Urstadt Biddle Properties Inc. Annual Report 2002

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FY2002 Annual Report · Urstadt Biddle Properties Inc.

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URSTADT BIDDLE
PR O P E R T I E S I N C .

2002 ANNUAL REPORT

DIVIDEND$! DIVIDEND$! DIVIDEND$!

IN MILLIONS

—$48

OVER THE LAST NINE YEARS:

• DIVIDENDS PER SHARE INCREASED
AN AVERAGE OF 4% EACH YEAR

• TOTAL FUNDS FROM OPERATIONS
INCREASED AN AVERAGE OF 13%

• TOTAL REVENUES INCREASED AN

AVERAGE OF 11%

Revenues

Funds From Operations

—$36

■ Dividends

—$24

—$12

—$0

94 95

97 98 99

00 01 02

Ridgeway Shopping Center, Stamford, Connecticut (Acquired June, 2002)

URSTADT BIDDLE PROPERTIES INC.

Urstadt Biddle Properties Inc. (UBP) is a self-administered

publicly held real estate investment trust providing

investors with a means of participating in the ownership of

income-producing properties. UBP’s core properties con-

sist of neighborhood and community shopping centers in

the suburban areas of the northeastern United States with

a primary concentration in Fairfield County, Connecticut

and Westchester and Putnam Counties, New York. Non-

core assets consist of office and retail buildings, industrial

properties and mortgages.

Class A Common Shares and Common Shares of the Com-

pany trade on the New York Stock Exchange under the

symbols “UBP.A” and “UBP.”

2002 ANNUAL REPORT CONTENTS

Selected Financial Data ..................1

Letter to Stockholders ....................2

Portfolio Review..............................5

Core Properties..............................10

Investment Portfolio .....................12

Financials........................................13

Directors and Officers ..................37

SELECTED FINANCIAL DATA

(In thousands, except per share data)

Year Ended October 31,

Balance Sheet Data:
Total Assets
Mortgage Notes Payable
Preferred Stock

Operating Data:
Total Revenues
Total Operating Expenses
Net Income Applicable to Common

2002

2001

2000

1999

1998

1997

$353,633
$106,429
$ 14,341

$218,352
$ 47,115
$ 33,462

$180,792
$ 51,903
$ 33,462

$183,774
$ 51,263
$ 33,462

$165,039
$ 32,900
$ 33,462

$137,430
$ 43,687
—

$ 44,340
$ 29,438

$ 36,093
$ 26,154

$ 31,009
$ 23,281

$ 29,430
$ 21,596

$ 25,385
$ 17,252

$ 24,719
$ 16,238

and Class A Common Stockholders

$ 16,080

$ 10,540

5,442

6,043

$ 5,615

$ 8,589

Other Data:
Funds from Operations (Note 1)
Net Cash Provided by Operating Activities
Net Cash Used in Investing Activities
Net Cash Provided by (Used in)

$ 21,073
$ 18,532
$(64,960)

$ 14,611
$ 21,308
$(11,394)

$ 11,914
$ 14,262
$ (3,713)

$ 11,878
$ 14,423
$ (10,556)

$ 11,782
$ 13,901
$(31,130)

$ 10,189
$ 14,755
$ (7,460)

Financing Activities

$ 59,023

$ 22,040

$(11,436)

$ (5,009)

$ 19,207

$ (7,192)

Per Share Data: (Note 2)
Net Income – Basic:

Class A Common Stock
Common Stock
Net Income – Diluted:

Class A Common Stock
Common Stock
Cash Dividends on:

Class A Common Stock
Common Stock

$.89
$.80

$.87
$.78

$ .82
$ .74

$1.56

$1.01
$.91

$.97
$.88

$ .80
$ .72

$1.52

$.55
$.50

$.55
$.49

$ .78
$ .70

$1.48

$.62
$.55

$.61
$.54

$ .76
$ .68

$1.44

$.57
$.52

$ .19
$1.13

$1.32

$.87
$.80

$.86
$.79

—
$1.26

$1.26

Cash Dividends on Common and Class A

Common Stock as a Percentage of Funds
from Operations

71%

60%

65%

63%

58%

63%

Note (1): The Company considers Funds from Operations (FFO) to be a supplemental measure of operating performance. FFO is calculated as net income (computed in
accordance with generally accepted accounting principles), excluding gains (or losses) from sales of properties and debt restructuring, plus depreciation and amortization,
and after adjustments for unconsolidated joint ventures. FFO does not represent cash flows from operations as defined by GAAP and should not be considered an alternative
to net income as an indication of the Company’s operating performance or for cash flows as a measure of liquidity or its dividend paying capacity. Furthermore, FFO as dis-
closed by other REITs may not be comparable to the Company’s calculation of FFO. For a further discussion of FFO, see Management’s Discussion and Analysis on page 31.

Note (2): In August 1998, the Company declared a one-for-one stock dividend effected in the form of a new issue of Class A Common Stock.

Total Revenues
(In millions)

Total Funds From Operations
(In millions)

Combined Dividends Paid on Common
and Class A Common Shares (Note 2)
(In dollars per share)

$48

$36

$24

$12

$24

$18

$12

$1.60

$1.20

$.80

$.40

$0.0

TO OUR STOCKHOLDERS

SIMPLY STATED —

al economy was struggling and

this letter. We have signed

2002 WAS A GREAT YEAR FOR

for the third straight year the

contracts to acquire another two

YOUR COMPANY!

major stock averages were down.

shopping centers for $33 million.

All of the Company’s principal
financial indicators rose in 2002.

As we stated in last year’s

We expect these new properties

annual report, our biggest chal-

to contribute to our Funds

lenge in 2002 was to quickly and

From Operations in 2003 and

Our Total Assets increased 62%,

profitably use the $47 million

thereafter.

Stockholders Equity increased

74%, Total Revenues increased

raised from the sale of 5.5 million

This year’s news was filled

shares of Class A Common Stock

with stories about “lack of

23%, Net Income increased 53%,

in 2001. Not only were we suc-

investor confidence” in corporate

Funds From Operations increased

cessful in putting that money to

America which has caused some

44% and, most importantly, our

work but, we raised another $82

dramatic changes in regulations

dividends increased for the

million this year through the sale

affecting public companies. The

ninth straight year. Funds From

of an additional 8.05 million Class

Sarbanes-Oxley Law will result in

Operations per share experienced

A Shares, bringing the total new

some added costs for public com-

We strive to be judged on the facts — namely —
increased profits and thus consistent, well-covered
dividends to our stockholders.

Charles J. Urstadt, Chairman

panies of which UBP is no excep-

tion. Our business is relatively

simple and fairly easy to under-

stand. Our names are “on the

door” of this Company, our Board

of Directors and management

team have a significant invest-

ment and, as a result, we are espe-

a temporary decline as a result of

capital raised to $129 million in

cially dedicated to making certain

the issuance of new shares. For

under 15 months, more than

that the Company complies with

calendar 2002, UBP’s Class A

Common Stock yielded a total

doubling the equity base of the

the new laws. During the year we

Company. Our acquisition team

replaced Arthur Andersen LLP,

return of 15.8% which exceeded

met the challenge and invested

who had served as our

the NAREIT All-REIT index aver-

$148 million in four shopping

Company’s auditors for many

age of 5.2%. We achieved these

center properties totaling 656,000

years, with Ernst & Young LLP.

results at a time when the nation-

square feet through the date of

We are pleased to say that the

Despite the softening U.S. economy, we were able to
maintain a 95% leased rate in our properties.

Willing L. Biddle, President

transition has been smooth thanks

FUNDS FROM OPERATIONS

to the cooperation of everyone

concerned.

On the topic of our stock

prices, we would like to point out

that we have no control over pre-

vailing stock market attitudes or

interest rates, both of which can

have a profound influence on our

stock price. Wall Street now seems

to be focusing on dividends. We

have long felt “stock prices are

opinions, but dividends are

facts.” And so, we strive to be

judged on the facts — namely —

increased profits and thus consis-

tent, well-covered dividends to

our stockholders. Therefore, we

believe that this new emphasis on

dividends should make our stock

appeal to long term investors as

opposed to traders seeking quick

returns.

ments, should correct this

temporary imbalance in 2003 and

thereafter.

DIVIDENDS

For more than 33 years, the

Company has paid uninterrupted

dividends. We are proud to state

that the January quarterly pay-

ments will be the Company’s

133rd consecutive quarterly

For the ninth consecutive

year, the Company reported an

increase in its Funds From

Operations (FFO), a supplemental

measure of operating performance

dividends.

used by REITs. Total FFO

increased this year to $21 million

from $14.6 million last year and

is the result of new property

acquisitions, higher occupancies

and new tenant leasing. However,

as the stock sale proceeds were

temporarily invested in low-yield-

ing cash investments during the

year, the Company’s FFO per

share was affected by the dilution

caused from the more than 13 mil-

lion new Class A shares added

over the past fifteen months.

Recent acquisitions which will

earn substantially more than the

cash yields on short term invest-

We are also pleased to report

that for the ninth consecutive

year, the Board of Directors in

December 2002, approved an

increase in the quarterly divi-

dend rates. Our dividends are

well covered by our Funds From

Operations. At 71% of our 2002

Funds from Operations, our divi-

dend payout rate is among the

lowest in the REIT industry.

The President recently

released his new tax proposals

concerning the elimination of the

double taxation of dividends.

While it is still too early to tell

what the effect on REITS may be,

The Company’s capital base more than doubled as a
result of the sale of more than 13 million shares of
Class A Common stock since June 2001.

James R. Moore, Chief Financial Officer

TO OUR STOCKHOLDERS

we believe that investors interest-

ment and leasing staff to enable

OUTLOOK

ed in more reliable cash yields

us to continue to intensively

should continue to be attracted to

manage and add value to our

REITS and because of the impor-

growing portfolio. Please read the

tance that real estate plays in

“Portfolio Review” section (pages

diversified portfolios, REIT shares

5-9) of this Annual Report for

will remain attractive to the

more detail.

investing public.

OPERATIONS

CAPITAL

The Company’s capital base

The success at our properties

more than doubled as a result of

is largely due to our capable,

the sale of more than 13 million

hardworking acquisition, manage-

shares of Class A Common stock

ment and leasing staff.

since June 2001. We also have

Despite the softening U.S.

strong banking relationships and

economy, we were able to main-

have available approximately $40

tain a 95% leased rate in our

million in bank credit lines which

properties. However, due to the

can be drawn upon to meet liquidi-

downsizing of a large office tenant

ty needs. Our mortgage debt is

at our Southfield, Michigan prop-

modest for a real estate company.

erty earlier this year, our overall

At year end, debt comprised less

leased rate dropped from last

than a third of the Company’s total

year. During the year, we complet-

book capitalization and all of our

ed a number of property renova-

mortgages have fixed rates of inter-

tions and new tenant installations.

est and long maturities. More than

We added depth to our manage-

half our properties are free of debt.

We feel that of all property

types, retail centers, are the most

stable in uncertain times. While

we are cautious given the state of

the economy and the effect it can

have on our tenants, we are opti-

mistic because our properties are

primarily grocery anchored cen-

ters located in excellent locations

with high barriers to entry. We

will continue our proven strategy

and we have the team in place to

enable the company to grow and

improve despite the economy as

evidenced by our results.

We thank our outstanding

board of Directors and our hard

working dedicated staff for con-

tributing to the Company’s con-

tinued success this year and we

extend our gratitude to our old

and new shareholders for their

support of our team’s efforts.

Sincerely yours,

Charles J. Urstadt

Willing L. Biddle

Chairman

President

January 16, 2003

PORTFOLIO REVIEW

Our strategy is to concentrate our portfolio of

properties in a geographic area close to our head-

quarters and primarily in one property type —

grocery-anchored shopping centers. Our focus is

on well-located neighborhood shopping centers

leased to retailers who deliver basic services and

products to consumers. We are also receptive to

acquiring well-located

high yield office proper-

ties near our executive

offices in Greenwich,

Connecticut.

Urstadt Biddle Properties
Executive Offices
Greenwich, Connecticut

PORTFOLIO REVIEW

ACQUISITIONS

Clearly, the past 15 months has

seen the greatest dollar volume of

acquisitions ($148 million) in the

company’s history. In July 2002,

we purchased the 360,000 square

foot Ridgeway Shopping Center,

located in the heart of Stamford,

Connecticut. Ridgeway, which is

on the cover of this annual report,

is the largest open-air community

shopping center in Fairfield

County, Connecticut and contains

such well-known national retail-

ers as Stop & Shop Supermarket,

Bed Bath & Beyond, Marshalls,

Staples, Old Navy and Michael’s

Crafts. Many of these stores per-

form in the top 10% of their

chains in terms of sales per square

Ridgeway
Shopping Center
Stamford, Connecticut
(above and right)

foot. Earlier in the year, we pur-

year, we purchased the 185,000

chased Airport Plaza Shopping

square foot Westchester Pavilion

Center, a 33,000 square foot shop-

Shopping Center located in the

ping center located across the

center of White Plains,

road from our Danbury Square

Westchester County, New York

Shopping Center in Danbury,

and the 78,000 square foot Orange

Fairfield County, Connecticut.

Meadows Shopping Center locat-

Shortly after the end of our fiscal

ed on the busy Route 1 corridor

Airport Plaza
Danbury, Connecticut

Orange Meadows Shopping Center
Orange, Connecticut

PORTFOLIO REVIEW

in Orange, Connecticut. The

Pavilion, which is 100% leased,

contains well known national

retailers such as Toys R Us, Office

Max, Sports Authority, Borders

Books and Outback Steakhouse,

many of which stores also per-

form in the top 10% of their

chains in terms of sales per square

foot. Orange Meadows is 85%

leased and its tenant roster con-

sists of national and local retailers

including Trader Joe’s (a specialty

supermarket), Talbots, Seamans

Furniture and Thomasville

Furniture. These four properties

added over 656,000 square feet of

Westchester Pavilion Shopping Center, White Plains, New York (above and below)

next several months.Your compa-

leases and negotiated lease

ny has a strong management and

renewals totaling 236,000 square

leasing team in place to handle

feet of space, about 10% of the

these new properties and our

acquisition team continues to

proactively uncover attractive

prime retail property to our port-

shopping center investments in

folio in our target market at an

our target market.

approximate cost of $148 million.

LEASING

company’s core property total

leasable area. The percentage of

our total portfolio leased dropped

slightly over the year from 98% to

95% due primarily to a vacancy in

our Southfield, Michigan office

building. At Townline Square,

In addition, we have two addi-

tional properties in contract for a

In 2002 we continued our success

Burlington Coat, Michaels Crafts

in leasing vacant space and posi-

and Chuck E. Cheese opened for

cost of approximately $33 million

tioning our properties for future

which we expect to close in the

growth. Overall, we signed new

business during the year complet-

ing the re-tenanting of this prop-

erty. At Newington Park, JoAnn

and increased their leased square

erty a tenant downsized resulting

Fabrics (22,500 sf) renewed their

footage to accommodate the

in a 61,600 sf vacancy which we

lease and Outback Steakhouse

store’s anticipated expansion and

are marketing. We have a number

(6,500 sf) opened for business. We

renovation. At Five Town Plaza,

of anchor grocer expansions in

completed a façade renovation of

we re-leased the 115,390 sf former

negotiation at our core properties.

the Eastchester Mall and added

Spag’s space to Burlington Coat

Our leasing challenges this year

an additional 2,500 square feet of

Factory and World Gym both of

will be to lease the vacant

leasable space in the process. At

whose stores will open in 2003. In

Michigan office space and approx-

the Goodwives Shopping Center,

Tempe, Arizona 99¢ Stores

imately 40,000 sf of office and

we extended the lease with our

opened for business but in our

retail space available at the

anchor grocer Shaws (42,000 sf),

Southfield, Michigan office prop-

Ridgeway Shopping Center.

Goodwives Shopping Center
Darien, Connecticut

Townline Square
Meriden, Connecticut

URSTADT BIDDLE PROPERTIES INC.

Towne Centre Shopping Center
Somers, New York

Carmel ShopRite Center
Carmel, New York

Arcadian Shopping Center
Briarcliff Manor, New York

Chilmark Shopping Center
Briarcliff Manor, New York

Heritage 202 Center
Somers, New York

25 Valley Drive
Greenwich, Connecticut

7 Riversville Road
Greenwich, Connecticut

530 Old Post Road
Greenwich, Connecticut

Westchester Pavilion Shopping Center
White Plains, New York

Eastchester Mall
Eastchester, New York

Valley Ridge Shopping Center
Wayne, New Jersey

URSTADT
BIDDLE
PROPERTIES
Greenwich,
Connecticut

Bi-County Shopping Center
Farmingdale, New York

Danbury Square
Danbury, Connecticut

Ridgefield Center
Ridgefield, Connecticut

Ridgeway Shopping Center
Stamford, Connecticut

Five Town Plaza
Springfield, Massachusetts

Newington Park
Newington, New Hampshire

Airport Plaza
Danbury, Connecticut

Townline Square
Meriden, Connecticut

Goodwives Shopping Center
Darien, Connecticut

Orange Meadows Shopping Center
Orange, Connecticut

CORE PROPERTIES

INVESTMENT PORTFOLIO

URSTADT BIDDLE PROPERTIES INC.

CORE PROPERTIES

UBP owns or has interests in nineteen shopping centers and five office buildings which total 2,479,000 square feet.

Location

Square Feet

Principal Tenants

360,000

316,000

313,000

194,000

190,000

185,000

126,000

102,000

95,000

78,000

70,000

51,000

38,000

33,000

19,000

59,000

Stamford, Connecticut

Springfield, Massachusetts

Meriden, Connecticut

Danbury, Connecticut

Briarcliff Manor, New York

White Plains, New York*

Carmel, New York

Wayne, New Jersey

Newington, New Hampshire

Darien, Connecticut

Somers, New York

Orange, Connecticut*

Farmingdale, New York

Eastchester, New York

Ridgefield, Connecticut

Briarcliff Manor, New York

Danbury, Connecticut

Somers, New York

Greenwich, Connecticut

*Acquired-12/02

NON-CORE PROPERTIES

Property Type

Shopping center

Stop & Shop, Bed Bath & Beyond

A&P, Burlington Coat, Toy Works

ShopRite, Old Navy, Linens ‘N Things

Shopping center

Barnes & Noble, Christmas Tree Shops

Shopping center

Stop & Shop, Toy Works

Toys R Us, The Sports Authority

ShopRite, Eckerd Drugs

A&P, PNC Bank

Linens ‘N Things

Shaw’s Supermarket

Gristede’s, US Post Office

Trader Joe’s Food Market, Seamans

Furniture

King Kullen, Eckerd Drugs

Food Emporium (A&P)

Chico’s

Dress Barn, Radio Shack

Gateway

Putnam County Savings Bank

Greenwich Hospital,
Urstadt Biddle Properties
(Executive Offices)

Shopping center

5 Office buildings

UBP owns one office building containing 202,000 square feet, one retail property containing 126,000 square feet and
two industrial properties with a total of 447,000 square feet. The Company also holds long-term mortgages.

Location

Square Feet

Principal Tenant

Property Type

Southfield, Michigan

Tempe, Arizona

Dallas, Texas
St. Louis, Missouri

202,000

126,000

255,000
192,000

Arcadis/Giffels

Mervyn’s

DaimlerChrysler
DaimlerChrysler

Office building

Shopping center

Parts distribution facility
Parts distribution facility

FINANCIALS

CONTENTS

Consolidated Balance Sheets at October 31, 2002 and 2001 ........14

Consolidated Statements of Income for each of the

three years in the period ended October 31, 2002.................15

Consolidated Statements of Cash Flows for each of the

three years in the period ended October 31, 2002.................16

Consolidated Statements of Stockholders’ Equity

for each of the three years in the period
ended October 31, 2002 ...................................................17

Notes to Consolidated Financial Statements .......................18-30

Report of Independent Auditors ...........................................30

Management’s Discussion and Analysis of Financial

Condition and Results of Operations .................................31

Tax Status ..........................................................................36

Market Price Ranges ...........................................................36

URSTADT BIDDLE PROPERTIES INC.

FINANCIAL STATEMENTS

URSTADT BIDDLE PROPERTIES INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

ASSETS

Real Estate Investments:

Core properties — at cost, net of accumulated depreciation
Non-core properties — at cost, net of accumulated depreciation
Mortgage notes and other receivable

Cash and cash equivalents
Restricted cash
Short-term investments
Tenant receivables, net of allowances
Deferred charges, net of accumulated amortization
Prepaid expenses and other assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:

Mortgage notes payable
Accounts payable and accrued expenses
Deferred officers’ compensation
Other liabilities

Minority Interests

Preferred Stock, par value $.01 per share; 20,000,000 shares authorized;

8.99% Series B Senior Cumulative Preferred stock, (liquidation preference of
$100 per share); 150,000 and 350,000 shares issued and outstanding in 2002
and 2001, respectively

Commitments and Contingencies

Stockholders’ Equity:

Excess stock, par value $.01 per share; 10,000,000 shares authorized;

none issued and outstanding

Common stock, par value $.01 per share; 30,000,000 shares authorized; 6,578,572
and 6,242,139 issued and outstanding shares in 2002 and 2001, respectively
Class A Common stock, par value $.01 per share; 40,000,000 shares authorized;

18,449,472 and 9,600,019 issued and outstanding shares in 2002 and
2001, respectively

Additional paid in capital
Cumulative distributions in excess of net income
Unamortized restricted stock compensation and notes receivable

from officers/stockholders

The accompanying notes to consolidated financial statements are an integral part of these statements.

October 31,

2002

2001

$252,711
11,944
3,447

$160,152
11,039
3,507

268,102

174,698

46,342
514
25,145
5,695
3,294
4,541

33,747
333
—
3,826
3,477
2,271

$353,633

$218,352

$106,429
1,021
287
4,218

111,955

$47,115
2,670
230
4,142

54,157

7,320

4,365

14,341

33,462

—

185
254,266
(30,487)

96
162,763
(31,654)

(4,013)

(4,899)

220,017

126,368

$353,633

$218,352

URSTADT BIDDLE PROPERTIES INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

Revenues

Operating leases
Lease termination income
Interest and other

Operating Expenses
Property expenses
Interest
Depreciation
Amortization
General and administrative expenses
Directors’ fees and expenses

Operating Income

Equity in Earnings of Unconsolidated Joint Venture

Minority Interests in Results of Consolidated Joint Ventures

Gains on Sales of Real Estate Investments

Net Income

Preferred Stock Dividends
Excess of Carrying Value over Cost to Repurchase Preferred Shares

Year Ended October 31,

2002

2001

2000

$42,206
765
1,369
44,340

$34,209
1,137
747
36,093

$30,242
—
767
31,009

12,781
5,584
7,547
517
2,836
173

29,438

14,902

—

(395)

—

14,507

(1,498)
3,071

11,502
4,456
6,697
871
2,484
144

26,154

9,939

3,864

(432)

316

13,687

(3,147)
—

10,413
4,245
5,638
669
2,152
164

23,281

7,728

245

(451)

1,067

8,589

(3,147)
—

Net Income Applicable to Common and

Class A Common Stockholders

$16,080

$10,540

$5,442

Basic Earnings Per Share:
Common

Class A Common

Weighted Average Number of Shares Outstanding:
Common

Class A Common

Diluted Earnings Per Share:
Common

Class A Common

Weighted Average Number of Shares Outstanding:
Common and Common Equivalent

Class A Common and Class A Common Equivalent

Dividends Per Share:
Common

Class A Common

The accompanying notes to consolidated financial statements are an integral part of these statements.

$.80

$.89

6,089

12,615

$.78

$.87

6,432

13,136

$.74

$.82

$.91

$1.01

5,881

5,182

$.88

$.97

6,038

5,606

$.72

$.80

$.50

$.55

5,351

5,059

$.49

$.55

5,433

5,532

$.70

$.78

FINANCIAL STATEMENTS

URSTADT BIDDLE PROPERTIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Operating Activities:

Net income
Adjustments to reconcile net income to net cash provided

by operating activities:

Depreciation and amortization
Restricted stock compensation
Recovery of investment in properties owned subject

to financing leases

Equity in income of unconsolidated joint venture
Minority interests in results of consolidated joint ventures
Gains on sales of real estate investments
Increase in restricted cash
(Increase) decrease in tenant receivables
(Decrease) increase in accounts payable and accrued expenses
(Increase) decrease in other assets and other liabilities, net

Year Ended October 31,

2002

2001

2000

$14,507

$13,687

$8,589

8,064
942

—
—
395
—
(181)
(1,871)
(1,649)
(1,675)

7,568
769

191
(3,864)
432
(316)
(174)
98
1,448
1,469

6,307
630

1,214
(245)
451
(1,067)
(81)
(481)
(684)
(371)

Net Cash Provided by Operating Activities

18,532

21,308

14,262

Investing Activities:

Purchase of short term investments
Acquisitions of properties
Acquisition of minority interest
Improvements to properties and deferred charges
Investment in unconsolidated entity
Net proceeds from sales of properties
Distributions to limited partners of consolidated joint venture
Distributions received from unconsolidated joint venture
Payments to limited partners of unconsolidated joint venture
Payments received on mortgage notes and other receivables
Deposits on acquisitions of properties

Net Cash Used in Investing Activities

Financing Activities:

Sales of additional Common and Class A Common shares
Proceeds from mortgage notes payable and bank loans
Payments on mortgage notes payable and bank loans
Dividends paid – Common and Class A Common shares
Dividends paid – Preferred Stock
Purchases of Common and Class A Common shares
Repurchase of preferred shares
Repayments of notes from officers

Net Cash Provided by (Used in) Financing Activities

Net Increase (Decrease) In Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year

(25,145)
(34,785)
(1,258)
(2,814)
—
275
(395)
—
(600)
62
(300)

(64,960)

88,523
17,200
(17,256)
(14,913)
(1,498)
—
(16,050)
3,017

59,023

12,595
33,747

—
(5,606)
(1,013)
(11,695)
(480)
1,216
(432)
6,544
—
72
—

(11,394)

42,959
26,250
(35,190)
(8,797)
(3,147)
(35)
—
—

22,040

31,954
1,793

—
(1,627)
—
(6,642)
(535)
3,921
(451)
1,500
—
121
—

(3,713)

2,713
6,500
(7,861)
(7,712)
(3,147)
(1,929)
—
—

(11,436)

(887)
2,680

Cash and Cash Equivalents at End of Year

$46,342

$33,747

$1,793

The accompanying notes to consolidated financial statements are an integral part of these statements.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except shares and per share data)

URSTADT BIDDLE PROPERTIES INC.

Common Stock

Class A Common Stock

Outstanding
Number of
Shares

Par
Value

Outstanding
Number of
Shares

Par
Value

Unamortized
Restricted
Stock
(Cumulative
Additional Distributions Compensation
and Notes
In Excess of
Receivable
Net Income)

Paid In
Capital

Total

Balances — October 31, 1999

5,531,845

$55

5,184,039

$52

$120,964

$(31,127)

$(1,907)

$88,037

Net income applicable to Common and

Class A Common stockholders

Cash dividends paid:

Common stock ($.70 per share)
Class A Common stock ($.78 per share)

Sale of additional shares
Sale of additional shares under dividend

reinvestment plan

Shares issued under restricted stock plan
Amortization of restricted stock

compensation
Purchases of shares

Balances — October 31, 2000

Net Income applicable to Common and

Class A Common stockholders

Cash dividends paid:

Common stock ($.72 per share)
Class A common stock ($.80 per share)

Sale of additional shares
Sale of additional shares under dividend

reinvestment plan

Shares issued under restricted stock plan
Amortization of restricted stock

compensation
Purchases of shares
Exercises of stock options
Note from officer upon exercise

of stock options

Deemed repurchase of Class A

common Stock

—

—
—
64,400

21,367
48,375

—
(108,600)

5,557,387

—

—
—
200,000

18,652
48,000

—
(900)
419,000

—

Balances — October 31, 2001

6,242,139

Net income applicable to Common and

Class A common stockholders

Cash dividends paid:

Common stock ($.74 per share)
Class A common stock ($.82 per share)

Sales of Class A common shares
Sales of additional shares under dividend

reinvestment plan

Shares issued under restricted stock plan
Amortization of restricted stock

compensation

Exercises of stock options
Notes from officers upon exercises of

stock options

Repayments of notes receivable

from officers

—

—
—
—

14,296
110,375

—
211,762

—

Balances — October 31, 2002

6,578,572

—

—
—
—

—
1

—
(1)

—

—
—
2

—
—

—
—
5

—

—
—
—

—
2

—

$66

—

—
—
256,400

22,035
48,375

—
(154,600)

5,356,249

—

—
—
4,805,000

23,257
48,000

—
(2,800)
24,859

—

—
—
3

—
1

—
(2)

—

—
—
48

—
—

—
—
—

—

—
—
2,406

304
700

—
(1,926)

5,442

(3,748)
(3,964)
—

—
—

—

—
—
—

—
(702)

630
—

5,442

(3,748)
(3,964)
2,409

304
—

630
(1,929)

122,448

(33,397)

(1,979)

87,181

—

10,540

—
—
42,521

343
686

—
(35)
3,043

—

(4,487)
(4,310)
—

—
—

—
—
—

—

—
—
—

—
(686)

769
—
—

10,540

(4,487)
(4,310)
42,571

343
—

769
(35)
3,048

(3,003)

—

(6,249)

(654,546)

9,600,019

(6)

(6,243)

162,763

(31,654)

(4,899)

126,368

—

—
—
8,749,222

19,494
43,425

—
37,312

—

—
—
88

—
1

—
—

—

16,080

—
—
87,835

364
1,577

—
1,727

—

(4,750)
(10,163)
—

—
—

—

—
—
—

—
(1,580)

942
—

16,080

(4,750)
(10,163)
87,923

364
—

942
1,729

(1,493)

3,017

18,449,472

$185

$254,266

$(30,487)

$(4,013)

$220,017

The accompanying notes to consolidated financial statements are an integral part of these statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business
Urstadt Biddle Properties Inc. (Company), a real estate investment trust (REIT), is engaged in the acquisition,
ownership and management of commercial real estate, primarily neighborhood and community shopping
centers in the northeastern part of the United States. Other assets include office and retail buildings and
industrial properties. The Company’s major tenants include supermarket chains and other retailers who sell
basic necessities. At October 31, 2002, the Company owned or had interests in 26 properties containing a total
of 3.0 million square feet of leasable area.

Principles of Consolidation
The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and
entities in which the Company has the ability to control the affairs of the venture. Prior to September 2001, the
Company had an investment in an unconsolidated joint venture which was accounted for by the equity method
of accounting. Under the equity method, only the Company’s net investment and proportionate share of income
or loss of the unconsolidated joint venture is reflected in the financial statements. All significant intercompany
transactions and balances have been eliminated in consolidation.

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States requires management to make use of estimates and assumptions that affect amounts reported in
the financial statements as well as certain disclosures. Actual results could differ from those estimates.

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

Federal Income Taxes
The Company has elected to be treated as a real estate investment trust under Sections 856-860 of the Internal
Revenue Code (Code). Under those sections, a REIT, that among other things, distributes at least 90% of real
estate trust taxable income and meets certain other qualifications prescribed by the Code will not be taxed on
that portion of its taxable income which is distributed. The Company believes it qualifies as a REIT and will
distribute all of its taxable income for the fiscal years through 2002 in accordance with the provisions of the
Code. Accordingly, no provision has been made for Federal income taxes in the accompanying consolidated
financial statements.

Depreciation and Amortization
The Company uses the straight-line method for depreciation and amortization. Core and non-core properties
are depreciated over the estimated useful lives of the properties, which range from 30 to 40 years. Property
improvements are depreciated over the estimated useful lives which range from 10 to 20 years. Tenant
improvements are amortized over the life of the related leases.

Deferred Charges
Deferred charges consist principally of leasing commissions which are amortized ratably over the life of the
tenant leases and financing fees which are amortized over the terms of the respective agreements. Deferred
charges in the accompanying consolidated balance sheets are shown at cost, net of accumulated amortization
of $1,437,000 and $1,786,000 as of October 31, 2002 and 2001, respectively.

Real Estate Investment Impairment
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used
is measured by a comparison of the carrying amount of the asset to aggregate future net cash flows, undis-
counted and without interest, expected to be generated by the asset. If such assets are considered impaired,
the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed
the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair
value less costs to sell. It is the Company’s policy to reclassify properties as assets to be disposed of upon deter-
mination that such properties will be sold within one year.

URSTADT BIDDLE PROPERTIES INC.

Capitalization
Acquisition of real estate investments, including brokerage, legal and other external costs incurred in acquiring
new properties are capitalized as incurred. Additions, renovations and improvements that enhance and/or
extend the useful life of a property are also capitalized. Expenditures for ordinary maintenance, repairs and
improvements that do not materially prolong the normal useful life of an asset are charged to operations as
incurred.

Revenue Recognition
Revenues from operating leases include revenues from core properties and non-core properties. Rental income
is generally recognized based on the terms of leases entered into with tenants. Minimum rental income from
leases with scheduled rent increases is recognized on a straight-line basis over the lease term. At October 31, 2002
and 2001, approximately $3,743,000 and $1,970,000 has been recognized as straight-line rents receivable (represent-
ing the current net cumulative rents recognized prior to when billed and collectible as provided by the terms of
the leases), all of which is included in tenant receivables in the accompanying consolidated financial statements.
Percentage rent is recognized when a specific tenant’s sales breakpoint is achieved. Property operating cost recov-
eries from tenants of common area maintenance, real estate taxes, and other recoverable costs are recognized in the
period the related expenses are incurred. Lease termination fees received by the Company from its tenants are
recognized as income in the period received. Interest income is recognized as it is earned. Gains and losses on sales
of properties are recorded when the criteria for recognizing such gains or losses under generally accepted account-
ing principles have been met.

The Company provides an allowance for doubtful accounts against the portion of tenant accounts receivable
(including straight-line rents receivable) which is estimated to be uncollectible. Such allowances are reviewed
periodically. At October 31, 2002 and 2001, tenant receivables in the accompanying consolidated balance sheets
are shown net of allowances for doubtful accounts of $1,169,000 and $411,000, respectively.

Cash and Cash Equivalents
The Company considers highly liquid investments with original maturities of 90 days or less when purchased
to be cash equivalents.

Restricted Cash
Restricted cash consists of those tenant security deposits which are required to be held in separate bank accounts.

Short-Term Investments
Short-term investments consist of investments with original maturities of greater than three months when
purchased and are carried at cost plus accrued interest (which approximates fair value). At October 31, 2002,
short-term investments consists principally of shares of a mutual fund which invests primarily in fixed income
securities with an average duration of between three and thirteen months.

Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, short-term investments, rent receivable, accounts payable,
accrued expenses and other assets and liabilities are reasonable estimates of their fair values because of the
short maturities of these instruments.

The estimated fair value of mortgage notes receivable collateralized by real property is based on discounting
the future cash flows at a year-end risk adjusted lending rate that the Company would utilize for loans of
similar risk and duration. At October 31, 2002 and 2001, the estimated aggregate fair value of the mortgage
notes receivable was $3,542,000 and $3,594,000, respectively.

The estimated fair value of mortgage notes payable was $118,000,000 and $49,000,000 at October 31, 2002 and
2001, respectively. The estimated fair value of mortgage notes payable is based on discounting the future cash
flows at a year-end risk adjusted lending rate currently available to the Company for issuance of debt with
similar terms and remaining maturities.

Although management is not aware of any factors that would significantly affect the estimated fair value
amounts, such amounts have not been comprehensively revalued for purposes of these financial statements
since that date and current estimates of fair value may differ significantly from the amounts presented herein.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Earnings Per Share
The Company calculates basic and diluted earnings per share in accordance with SFAS No. 128, “Earnings
Per Share.” Basic earnings per share (“EPS”) excludes the impact of dilutive shares and is computed by dividing
net income applicable to Common and Class A Common stockholders by the weighted number of Common shares
and Class A Common shares outstanding for the period. Diluted EPS reflects the potential dilution that could
occur if securities or other contracts to issue Common shares or Class A Common shares were exercised or con-
verted into Common shares or Class A Common shares and then shared in the earnings of the Company. Since the
cash dividends declared on the Company’s Class A Common stock are higher than the dividends declared on the
Common Stock, basic and diluted EPS have been calculated using the “two-class” method. The two-class method
is an earnings allocation formula that determines earnings per share for each class of common stock according
to the weighted average of the dividends declared, outstanding shares per class and participation rights in
undistributed earnings.

The following table sets forth the reconciliation between basic and diluted EPS (in thousands):

Numerator
Net income applicable to common stockholders – basic
Effect of dilutive securities:

Operating partnership units

Net income applicable to common stockholders – diluted

Denominator
Denominator for basic EPS – weighted average common shares
Effect of dilutive securities:
Stock options and awards
Operating partnership units

Denominator for diluted EPS – weighted average common

equivalent shares

Numerator
Net income applicable to Class A common stockholders – basic
Effect of dilutive securities

Operating partnership units

Net income applicable to Class A common stockholders – diluted

Denominator
Denominator for basic EPS – weighted average Class A common shares
Effect of dilutive securities:
Stock options and awards
Operating partnership units

Denominator for diluted EPS – weighted average Class A common

equivalent shares

2002

2001

2000

$4,880

$5,326

$2,650

160
$5,040

(32)
$5,294

28
$2,678

6,089

5,881

5,351

288
55

157
—

82
—

6,432

6,038

5,433

$11,200

$5,214

$2,792

202
$11,402

246
$5,460

246
$3,038

12,615

5,182

5,059

211
310

135
289

90
383

13,136

5,606

5,532

The weighted average Common equivalent shares and Class A common equivalent shares for the years ended
October 31, 2001 and 2000 exclude 54,553 Common and 54,553 Class A partnership units which are exchange-
able into shares. These shares were not included in the calculation of diluted EPS because the effect would be
anti-dilutive.

URSTADT BIDDLE PROPERTIES INC.

Recently Issued Accounting Pronouncements
The Financial Accounting Standards Board (FASB) has issued SFAS No. 144 “Accounting for the Impairment or
Disposal of Long Lived Assets” which updates and clarifies the accounting and reporting for impairment of
assets held in use and to be disposed of. The Statement, among other things, will require the Company to
classify the operations and cash flow of properties to be disposed of as discontinued operations. The Company
will adopt the provisions of the Statement in fiscal 2003, and does not expect the Statement to have a material
impact on the Company’s financial position or results from operations.

In December 2002, the FASB issued SFAS No. 148 “Accounting for Stock-Based Compensation-Transition and
Disclosure.” This statement amends SFAS No. 123 to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee compensation and amends the
disclosure requirements of SFAS No. 123. Adoption of the provisions of the Statement in fiscal 2003 will not
have an impact since the Company will continue to use the intrinsic value method as set forth in APB No. 25.

Segment Reporting
The Company operates in one industry segment, ownership of commercial real estate properties which are
located principally in the northeastern United States. Management reviews operating and financial data for each
property separately and independently from all other properties when making resource allocation decisions and
measuring performance.

(2) REAL ESTATE INVESTMENTS
The Company’s investments in real estate, net of depreciation, were composed of the following at October 31,
2002 and 2001 (in thousands):

Retail
Office
Industrial
Undeveloped Land

Core
Properties

Non-core
Properties

Mortgage Notes
and Other
Receivables

$244,384
8,023
—
304
$252,711

$1,920
8,240
1,784
—
$11,944

$3,447
—
—
—
$3,447

2002
Totals

$249,751
16,263
1,784
304
$268,102

2001
Totals

$145,289
27,071
2,034
304
$174,698

The Company’s investments at October 31, 2002, consisted of equity interests in 26 properties, which are
located in various regions throughout the United States and mortgage notes. The Company’s primary invest-
ment focus is neighborhood and community shopping centers located in the northeastern United States.
These properties are considered core properties of the Company. The remaining properties are located outside
of the northeastern United States and are considered non-core properties. As a significant concentration of
the Company’s properties are in the northeast, market changes in this region could have an effect on the
Company’s leasing efforts and ultimately its overall results of operations. The following is a summary of the
geographic locations of the Company’s investments at October 31, 2002 and 2001 (in thousands):

Northeast
Southeast
Midwest
Southwest

2002

$253,432
1,196
9,048
4,426
$268,102

2001

$160,897
1,200
8,064
4,537
$174,698

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(3) CORE PROPERTIES
The components of core properties were as follows (in thousands):

Land
Buildings and improvements

Accumulated depreciation

2002

$53,021
236,362
289,383
(36,672)
$252,711

2001

$32,524
159,650
192,174
(32,022)
$160,152

Space at the Company’s core properties is generally leased to various individual tenants under short and
intermediate term leases which are accounted for as operating leases.

Minimum rental payments on non-cancelable operating leases become due as follows: 2003 – $31,861,000;
2004 – $30,677,000; 2005 – $28,608,000; 2006 – $26,645,000; 2007 – $24,711,000 and thereafter – $134,255,000.

Certain of the Company’s leases provide for the payment of additional rent based on a percentage of the
tenant’s revenues. Such additional percentage rents are included in operating lease income and were approxi-
mately $47,000, $70,000, and $148,000, in 2002, 2001 and 2000, respectively.

In fiscal 2002 and 2001, the Company received net proceeds of $765,000 and $1,137,000, respectively, in
satisfaction of all claims against former tenants in negotiated settlements of the tenants lease obligations.
The settlement amounts are reflected in revenues in the accompanying consolidated statements of income
as lease termination income in the years ended October 31, 2002 and 2001.

The Company is the general partner in an entity that owns the Eastchester Mall in Eastchester, New York. The
limited partner is entitled to preferential distributions of cash flow from the property and may put its interest in
the entity to the Company for a fixed number of shares of Common Stock and Class A Common stock of the
Company. The Company, at its option, may redeem the limited partner’s interest for cash. The Company also
has an option to purchase the limited partner’s interest after a certain period.

The Company is also the general partner in an entity that owns the Arcadian Shopping Center in Briarcliff
Manor, New York. The limited partners contributed the property, subject to a $6.3 million first mortgage, in
exchange for operating partnership units (OPU’s) of the entity. The OPU’s are exchangeable into an equivalent
number of shares of the Company’s Class A Common Stock. The limited partners are entitled to
preferential distributions of cash flow from the property and may put their partnership interests to the
Company for cash or Class A Common Stock of the Company at a unit price as defined in the partnership
agreement. The Company, at its option, may redeem the limited partners’ interest for cash. The Company also
has the option to purchase the limited partners’ interest for cash after a certain period. In fiscal 2001, the
Company redeemed, at net book value, 127,548 OPU’s for cash of $1.0 million. At October 31, 2002 and 2001
there were 255,097 OPU’s outstanding.

URSTADT BIDDLE PROPERTIES INC.

In June 2002, UB Stamford, LP, a newly formed limited partnership in which the Company has a 90% general
partner interest, acquired the Ridgeway shopping center, a 360,000 square foot shopping center in Fairfield
County, Connecticut for a total purchase price of $89.99 million, including transaction costs of $708,000 and the
assumption of an existing first mortgage loan on the property of $57,369,000 at a fixed interest rate of 7.54%. The
partnership agreement provides for the partners to receive an annual cash preference from available cash of the
partnership. Any unpaid preferences accumulate and are paid from future available cash, if any. The limited
partners’ cash preferences are paid after the general partner’s preferences are satisfied. The balance of available
cash, if any, is distributed in accordance with the respective partners’ interests. Upon liquidation, proceeds from
the sale of partnership assets are to be distributed in accordance with the respective partners’ interests. The
partners are not obligated to make any additional capital contributions to the partnership. The Company has
retained an affiliate of one of the limited partners to provide management and leasing services to the property
at an annual fee of $125,000 for a period of five years ending in June 2007. The assumption of the first mortgage
loan represents a non-cash financing activity and is therefore not included in the accompanying 2002 consolidat-
ed statement of cash flows.

The limited partnership interests in the partnerships are reflected in the accompanying consolidated financial
statements as Minority Interests.

In March 2002, the Company acquired a shopping center in Danbury, Connecticut for $7.0 million subject to
a first mortgage loan of $2.0 million at a fixed interest rate of 8.375%. The assumption of the first mortgage
represents a non-cash financing activity and is therefore not included in the accompanying 2002 consolidated
statement of cash flows.

In fiscal 2001, the Company purchased an office property in Greenwich, Connecticut and a 38,000 square foot
shopping center in Westchester County, New York in separate transactions for a total purchase price of
$9.5 million. In connection with the acquisition of the shopping center, the Company assumed a first mortgage
of $4.2 million. The assumption of the first mortgage represents a non-cash financing activity and is therefore
not included in the accompanying 2001 consolidated statement of cash flows.

In fiscal 2000, the Company purchased one office property for $1.65 million.

(4) NON-CORE PROPERTIES

The Board of Directors has authorized a plan to sell all of the non-core properties of the Company over a period
of several years. At October 31, 2002, the non-core properties consist of two distribution and service properties,
one office building and one retail property located outside of the Northeast region of the United States.

The components of non-core properties were as follows (in thousands):

2002

2001

Land
Buildings and improvements

$1,493
17,970
19,463
Accumulated depreciation (9,320) (8,424)
$11,039

$1,943
19,321
21,264

$11,944

Minimum rental payments on non-cancelable operating leases of the non-core properties become due as follows:
2003 – $4,822,000; 2004 – $4,956,000; 2005 – $4,497,000; 2006 – $4,572,000; 2007 – $4,284,000 and thereafter
$3,695,000.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4) NON-CORE PROPERTIES (continued)

Sales of Properties
In fiscal 2002, the Company sold undeveloped land for a net loss on sale of $6,200.

In fiscal 2001, the Company sold a non-core property for $100,000. There was no gain or loss on the sale.
The Company also sold undeveloped land for a net gain on the sale of the property of $316,000.

In fiscal 2000, the Company sold two of its non-core properties for net gains on the sales of $1,067,000.

The operating income of the properties sold during each of the years ended October 31, 2002, 2001 and
2000 was less than 1% of the consolidated operating income in each of the years then ended.

Prior to December 2001, the Company was the sole general partner in Countryside Square Limited Partnership
(the “Partnership”), which owned the Countryside Square Shopping Center in Clearwater, Florida. Upon the
formation of the Partnership in 1997, the Company contributed the property and the limited partners con-
tributed 600,000 Common shares of the Company. In 1998, the Partnership received 600,000 Class A Common
shares pursuant to a stock dividend and in 1999, exchanged 600,000 Common shares with an affiliate for an
equivalent number of Class A Common shares. After the exchange, the Partnership owned 1,200,000 shares of
Class A Common stock of the Company. The Company accounted for its proportionate interest in the Class A
Common shares owned by the Partnership as a deemed repurchase of 545,454 Class A Common shares and
reduced its investment in the unconsolidated joint venture and stockholders’ equity in an amount equal to the
fair value of the shares repurchased.

In September 2001, the property was sold by the Partnership. Prior to the sale of the property, the Company
accounted for its interest in the Partnership under the equity method. Accordingly, through the date of sale in
fiscal 2001, the Company recorded $3,864,000 as its proportionate share of the income of the joint venture
including earnings from the sale of the property. The Company’s equity in earnings of the Partnership was
reflected after eliminating its proportionate share of dividend income in the Class A Common shares of the
Company recorded by the Partnership.

Upon the Partnership’s sale of the property, the Company effectively gained control of the Partnership and as a
result, the Partnership’s accounts, which included $1.2 million in notes issued by the purchaser of the property
and 1,200,000 shares of the Company’s Class A Common stock held by the Partnership, were thereafter consolidat-
ed with the Company. Upon consolidation, the remaining 654,546 shares of Class A Common stock held by the
Partnership were retired. In December 2001, the Partnership was liquidated.

(5) MORTGAGE NOTES AND OTHER RECEIVABLE

The components of the mortgage notes and other receivables at October 31, 2002 and 2001 were as follows
(in thousands):

Remaining principal balance
Unamortized discounts to reflect market interest rates at time

of acceptance of notes

Promissory note receivable

2002

$2,685

(434)
2,251
1,196
$3,447

2001

$2,786

(479)
2,307
1,200
$3,507

Mortgage notes receivable consist of two fixed rate mortgages with contractual interest rates of 9% and 12%.
The promissory note is due in 2004, bears interest at 12.5% and is collateralized by a security interest in the
ownership interest of the purchaser of the Clearwater, Florida property. See Note 4.

At October 31, 2002, principal payments on mortgage notes and promissory note become due as follows:
2003 – $163,000; 2004 – $1,261,000; 2005 – $130,000; 2006 – $142,000; 2007 – $156,000 and thereafter – $2,029,000.

URSTADT BIDDLE PROPERTIES INC.

(6) MORTGAGE NOTES PAYABLE AND LINES OF CREDIT

At October 31, 2002, the Company had ten non-recourse first mortgage notes payable totaling $106,429,000
($47,115,000 at October 31, 2001) due in installments over various terms extending to fiscal year 2011 at fixed
rates of interest ranging from 6.29% to 8.375%. The mortgage notes payable are collateralized by real estate
investments having a net carrying value of approximately $170,000,000 as of October 31, 2002.

Scheduled principal payments during the next five years and thereafter are as follows: 2003 – $1,840,000;
2004 – $1,985,000; 2005 – $2,139,000; 2006 – $8,928,000; 2007 – $11,225,000 and thereafter – $80,312,000.

At October 31, 2002, the Company had a secured revolving line of credit with a bank which allows for borrow-
ings up to $18.75 million. The agreement which expires in October 2005 is secured by first mortgage liens on
two properties. Interest on outstanding borrowings is at a variable rate of prime + 1/2% or LIBOR + 1.5%. The
Company can elect a fixed rate option at any time prior to the last year of the agreement. The agreement
requires the Company to maintain certain debt service coverage ratios during its term and provides for a per-
manent reduction in the revolving credit loan amount of $625,000 annually. At October 31, 2002 and 2001, the
Company had no outstanding borrowings under this revolving credit agreement. The Company pays annual
fees of 1/4% on the unused portion of this credit facility.

At October 31, 2002 and 2001, the Company had an outstanding letter of credit of $139,295 which expires in
fiscal 2003.

The Company also has a $20 million unsecured line of credit arrangement with the same bank. The line of
credit expires in fiscal 2003 and, is available to acquire real estate, refinance indebtedness and for working
capital needs. Extensions of credit under the arrangement are at the bank’s discretion and subject to the bank’s
satisfaction of certain conditions. Outstanding borrowings bear interest at the prime rate + 1/2% or LIBOR
+ 2.5%. The Company pays an annual fee of 1/4% on unused amounts. There were no borrowings outstanding
under this line of credit at October 31, 2002 and 2001.

Interest paid for the years ended October 31, 2002, 2001, and 2000 was $5,584,000, $4,456,000 and $4,245,000,
respectively.

(7) PREFERRED STOCK

The Series B Preferred Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption
and is not convertible into other securities or property of the Company. On or after January 8, 2008, the Series B
Preferred Stock may be redeemed by the Company at its option, in whole or in part, at a redemption price of
$100 per share, plus all accrued dividends. Upon a change in control of the Company (as defined), (i) each hold-
er of Series B Preferred Stock shall have the right, at such holder’s option, to require the Company to repurchase
all or any part of such holder’s Series B Preferred Stock for cash at a repurchase price of $100 per share, plus all
accrued and unpaid dividends, and (ii) the Company shall have the right, at the Company’s option, to redeem
all or any part of the Series B Preferred Stock at (a) prior to January 8, 2008, the Make-Whole Price (as defined)
and (b) on or subsequent to January 8, 2008, the redemption price of $100 per share, plus all accrued and unpaid
dividends. Holders of the Series B Preferred Stock are entitled to receive cumulative preferential cash dividends
equal to 8.99% per annum, payable quarterly in arrears and subject to adjustments under certain circumstances.

The Series B Preferred Stock contains covenants which require the Company to maintain certain financial
coverages relating to fixed charge and capitalization ratios. Shares of the Series B Preferred Stock are non-voting;
however, under certain circumstances (relating to non-payment of dividends or failure to comply with the
financial covenants) the preferred stockholders will be entitled to elect two directors. The Company was in
compliance with such covenants at October 31, 2002 and 2001.

In fiscal 2002, the Company repurchased 200,000 shares of its Series B Preferred Stock for a purchase price of
$16,050,000 in a negotiated transaction with a holder of the preferred shares. The Company has recorded the
excess of the carrying value over the cost to repurchase the preferred shares as an increase in net income
applicable to Common and Class A Common stockholders.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(8) STOCKHOLDERS’ EQUITY

In fiscal 2002, the Company completed a secondary offering of 8,050,000 shares of its Class A Common Stock in
an underwritten public offering. The net proceeds to the Company (after deducting underwriting fees and
expenses) were $81,854,000. In November 2001, the Company also sold 699,222 shares to its underwriters to
cover over allotments in connection with the Company’s secondary stock offering of 4,800,000 shares in fiscal
2001. Net proceeds to the Company amounted to $6,069,000.

In fiscal 2001, the Company sold 4,800,000 shares of its Class A Common Stock in an underwritten public offer-
ing. The net proceeds to the Company (after deducting underwriting fees and expenses) were $41,136,000. The
Company also sold 200,000 shares of Common Stock and 5,000 shares of Class A Common Stock for total pro-
ceeds of $1,435,000 in a private placement offering with two entities controlled by an officer of the Company.

Underwriting commissions and costs incurred in connection with the Company’s stock offerings are reflected as
a reduction of additional paid in capital.

In fiscal 1998, the Board of Directors declared and paid a special stock dividend on the Company’s Common
Stock consisting of one share of a newly created class of Class A Common Stock, par value $.01 per share, for
each share of the Company’s Common Stock. The Class A Common Stock entitles the holder to 1/20 of one
vote per share. Each share of Common Stock and Class A Common Stock have identical rights with respect
to dividends except that each share of Class A Common Stock will receive not less than 110% of the regular
quarterly dividends paid on each share of Common Stock.

The Company has a stockholders rights agreement, which expires on November 12, 2008. The rights are not cur-
rently exercisable. When they are exercisable, the holder will be entitled to purchase from the Company one
one-hundredth of a share of a newly-established Series A Participating Preferred Stock at a price of $65 per one
one-hundredth of a preferred share, subject to certain adjustments. The distribution date for the rights will occur
10 days after a person or group either acquires or obtains the right to acquire 10% (“Acquiring Person”) or more
of the combined voting power of the Company’s Common Shares, or announces an offer the consummation
of which would result in such person or group owning 30% or more of the then outstanding Common Shares.
Thereafter, shareholders other than the Acquiring Person will be entitled to purchase original common shares
of the Company having a value equal to two times the exercise price of the right.

If the Company is involved in a merger or other business combination at any time after the rights become
exercisable, and the Company is not the surviving corporation or 50% or more of the Company assets are sold
or transferred, the rights agreement provides that the holder other than the Acquiring Person will be entitled to
purchase a number of shares of common stock of the acquiring company having a value equal to two times the
exercise price of each right.

The Company’s articles of incorporation provide that if any person acquires more than 7.5% of the outstanding
shares of any class of stock, except, among other reasons, as approved by the Board of Directors, such shares in
excess of this limit shall automatically be exchanged for an equal number of shares of Excess Stock. Excess Stock
have limited rights, may not be voted and are not entitled to any dividends.

In fiscal 1996, the Company’s Board of Directors authorized a program to purchase up to 500,000 shares each of
the Company’s Common Stock and Class A Common Stock. As of October 31, 2002, the Company purchased and
retired a total of 224,500 Common shares and 214,100 Class A Common shares under this program (none in 2002).

URSTADT BIDDLE PROPERTIES INC.

(9) STOCK OPTION AND OTHER BENEFIT PLANS

The Company has a stock option plan, whereby 824,093 Common shares and 743,003 Class A Common shares
were reserved for issuance to key employees and non-employee Directors of the Company. Options are granted
at fair market value on the date of the grant, have a duration of ten years from the date of grant and are general-
ly exercisable in installments over a maximum period of four years from the date of grant.

A summary of stock option transactions during the periods covered by these financial statements is as follows:

Year ended October 31,

2002

2001

2000

Common stock:

Balance at beginning

of period

Granted
Exercised
Canceled/Forfeited
Balance at end of period
Exercisable

Class A Common Stock:

Balance at beginning

of period

Granted
Exercised
Canceled/Forfeited
Balance at end of period
Exercisable

Weighted average fair value
per share of an option
granted during the year
– Common Stock
– Class A Common Stock

Weighted
Average
Exercise
Prices

$7.00
—
$6.88
$7.03
$7.50

$7.50
—
$7.26
$7.16
$7.71

Number
of Shares

315,060
—
(211,762)
(11,728)
91,570
91,570

314,605
—
(37,312)
(210,483)
66,810
66,810

Weighted
Average
Exercise
Prices

$6.91
—
$6.83
$7.54
$7.00

$7.48
—
$7.38
$7.13
$7.50

Number
of Shares

739,958
—
(419,000)
(5,898)
315,060
222,060

739,464
—
(24,859)
(400,000)
314,605
221,605

Weighted
Average
Exercise
Prices

$7.04
$6.81
—
$6.91
$6.91

$7.10
$7.13
—
$6.96
$7.48

Number
of Shares

736,843
593,000
—
(589,885)
739,958
146,958

732,482
593,000
—
(586,018)
739,464
146,464

—
—

$0.18
$0.12

At October 31, 2002, exercise prices of shares of Common Stock and Class A Common Stock under option
ranged from $6.60 to $9.03, for the Common Stock and $6.65 to $9.09, for the Class A Common Stock. Option
expiration dates range for both classes of stock from April 2003 through April 1, 2009 and the weighted average
remaining contractual life of these options is 3.5 years.

As of October 31, 2002, outstanding options to acquire approximately 44,000 shares each of Common Stock and
Class A Common stock permit the optionee to elect to receive either shares of Common stock, Class A Common
Stock or a combination of both. Upon an election to exercise shares of a class of common stock by the optionee,
a comparable number of shares of the class of common stock not elected by such optionee is deemed cancelled
and no longer available for future grants.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(9) STOCK OPTION AND OTHER BENEFIT PLANS (continued)

The fair value of the Company’s stock options granted in fiscal 2000 were estimated as of the date of grant using
a Black-Scholes option pricing model using the following assumptions (there were no grants in fiscal 2002 and
2001).

Year Ended October 31,

Risk-free interest rate
Expected dividend yields
Expected volatility
Weighted average option life

2000

6.17%
9.8%-10.9%
15.1%
10 Years

The Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards No.
123, “Accounting for Stock Based Compensation” (“SFAS 123”). Accordingly, no compensation expense has
been recognized for stock options granted under the plan. Had compensation cost for stock options granted
been determined based on the fair value on the grant date consistent with the provisions of SFAS 123, the effect
on the Company’s net income and earnings per share for the three years ended October 31, 2002 would have
been immaterial.

Certain officers of the Company exercised stock options to purchase shares of Common Stock and Class A
Common Stock. In connection with the share exercises, the officers executed full recourse promissory notes in
favor of the Company for the purchase price of the shares. In October 2002, an officer prepaid $3,017,000 in out-
standing stock loans. At October 31, 2002, notes from officers totaled $1,746,000 ($3,270,000 at October 31, 2001).
The notes have 10 year terms and bear fixed rates of interest ranging from 6.8% to 8%. The shares have been
pledged as additional collateral for the notes. Interest is payable quarterly. The exercise of the stock options and
the issuance of the notes from officers represent non-cash financing activities and are therefore not included in
the accompanying consolidated statements of cash flows.

The Company has a restricted stock plan for key employees and directors of the Company. The plan, which
was amended in 2002, authorizes grants of restricted stock of up to 1,050,000 shares (350,000 shares each of
Common Stock and Class A Common Stock and 350,000 shares which, at the discretion of the Company’s com-
pensation committee, may be awarded in any combination of Common Stock or Class A Stock). As of October 31,
2002, the Company has awarded 350,000 shares of Common Stock and 186,300 shares of Class A Common Stock
to participants as an incentive for future services. The shares vest between five and ten years after the date of
grant (3,500 shares each of Common Stock and Class A Common Stock were vested at October 31, 2002 (none at
October 31, 2001)). Dividends on vested and non-vested shares are paid as declared. The market value of shares
awarded has been recorded as unamortized restricted stock compensation and is shown as a separate component
of stockholders’ equity. Unamortized restricted stock compensation is being amortized to expense over the vest-
ing period. For the years ended October 31, 2002, 2001 and 2000 amounts charged to expense totaled $942,000,
$769,000 and $630,000, respectively.

The Company has a profit sharing and savings plan (the “401K Plan”) which permits all eligible employees to
defer a portion of their compensation in accordance with the Internal Revenue Code. Under the 401K Plan, the
Company may make discretionary contributions on behalf of eligible employees. For the years ended October
31, 2002, 2001 and 2000, the Company made contributions to the 401K Plan of $93,000, $88,000 and $95,000,
respectively. The Company also has an Excess Benefits and Deferred Compensation Plan which allows eligible
employees to defer benefits in excess of amounts provided under the Company’s 401K Plan and a portion of
the employees current compensation.

URSTADT BIDDLE PROPERTIES INC.

(10) PRO FORMA FINANCIAL INFORMATION (UNAUDITED)

The unaudited pro forma financial information set forth below is based upon the Company’s historical
consolidated statements of income for the year ended October 31, 2002 and 2001 adjusted to give effect to the
acquisition of the Ridgeway shopping center (see Note 3) as though it was completed on November 1, 2000.

The unaudited pro forma financial information is presented for informational purposes only and may not be
indicative of what actual results of operations would have been had the transaction occurred as of November 1,
2000. Unaudited pro forma amounts in thousands are as follows (except per share data).

Year ended October 31,

Revenues:
Net income applicable to Common and
Class A Common Stockholders:
Earnings per share:

Basic:

Common
Class A Common

Diluted:

Common
Class A Common

2002

$50,066

$16,191

$.81
$.89

$.79
$.87

2001

$46,717

$9,843

$.85
$.94

$.82
$.91

(11) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The unaudited quarterly results of operations for the years ended October 31, 2002 and 2001 are as follows (in
thousands, except per share data):

Year Ended October 31, 2002

Year Ended October 31, 2001

Quarter Ended

Jan 31 Apr 30

July 31 Oct 31

Jan 31 Apr 30

July 31 Oct 31

Revenues

$10,014

$9,971 $11,223 $13,132

$8,281

$8,702

$9,983

$9,127

Net Income (1)

$3,508

$3,368

$3,295

$4,336

$1,932

$2,276

$3,211

$6,268

Preferred Stock Dividends
Excess of carrying value over
cost of Preferred Shares
Repurchased

Net Income Applicable to
Common and Class A
Common Stockholders

Basic Earnings per Share:
Common
Class A Common

Diluted Earnings per Share:
Common
Class A Common

(487)

(337)

(786)

(787)

3,071

—

$6,092

$3,031

$2,958

$3,999

$1,146

$1,489

$2,424

$5,481

$.36
$.40

$.35
$.38

$.18
$.20

$.17
$.19

$.15
$.17

$.15
$.16

$.15
$.17

$.10
$.11

$.13
$.14

$.12
$.14

$.21
$.24

$.21
$.23

$.47
$.52

$.45
$.49

(1) Quarter ended October 31, 2001 includes a gain on sale of real estate investments of $316,000 and the Company’s proportionate share
of the earnings of an unconsolidated joint venture of $3,884,000.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(12) SUBSEQUENT EVENTS, COMMITMENTS AND CONTINGENCIES

On December 23, 2002, the Company acquired the Westchester Pavilion Shopping Center in White Plains,
New York, a 185,000 square foot shopping center for $39.9 million in an all cash transaction.

On December 20, 2002, the Company acquired the Orange Meadows Shopping Center in Orange, Connecticut,
a 78,000 square foot retail property for $11.2 million in an all cash transaction.

The Company has also contracted to purchase two retail properties totaling 169,000 square feet under separate
agreements for an aggregate purchase price of approximately $33 million.

In the normal course of business, from time to time, the Company is involved in legal actions relating to the
ownership and operations of its properties. In management’s opinion, the liabilities, if any that may ultimately
result from such legal actions are not expected to have a material adverse effect on the consolidated financial
position, results of operations or liquidity of the Company.

REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of Urstadt Biddle Properties Inc.:

We have audited the accompanying consolidated balance sheet of Urstadt Biddle Properties Inc. (the
“Company”) as of October 31, 2002, and the related consolidated statements of income, cash flows and stock-
holders’ equity for the year then ended. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audit. The
financial statements of Urstadt Biddle Properties Inc. as of October 31, 2001 and for each of the two years in
the period October 31, 2001, were audited by other auditors who have ceased operations. Those auditors
expressed an unqualified opinion on those financial statements in their report dated December 12, 2001.

We conducted our audit in accordance with auditing standards generally accepted in the 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. 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidat-
ed financial position of Urstadt Biddle Properties Inc. at October 31, 2002 and the consolidated results of their
operations and their cash flows for the year then ended in conformity with accounting principles generally
accepted in the United States.

Ernst & Young LLP

New York, New York
December 11, 2002, except for the first
two paragraphs in Note 12 as to which
the date is December 23, 2002

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

GENERAL
Urstadt Biddle Properties Inc. (Company), a real estate
investment trust (REIT), is engaged in the acquisition,
ownership and management of commercial real estate,
primarily neighborhood and community shopping cen-
ters in the northeastern part of the United States. Other
assets include office and retail buildings and industrial
properties. The Company’s major tenants include super-
market chains and other retailers who sell basic necessi-
ties. At October 31, 2002, the Company owned or had
interests in 26 properties containing a total of 3.0 million
square feet of leasable area.

This report includes certain statements that may be
deemed to be “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. All statements, other than state-
ments of historical facts, included in this report that
address activities, events or developments that the
Company expects, believes or anticipates will or may
occur in the future, including such matters as future cap-
ital expenditures, dividends and acquisitions (including
the amount and nature thereof), expansion and other
development trends of the real estate industry, business
strategies, expansion and growth of the Company’s oper-
ations and other such matters are forward-looking state-
ments. These statements are based on certain assump-
tions and analyses made by the Company in light of its
experience and its perception of historical trends, current
conditions, expected future developments and other fac-
tors it believes are appropriate. Such statements are sub-
ject to a number of assumptions, risks and uncertainties,
general economic and business conditions, the business
opportunities that may be presented to and pursued by
the Company, changes in laws or regulations and other
factors, many of which are beyond the control of the
Company. Any such statements are not guarantees of
future performance and actual results or developments
may differ materially from those anticipated in the for-
ward-looking statements.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Capital
The Company’s sources of liquidity and capital resources
include its cash and cash equivalents, proceeds from
bank borrowings and long-term mortgage debt, capital
financings and sales of real estate investments. Payments
of expenses related to real estate operations, debt service,
management and professional fees, and dividend
requirements place demands on the Company’s short-
term liquidity. The Company expects to meet its short-
term liquidity requirements primarily by generating net
cash from the operations of its properties. The Company

believes that its net cash provided by operations will be
sufficient to fund its short-term liquidity requirements
for fiscal 2003 and to meet its dividend requirements
necessary to maintain its REIT status. In fiscal 2002, 2001
and 2000, net cash provided by operations amounted to
$18.5 million, $21.3 million and $14.3 million, respective-
ly. Dividends paid to stockholders of the Company in fis-
cal 2002, 2001 and 2000, amounted to $16.4 million, $11.9
million and $10.9 million, respectively. The Company
derives substantially all of its revenues from tenants
under existing leases at its properties. The Company’s
operating cash flow therefore depends on the rents that it
is able to charge to its tenants, and the ability of its ten-
ants to make rental payments. The Company believes
that the nature of the properties in which it typically
invests — primarily grocery-anchored neighborhood and
community shopping centers — provides a more stable
revenue flow in uncertain economic times, in that con-
sumers still need to purchase basic staples and conve-
nience items. However, even in the geographic areas in
which the Company owns properties, general economic
downturns may adversely impact the ability of the
Company’s tenants to make lease payments and the
Company’s ability to re-lease space as leases expire. In
either of these cases, the Company’s cash flow could be
adversely affected.

The Company expects to fund its long-term liquidity

requirements such as property acquisitions, repayment
of indebtedness and capital expenditures through other
long-term indebtedness (including indebtedness
assumed in acquisitions), proceeds from sales of non-
core properties and/or the issuance of equity securities.
The Company believes that these sources of capital will
continue to be available to it in the future to fund its
long-term capital needs; however, there are certain fac-
tors that may have a material adverse effect on its access
to capital sources. The Company’s ability to incur addi-
tional debt is dependent upon its existing leverage, the
value of its unencumbered assets and borrowing limita-
tions imposed by existing lenders. The Company’s abili-
ty to raise funds through sales of equity securities is
dependent on, among other things, general market con-
ditions for REITs, market perceptions about the
Company and its stock price in the market. The
Company’s ability to sell properties in the future to raise
cash will be dependent upon market conditions at the
time of sale.

At October 31, 2002, the Company had cash and
cash equivalents of $46.3 million compared to $33.7
million in 2001. The Company also had $25.1 million in
liquid short-term investments as of October 31, 2002.
The Company’s cash positions and short-term invest-
ments reflect the temporary investment of the net pro-
ceeds received from the sales of the Company’s Class A
Common shares during fiscal 2002 and 2001.

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

Financings

In fiscal 2002, the Company completed an underwrit-
ten public offering of 8,050,000 shares of its Class A
Common stock. The net proceeds to the Company
(after deducting underwriting fees and expenses) was
$81.9 million. A portion of the proceeds was used to
repay $16 million of outstanding revolving credit line
indebtedness. The balance of the net proceeds of the
offering is expected to be used to acquire properties. In
December 2002, the Company acquired two properties
utilizing approximately $51 million in cash. In
November 2001, the Company also sold 699,222 shares
to its underwriters to cover over allotments in connec-
tion with the Company’s stock offering of 4,800,000
shares in fiscal 2001. Net proceeds to the Company
amounted to $6,069,000.

In fiscal 2001, the Company completed an under-
written public offering of 4,800,000 shares of its Class
A Common stock. The net proceeds to the Company
(after deducting underwriting fees and expenses) was
$41.1 million. The Company also sold 200,000 shares of
Common stock and 5,000 shares of Class A Common
stock in a private placement for total proceeds of
$1,435,000. The Company used the proceeds of these
offerings to complete the acquisitions of two proper-
ties, repay outstanding credit line borrowings and
repurchase 200,000 shares of its Series B preferred
stock at a cost of $16.1 million.

At October 31, 2002, the Company had a $18.75
million secured revolving credit facility with a bank
which expires in fiscal 2005 and a conditional $20 mil-
lion unsecured revolving line of credit with the same
bank which expires in fiscal 2003. The revolving credit
lines are available to finance the acquisition, manage-
ment and/or development of commercial real estate,
refinance indebtedness and for working capital pur-
poses. Extensions of credit under the unsecured credit
line are at the bank’s discretion and subject to the
bank’s satisfaction of certain conditions. During 2002,
the Company borrowed $16 million on the secured
credit line to complete the acquisition of the Ridgeway
Shopping Center, Stamford, Connecticut (see below).
Borrowings were fully repaid from the proceeds of the
sale of equity securities in fiscal 2002. There were no
borrowings during the year under the unsecured cred-
it line and there were no outstanding borrowings on
either line of credit at October 31, 2002.

The Company is exposed to interest rate risk pri-

marily through its borrowing activities. There is inher-
ent rollover risk for borrowings as they mature and are
renewed at current market rates. The extent of this risk
is not quantifiable or predictable because of the vari-
ability of future interest rates and the Company’s
future financing requirements.

At October 31,2002, the Company’s contractual

obligations for borrowings are as follows:

Payments Due by Period

Less than 1 year
1 to 3 years
4 to 5 years
After 5 years

Amount

$1,840,000
$4,124,000
$20,153,000
$80,312,000

Borrowings consist of $106,429,000 of fixed rate

mortgage loan indebtedness with a weighted average
interest rate of 7.53% at October 31, 2002. The mortgage
loans are secured by fourteen properties and have fixed
rates of interest ranging from 6.29% to 8.375%. The
Company expects to refinance certain of these borrow-
ings, at or prior to maturity, through new mortgage
loans on real estate. The ability to do so, however, is
dependent upon various factors, including the income
level of the properties, interest rates and credit condi-
tions within the commercial real estate market.
Accordingly, there can be no assurance that such refi-
nancings can be achieved.

Capital Expenditures

The Company invests in its existing properties and
regularly incurs capital expenditures in the ordinary
course of business to maintain its properties. The
Company believes that such expenditures enhance the
competitiveness of its properties. In fiscal 2002, the
Company spent approximately $2.8 million for capital
expenditures including $1.5 million related to tenant
allowances and commissions in connection with the
Company’s leasing activities. The amounts of these
expenditures can vary significantly depending on ten-
ant negotiations, market conditions and rental rates.
The Company has budgeted an additional $3.3 million
for known capital improvements and leasing costs in
fiscal 2003. These expenditures are generally funded
from operating cash flows or borrowings on its credit
facilities.

Acquisitions and Sales

During fiscal 2002, the Company acquired a 90% gen-
eral partner interest in a shopping center in Stamford,
Connecticut for $86.8 million (including transaction
costs of $708,000). The property was acquired subject
to a $57.4 million first mortgage loan, utilizing avail-
able cash of approximately $13.4 million and revolving
credit line borrowings of $16 million. The Company
also purchased a shopping center in Danbury,
Connecticut for $7.0 million subject to a first mortgage
loan of $2.0 million and acquired the remaining 15%
interest in the Giffels Building in Southfield, Michigan
that it did not own for a purchase price of $1.25
million.

In December 2002, the Company acquired two
properties in separate transactions for an aggregate

purchase price of approximately $51 million. The
acquisitions were funded from available cash.

As of October 31, 2002, the Company had con-
tracted to purchase two additional shopping center
properties for an aggregate purchase price of approxi-
mately $33 million. The properties are located in the
Company’s preferred geographic area of Westchester
County, New York and Fairfield County, Connecticut.
The transactions are expected to close during the first
half of fiscal 2003.

In fiscal 2001, the Company acquired two proper-

ties for $9.5 million. One property was acquired sub-
ject to a first mortgage loan of $4.2 million. The pur-
chases were financed from available cash and borrow-
ings under the Company’s revolving credit lines.

In a prior year, the Company’s Board of Directors

expanded and refined the strategic objectives of the
Company to refocus its real estate portfolio into one of
self-managed retail properties located in the northeast
and authorized a plan to sell the non-core properties
of the Company in the normal course of business over
a period of several years. The Company intends to sell
the non-core properties as opportunities become avail-
able. The Company has selectively effected asset sales
to generate cash proceeds over the last several years.
The Company’s ability to generate cash from asset
sales is dependent upon market conditions and will
necessarily be limited if market conditions make such
sales unattractive. In fiscal 2001, the Company sold
two non-core properties for $1.2 million and a shop-
ping center for $16 million. At October 31, 2002, the
remaining non-core properties total four properties
with a net book value of approximately $12 million
and consist of two distribution service facilities, one
office building and one retail property (all of which are
located outside of the northeast region of the United
States).

FUNDS FROM OPERATIONS
The Company considers Funds from Operations
(“FFO”) to be one supplemental financial measure of
an equity REIT’s operating performance. FFO is calcu-
lated as net income (computed in accordance with
generally accepted accounting principles (GAAP)),
plus depreciation and amortization, excluding gains
(or losses) from sales of property and debt restructur-
ing, and after adjustments for unconsolidated joint
ventures. The Company considers recoveries of invest-
ments in properties subject to finance leases to be anal-
ogous to amortization for purposes of calculating FFO.
FFO does not represent cash flows from operations as
defined by GAAP and should not be considered an
alternative to net income as an indication of the
Company’s operating performance or for cash flows as
a measure of liquidity or its dividend paying capacity.
Furthermore, FFO as disclosed by other REITs may not
be comparable to the Company’s calculation of FFO.

The table below provides a reconciliation of net
income in accordance with GAAP to FFO for each of
the years ended October 31, 2002, 2001 and 2000
(amounts in thousands).

2002

2001

2000

Net Income Applicable
to Common and Class A
Common Stockholders

Plus: Real property

depreciation

Amortization of
tenant improvements
and allowances

Amortization of
deferred leasing cost

Recoveries of
investments in
properties subject to
finance leases

Adjustments for
unconsolidated
joint venture

Less: Excess of carrying
value over cost to
repurchase preferred
shares

Gains on sales of
real estate
investments

$16,080

$10,540

$5,442

5,459

4,463

4,571

2,088

2,234

1,067

517

851

545

—

822

— (3,252)

534

(3,071)

—

(316)

(1,067)

Funds from Operations

$21,073

$14,611

$11,914

Net Cash Provided by

Operating Activities

$18,532

$21,308

$14,262

Net Cash Used in

Investing Activities

$(64,960) $(11,394)

$(3,713)

Net Cash Provided by

(Used in) Financing
Activities

$59,023

$22,040 $(11,436)

RESULTS OF OPERATIONS

Fiscal 2002 vs. Fiscal 2001

Revenues

Revenues from operating leases increased 23.4% to
$42.2 million in fiscal 2002 compared to $34.2 million
in fiscal 2001. The increase in operating lease revenues
resulted from additional rental revenues from new
properties acquired during both years and leasing of
previously vacant space at the Company’s core prop-
erties. During fiscal 2002 and 2001, the Company
acquired four properties containing 442,000 square feet
of space. Rents from recently acquired properties
increased operating lease income by approximately
$5.5 million in fiscal 2002. In the current year the

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

Company renewed or signed new leases totaling
236,000 square feet of space at its core properties. In
fiscal 2002, the overall leasing levels at the Company’s
properties decreased to 95% compared to 98% leased in
the year ago period. Additionally, the Company’s total
property occupancy levels decreased to 92% in fiscal
2002 from 98% in fiscal 2001. The decrease in leasing
and occupancy levels was principally caused by the loss
of a tenant occupying 115,390 square feet at the
Company’s Five Town Plaza shopping center and a
tenant occupying 94,000 square feet at the Company’s
office property in Southfield, Michigan who re-leased
32,400 square feet of its previously occupied space. The
balance of the office space remains vacant at October 31,
2002. The Company re-leased the 115,390 square feet of
space at Five Town Plaza.

Lease termination income of $765,000 in fiscal 2002

represents lease cancellation payments from tenants
who terminated two leases early during the year. One of
the vacant spaces was re-leased during the year.

Interest income increased in fiscal 2002 from the
investment of cash proceeds during the year into short-
term investments at generally lower yields and the
addition of a new $1.2 million promissory note receiv-
able (interest at 12.5% per annum).

Expenses

Total expenses increased to $29.4 million from $26.2 mil-
lion in fiscal 2001. Property expenses increased 11.1% to
$12.8 million from $11.5 million principally from the
incremental expense of recently acquired properties,
which increased property expenses by $1.4 million in
fiscal 2002. Property expenses for properties owned
during 2002 and 2001 were generally unchanged. Snow
removal costs decreased by approximately $250,000
which was largely offset by increases in property taxes
and insurance costs.

Interest expense increased principally from new

mortgage loans totaling $59.4 million assumed in con-
nection with recent acquisitions. The increase in interest
expense was partially offset by the repayments of out-
standing bank credit line borrowings. The Company
also repaid approximately $6 million in mortgage notes
payable which matured during fiscal 2001.

Depreciation expense increased by $850,000 princi-
pally due to the additional expense incurred from cur-
rent year property acquisitions. Amortization expense
decreased by $354,000 principally from the write-off in
fiscal 2001 of unamortized leasing commissions related
to tenants who vacated during the year.

General and administrative expenses increased to
$2.8 million or 14.2% in fiscal 2002 as compared to $2.5
million in fiscal 2001. The increase is due primarily to
increased compensation costs.

In fiscal 2002, the Company repurchased 200,000

shares of its Series B Preferred Stock for a purchase
price of $16,050,000 in a negotiated transaction with a

holder of the preferred shares. The Company has
recorded the excess of the carrying value over the cost
to repurchase the preferred shares of $3,071,000 as an
increase in net income applicable to Common and Class
A Common stockholders.

Fiscal 2001 vs. Fiscal 2000

Revenues

Property occupancy levels increased to 98% from 97% in
fiscal 2000. Operating lease revenues increased 13.1% to
$34.2 million in fiscal 2001 compared to $30.2 million in
fiscal 2000. The increase in operating lease revenues
resulted from leasing of previously vacant space, higher
tenant base rent renewal rates at certain of the
Company’s properties and higher recoveries of property
operating, property tax and other recoverable costs.
Operating lease income also increased by $682,000 from
the reclassification of three net leases previously
accounted for as direct finance leases in accordance
with generally accepted accounting principles. During
the year, one of the properties was sold and the net leas-
es of the remaining two properties expired. The new
leases were classified as operating leases.

Lease termination income of $1,137,000 represents a

settlement of the Company’s claims against a former
tenant arising from the tenant’s bankruptcy and rejec-
tion of its lease at one of the Company’s properties.

The Company had an investment in an unconsoli-
dated joint venture which was accounted for under the
equity method. The joint venture owned the
Countryside Square shopping center in Clearwater,
Florida. In fiscal 2001, the property was sold and the
Company recorded $3,864,000 as its proportionate share
of the income of the joint venture including its earnings
from the sale of the property as compared to earnings of
$245,000 in fiscal 2000.

In 2001, the Company sold two non-core properties

for net gains of $316,000 as compared to net gains on
sales of $1,067,000 in fiscal 2000.

Expenses

Total expenses increased to $26.2 million from $23.3 mil-
lion in fiscal 2000. Property expenses increased by 10.5%
in fiscal 2001 principally from higher snow removal
costs, maintenance and repairs and property taxes.
These items increased property expenses by $1,046,000
in fiscal 2001 and resulted from higher than normal
snowfall amounts during the period and increased
property tax assessments at the Company’s core proper-
ties.

Interest expense increased from borrowings of $16.5
million on the Company’s revolving credit lines during
the year. The increase in interest expense was partially
offset by mortgage loans repaid during the year.

Depreciation and amortization expense increased to

$7.6 million from $6.3 million in fiscal 2000 from the

expenditure of $11.7 million for property improvements,
tenant allowances and leasing costs during the year. The
Company also wrote off $287,000 of unamortized tenant
allowances related to former tenants who vacated space
during the year.

APPLICATION OF CRITICAL ACCOUNTING
POLICIES

Critical accounting policies are those that are both
important to the presentation of the Company’s finan-
cial condition and results of operations and require
management’s most difficult, complex or subjective
judgments. The Company’s critical accounting policies
are those applicable to the evaluation of the collectibility
of accounts and notes receivable and the evaluation of
impairment of long-term assets.

The allowance for doubtful accounts and notes
receivable is established based on quarterly analysis of
the risk of loss on specific accounts. The analysis places
particular emphasis on past-due accounts and considers
information such as the nature and age of the receiv-
ables, the payment history of the tenants or other
debtors, the financial condition of the tenants and man-
agement’s assessment of their ability to meet their lease
obligations, the basis for any disputes and the status of
related negotiations, among other things. Management’s
estimates of the required allowance is subject to revision
as these factors change and is sensitive to the effects of
economic and market conditions on tenants, particular-
ly those at retail centers.

Rental revenue is recognized on a straight-line basis

over the term of the lease. The excess of rents recog-
nized over amounts contractually due pursuant to the
underlying leases is included in tenant receivables on
the accompanying balance sheets. It is the Company’s
policy to maintain an allowance for future tenant credit
losses of approximately 10% of the deferred straight line
rent receivable balance.

On a periodic basis, management assesses whether
there are any indicators that the value of the real estate
properties and mortgage notes receivable may be
impaired. To the extent impairment has occurred, the
loss is measured as the excess of the carrying amount
of the property over the fair value of the asset.
Management does not believe that the value of any of
its rental properties or mortgage notes receivable is
impaired at October 31, 2002.

RECENTLY ISSUED ACCOUNTING
PRONOUNCEMENTS
The Financial Accounting Standards Board (FASB) has
issued SFAS No. 144 “Accounting for the Impairment or
Disposal of Long Lived Assets” which updates and clar-
ifies the accounting and reporting for impairment of
assets held in use and to be disposed of. The Statement,

among other things, will require the Company to classi-
fy the operations and cash flow of properties to be dis-
posed of as discontinued operations. The Company will
adopt the provisions of the Statement in fiscal 2003, and
does not expect the Statement to have a material impact
on the Company’s financial position or results of opera-
tions. In December 2002, the FASB issued SFAS No. 148
“Accounting for Stock-Based Compensation-Transition
and Disclosure.” This statement amends SFAS No. 123
to provide alternative methods of transition for a volun-
tary change to the fair value based method of account-
ing for stock-based employee compensation and
amends the disclosure requirements of SFAS No. 123.
Adoption of the provisions of the Statement in fiscal
2003 will not have any impact since the Company will
continue to use the intrinsic value method as set forth in
APB #25.

INFLATION
The Company’s long-term leases contain provisions to
mitigate the adverse impact of inflation on its operating
results. Such provisions include clauses entitling the
Company to receive (i) scheduled base rent increases
and (ii) percentage rents based upon tenants’ gross
sales, which generally increase as prices rise. In addi-
tion, many of the Company’s non-anchor leases are for
terms of less than ten years, which permits the
Company to seek increases in rents upon renewal at
then current market rates if rents provided in the expir-
ing leases are below then existing market rates. Most of
the Company’s leases require tenants to pay a share of
operating expenses, including common area mainte-
nance, real estate taxes, insurance and utilities, thereby
reducing the Company’s exposure to increases in costs
and operating expenses resulting from inflation.

ENVIRONMENTAL MATTERS
Based upon management’s ongoing review of its prop-
erties, management is not aware of any environmental
condition with respect to any of the Company’s proper-
ties which would be reasonably likely to have a material
adverse effect on the Company. There can be no assur-
ance, however, that (i) the discovery of environmental
conditions which were previously unknown, (ii)
changes in law, (iii) the conduct of tenants or (iv) activi-
ties relating to properties in the vicinity of the
Company’s properties, will not expose the Company to
material liability in the future. Changes in laws increas-
ing the potential liability for environmental conditions
existing on properties or increasing the restrictions on
discharges or other conditions may result in significant
unanticipated expenditures or may otherwise adversely
affect the operations of the Company’s tenants, which
would adversely affect the Company’s financial condi-
tion and results of operations.

TAX STATUS

The Company has elected to be treated as a real estate investment trust under the Internal Revenue Code.
Thus, generally it will be subject to Federal income taxes only on that part of its taxable income not distributed
as dividends so long as 90% of such taxable income is distributed. The Company intends to distribute all of its
taxable income for fiscal 2002 and, accordingly, no provision has been made for Federal income taxes.

INCOME TAX INFORMATION

The tax status for Federal income tax purposes of the dividends paid by the Company during fiscal 2002 is
as follows:

Common Share

Class A Common Share

Gross
Dividend
Paid

Capital
Ordinary
Gain
Income
Per Share Distribution Distribution

Gross
Dividend
Paid

Capital
Gain
Per Share Distribution Distribution

Ordinary
Income

Dividend
Payment Date

January 18, 2002
April 19, 2002
July 21, 2002
October 18, 2002

Total

$0.185
$0.185
$0.185
$0.185

$0.74

$0.135
$0.135
$0.135
$0.135

$0.54

$0.05
$0.05
$0.05
$0.05

$0.20

$0.205
$0.205
$0.205
$0.205

$0.82

$0.15
$0.15
$0.15
$0.15

$0.60

$0.055
$0.055
$0.055
$0.055

$0.22

MARKET PRICE RANGES

The following sets forth, for the fiscal years ended October 31, 2002 and 2001, the low and high closing
sales price per Common Share and Class A Common Share as quoted on The New York Stock Exchange.

Shares trade on the New York Stock Exchange under the Symbols: UBP and UBP.A.

Fiscal 2002

Low High

$8.60 – $10.65
$10.25 – $12.28
$9.95 – $12.80
$10.77 – $11.60

$9.35 – $10.28
$9.88 – $12.00
$10.60 – $12.00
$10.80 – $11.97

Fiscal 2001

Low High

$6.35 – $7.27
$6.99 – $7.85
$7.64 – $8.66
$8.02 – $8.93

$6.39 – $7.64
$7.35 – $8.54
$8.12 – $9.28
$8.55 – $9.75

Common Shares

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Class A Common Shares

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

URSTADT BIDDLE PROPERTIES INC.

DIRECTORS
CHARLES J. URSTADT
Chairman, Urstadt Biddle Properties Inc.

ROBERT R. DOUGLASS
Vice Chairman, Urstadt Biddle Properties Inc.
Of Counsel, Milbank, Tweed, Hadley and McCloy

WILLING L. BIDDLE
President, Urstadt Biddle Properties Inc.

E. VIRGIL CONWAY
Retired Chairman, New York State Metropolitan
Transportation Authority

PETER HERRICK
Retired Vice Chairman, The Bank of New York

GEORGE H.C. LAWRENCE
Chairman and Chief Executive Officer
Lawrence Properties

CHARLES D. URSTADT
President, Urstadt Property Co, Inc.

GEORGE J. VOJTA
Retired Vice Chairman
Bankers Trust Company

Directors Emeriti
GEORGE T. CONKLIN, JR.
GEORGE M. HUBBARD, JR.
JAMES O. YORK

Officers
CHARLES J. URSTADT
Chairman and Chief Executive Officer

WILLING L. BIDDLE
President and Chief Operating Officer

JAMES R. MOORE
Executive Vice President, Chief Financial Officer
and Treasurer

RAYMOND P. ARGILA
Senior Vice President, Legal and Assistant Secretary

THOMAS D. MYERS
Senior Vice President and Secretary

JOHN C. MERRITT
Vice President, Acquisitions

LINDA L. LACEY
Vice President, Leasing

JAMES M. ARIES
Vice President, Acquisitions and Leasing

JOSEPH V. LoPARRINO
Vice President, Controller

WAYNE W. WIRTH
Vice President, Construction

Securities Traded
New York Stock Exchange
Symbols: UBP.A and UBP
Stockholders of Record as of January 10, 2003:
Common Stock: 1,453 and Class A Common Stock: 1,459

Annual Meeting
The annual meeting of stockholders will be held
at 11:00 A.M. March 12, 2003 at The Hyatt Regency
Greenwich, Old Greenwich, Connecticut.

Form 10-K
A copy of the Company’s 2002 Annual Report on
Form 10-K filed with the Securities and Exchange
Commission may be obtained by stockholders
without charge by writing to the Secretary of the
Company at its executive office.

Shareholder Information and Dividend
Reinvestment Plan
Inquiries regarding stock ownership, dividends or
the transfer of shares can be addressed to our Transfer
Agent, The Bank of New York, Shareholder Relations
Department–11E, P.O. Box 11258, Church Street
Station, New York, NY 10286-1258 or call toll-free at
1-800-524-4458. The Company has a dividend reinvest-
ment plan which provides stockholders with a con-
venient means of increasing their holdings without
incurring commissions or fees. For information about
the plan, stockholders should contact the Transfer
Agent. Other shareholder inquiries should be directed
to Thomas D. Myers, Secretary, telephone
(203)-863-8200.

Investor Relations
Investors desiring information about the Company
can contact James R. Moore, Executive Vice President,
telephone (203) 863-8200. Investors are also encouraged
to visit our web site at: www.ubproperties.com

Auditors
Ernst & Young LLP

General Counsel
Coudert Brothers

Executive Office of the Company
321 Railroad Avenue
Greenwich, CT 06830
Tel: (203) 863-8200
Fax: (203) 861-6755
Website: www.ubproperties.com

HEIDI R. BRAMANTE
Assistant Vice President and Assistant Controller

CHARLES R. DAVIS, JR.
Assistant Vice President, Leasing

Memberships
National Association of Real Estate Investment Trusts, Inc.
(NAREIT)
International Council of Shopping Centers (ICSC)

URSTADT BIDDLE
PR O P E R T I E S I N C .

321 RAILROAD AVENUE
GREENWICH, CONNECTICUT 06830

We are the RIGHT Company.

still
V

In the RIGHT Business.

In the RIGHT Place.

At the RIGHT Time.