increase was
aggregate revenue, up 16.5%, benefiting from joint initiatives that resulted in
customers achieving increased market share, and strong construction demand. In
addition, revenues from foodstuffs increased 53.7% due to significant new
business from moving chilled juice products for Tropicana Products, Inc. Motor
vehicle revenues were comparable to the first quarter of 2001.

Intermodal revenues declined 3.0% for the quarter, primarily reflective of a
slow economy, though revenues from intermodal interconnections with Florida
Express Carriers (FLX) remained stable compared to first quarter 2001 levels due
to business development and marketing initiatives by the Railway and FLX.

Operating expenses for the Railway were $31.2 million for the first quarter 2002
compared to $29.5 million for the first quarter of 2001. Wages and benefits
increased $0.9 million, reflecting a general wage increase and increased labor
to support the Railway's efforts to gain and maintain new customers and traffic.
Purchased services were up $1.0 million from 2001 levels due to several new
outsourcing activities intended to improve customer service and operations, as
well as 2002 rail grinding costs that more typically are incurred in the second
half of the year. Depreciation increased $0.5 million because of increased
capital levels. Partially offsetting these increases for the quarter were
decreased fuel costs of $0.7 million, primarily due to favorable fuel prices.

TRUCKING

Revenues from FLX grew 20.3% to $9.1 million in the first quarter of 2002 from
$7.6 million in the first quarter of 2001 due to increased agency revenues. The
operating loss was $1.8 million compared to a loss of $1.0 million in the same
period for 2001, which reflects declining line-haul revenues (both loads and
rates) in a highly competitive market. Line-haul costs, while down $0.2 million,
included increased claims expense of $0.2 million, and additional operational
related costs of $0.2 million that were considered necessary to maintain
customer service levels. General and administrative expenses also increased $0.4
million versus first quarter 2001.

FLX is undertaking a number of steps intended to improve its intermodal services
to customers in conjunction with the Railway, and better align its overall
revenues and costs. FLX recently expanded the northern focus of its interchange
with the Railway to include Atlanta, in addition to Jacksonville, to take
advantage of the Railway's and Norfolk Southern's "Hurricane Train" service from
Atlanta to Miami. In the first quarter, FLX also began replacing its agency
arrangements, substituting in-house customer service for the purpose of
improving service quality and to shed non-intermodal trucking that contributes
little to FLX's profits. The Company expects these steps to reduce FLX's
expenses and provide higher rates of interconnection with the Railway, reducing
FLX's loss in future quarters.

REALTY

Flagler's rental and services revenues increased by 4.2% to $15.7 million during
the first quarter, relating primarily to increased revenue from product
delivered in 2001, partially offset by decreases in rental revenue due to lower
"same store" occupancy. Overall occupancy for Flagler's operating properties was
89% compared to 94% at the end of the first quarter 2001.

At the end of first quarter 2002, Flagler held 54 wholly owned finished
buildings, with 6.0 million square feet, located in major Florida markets. These
operating properties generated $10.1 million of EBITDA during the first quarter
2002, a decrease of 1.2% compared to prior year, which was $10.2 million for all
properties owned at that time. Contributing to this decrease was an adjustment
of $0.3 million related to prior year tenant operating expense recoveries.

Flagler's "same store" buildings, including 52 operating properties, with 5.5
million square feet, generated rental revenues of $13.6 million for the quarter,
representing a 5.9% decrease compared to 2001 rental revenues of $14.5 million.
The decrease in "same store" revenue is attributable to occupancy decreases, and
an adjustment for prior year operating expense recovery, somewhat offset by
increases in rental rates. Occupancy for "same store" properties was 89% at the
end of the first quarter 2002 compared to 93% in 2001.


                                       11
<PAGE>

At quarter end, Flagler had 10 projects, with 1.2 million square feet, in
various stages of development (657,000 square feet in lease-up stage; 591,000
square feet in pre-development).

Offsetting the declines in rental EBITDA were increases of $0.4 million in
equity pickups from operation of five properties held in joint ventures with
Duke Realty. Four of these properties are completed and 99% occupied, with one
property currently in the lease-up stage.

Depreciation and amortization rose $0.3 million to $5.6 million during the first
quarter 2002. Increased depreciation on new buildings delivered in 2001
primarily accounted for this increase.

Flagler's operating profit from real estate sales was $1.4 million for the
quarter, compared to $1.2 million profit from sales during first quarter 2001.

Other rental operating expenses rose to $1.2 million during the quarter,
primarily reflecting rental payments for a parcel of developable land in South
Florida. The lease for this property was entered into during the fourth quarter
of 2000.

TELECOMMUNICATIONS

In the fourth quarter of 2001, the Company had restructured EPIK to focus on
growing revenues from its existing lit Southeast network, while reducing ongoing
operating expenses and capital needs. In the first quarter 2002, EPIK's
operating expenses before depreciation and amortization were $10.4 million,
which is consistent with the restructuring plan's expectation. Also consistent
with the restructuring plan's expectation, capital expenditures in the first
quarter were $0.9 million.

EPIK's first quarter 2002 revenues were $5.4 million, which compares to $2.6
million in the first quarter of 2001. EPIK recognizes certain revenues from
credit risk customers only as payments are received. Included in first quarter
2002 revenues are payments of $1.0 million received from credit risk customers
for services provided in prior periods. Conversely, in the first quarter, EPIK
provided services of $0.4 million to credit risk customers that was not
recognized as revenue in the quarter. At March 31, 2002, EPIK's contracted
revenue backlog stood at $103.3 million, $22.1 million of which is considered at
credit risk. From the backlog, EPIK is scheduled to recognize revenues of $11.6
million in the remainder of 2002, $2.2 million of which is considered at risk.

CORPORATE EXPENSES

Corporate general and administrative expenses were $1.9 million and $1.5 million
for the first quarters of 2002 and 2001, respectively. Increases are primarily
due to increased staffing and professional fees.

INTEREST EXPENSE

Net interest expense for the quarter was $4.7 million compared to $0.1 million
in the first quarter of 2001. The higher net interest expense resulted primarily
from increased borrowings and reduced capitalization of interest due to
completion of telecommunications network construction.

OTHER INCOME

Other income was $2.3 million and $0.7 million for the first quarters of 2002
and 2001, respectively. Increases resulted from $1.9 million of income from a
pipe and wire crossing transaction.

PROVISION FOR INCOME TAXES

Income tax expense represented an effective rate of 38.5% for first quarter 2002
compared to an effective rate of 39.4% for first quarter 2001. Cash taxes
received for first quarter 2002 were $2,542 versus cash taxes paid of $5,350 for
first quarter 2001. The net cash taxes received during first quarter 2002 were
primarily refunds from 2001's estimated tax payments.


                                       12
<PAGE>

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Net cash generated from operations was $5.9 million and $3.6 million for the
quarters ended March 31, 2002 and 2001, respectively. Changes in operating
assets and liabilities used $7.7 million and $8.4 million in the quarters ended
March 31, 2002 and 2001, respectively, which included in the quarter ended March
31, 2002, a significant reduction in EPIK's payables related to construction of
its telecommunications network that was completed in late 2001. Eliminating
changes in operating assets and liabilities, net cash otherwise generated by
operating activities was $13.6 million and $11.9 million in the quarters ended
March 31, 2002 and 2001, respectively. During the first quarter of 2002, the
Company made capital investments of $14.1 million, received $3.1 million from
asset dispositions, and reduced debt balances by $6.5 million and cash and
equivalents balances by $11.6 million.

The Company continues to manage its capital spending, especially at Flagler and
EPIK, based on customer demand in the marketplace. Thus far in 2002, Flagler has
seen cyclical softness in the commercial real estate markets, and anticipated
2002 capital investment has been reduced to between $45-$60 million from its
previously forecasted $60-$90 million. In 2001 and 2000, the Company's capital
investments at EPIK were made primarily to construct a telecommunications
network and certain related facilities. This construction was completed in late
2001. The Company presently does not expect to make material capital
expenditures to expand the network in 2002 or in the foreseeable future. Capital
expenditures estimated at $5 million to $8 million are expected to be made in
2002 to maintain EPIK's business and to discharge commitments pursuant to
customer contracts executed prior to December 31, 2001. The Company expects that
further capital investment at EPIK in 2002 will be undertaken only as warranted
to fulfill new revenue-generating customer contracts, which the Company is
seeking.

Financing of the Company's investment program is planned through internally
generated cash flows and the use of the Company's $300 million revolving credit
facility. At March 31, 2002, the amount drawn down on the revolving credit
facility was $34 million.

The Company's $300 million revolving credit facility is provided pursuant to an
agreement, as amended, between the Company and eleven banking institutions (the
"Credit Facility Agreement"). The description herein of the revolving credit
facility is qualified in its entirety by reference to the Credit Facility
Agreement, which is incorporated as Exhibit 10(b) to the Company's Reports on
Form 10-K for the years ended December 31, 2001 and December 31, 2000. Pursuant
to the Credit Facility Agreement, the Company agreed, among other things, to
maintain certain financial ratios. The Company believes the most restrictive of
such ratios to be the Global Debt/EBITDA ratio (the terms Global Debt and EBITDA
being defined in the Credit Facility Agreement). The Credit Facility Agreement
provides that at March 31, 2002, the Company's Global Debt/EBITDA ratio shall be
no greater than 4.75. At March 31, 2002, the Company's actual Global Debt/EBITDA
ratio was 0.87. Pursuant to the Credit Facility Agreement, the required Global
Debt/EBITDA ratio varies in future periods, declining from 4.75 at June 30, 2002
to 3.50 at March 31, 2003 and thereafter, all as more particularly set forth in
the Credit Facility Agreement. Although no assurances can be given as to the
Company's future compliance with the Global Debt/EBITDA ratio covenant or other
financial covenants, the Company has complied with the terms of the Credit
Facility Agreement at all times in the past and expects to continue to comply
with them in the future.

These interim results on Financial Condition, Liquidity and Capital Resources
should be read in conjunction with the Company's Annual Report on Form 10-K for
the year ended December 31, 2001 filed with the Securities and Exchange
Commission.


                                       13
<PAGE>



ITEM 3.

           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change to the disclosures made under the heading
"Quantitative and Qualitative Disclosures about Market Risk" on page 41 of the
Company's 2001 Annual Report on Form 10-K.



                                     PART II

ITEM 1.

                                LEGAL PROCEEDINGS

There are no new legal or regulatory proceedings pending or known to be
contemplated which, in Management's opinion, are other than normal and
incidental to the kinds of businesses conducted by the Company.

ITEM 5.

                                OTHER INFORMATION

FECR's traffic volume and revenues for the three months ended March 31, 2002 and
2001, respectively, are shown below. Also, FECR's, Flagler's and FLX's operating
expenses for the three months ended March 31, 2002 and 2001, respectively, are
presented below.

<TABLE>
<CAPTION>
                                                  TRAFFIC
                                                  -------
                                     (dollars and units in thousands)

                          THREE MONTHS ENDED                  THREE MONTHS ENDED
                          ------------------                  ------------------
                           2002        2001      PERCENT        2002       2001     PERCENT
COMMODITY                  UNITS      UNITS      VARIANCE     REVENUES   REVENUES   VARIANCE
---------                  -----      -----      --------     --------   --------   --------
INTERMODAL
----------
<S>                       <C>         <C>        <C>          <C>        <C>        <C>
  TOFC/COFC                 64.1       65.3        (1.8)      $15,044     $15,511     (3.0)
RAIL CARLOADS
  Crushed stone             28.1       25.2        11.5        12,260      10,520     16.5
  Construction materials     1.3        1.6       (18.8)          757       1,090    (30.6)
  Vehicles                   6.0        6.0         0.0         4,570       4,615     (1.0)
  Foodstuffs                 3.1        2.0        55.0         2,317       1,507     53.7
  Chemicals                  0.9        1.1       (18.2)        1,080       1,169     (7.6)
  Paper                      1.6        2.1       (23.8)        1,671       1,910    (12.5)
  Other                      3.9        3.9         0.0         2,331       2,318      0.6
                           -----      -----       -----       -------     -------    -----

Total                      109.0      107.2         1.7       $40,030     $38,640      3.6
                           =====      =====       =====       =======     =======    =====
</TABLE>

(Prior year results have been reclassified to conform to current year's
presentation.)


                                       14
<PAGE>


               Railway Operating Expenses-First Quarter 2002/2001

<TABLE>
<CAPTION>
(dollars in thousands)                            3/31/02           3/31/01
                                                  -------           -------

<S>                                               <C>               <C>
Compensation & Benefits                            12,568            11,717
Fuel                                                3,020             3,728
Equipment Rents (net)                                 835               318
Car Hire (net)                                       (781)             (141)
Depreciation                                        4,234             3,759
Purchased Services                                  2,832             1,841
Repairs to/by Others (net)                           (834)           (1,094)
Load/Unload                                         1,848             1,852
Casualty & Insurance                                1,115             1,008
Property Taxes                                      1,185             1,155
Materials                                           2,047             2,604
General & Administrative Expenses                   2,170             2,220
Other                                                 997               494
                                                  -------           -------
Total Operating Expenses                           31,236            29,461
                                                  =======           =======
</TABLE>
(Prior year results have been reclassified to conform to current year's
presentation.)

                Trucking Segment Expenses-First Quarter 2002/2001

<TABLE>
<CAPTION>
(dollars in thousands)                            3/31/02           3/31/01
                                                  -------           -------
<S>                                               <C>               <C>
Compensation & Benefits                               561               581
Fuel                                                  259               327
Equipment Rentals (net)                               652               528
Depreciation                                           27                39
Purchased Services                                  3,248             3,624
Repairs Billed to/by Others (net)                     121               172
Casualty & Insurance                                  654               271
Property Taxes                                         18                45
Other                                                 180               284
                                                  -------           -------
Total Line-Haul Expenses                            5,720             5,871
Agency Costs                                        3,452             1,413
General & Administrative Expenses                   1,703             1,270
                                                  -------           -------
Total Operating Expenses                           10,875             8,554
                                                  =======           =======
</TABLE>

(Prior year results have been reclassified to conform to current year's
presentation.)

                 Realty Segment Expenses-First Quarter 2002/2001

<TABLE>
<CAPTION>
(dollars in thousands)                            3/31/02           3/31/01
                                                  -------           -------
<S>                                               <C>               <C>
Real Estate Taxes-Developed                         1,842             1,644
Repairs & Maintenance-Recoverable                     418               379
Services, Utilities, Management Costs               2,487             2,385
                                                  -------           -------
  Subtotal-Expenses subject to recovery             4,747             4,408

Realty Sales Expense                                1,143               853
Real Estate Taxes-Undeveloped Land                    864               868
Repairs & Maintenance-Non-recoverable                 115               177
Depreciation & Amortization                         5,570             5,276
SG&A-Non-recoverable                                2,481             1,907
                                                  -------           -------
  Subtotal-Non-recoverable expenses                10,173             9,081

Total Operating Expenses                           14,920            13,489
                                                  =======           =======
</TABLE>
(Prior year results have been reclassified to conform to current year's
presentation.)


                                       15
<PAGE>


                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                             FLORIDA EAST COAST INDUSTRIES, INC.
                                          (REGISTRANT)



Date: 5/3/02
      ------                 --------------------------------------------------
                             Mark A. Leininger, Vice President and Controller





Date: 5/3/02
      ------                 --------------------------------------------------
                             Richard G. Smith, Executive Vice President and
                                        Chief Financial Officer



                                       16