Urstadt Biddle Properties Inc. Annual Report 2003

FY2003 Annual Report · Urstadt Biddle Properties Inc.

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

2003 ANNUAL REPORT

STOCK PRICES ARE OPINIONS — BUT DIVIDENDS ARE FACTS

OVER THE LAST TEN YEARS:
• DIVIDENDS PER SHARE INCREASED AN AVERAGE OF 4% EACH YEAR
• TOTAL FUNDS FROM OPERATIONS INCREASED AN AVERAGE OF 13% EACH YEAR
• TOTAL REVENUES INCREASED AN AVERAGE OF 12% EACH YEAR

IN MILLIONS

■ Revenues

■ Funds From Operations

■ Dividends

$60

$48

$36

$24

$12

94 95

97 98 99

00 01 02 03

(Above)
Somers Commons,
Somers, NY
(Acquired 2003)

(Left)
Greens Farms
Plaza,
Westport, CT
(Acquired 2003)

URSTADT BIDDLE PROPERTIES INC.

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

tered publicly held real estate investment trust providing

investors with a means of participating in the ownership

of income-producing properties. UBP’s core properties

consist 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

Company trade on the New York Stock Exchange under

the symbols “UBA” and “UBP.”

2003 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

2003

2002

2001

2000

1999

1998

$392,718
$104,588
$ 52,747

$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

$ 60,361
$ 39,626

$ 44,340
$ 29,438

$ 36,093
$ 26,154

$ 31,009
$ 23,281

$ 29,430
$ 21,596

$ 25,385
$ 17,252

and Class A Common Stockholders

$ 17,576

$ 16,080

$ 10,540

5,442

6,043

$ 5,615

Other Data:
Net Cash Provided by (Used in):

Operating Activities
Investing Activities
Financing Activities

Per Share Data: (Note 1)
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

$ 31,176
$(69,818)
$ 14,749

$ 21,308
$ 18,532
$(64,960) $(11,394)
$ 22,040
$ 59,023

$ 14,262
$ (3,713)
$(11,436)

$ 14,423
$ (10,556)
$ (5,009)

$ 13,901
$(31,130)
$ 19,207

$.74
$.67

$.73
$.66

$ .84
$ .76

$1.60

$.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

Funds from Operations (Note 2)

$ 27,964

$ 24,144

$ 14,611

$ 11,914

$ 11,878

$ 11,782

Cash Dividends on Common and Class A

Common Stock as a Percentage of Funds

from Operations

74%

62%

60%

65%

63%

58%

Note (1): 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.

Note (2): 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. FFO for 2002 has been adjusted to conform with revised guidance provided by NAREIT
(see further discussion of FFO, in Management’s Discussion and Analysis section on page 31).

Total Revenues
(In thousands)

Funds From Operations
(In thousands)

1
6
3
,
0
6
$

0
4
3
,
4
4
$

3
9
0
,
6
3
$

9
0
0
,
1
3
$

0
3
4
,
9
2
$

5
8
3
,
5
2
$

4
6
9
,
7
2
$

4
4
1
,
4
2
$

2
8
7
,
1
1
$

8
7
8
,
1
1
$

4
1
9
,
1
1
$

1
1
6
,
4
1
$

Combined Dividends Paid on Common
and Class A Common Shares (Note 1)
(In dollars per share)

0
6
.
1
$

6
5
.
1
$

2
5
.
1
$

8
4
.
1
$

4
4
.
1
$

2
3
.
1
$

98 99 00 01 02 03

TO OUR
STOCKHOLDERS

In last year’s report to you we said that “2002 was a great year for
your Company.” Well, 2003 was even better!! This is a tribute to our

talented, hard-working, dedicated staff and our excellent Board of

Directors.

Fourteen years ago we adopted an overall strategy that we have stead-

fastly followed and it has served us well:

. . . to invest primarily in shopping centers in an area close to our

home office in Greenwich, Connecticut, while maintaining a modest

level of debt and few partnership interests.

Most importantly, our goal is to protect the dividends we pay and to

keep the rate of dividends growing each year.

The results have been satisfying. In 2003, our gross revenues, funds from

operations and earnings increased significantly and our real estate portfolio

grew by 28% from the purchase of more than $83 million in properties.

Funds from operations increased to $28 million from $24.1 million last

year. Our growth came from accretive acquisitions and higher portfolio occu-

pancy. A significant event of 2003 was our successful sale of a $40 million

new issue of Series C Senior Cumulative Preferred Stock. We used a portion

of the proceeds to buy property and the balance will be used for additional

property acquisitions in 2004.

And for the tenth consecutive year — we increased dividends to our

stockholders.

By most financial measurements, we equaled or exceeded our peers in

the REIT shopping center sector, particularly in our debt coverage ratios

where we were among the highest in 2003. We were also named one of the

100 fastest growing public small companies in the country by Fortune’s

Small Business Magazine.

In spite of all the positive results we should bear in mind some words of

caution.

Because of historically low interest rates and an abundance of capital

seeking a reasonable yield, the acquisition market for shopping centers has

Most importantly,
our goal is to pro-
tect the dividends
we pay and to keep
the rate growing
each year.

Charles J. Urstadt
Chairman

Our gross revenues,
funds from opera-
tions and earnings
increased signifi-
cantly and our real
estate portfolio grew
by 28% from the
purchase of more
than $83 million
in properties.

Willing L. Biddle
President

By most financial
measurement
standards, we
equaled or exceeded
our peers in the
REIT shopping
center sector.

James R. Moore
Chief Financial Officer

become a “seller’s market.” In terms of basic economics, the demand is

exceeding the supply and has caused an increase in prices and a reduction

in yields. Although we have demonstrated an ability to buy superior proper-

ties in our target area, it may not be appropriate at this time to make pur-

chases for the sake of growth without due regard to receiving a reasonable

return on our investment. In the near term, unless the market changes, we

cannot predict that we will be able to grow our portfolio as quickly as we

have in the last few years, nor do we feel that there is a strategic necessity to

sell equity securities or increase our debt levels — only to have the proceeds

invested in cash in the short term — yielding historically low returns. We

have always felt that — size is vanity but profits are sanity.

Real estate in general and our stock price specifically, is strongly affected

by economic factors other than our own performance, especially interest

rates. Because REIT stock prices tend to react to interest rates, a change

in monetary policy or an increase in rates may adversely affect our stock

price. We believe that stock prices are opinions — but dividends are facts

and it is our intention to do what we can to preserve or enhance our

dividends.

Finally, a word about the impact that recent changes in the regulatory

climate have had on public companies. Over the last two years, all of the

regulatory agencies including the Securities and Exchange Commission, the

New York Stock Exchange and the Financial Accounting Standards Board

have greatly added to our legal and financial accounting requirements,

mostly under the aegis of ‘restoring investor confidence.’ We are dedicated

to making certain the Company complies with these new regulatory changes

although the burden of compliance falls disproportionately on smaller

companies such as ours. We try to present our story in a straight forward

and direct manner. We believe our financial statements are clear and simple

to read and are not aware of any lack of confidence by our stockholders in

our strategy. We plan to keep it that way!

TO OUR
STOCKHOLDERS

We are pleased that Robert J. Mueller, Senior Executive Vice President of The

Bank of New York has agreed to be nominated for election to our Board of

Directors at this year’s stockholders meeting. His knowledge of finance and real

estate will be of great value to the Company and we wholeheartedly endorse his

election.

In closing, we are confident in the quality of our properties and tenants. We

have a highly efficient Company and are optimistic about our outlook. We

extend our thanks to our outstanding directors and staff for their hard work

which has made this year another success and to you, our stockholders, for your

continued support.

Sincerely yours,

Charles J. Urstadt

Willing L. Biddle

Chairman

President

January 14, 2004

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 shop-

ping centers leased to retailers

who deliver basic services and

products to consumers. We

are also receptive to acquiring

office properties near our

executive offices in Greenwich,

Connecticut.

Urstadt Biddle Properties
Executive Offices
Greenwich, Connecticut

PORTFOLIO
REVIEW

Total Assets
(In 000’s of Dollars)

8
1
7
,
2
9
3
$

3
3
6
,
3
5
3
$

2
5
3

8
1
2
$

4
7
7

3
8
1
$

2
9
7

0
8
1
$

99 00 01 02 03

ACQUISITIONS

In 2003 we acquired 436,000 square feet of prime shopping centers in the

Fairfield and Westchester County market at a cost of $83 million. At the

beginning of the year, we purchased the Westchester Pavilion in White

Plains, New York. This 185,000 sf property is located adjacent to the premier

regional mall in Westchester County and is leased to strong national tenants

such as Toys R Us, The Sports Authority, Borders Books and Office Max. We

also acquired the Orange Meadows Shopping Center, a 78,000 sf shopping

center located on the high traffic Route 1 corridor in Orange Connecticut.

Orange Meadows contained a 15% vacancy at closing but is now 96% leased

to tenants such as Trader Joe’s, a specialty grocer, Talbots Clothing, Seamans

Furniture and Thomasville Furniture.

In February 2003, we purchased Greens Farms Plaza in Westport,

Connecticut. Greens Farms, a 38,000 sf center, is also located on Route 1 and

is 100% leased to nine tenants including Pier One Imports, a national home

furnishings retailer. In June 2003, we purchased seven retail units containing

135,000 sf in Somers Commons in Somers, New York. The property (which

is owned in condominium form) is “shadow” anchored by a 72,000 sf Stop &

Shop supermarket and leased to 25 tenants including Homegoods (a division

of TJX Co.). Somers Commons is 95% leased and represents our third

property investment in the affluent Westchester County community of

Somers, New York.

URSTADT BIDDLE PROPERTIES STAFF

ACQUISITIONS AND LEASING

(Left to right)
Philip Dunn, Linda Lacey,
John Merritt, Wanda Correa-Sosa,
James Aries, Donna Borchers and
Charles Davis

We continue to actively pursue quality shopping centers in our

target market. We will resist the temptation to stray outside of our target

market. While doing so would enable us to grow more quickly because of

the increased investment opportunities, we do not feel the demographics are

as attractive to create long term value. We believe that over the long run our

patient focused approach will yield superior results. We do not believe in

growth simply for growth’s sake.

2003 acquisitions: Westchester
Pavilion, White Plains, New York
(top left); Orange Meadows
Shopping Center, Orange,
Connecticut (top right);
Somers Commons, Somers,
New York (above left); Greens
Farms Plaza, Westport,
Connecticut (above right).

ACCOUNTING/ADMINISTRATIVE

(Left to right)
Joseph LoParrino, Heidi Bramante,
James R. Moore, Robert Pappa and
Suzanne Moore

PORTFOLIO
REVIEW

Core Property Portfolio
Leased Rate
(Percent)

%
6
9

%
7
9

%
6
9

%
7
9

LEASING

Our core property portfolio is in great shape! In 2003, we leased or renewed

375,000 sf of retail space, (about 14% of the Company’s total core property

portfolio). Core property portfolio was 97% leased by year-end and we success-

fully renewed some key tenants during the year. Our lease expiration exposure

over the next two years is relatively modest with less than 5% of our core

portfolio’s leasable space expiring in each of 2004 and 2005.

At Five Town Plaza, Burlington Coat Factory (82,500 sf) and World Gym

(33,000 sf) opened for business during the year. Both new tenants are reporting

strong sales at these new stores which is facilitating our leasing of several

undeveloped out-parcels of land at the center. At the Ridgeway Shopping

Center, we signed a 42,700 sf lease with LA Fitness, a national chain of upscale

99 00 01 02 03

fitness centers. This tenant will fill the remaining vacancy at the Ridgeway prop-

Core Property Portfolio
Total Gross Leasable
Square Footage
(In thousands)

9
5
6

6
1
2
2

8
3
7
1

8
4
7

6
1
8
1

erty in Stamford Connecticut. We still need zoning approvals to put this tenant

in place, but we are optimistic that they will be received shortly. Throughout the

core portfolio nearly all lease renewals or new leases signed were at higher

effective rents than the expiring leases.

We expect to invest an additional $4 million in building and tenant improve-

ments at our properties in 2004. The majority of this investment will contribute

to an increase in occupancy levels and add to our revenues.

Our single concern in the portfolio continues to be at the Southfield

Michigan office building where we have a 60,000 sf vacancy (and the possible

99 00 01 02 03

loss of another 40,000 sf tenant). The Southfield, Michigan office market is weak

LEGAL

(Left to right)
Thomas Myers, Janine Iarossi
and Raymond Argila

Renovations were completed in
2003 at the Eastchester Mall,
Eastchester, New York.

and we do not anticipate a quick recovery; however, we are working hard to

find alternate solutions to this leasing problem. Our other non-core properties

remained fully tenanted during the year.

OUTLOOK

The demand for quality shopping centers in our target market is at an all time

high. Our target market of Fairfield County, Connecticut and Westchester and

Putnam Counties, New York are strong economically. The good news is that the

value of our properties has increased. Rising prices and increased competition

also make our acquisition strategy more challenging. Knowing our market well

and having relationships with owners within the market provides us a competi-

tive advantage in addition to being a buyer with a solid reputation. One of our

goals in 2004 is to purchase property in our market sufficient to fully invest our

available capital. We have nearly $30 million in cash and $40 million of available

credit lines. Our “powder is dry” and we have the ability to react quickly when

we find attractive investment prospects.

CONSTRUCTION AND MANAGEMENT

(Left to right)
Thomas Griffith, Kevin Mugford,
Mary Murray, Andrew Albrecht,
Mario Barone, John Grillo,
Elaine Kennedy and Wayne Wirth

URSTADT BIDDLE PROPERTIES INC.

Carmel ShopRite Center
Carmel, New York

Towne Centre Shopping Center
Somers, New York

Arcadian Shopping Center
Briarcliff Manor, New York

Heritage 202 Center
Somers, New York

Chilmark Shopping Center
Briarcliff Manor, New York

Somers Commons
Somers, New York

7 Riversville Road
Greenwich, Connecticut

530 Old Post Road
Greenwich, Connecticut

25 Valley Drive
Greenwich, Connecticut

Westchester Pavilion
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

Five Town Plaza
Springfield, Massachusetts

Newington Park
Newington, New Hampshire

Danbury Square
Danbury, Connecticut

Townline Square
Meriden, Connecticut

Airport Plaza
Danbury, Connecticut

Ridgefield Center
Ridgefield, Connecticut

Orange Meadows Shopping Center
Orange, Connecticut

Goodwives Shopping Center
Darien, Connecticut

Greens Farms Plaza
Westport, Connecticut

Ridgeway Shopping Center
Stamford, Connecticut

CORE
PROPERTIES

✭
INVESTMENT
PORTFOLIO

URSTADT BIDDLE PROPERTIES INC.

CORE PROPERTIES

UBP owns or has interests in twenty one shopping centers and five office buildings which total 2,659,000 square feet.

Location

Square Feet

Principal Tenants

360,000

323,000

313,000

194,000

185,000

161,000

135,000

126,000

102,000

95,000

78,000

70,000

51,000

38,000

33,000

29,000

19,000

59,000

Stamford, Connecticut

Springfield, Massachusetts

Meriden, Connecticut

Danbury, Connecticut

White Plains, New York

Briarcliff Manor, New York

Somers, 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

Westport, Connecticut

Briarcliff Manor, New York

Danbury, Connecticut

Briarcliff Manor, New York

Somers, New York

Greenwich, Connecticut

NON-CORE PROPERTIES

Property Type

Shopping center

Stop & Shop, Bed Bath & Beyond

Big Y, Burlington Coat, World Gym

ShopRite, Old Navy, Linens ‘N Things

Shopping center

Barnes & Noble, Christmas Tree Shops

Shopping center

Toys R Us, The Sports Authority

Stop & Shop, Toy Works, Mandees

Home Goods

ShopRite, Eckerd Drugs

A&P, PNC Bank

Linens ‘N Things

Shaw’s Supermarket

Gristede’s, US Post Office

Trader Joe’s, Seamans Furniture

King Kullen, Eckerd Drugs

Food Emporium (A&P)

Chico’s

Pier One Imports

Dress Barn, Radio Shack

Boston Billards

Party Plus Warehouse

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

Mervyn’s

DaimlerChrysler
DaimlerChrysler

Office building

Shopping center

Parts distribution facility
Parts distribution facility

FINANCIALS

CONTENTS

Consolidated Balance Sheets at October 31, 2003 and 2002 ........14

Consolidated Statements of Income for each of the

three years in the period ended October 31, 2003.................15

Consolidated Statements of Cash Flows for each of the

three years in the period ended October 31, 2003.................16

Consolidated Statements of Stockholders’ Equity

for each of the three years in the period
ended October 31, 2003 ...................................................17

Notes to Consolidated Financial Statements .......................18-29

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 of $1,369 and $1,169
Prepaid expenses and other assets
Deferred charges, net of accumulated amortization

Total Assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:

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

Total 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 shares issued and outstanding

8.50% Series C Senior Cumulative Preferred stock, (liquidation preference

of $100 per share); 400,000 and -0- shares issued and outstanding

Total Preferred Stock

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;
6,817,771 and 6,578,572 issued and outstanding shares, respectively

Class A Common stock, par value $.01 per share; 40,000,000 shares authorized;

18,548,453 and 18,449,472 issued and outstanding shares, respectively

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

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

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

October 31,

2003

2002

$330,920
11,215
2,184

$252,711
11,944
3,447

344,319

268,102

22,449
516
9,532
8,815
3,858
3,229

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

$392,718

$353,633

$104,588
2,743
401
5,243

$106,429
1,021
287
4,218

112,975

111,955

7,320

14,341

38,406

52,747

14,341

—

14,341

—

185
258,296
(33,611)
(5,262)

—

185
254,266
(30,487)
(4,013)

219,676

220,017

$392,718

$353,633

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,

2003

2002

2001

$59,247
80
1,034
60,361

$42,206
765
1,369
44,340

$34,209
1,137
747
36,093

17,805
8,094
9,919
469
3,154
185

39,626

20,735

—

(365)

—

20,370

(2,794)
—

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)
—

Net Income Applicable to Common and

Class A Common Stockholders

$17,576

$16,080

$10,540

Basic Earnings Per Share:

Common

Class A Common

Diluted Earnings Per Share:

Common

Class A Common

Dividends Per Share:

Common

Class A Common

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

$.67

$.74

$.66

$.73

$.76

$.84

$.80

$.89

$.78

$.87

$.74

$.82

$.91

$1.01

$.88

$.97

$.72

$.80

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
Amortization of restricted stock
Recovery of investment in properties owned subject

to financing leases

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

Year Ended October 31,

2003

2002

2001

$20,370

$14,507

$13,687

10,388
1,105

—
—
365
—
(2)
(3,120)
243
1,827

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

Net Cash Provided by Operating Activities

31,176

18,532

21,308

Investing Activities:

Sales (purchases) of short term investments
Acquisitions of properties
Acquisition of minority interest
Improvements to properties and deferred charges
Investment in unconsolidated joint venture
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:

Net proceeds from sale of Series C Preferred Stock
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 Financing Activities

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

15,613
(83,485)
—
(2,844)
—
—
(365)
—
—
1,263
—

(69,818)

38,406
1,366
—
(1,841)
(20,700)
(2,794)
—
—
312

14,749

(23,893)
46,342

(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

Cash and Cash Equivalents at End of Year

$22,449

$46,342

$33,747

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, 2000

5,557,387

$55

5,356,249

$54

$122,448

$(33,397)

$(1,979)

$87,181

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 shares

—

—
—
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

Repayment of notes receivable

from officers

—

—
—
—

14,296
110,375

—
211,762

—

Balances — October 31, 2002

6,578,572

Net income applicable to Common and

Class A common stockholders

Cash dividends paid:

Common stock ($.76 per share)
Class A common stock ($.84 per share)
Sales of additional shares under dividend

reinvestment plan

Shares issued under restricted stock plan
Amortization of restricted stock

compensation

Exercises of stock options
Repayment of notes receivable

from officers

—

—
—

61,699
159,500

—
18,000

—

—
—
2

—
—

—
—
5

—
—

—

—
—
—

—
2

—

—
—

1
1

—
—

—

—
—
4,805,000

23,257
48,000

—
(2,800)
24,859

—
(654,546)

9,600,019

—

—
—
8,749,222

19,494
43,425

—
37,312

—

18,449,472

—

—
—

18,704
56,200

—
24,077

—

—
—
48

—
—

—
—
—

—
(6)

—

—
—
88

—
1

—
—

—

185

—

—
—

—

—
—

—

10,540

—
—
42,521

343
686

—
(35)
3,043

—
(6,243)

(4,487)
(4,310)
—

—
—

—
—
—

—
—

162,763

(31,654)

—

16,080

—
—
87,835

364
1,577

—
1,727

—

(4,750)
(10,163)
—

—
—

—

—
—
—

—
(686)

769
—
—

(3,003)
—

(4,899)

—

—
—
—

—
(1,580)

942
—

10,540

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

343
—

769
(35)
3,048

(3,003)
(6,249)

126,368

16,080

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

364
—

942
1,729

(1,493)

3,017

254,266

(30,487)

(4,013)

220,017

—

—
—

1,051
2,665

—
314

—

17,576

(5,135)
(15,565)

—
—

—

—
—

—
(2,666)

1,105
—

312

17,576

(5,135)
(15,565)

1,052
—

1,105
314

312

Balances — October 31, 2003

6,817,771

$68

18,548,453

$185

$258,296

$(33,611)

$(5,262)

$219,676

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, 2003, the Company owned or had interests in 30 properties containing a total
of 3.4 million square feet of leasable area.

Principles of Consolidation and Use of Estimates
The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and
joint ventures in which the Company has the ability to control the affairs of the venture. Since the Company has
operating control over the joint ventures, the joint ventures are consolidated into the consolidated financial
statements of the Company. All significant intercompany transactions and balances have been eliminated in con-
solidation.

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.

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 that is distributed. The Company believes it qualifies as a REIT and has
distributed all of its taxable income for the fiscal years through 2003 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 that range from 10 to 20 years. Furniture and
fixtures are depreciated over the estimated useful lives that range from 3 to 10 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 $1,729,000 and $1,485,000 as of October 31, 2003 and 2002, 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 amounts of the assets exceed
the fair value less costs to sell. It is the Company’s policy to reclassify properties as assets to be disposed of
upon determination that such properties will be sold within one year.

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.

URSTADT BIDDLE PROPERTIES INC.

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, 2003
and 2002, approximately $6,372,000 and $3,743,000 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 rec-
ognized 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 accounting
principles have been met.

The Company provides an allowance for doubtful accounts against the portion of tenant receivables (including
an allowance for future tenant credit losses of approximately 10% of the deferred straight-line rents receivable)
which is estimated to be uncollectible. Such allowances are reviewed periodically. At October 31, 2003 and 2002,
tenant receivables in the accompanying consolidated balance sheets are shown net of allowances for doubtful
accounts of $1,369,000 and $1,169,000, 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 fair value (which approximates cost plus accrued interest). At October 31, 2003
and 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, 2003 and 2002, the estimated aggregate fair value of the mortgage
notes and other receivable was $2,161,000 and $3,542,000, respectively.

The estimated fair value of mortgage notes payable was $114,000,000 and $118,000,000 at October 31, 2003 and
2002, 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.

Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of
cash and cash equivalents, mortgage loans receivable and tenant receivables. The Company places its cash and
cash equivalents in excess of insured amounts with high quality financial institutions. Management of the
Company performs ongoing credit evaluations of its tenants and requires certain tenants to provide security
deposits or letters of credit. Though these security deposits and letters of credit are insufficient to meet the ter-
minal value of a tenant’s lease obligation, they are a measure of good faith and a source of funds to offset the
economic costs associated with lost rent and the costs associated with retenanting the space.

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

2003

2002

2001

$4,171

$4,880

$5,326

151
$4,322

160
$5,040

(32)
$5,294

6,259

6,089

5,881

252
55

288
55

157
—

6,566

6,432

6,038

$13,405

$11,200

$5,214

215
$13,620

202
$11,402

246
$5,460

18,200

12,615

5,182

210
310

211
310

135
289

18,720

13,136

5,606

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

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.

URSTADT BIDDLE PROPERTIES INC.

Recently Issued Accounting Pronouncements
In January 2003, the FASB issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities,” which
explains how to identify variable interest entities (“VIE”) and assess whether to consolidate such entities. The
provisions of this interpretation are effective immediately for VIE’s formed after January 31, 2003. For VIE’s
formed prior to January 31, 2003, the provisions of this interpretation apply to the first fiscal year or interim
period beginning after December 15, 2003. Management does not believe that the adoption of this pronounce-
ment will have a material effect on its operations or financial position.

In May 2003, the FASB issued SFAS No. 150 “Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity” (“Statement”). The Statement establishes standards for classifying and measuring
as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both
liabilities and equity. As the holders of the Series B Preferred Stock and Series C Preferred Stock only have a con-
tingent right to require the Company to repurchase all or part of such holders interests upon a change of control
of the Company (as defined), the Series B Preferred Stock and Series C Preferred Stock are classified as
redeemable equity instruments as a change in control is not certain to occur.

In November 2003, the FASB deferred the classification and measurement provisions of FASB No.150 which
apply to certain mandatorily redeemable non-controlling interests. This deferral is expected to remain in effect
while these provisions are further evaluated by the FASB. The Company has one finite life joint venture which
contains a mandatorily redeemable non-controlling interest. At October 31, 2003 the estimated fair value of the
minority interest was approximately $2.4 million. The joint venture has a termination date of December 31, 2097.

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 in each of the three years ended October 31, 2003 would have
been immaterial.

(2) REAL ESTATE INVESTMENTS

The Company’s investments in real estate, net of depreciation, were composed of the following at October 31,
2003 and 2002 (in thousands):

Retail
Office
Industrial
Undeveloped Land

Core
Properties

Non-core
Properties

$322,734
7,882
—
304
$330,920

$1,830
7,821
1,564
—
$11,215

Mortgage
Notes
Receivable

$2,184
—
—
—
$2,184

2003
Totals

$326,748
15,703
1,564
304
$344,319

2002
Totals

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

The Company’s investments at October 31, 2003, consisted of equity interests in 30 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(2) REAL ESTATE INVESTMENTS (continued)

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, 2003 and 2002 (in thousands):

Northeast
Southeast
Midwest
Southwest

(3) CORE PROPERTIES

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

Land
Buildings and improvements

Accumulated depreciation

2003

$331,608
—
8,704
4,007
$344,319

2003

$69,756
304,985
374,741
(43,821)
$330,920

2002

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

2002

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

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: 2004 – $41,343,000;
2005 – $38,672,000; 2006 – $36,745,000; 2007 – $34,556,000; 2008 – $31,946,000 and thereafter – $151,909,000.

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 $60,000, $47,000, and $70,000, in 2003, 2002 and 2001, respectively.

Owned Properties
In fiscal 2003, the Company acquired four properties consisting of the Westchester Pavilion in White Plains,
New York, a 185,000 square foot property for $39.9 million, seven retail building units totaling 135,000 square
feet in the Somers Commons, in Somers, New York, for $21.65 million, the Orange Meadows Shopping Center in
Orange, Connecticut, a 78,000 square foot property for $11.3 million, and the Greens Farms Plaza, in Westport,
Connecticut, a 38,000 square foot property for $10.1 million.

In connection with the purchase of Orange Meadows, the Company has agreed to pay the seller approximately
$1.5 million as additional purchase price pursuant to an agreed formula, which amount is included in Accounts
Payable in the accompanying consolidated balance sheet at October 31, 2003.

In fiscal 2002, the Company acquired the Airport Plaza 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 two properties consisting of an office property in Greenwich,
Connecticut and a 38,000 square foot shopping center in Westchester County, New York 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.

URSTADT BIDDLE PROPERTIES INC.

Upon the acquisition of real estate properties, the fair value of the real estate purchased is allocated to the
acquired tangible assets, (consisting of land, buildings and building improvements) and identified intangible
assets and liabilities, (consisting of above-market and below-market leases and in-place leases) in accordance
with SFAS No.141 “Business Combinations.” The Company utilizes methods similar to those used by indepen-
dent appraisers in estimating the fair value of acquired assets and liabilities. The fair value of tangible assets of
an acquired property considers the value of the property “as-if-vacant.” The fair value reflects the depreciated
replacement cost of the asset. In allocating purchase price to identified intangible assets and liabilities of an
acquired property, the value of above-market and below-market leases are estimated based on the differences
between (i) contractual rentals and the estimated market rents over the applicable lease term discounted back to
the date of acquisition utilizing a discount rate adjusted for the credit risk associated with the respective tenants
and (ii) the estimated cost of acquiring such leases giving effect to the Company’s history of providing tenant
improvements and paying leasing commissions, offset by a vacancy period during which such space would be
leased. The aggregate value of in-place leases, is measured by the excess of (i) the purchase price paid for a
property after adjusting existing in-place leases to market rental rates over (ii) the estimated fair value of the
property “as-if-vacant,” determined as set forth above.

As of October 31, 2003, as a result of its evaluations, the Company has allocated $192,000 to an asset and
$560,000 to a liability associated with the net fair value assigned to the acquired leases at the properties.

The Company is currently in the process of analyzing the fair value of in-place leases for the Somers Commons
property, and consequently, no value has yet been assigned to the leases. Accordingly, the purchase price alloca-
tion is preliminary and may be subject to change.

Consolidated Joint Ventures
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 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 partnership units (PU’s) of the entity. The PU’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. In fiscal 2001, the Company redeemed, at net book value, 127,548
PU’s for cash of $1.0 million. At October 31, 2003 and 2002 there were 255,097 PU’s outstanding.

The Company has a 90% general partner interest in a partnership that owns the Ridgeway Shopping Center in
Fairfield County, Connecticut. The partnership acquired the property in fiscal 2002, subject to a $57.4 million
first mortgage. The partners receive an annual cash preference payable 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 repre-
sents a non-cash financing activity and is therefore not included in the accompanying 2002 consolidated state-
ment of cash flows.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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, 2003, 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):

2003

Land
Buildings and improvements

$ 1,943
19,433
21,376
Accumulated depreciation (10,161)
$11,215

2002

$ 1,943
19,321
21,264
(9,320)
$11,944

Minimum rental payments on non-cancelable operating leases of the non-core properties become due as follows:
2004 – $4,257,000; 2005 – $4,332,000; 2006 – $4,408,000; 2007 – $4,156,000; 2008 – $1,376,000 and thereafter
$2,170,000.

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.

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

In fiscal 2001, the Company had a general partner interest in the Countryside Square Limited Partnership (the
“Partnership”), an unconsolidated joint venture, which owned the Countryside Square Shopping Center in
Clearwater, Florida. The Company accounted for its investment in the partnership by the equity method of
accounting. Under the equity method, only the Company’s share of income or loss of the partnership is
reflected in the financial statements. During fiscal 2001, the property was sold and the partnership liquidated.
Accordingly, through the date of sale, 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.

(5) MORTGAGE NOTES AND OTHER RECEIVABLE

The components of the mortgage notes and other receivable at October 31, 2003 and 2002 were as follows
(in thousands):

Mortgage notes receivable:

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

of acceptance of notes

Other receivable

2003

2002

$2,577

$2,685

(393)
2,184
—
$2,184

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

Mortgage notes receivable consist of two fixed rate mortgages with contractual interest rates of 9% and 12%
which are secured by commercial property.

At October 31, 2003, principal payments on mortgage notes receivable become due as follows:
2004 – $119,000; 2005 – $130,000; 2006 – $142,000; 2007 – $156,000; 2008 – $170,000 and thereafter – $1,860,000.

URSTADT BIDDLE PROPERTIES INC.

(6) MORTGAGE NOTES PAYABLE AND LINES OF CREDIT

At October 31, 2003, the Company had ten non-recourse first mortgage notes payable totaling $104,588,000
($106,429,000 at October 31, 2002) 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 $167,000,000 as of October 31, 2003.

Scheduled principal payments during the next five years and thereafter are as follows: 2004 – $1,985,000;
2005 – $2,139,000; 2006 – $8,927,000; 2007 – $11,225,000; 2008 – $53,261,000 and thereafter – $27,051,000.

At October 31, 2003, the Company had a secured revolving line of credit with a bank, which allows for borrow-
ings up to $18.125 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 + .5% 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, 2003 and 2002, the
Company had no outstanding borrowings under this revolving credit agreement. The Company pays annual
fees of .25% on the unused portion of this credit facility.

The Company also has a $20 million unsecured line of credit arrangement with the same bank. The line of
credit expires in fiscal 2004 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 + .5% or LIBOR
+ 2.5%. The Company pays an annual fee of .25% on unused amounts. There were no borrowings outstanding
under this line of credit at October 31, 2003 and 2002.

Interest paid for the years ended October 31, 2003, 2002, and 2001 was $8,094,000, $5,584,000 and $4,456,000,
respectively.

(7) PREFERRED STOCK

The 8.99% Series B Senior Cumulative Preferred Stock (“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 Company at its option may redeem the Series B Preferred Stock,
in whole or in part, at a redemption price of $100 per share, plus all accrued dividends. Upon a change in con-
trol of the Company (as defined), (i) each holder 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 enti-
tled to receive cumulative preferential cash dividends equal to 8.99% per annum, payable quarterly in arrears
and subject to adjustments under certain circumstances.

In fiscal 2003, the Company sold 400,000 shares of 8.50% Series C Senior Cumulative Preferred stock, (“Series C
Preferred Stock”) for net proceeds of $ 38.4 million. The Series C Preferred Stock has no stated maturity and is
not convertible into other securities of the Company. On or after May 29, 2013, the Series C Preferred Stock may
be redeemed by the Company, at its option, at a redemption price of $100 per share.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(7) PREFERRED STOCK (continued)

The Series B Preferred Stock and Series C Preferred Stock contain covenants, which require the Company to
maintain certain financial coverages relating to fixed charge and capitalization ratios. Shares of both Preferred
Stock series are non-voting; however, under certain circumstances (relating to non-payment of dividends or fail-
ure 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, 2003 and 2002.

In fiscal 2002, the Company repurchased 200,000 shares of its Series B Preferred Stock for $16,050,000 in a nego-
tiated transaction with a holder of the preferred shares. The Company 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.

(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.

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 Dividend Reinvestment and Share Purchase Plan that allows shareholders to acquire
additional shares of Common Stock and Class A Common Stock by automatically reinvesting dividends. The
Company issued 61,699 shares of Common Stock and 18,704 shares of Class A Common Stock in fiscal 2003
(14,296 shares of Common Stock and 19,494 shares of Class A Common Stock in fiscal 2002) through the Plan.

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 aggregate
value of all outstanding 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 has limited rights, may not be voted and is not entitled to any dividends.

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
are 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 vest 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,

2003

2002

2001

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
Exercise
Prices

Number
of Shares

91,570
—
(18,000)
(17,694)
55,876
55,876

66,810
—
(24,077)
—
42,733
42,733

$7.50
—
$7.22
$7.44
$7.62

$7.71
—
$7.61
—
$7.83

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

At October 31, 2003, 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 2004 through April 2009 and the weighted average
remaining contractual life of these options is 3.5 years.

As of October 31, 2003, outstanding options to acquire approximately 21,000 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.

In connection with the exercise of stock options certain officers of the Company executed full recourse
promissory notes equal to the purchase price of the shares. At October 31, 2003, notes from officers totaled
$1,434,000 ($1,746,000 at October 31, 2002). The notes have 10-year terms and bear fixed rates of interest ranging
from 6.8% to 8%. The shares are pledged as additional collateral for the notes. Interest is payable quarterly. The
exercise of the stock options and the issuance of the notes represent non-cash financing activities and are there-
fore not included in the accompanying consolidated statements of cash flows.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company has a restricted stock plan for key employees and directors of the Company. The plan 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 compensation committee, may be awarded
in any combination of Common stock or Class A Stock). As of October 31, 2003, the Company has awarded
509,500 shares of Common Stock and 242,500 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. At October 31, 2003, 13,250
shares each of Common Stock and Class A Common Stock were vested (3,500 shares each of Common and Class
A Common Stock at October 31, 2002). 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. Unamortized
restricted stock compensation is charged to expense over the respective vesting periods. For the years ended
October 31, 2003, 2002 and 2001 amounts charged to expense totaled $1,105,000, $942,000 and $769,000,
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, 2003, 2002 and 2001, the Company made contributions to the 401K Plan of $95,000, $93,000 and $88,000,
respectively. The Company also has an Excess Benefits and Deferred Compensation Plan that allow eligible
employees to defer benefits in excess of amounts provided under the Company’s 401K Plan and a portion of the
employee’s current compensation.

(10) PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The unaudited pro forma financial information set forth below is based upon the Company’s historical consoli-
dated statements of income for the years ended October 31, 2003 and 2002 adjusted to give effect to the acquisi-
tions of the Ridgeway Shopping Center, (June 2002) Westchester Pavilion (December 2002), Orange Meadows
Shopping Center (December 2002), Greens Farms Plaza (February 2003), and Somers Commons (June 2003) as
though these transactions were completed on November 1, 2001. The pro forma information also gives effect to
the issuance of 8,050,000 shares of Class A Common stock (July 2002) and 400,000 shares of Series C Preferred
Stock (May 2003) as though these transactions were also completed on November 1, 2001.

The pro forma financial information is presented for informational purposes only and may not be indicative of
what the actual results of operations would have been had the transactions occurred as of November 1, 2001,
nor does it purport to represent the results of future operations. (Amounts in thousands, except per share
figures).

Year ended October 31,
2003

2002

Pro forma revenues:
Pro forma net income applicable to Common and

Class A Common Stockholders:

Pro forma basic shares outstanding:
Common and Common Equivalent
Class A Common and Class A Common Equivalent

Pro forma diluted shares outstanding:
Common and Common Equivalent
Class A Common and Class A Common Equivalent

Pro forma earnings per share:

Basic:

Common
Class A Common

Diluted:

Common
Class A Common

$63,302

$17,064

6,259
18,200

6,566
18,720

$.65
$.72

$.64
$.71

$61,442

$18,526

6,089
18,097

6,432
18,618

$.71
$.79

$.70
$.77

URSTADT BIDDLE PROPERTIES INC.

(11) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The unaudited quarterly results of operations for the years ended October 31, 2003 and 2002 are as follows (in
thousands, except per share data):

Year Ended October 31, 2003

Year Ended October 31, 2002

Quarter Ended

Jan 31 Apr 30

July 31 Oct 31

Jan 31 Apr 30

July 31 Oct 31

$13,681 $15,027 $15,413 $16,240

$10,014

$9,971

$11,223 $13,132

$4,197

$4,870

$5,459

$5,844

$3,508

$3,368

$3,295

$4,336

(337)

(932)

(1,188)

(487)

(337)

—

3,071

—

$3,860

$4,533

$4,527

$4,656

$6,092

$3,031

$2,958

$3,999

$.15
$.16

$.17
$.19

$.18
$.19

$.17
$.19

$.36
$.40

$.35
$.38

$.18
$.20

$.17
$.19

$.15
$.17

$.15
$.16

$.15
$.17

Revenues

Net Income

Preferred Stock Dividends
Excess of Carrying Value over

Cost to Repurchase
Preferred Shares

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

(12) COMMITMENTS AND CONTINGENCIES

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

We have audited the accompanying consolidated balance sheets of Urstadt Biddle Properties Inc. (the
“Company”) as of October 31, 2003 and 2002, and the related consolidated statements of income, cash flows
and stockholders’ equity for each of the two years in the period ended October 31, 2003. These financial state-
ments are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audit. Other auditors who have ceased operations audited the finan-
cial statements of Urstadt Biddle Properties Inc. for the year ended October 31, 2001. 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
consolidated financial position of Urstadt Biddle Properties Inc. at October 31, 2003 and 2002 and the
consolidated results of its operations and its cash flows for each of the two years in the period ended
October 31, 2003 in conformity with accounting principles generally accepted in the United States.

ERNST & YOUNG LLP

New York, New York
December 10, 2003

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

The following discussion should be read in conjunction
with the consolidated financial statements of the Company
and the notes thereto included elsewhere in this report.

OVERVIEW
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
real estate 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, 2003, the Company
owned or had controlling interests in 30 properties con-
taining a total of 3.4 million square feet of leasable area.
The Company focuses on increasing cash flow and,
consequently, the value of its properties and seeks contin-
ued growth through strategic re-leasing, renovations and
expansion of its existing properties and selective acquisi-
tion of income producing properties, primarily neighbor-
hood and community shopping centers in the northeast-
ern part of the United States.

FORWARD LOOKING STATEMENTS

Certain statements made in this section or elsewhere in
this report may be deemed “forward-looking statements”
within the meaning of the Private Securities Litigation
Reform Act of 1995. Although the Company believes the
expectations reflected in any forward-looking statements
are based on reasonable assumptions, it can give no assur-
ance that expectations will be attained, and it is possible
that actual results may differ materially from those indi-
cated by these forward-looking statements due to a variety
of risks and uncertainties. Those risks and uncertainties
incidental to the ownership and operation of commercial
real estate include, but are not limited to: national, region-
al and local economic climates, competitive market forces,
changes in market rental rates, trends in the retail indus-
try, the inability to collect rent due to the bankruptcy or
insolvency of tenants or otherwise, risks associated with
acquisitions, environmental liabilities, maintenance of
REIT status, the availability of financing, and changes in
market rates of interest. The Company undertakes no duty
or obligation to update or revise these forward-looking
statements, whether as a result of new information, future
developments, or otherwise.

CRITICAL ACCOUNTING POLICIES
Critical accounting policies are those that are both impor-
tant to the presentation of the Company’s financial condi-
tion and results of operations and require management’s

most difficult, complex or subjective judgments. Set forth
below is a summary of the accounting policies that man-
agement believes are critical to the preparation of the con-
solidated financial statements. This summary should be
read in conjunction with the more complete discussion of
the Company’s accounting policies included in Note 1 to
the consolidated financial statements of the Company.

Revenue Recognition

The Company records base rents on a straight-line basis
over the term of each lease. The excess of rents recognized
over amounts contractually due pursuant to the underly-
ing leases is included in tenant receivables on the accom-
panying balance sheets. Most leases contain provisions
that require tenants to reimburse a pro-rata share of real
estate taxes and certain common area expenses. These
amounts are recognized in the period the related expenses
are incurred. Expense reimbursement payments generally
are made monthly based on an estimated amount deter-
mined at the beginning of the year. The difference between
the actual amount due and the estimated amounts paid by
the tenant throughout the year is billed or credited to the
tenant.

Allowance for Doubtful Accounts

The allowance for doubtful accounts and mortgage notes
receivable is established based on a 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 receivables,
the payment history of the tenants or other debtors, the
financial condition of the tenants and management’s
assessment of their ability to meet their lease obligations,
the basis for any disputes and the status of related negoti-
ations, 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 mar-
ket conditions on tenants, particularly those at retail cen-
ters. It is the Company’s policy to maintain an allowance
for future tenant credit losses of approximately 10% of the
deferred straight-line rents receivable balance.

Real Estate

Land, buildings, property improvements, furniture/
fixtures and tenant improvements are recorded at cost.
Expenditures for maintenance and repairs are charged to
operations as incurred. Renovations and/or replacements,
which improve or extend the life of the asset, are capital-
ized and depreciated over their estimated useful lives.
Properties are depreciated using the straight-line
method over the estimated useful lives of the assets. The
estimated useful lives are as follows:

Buildings 30-40 years
10-20 years
Property Improvements
3-10 years
Furniture/Fixtures
Lease term
Tenant Improvements

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

The Company is required to make subjective assess-
ments as to the useful lives of its properties for purposes
of determining the amount of depreciation. These assess-
ments have a direct impact on the Company’s net income.
Assessments by the Company of certain other lease
related costs are made when the Company has a reason to
believe that the tenant may not be able to perform under
the terms of the lease as originally expected. This requires
management to make estimates as to the recoverability of
such assets.

Asset Impairment

On a periodic basis, management assesses whether there
are any indicators that the value of the real estate proper-
ties and mortgage notes receivable may be impaired. A
property value is considered impaired only if manage-
ment’s estimate of current and projected operating cash
flows (undiscounted and without interest charges) of the
property over its remaining useful life is less than the net
carrying value of the property. Such cash flow projections
consider factors such as expected future operating income,
trend and prospects, as well as the effects of demand, com-
petition and other factors. To the extent impairment has
occurred, the loss is measured as the excess of the net
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, 2003.

LIQUIDITY AND CAPITAL RESOURCES
At October 31, 2003, the Company had unrestricted cash
and cash equivalents of $22.4 million compared to $46.3
million in 2002. The Company also had $9.5 million and
$25.1 million in short-term investments as of October 31,
2003 and 2002, respectively. The Company’s cash positions
and short-term investments include the remaining pro-
ceeds from the sales of equity securities of the Company
during fiscal 2003 and 2002.

The Company’s sources of liquidity and capital
resources include its cash and cash equivalents, proceeds
from bank borrowings and long-term mortgage debt, capi-
tal financings and sales of real estate investments.
Payments of expenses related to real estate operations,
debt service, management and professional fees, and divi-
dend 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 require-
ments for fiscal 2004 and to meet its dividend require-
ments necessary to maintain its REIT status. In fiscal 2003,
2002 and 2001, net cash provided by operations amounted
to $31.2 million, $18.5 million and $21.3 million, respec-
tively. The increase in net cash from operating activities in
fiscal 2003 reflects the additional operating income from a
greater number of properties in the year. Cash dividends

paid increased to $23.5 million in 2003 compared to $16.4
million in 2002 and $11.9 million in 2001. The Company
expects to continue paying regular dividends to its stock-
holders. These dividends will be paid from operating cash
flows which are expected to increase due to property
acquisitions and growth in operating income in the exist-
ing portfolio and from other sources. 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 tenants 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 uncer-
tain economic times, in that consumers still need to pur-
chase basic staples and convenience items. However, even
in the geographic areas in which the Company owns prop-
erties, general economic downturns may adversely impact
the ability of the Company’s tenants to make lease pay-
ments and the Company’s ability to re-lease space as leas-
es expire. In either of these cases, the Company’s cash flow
could be adversely affected.

Capital Resources

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 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 factors that may have a material adverse
effect on its access to capital sources. The Company’s abili-
ty to incur additional debt is dependent upon its existing
leverage, the value of its unencumbered assets and bor-
rowing limitations imposed by existing lenders. The
Company’s ability to raise funds through sales of equity
securities is dependent on, among other things, general
market conditions 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.

In May 2003, the Company sold 400,000 shares of a
new issue of Series C Cumulative Preferred Stock (Series C
Preferred Stock) for proceeds of $38.4 million. The pre-
ferred shares are redeemable at the option of the Company
after ten years. The Series C Preferred Stock issue entitles
the holders to a 8.5% cumulative dividend. The Company
used a portion of the proceeds to purchase a shopping
center in June 2003. The Company intends to use the
balance of the proceeds for property acquisitions.

In fiscal 2002, the Company sold 8,050,000 shares of its

Class A Common stock for net proceeds to the Company
of $81.9 million. The net proceeds were used to repay $16

million of outstanding revolving credit line indebtedness
and the acquisitions of three properties.

In fiscal 2001, the Company sold 5,499,222 shares of its
Class A Common stock for net proceeds of $47.2 million of
which $6.1 million was received in fiscal 2002. The
Company also sold 200,000 shares of Common stock and
5,000 shares of Class A Common stock in a private place-
ment for proceeds of $1.4 million. The proceeds of these
equity sales were used to complete the acquisitions of two
properties, repay outstanding credit line borrowings and
repurchase 200,000 shares of Series B Preferred Stock at a
cost of $16.1 million.

The Company is exposed to interest rate risk primari-

ly through its borrowing activities. There is inherent
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 variability of
future interest rates and the Company’s future financing
requirements.

At October 31, 2003, the Company’s contractual oblig-

ations 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

$1,985,000
$11,066,000
$64,486,000
$27,051,000

Borrowings consist of $104,588,000 of fixed rate mort-
gage loan indebtedness with a weighted average interest
rate of 7.53% at October 31, 2003. The mortgage loans are
secured by fourteen properties and have fixed rates of
interest ranging from 6.29% to 8.375%. The Company may
refinance certain of these borrowings, at or prior to matu-
rity, through new mortgage loans on real estate. The abili-
ty to do so, however, is dependent upon various factors,
including the income level of the properties, interest rates
and credit conditions within the commercial real estate
market. Accordingly, there can be no assurance that such
refinancing can be achieved.

At October 31, 2003, the Company had a secured
revolving credit facility with a bank which expires in fiscal
2005 and allows for borrowings up to $18.125 million. The
secured line is collateralized by two properties having a
net book value of $29.4 million at October 31, 2003. The
terms of the credit facility require a permanent reduction
in the credit loan amount of $625,000 annually. The
Company also has a $20 million unsecured revolving line
of credit with the same bank which expires in fiscal 2004.
The revolving credit lines are available to finance the
acquisition, management and/or development of commer-
cial real estate, refinance indebtedness and for working
capital purposes. Extensions of credit under the unsecured
credit line are at the bank’s discretion and subject to the
bank’s satisfaction of certain conditions. There were no
borrowings during the year on either credit line and there
were no outstanding borrowings at October 31, 2003.

Capital Expenditures

The Company invests in its existing properties and regu-

larly 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 2003, the Company incurred $2.8 mil-
lion for capital expenditures including $1.9 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 tenant
negotiations, market conditions and rental rates. The
Company expects to incur an additional $4.3 million for
known capital improvements and leasing costs in fiscal
2004. These expenditures are generally funded from oper-
ating cash flows or borrowings on its credit facilities.

Acquisitions and Sales

The Company seeks to acquire properties which are pri-
marily shopping centers located in the northeastern part of
the United States.

In fiscal 2003, the Company acquired four properties

totaling 436,000 square feet in separate transactions for
approximately $83 million. The properties were purchased
with cash raised from sales of equity securities and con-
sisted of: the Westchester Pavilion in White Plains, New
York, a 185,000 square foot property for $39.9 million, the
Orange Meadows Shopping Center in Orange,
Connecticut, a 78,000 square foot property for $11.3 mil-
lion, the Greens Farms Plaza in Westport, Connecticut, a
38,000 square foot property for $10.1 million and seven
retail building units totaling 135,000 square feet in Somers
Commons for $21.65 million.

In fiscal 2002, the Company acquired a 90% general

partner interest in a shopping center in Stamford,
Connecticut for $86.8 million. The property was acquired
subject to a $57.4 million first mortgage loan. 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% inter-
est in an office building that it did not own for a purchase
price of $1.25 million.

In fiscal 2001, the Company acquired two properties
for $9.5 million. One property was acquired subject to a
first mortgage loan of $4.2 million.

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 Company’s non-core proper-
ties in the normal course of business over a period of sev-
eral years. The non-core properties consist of two distribu-
tion service facilities, one office building and one retail
property (all of which are located outside of the northeast
region of the United States). The Company intends to sell
its non-core properties as opportunities become available.
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.
There were no sales of properties during fiscal 2003. At
October 31, 2003, the non-core properties total four proper-
ties with a net book value of approximately $11 million.

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

FUNDS FROM OPERATIONS
The Company considers Funds from Operations (“FFO”)
as defined by The National Association of Real Estate
Investment Trusts (“NAREIT”) to be one supplemental
financial measure of an equity REIT’s operating perfor-
mance. FFO is calculated as net income (computed in
accordance with generally accepted accounting principles
(GAAP)), plus real estate related depreciation and amorti-
zation, excluding gains (or losses) from sales of property
and debt restructuring and after adjustments for unconsoli-
dated 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 disclosed by other REITs might 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 three years
in the period ended October 31, 2003 (amounts in
thousands).

RESULTS OF OPERATIONS

Fiscal 2003 vs. Fiscal 2002

Revenues

Revenues from operating rents increased 40.4% to $59.2
million in fiscal 2003 compared to $42.2 million in fiscal
2002. The net increase in rents resulted primarily from (i)
the acquisition of four properties in fiscal 2003 containing
436,000 square feet of leasable space, providing revenues
of $8.3 million in the year (ii) the full year impact related
to two operating properties acquired in 2002, providing
incremental revenues of $6.5 million in fiscal 2003 (iii) an
increase in recoveries of property operating expenses and
property taxes from tenants of $700,000 in fiscal 2003 and
(iv) an overall increase in the leasing levels at the
Company’s properties.

At October 31, 2003, the Company’s total portfolio
was 96% leased compared to 95% leased in fiscal 2002.
During fiscal 2003, the Company renewed or signed new
leases totaling 375,000 square feet of space. The Company
has leases totaling 126,000 square feet of leasable space or
3.8% of total GLA expiring in fiscal 2004.

Net Income Applicable to Common

and Class A Common Stockholders $17,576

$16,080

$10,540

cancellation payment from a tenant who terminated its
lease early. This space was re-leased during the year.

Plus: Real property depreciation

7,831

5,459

4,463

Interest income in fiscal 2003 decreased due to the uti-

2003

2002

2001

Lease termination income of $80,000 represents a lease

Amortization of tenant
improvements and allowances

Amortization of deferred
leasing cost

Less: Adjustments for

2,088

2,325

lization of cash from the Company’s sale of 8,050,000
shares of Class A common stock in fiscal 2002. The cash
was used to acquire properties in fiscal 2003.

469

517

851

Expenses

Operating expenses, including depreciation and amortiza-
tion increased to $39.6 million in fiscal 2003 from $29.4
million in fiscal 2002. Property expenses increased $5.0
million from the incremental expense of recently acquired
properties, which increased property expenses by $4.6
million. Property expenses for properties owned during
both periods increased 4.0% from higher snow removal
and property tax costs, which increased $475,000 and
$171,000, respectively in fiscal 2003.

Interest expense increased to $8.1 million from $5.6
million principally from the full year impact of approxi-
mately $60 million in first mortgage loans assumed in
connection with property acquisitions in fiscal 2002.

Depreciation expense increased by $2.4 million in

fiscal 2003 from the additional depreciation on recent
property acquisitions.

General and administrative expenses increased to

$3.2 million in fiscal 2003 as compared to $2.8 million in
fiscal 2002 due to increased compensation costs.

unconsolidated joint venture

Gains on sales of real estate
investments

—

— (3,252)

—

(316)

Funds from Operations Applicable

to Common and Class A Common
Stockholders (1)

Net Cash Provided by (Used in):

$27,964

$24,144

$14,611

Operating Activities

$31,176

$18,532

$21,308

Investing Activities

$(69,818) $(64,960)

$(11,394)

Financing Activities

$14,749

$59,023

$22,040

(1) Funds from Operations for 2002 has been adjusted to conform with
revised guidance provided by NAREIT regarding the calculation for FFO.
This revised guidance provides that amounts associated with preferred
stock that has been redeemed or repurchased should be factored into the
calculation of FFO. As a result, the Company has adjusted its fiscal 2002
FFO to include a $3,071,000 adjustment to record the excess of the carrying
value over the cost to repurchase $20 million of its Series B Preferred shares
in that year in accordance with NAREIT’s revised guidance. The adjustment
to fiscal 2002 FFO did not affect net income applicable to Common and
Class A Common stockholders in that year.

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 revenues resulted from the addition
of new rents from properties acquired and leasing of pre-
viously vacant space at properties owned in both years.
During fiscal 2002 and 2001, the Company acquired four
properties which increased operating lease income by
approximately $5.5 million in fiscal 2002. In 2002 the
Company renewed or signed new leases totaling 236,000
square feet of space, however the overall leasing levels at
the Company’s properties decreased to 95% by the end of
fiscal 2002 compared to 98% leased at the end of fiscal
2001. The decrease in leasing levels reflected 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.

Lease termination income of $765,000 in fiscal 2002

represents lease cancellation payments from tenants who
terminated leases in 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 addi-
tion of a $1.2 million note receivable.

Expenses

Total expenses increased to $29.4 million in fiscal 2002
from $26.2 million in fiscal 2001. Property expenses
increased 11.1% to $12.8 million from $11.5 million princi-
pally from the incremental expense of new 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 from new mortgage loans
totaling $59.4 million assumed in connection with proper-
ty acquisitions. The increase in interest expense was par-
tially offset by lower outstanding bank credit line borrow-
ings during the year.

Depreciation expense increased $850,000 from the
additional expense related to property acquisitions in that
year. Amortization expense decreased by $354,000 princi-
pally from the write-off in fiscal 2001 of unamortized leas-
ing commissions for tenants who vacated during the year.

General and administrative expenses increased to $2.8

million in fiscal 2002 as compared to $2.5 million in fiscal
2001. The increase was due primarily to increased com-
pensation costs.

The Company repurchased 200,000 shares of its Series

B Preferred Stock for $16,050,000 in a negotiated transac-
tion with a holder of the preferred shares. The Company
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.

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 addition, the
majority 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 expiring 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 maintenance, 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
Properties, management is not aware of any environmen-
tal 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 assurance,
however, that (i) the discovery of environmental condi-
tions, which were previously unknown, (ii) changes in
law, (iii) the conduct of tenants or (iv) activities 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 increasing the potential liability for envi-
ronmental 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 condition 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 has distributed all of its
taxable income for fiscal 2003 and, accordingly, no provision has been made for Federal income taxes.

INCOME TAX INFORMATION

Dividends paid by the Company during fiscal 2003 were all considered ordinary income for Federal income tax
purposes and were paid as follows:

Dividend
Payment Date

January 17, 2003
April 18, 2003
July 18, 2003
October 17, 2003

Total

Dividend
Payment Date

January 31, 2003
April 30, 2003
July 31, 2003
October 31, 2003

Total

Dividends Paid Per

Common Share

Class A
Common Share

$.19
$.19
$.19
$.19

$.76

$.21
$.21
$.21
$.21

$.84

Series B Senior Cumulative

Preferred Share

Series C Senior Cumulative
Preferred Share (a)

$ —
$2.2475
$2.2475 $ —
$2.2475
$2.2475

$1.4875
$2.1250

$8.99

$3.6125

(a) Issued May 29, 2003

MARKET PRICE RANGES

The following sets forth, for the fiscal years ended October 31, 2003 and 2002, 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 UBA.

Common Shares

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Class A Common Shares

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Fiscal 2003

Low High

$11.00 – $12.70
$11.95 – $13.03
$12.70 – $13.80
$12.60 – $13.40

$10.85 – $11.72
$11.00 – $12.54
$12.15 – $13.80
$13.10 – $14.30

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

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: UBA and UBP
Stockholders of Record as of December 31, 2003:
Common Stock: 1,379 and Class A Common Stock: 1,393

Annual Meeting
The annual meeting of stockholders will be held
at 11:00 A.M. March 10, 2004 at Doral Arrowwood,
Rye, New York.

Form 10-K
A copy of the Company’s 2003 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 have always believed —

we are the RIGHT Company.

In the RIGHT Business.

In the RIGHT Place.

At the RIGHT Time.

Danbury
Square
Danbury,
Connecticut

Goodwives
Shopping Center
Darien,
Connecticut

Townline
Square
Meriden,
Connecticut

Ridgeway
Shopping Center
Stamford,
Connecticut