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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the fiscal year
ended October 31, 2003
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File No. 1-12803
URSTADT BIDDLE PROPERTIES INC.
(Exact name of registrant as specified in its charter)
MARYLAND 04-2458042
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(State of Incorporation) (I.R.S. Employer
Identification No.)
321 RAILROAD AVENUE
GREENWICH, CONNECTICUT 06830
---------------------- ---------------
(Address of Principal Executive Offices) (Zip code)
Registrant's telephone number, including area code: (203) 863-8200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, par value $.01 per share New York Stock Exchange
Class A Common Stock, par value $.01 per share New York Stock Exchange
8.50 % Series C Senior Cumulative Preferred Stock New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12 (g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. x
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes x No
The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of April 30, 2003: Common Shares, par value $.01 per share
$42,656,295; Class A Common Shares, par value $.01 per share $215,921,188.
Indicate the number of shares outstanding of each of the Registrant's
classes of Common Stock and Class A Common Stock, as of January 9, 2004 (latest
date practicable): 6,993,271 Common Shares, par value $.01 per share, and
18,607,078 Class A Common Shares, par value $.01 per share.
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement for Annual Meeting of Stockholders to be held on March 10,
2004 (certain parts as indicated herein) (Part III).
1
TABLE OF CONTENTS
Form 10-K
Item No. Report Page
PART I
1. Business 3
2. Properties 7
3. Legal Proceedings 10
4. Submission of Matters to a Vote of Security Holders 10
PART II
5. Market for the Registrant's Common Equity and Related
Shareholder Matters 11
6. Selected Financial Data 13
7. Management's Discussion and Analysis of
Financial Condition and Results of Operations 14
7A. Quantitative and Qualitative Disclosures about Market Risk 20
8. Financial Statements and Supplementary Data 21
9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 21
9A. Controls and Procedures 21
PART III
10. Directors and Executive Officers of the Registrant 22
11. Executive Compensation 22
12. Security Ownership of Certain Beneficial Owners and Management 22
13. Certain Relationships and Related Transactions 22
14. Principal Accountant Fees and Services 22
PART IV
15. Exhibits, Financial Statements, Schedules and
Reports on Form 8-K 23
Signatures
2
PART I
Forward-Looking Statements
This Annual Report on Form 10-K, together with other statements and information
publicly disseminated by Urstadt Biddle Properties Inc. (the "Company"),
contains certain forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Such statements are based on assumptions and expectations which may not be
realized and are inherently subject to risks, uncertainties and other factors,
many of which cannot be predicted with accuracy and some of which might not even
be anticipated. Future events and actual results, performance or achievements,
financial and otherwise, may differ materially from the results, performance or
achievements expressed or implied by the forward-looking statements. Risk,
uncertainties and other factors that might cause such differences, some of which
could be material, include, but are not limited to economic and other market
conditions; financing risks, such as the inability to obtain debt or equity
financing on favorable terms; the level and volatility of interest rates;
financial stability of tenants; the inability of the Company's properties to
generate revenue increases to offset expense increases; governmental approvals,
actions and initiatives; environmental/safety requirements; risks of real estate
acquisitions (including the failure of acquisitions to close); risks of
disposition strategies; as well as other risks identified in this Annual Report
on Form 10-K and in the other reports filed by the Company with the Securities
and Exchange Commission (the "SEC") or otherwise publicly disseminated by the
Company.
Item 1. Business.
Organization
Urstadt Biddle Properties Inc., a Maryland Corporation (the "Company"), is a
real estate investment trust engaged in the acquisition, ownership and
management of commercial real estate. The Company was organized as an
unincorporated business trust (the "Trust") under the laws of the Commonwealth
of Massachusetts on July 7, 1969. In 1997, the shareholders of the Trust
approved a plan of reorganization of the Trust from a Massachusetts business
trust to a corporation organized in Maryland. The plan of reorganization was
affected by means of a merger of the Trust into the Company. As a result of the
plan of reorganization, the Trust was merged with and into the Company, the
separate existence of the Trust ceased, the Company was the surviving entity in
the merger and each issued and outstanding common share of beneficial interest
of the Trust was converted into one share of Common Stock, par value $.01 per
share, of the Company.
Tax Status - Qualification as a Real Estate Investment Trust
The Company elected to be taxed as a real estate investment trust ("REIT") under
Sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code")
beginning with its taxable year ended October 31, 1970. Pursuant to such
provisions of the Code, a REIT which distributes at least 90% of its real estate
investment trust taxable income to its shareholders each year and which meets
certain other conditions regarding the nature of its income and assets will not
be taxed on that portion of its taxable income which is distributed to its
shareholders. Although the Company believes that it qualifies as a real estate
investment trust for federal income tax purposes no assurance can be given that
the Company will continue to qualify as a REIT.
Description of Business
The Company's sole business is the ownership of real estate investments, which
consist principally of investments in income-producing properties, with primary
emphasis on properties in the northeastern part of the United States with a
concentration in Fairfield County, Connecticut and Westchester and Putnam
Counties, New York. The Company's core properties consist principally of
neighborhood and community shopping centers. The remaining properties include
office and retail buildings and industrial properties. The Company seeks to
identify desirable properties for acquisition, which it acquires in the normal
course of business. In addition, the Company regularly reviews its portfolio and
from time to time may sell certain of its properties.
The Company intends to continue to invest substantially all of its assets in
income-producing real estate, with an emphasis on neighborhood and community
shopping centers, although the Company will retain the flexibility to invest in
other types of real property. While the Company is not limited to any
geographical location, the Company's current strategy is to invest primarily in
properties located in the northeastern region of the United States with a
concentration in Fairfield County, Connecticut and Westchester and Putnam
Counties, New York.
3
At October 31, 2003, the Company owned or had an equity interest in thirty
properties comprised of neighborhood and community shopping centers, office and
retail buildings and service and distribution facilities located in nine states
throughout the United States, containing a total of 3.4 million square feet of
gross leasable area ("GLA"). For a description of the Company's individual
investments, see Item 2.
Investment and Operating Strategy
The Company's investment objective is to increase the cash flow and consequently
the value of its properties. The Company seeks growth through (i) the strategic
re-tenanting, renovation and expansion of its existing properties, and (ii) the
selective acquisition of income-producing properties, primarily neighborhood and
community shopping centers, in its targeted geographic region. The Company may
also invest in other types of real estate in the targeted geographic region.
The Company invests in properties where cost effective renovation and expansion
programs, combined with effective leasing and operating strategies, can improve
the properties' values and economic returns. Retail properties are typically
adaptable for varied tenant layouts and can be reconfigured to accommodate new
tenants or the changing space needs of existing tenants. In determining whether
to proceed with a renovation or expansion, the Company considers both the cost
of such expansion or renovation and the increase in rent attributable to such
expansion or renovation. The Company believes that certain of its properties
provide opportunities for future renovation and expansion.
When evaluating potential acquisitions, the Company will consider such factors
as (i) economic, demographic, and regulatory conditions in the property's local
and regional market; (ii) the location, construction quality, and design of the
property; (iii) the current and projected cash flow of the property and the
potential to increase cash flow; (iv) the potential for capital appreciation of
the property; (v) the terms of tenant leases, including the relationship between
the property's current rents and market rents and the ability to increase rents
upon lease rollover; (vi) the occupancy and demand by tenants for properties of
a similar type in the market area; (vii) the potential to complete a strategic
renovation, expansion or re-tenanting of the property; (viii) the property's
current expense structure and the potential to increase operating margins; and
(ix) competition from comparable properties in the market area.
The Company may from time to time enter into arrangements for the acquisition of
properties with unaffiliated property owners through the issuance of units of
limited partnership interests in entities that the Company controls. These units
may be redeemable for cash or for shares of the Company's Common stock or Class
A Common stock. The Company believes that this acquisition method may permit the
Company to acquire properties at attractive prices from property owners wishing
to enter into tax-deferred transactions.
Core Properties
The Company considers those properties, which are directly managed by the
Company, concentrated in the retail sector and located close to the Company's
headquarters in Fairfield County, Connecticut, to be core properties. Of the
thirty properties in the Company's portfolio, twenty-six properties are
considered core properties consisting of twenty-one retail properties and five
office buildings (including the Company's executive headquarters). At October
31, 2003, these properties contained in the aggregate 2.7 million square feet of
gross leaseable area ("GLA"). The Company's core properties collectively had 449
tenants providing a wide range of products and services. Tenants include
regional supermarkets, national and regional discount department stores, other
local retailers and office tenants. At October 31, 2003, the core properties
were 97% leased.
Three of the core properties in the Company's portfolio are owned by
partnerships in which the Company is the sole general partner.
A substantial portion of the Company's operating lease income is derived from
tenants under leases with terms greater than one year. Certain of the leases
provide for the payment of fixed base rentals monthly in advance and for the
payment of a pro-rata share of the real estate taxes, insurance, utilities and
common area maintenance expenses incurred in operating the properties.
4
Non-Core Properties
In a prior year, the Board of Directors of the Company expanded and refined the
strategic objectives of the Company to concentrate the real estate portfolio
into one of primarily retail properties located in the Northeast and authorized
a plan to sell the Company's non-core properties in the normal course of
business over a period of several years given prevailing market conditions and
the characteristics of each property.
Through this strategy, the Company seeks to update its core property portfolio
by disposing of properties which have limited growth potential and redeploying
capital into properties in its target geographic region and product type where
the Company's management skills may enhance property values. The Company may
engage from time to time in like-kind property exchanges, which allow the
Company to dispose of properties and redeploy proceeds in a tax efficient
manner.
At October 31, 2003, the Company's non-core properties consisted of one office
building containing 202,000 square feet of GLA, one retail property totaling
126,000 square feet and two industrial facilities with a total of 447,000 square
feet of GLA. The non-core properties collectively had 6 tenants and were 92%
leased at October 31, 2003.
The office property consists of two tenants which offer engineering services.
The retail property, located in Tempe, Arizona, is leased to two tenants under
long-term leases. The leases obligate these tenants to pay all taxes, insurance,
maintenance and other operating costs on their portion of the property leased
during the term of the lease.
The two industrial facilities are 100% occupied and consist of automobile and
truck parts distribution warehouses. The facilities are net leased to
DaimlerChrysler Corporation under long-term lease arrangements whereby the
tenant pays all taxes, insurance, maintenance and other operating costs of the
property during the term of the lease.
At October 31, 2003, the Company also holds two fixed rate mortgage notes with a
total book value of $2,184,000. The mortgages are secured by retail properties
that were previously owned and sold by the Company.
Financing Strategy
The Company intends to finance future acquisitions with the most advantageous
sources of capital which it believes are available to the Company at the time,
and which may include the sale of common equity through public offerings or
private placements, the incurrence of additional indebtedness through secured or
unsecured borrowings, and the reinvestment of proceeds from the disposition of
assets. The Company's financing strategy is to maintain a strong and flexible
financial position by (i) maintaining a prudent level of leverage, and (ii)
minimizing its exposure to interest rate risk represented by floating rate debt.
Matters Relating to the Real Estate Business
The Company is subject to certain business risks arising in connection with
owning real estate which include, among others, (1) the bankruptcy or insolvency
of, or a downturn in the business of, any of its major tenants, (2) the
possibility that such tenants will not renew their leases as they expire, (3)
vacated anchor space affecting the entire shopping center because of the loss of
the departed anchor tenant's customer drawing power, (4) risks relating to
leverage, including uncertainty that the Company will be able to refinance its
indebtedness, and the risk of higher interest rates, (5) potential liability for
unknown or future environmental matters, and (6) the risk of uninsured losses.
Unfavorable economic conditions could also result in the inability of tenants in
certain retail sectors to meet their lease obligations and otherwise could
adversely affect the Company's ability to attract and retain desirable tenants.
The Company believes that its shopping centers are relatively well positioned to
withstand adverse economic conditions since they typically are anchored by
grocery stores, drug stores and discount department stores that offer day-to-day
necessities rather than luxury goods.
Compliance with Governmental Regulations
The Company, like others in the commercial real estate industry, is subject to
numerous environmental laws and regulations. Although potential liability could
exist for unknown or future environmental matters, the Company believes that its
tenants are operating in accordance with current laws and regulations and has
established procedures to monitor these operations.
5
Competition
The real estate investment business is highly competitive. The Company competes
for real estate investments with investors of all types, including domestic and
foreign corporations, financial institutions, other real estate investment
trusts and individuals. In addition, the Company's properties are subject to
local competitors from the surrounding areas. The Company does not consider its
real estate business to be seasonal in nature. The Company's shopping centers
compete for tenants with other regional, community or neighborhood shopping
centers in the respective areas where Company retail properties are located. The
Company's office buildings compete for tenants principally with office buildings
throughout the respective areas in which they are located. In most areas where
the Company's office buildings are located, competition for tenants is intense.
Leasing space to prospective tenants is generally determined on the basis of,
among other things, rental rates, location, and physical quality of the property
and availability of space.
Since the Company's industrial properties are net leased under long-term lease
arrangements that are not due to expire in the near future, the Company does not
currently face any immediate competitive re-leasing pressures with respect to
such properties.
Property Management
The Company actively manages and supervises the operations and leasing at all of
its core properties. Three of the Company's non-core properties are net leased
to tenants under long-term lease arrangements, in which case, property
management is provided by the tenants. An independent property management
company manages the Company's remaining property. The Company supervises the
property management company that manages the property.
Employees
The Company's executive offices are located at 321 Railroad Avenue, Greenwich,
Connecticut. It occupies approximately 5,000 square feet in a two-story office
building owned by the Company. The Company has 26 employees. The Company
believes that its relationship with its employees is good.
Financial Information About Industry Segments
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.
6
Item 2. Properties.
Core Properties
The Company considers those properties that are directly managed by the Company,
concentrated in the retail sector and located close to the Company's
headquarters in Fairfield County, Connecticut, to be core properties. Of the
thirty properties in the Company's portfolio, twenty-six properties are
considered core properties consisting of twenty-one retail properties and five
office buildings (including the Company's executive headquarters). At October
31, 2003, these properties contained in the aggregate 2.7 million square feet of
gross leaseable area ("GLA"). The Company's core properties collectively had 449
tenants providing a wide range of products and services. Tenants include
regional supermarkets, national and regional discount department stores, other
local retailers and office tenants. At October 31, 2003, the core properties
were 97% leased. The Company believes the core properties are adequately covered
by insurance.
The Company's single largest real estate investment is its 90% interest in the
Ridgeway Shopping Center ("Ridgeway"). Ridgeway is located in Stamford,
Connecticut and was developed in the 1950's and redeveloped in the mid 1990's.
The property contains 360,000 square feet of leasable space. It is the dominant
grocery anchored center and the largest non-mall shopping center located in the
City of Stamford, Fairfield County, Connecticut. For the year ended October 31,
2003, Ridgeway revenues represented approximately 16.4% of the Company's total
revenues and approximately 23.1% of the Company's total assets at October 31,
2003. The loss of this center or a material decrease in revenues from the center
for any reason might have a material adverse effect on the Company.
As of October 31, 2003, Ridgeway was 89% leased. The property's largest tenants
are: The Stop & Shop Company (a division of Ahold), occupying 60,000 square feet
of space of the property, and Bed, Bath and Beyond, a retailer occupying 47,000
square feet of space. Other than The Stop & Shop Company (22%), Bed Bath &
Beyond (16%) and Marshall's Inc, a division of the TJX Companies (11%), no
tenant accounts for more than 10% of Ridgeway's annual base rents.
The following table sets out a schedule of the annual lease expirations for
retail leases at Ridgeway as of October 31, 2003 for each of the next ten years
and thereafter (assuming that no tenants exercise renewal or cancellation
options and that there are no tenant bankruptcies or other tenant defaults):
Year of Lease Number of Square Footage of Minimum Annual Percentage of
Expiration Expiring Leases Expiring Leases Base Rentals Base Rent (%)
- ---------- --------------- --------------- ------------- -------------
2004 -- -- $ -- --
2005 1 2,375 120,000 1.5%
2006 2 4,642 146,000 1.8%
2007 4 9,400 333,000 4.1%
2008 12 70,216 1,872,000 23.1%
2009 2 2,209 103,000 1.3%
2010 4 42,240 647,000 8.0%
2011 1 3,040 99,000 1.2%
2012 4 21,567 654,000 8.1%
2013 3 60,676 1,491,000 18.4%
Thereafter 2 105,810 2,629,000 32.5%
-- -------- ---------- --------
35 322,175 8,094,000 100.0%
== ======= ========== ========
7
The following table sets forth information concerning each core property at
October 31, 2003. Except as otherwise noted, all core properties are 100% owned
by the Company.
Gross
Year Year Year Leasable Number of
Location Renovated Completed Acquired Square Feet Acres Tenants Leased Principal Tenant
- -------- --------- --------- -------- ----------- ----- --------- ------ ----------------
Retail Properties:
Stamford, CT (1) 1997 1950 2002 360,000 13.6 35 89% Stop & Shop Supermarket
Springfield, MA 1996 1970 1970 323,000 26.0 30 97% Big Y
Meriden, CT 2001 1989 1993 313,000 29.2 26 100% Shop Rite Supermarket
Danbury, CT - 1989 1995 194,000 19.3 20 98% Christmas Tree Shops
White Plains, NY 1994 1958 2003 185,000 3.5 9 100% Toys "R" Us
Briarcliff Manor, NY (1) 2000 1978 1998 161,000 11.4 31 99% Stop & Shop Supermarket
Somers, NY - 2002 2003 135,000 26.0 25 95% Home Goods
Carmel, NY 1999 1983 1995 126,000 19.0 17 99% Shop Rite Supermarket
Wayne, NJ 1992 1959 1992 102,000 9.0 45 99% A&P Supermarket
Newington, NH 1994 1975 1979 102,000 14.3 8 97% Linens `N Things
Darien, CT 1992 1955 1998 95,000 9.5 20 100% Shaw's Supermarket
Somers, NY - 1991 1999 78,000 10.8 34 99% Gristede's Supermarket
Orange, CT - 1990 2003 78,000 10.0 8 96% Seaman's Furniture
Farmingdale, NY 1993 1981 1993 70,000 5.6 15 100% King Kullen Supermarket
Eastchester, NY (1) 2002 1978 1997 70,000 4.0 11 100% Food Emporium (Division
of A&P)
Ridgefield, CT 1999 1930 1998 51,000 2.1 51 90% Chico's
Westport, CT - 1986 2003 38,000 3.0 9 100% Pier One Imports
Briarcliff Manor, NY - 1975 2001 38,000 1.0 19 100% Dress Barn
Danbury, CT - 1988 2002 33,000 2.7 6 100% Boston Billiards
Briarcliff Manor, NY 2001 1981 1999 29,000 4.0 3 100% Party Plus Warehouse
Somers, NY - 1987 1992 19,000 4.9 12 100% Putnam County Savings Bank
Office Properties:
Greenwich, CT - 1983 1998 19,000 1.0 2 100% Greenwich Hospital
Greenwich, CT - 1977 2001 11,000 0.4 3 76% Glenville Medical Center
Greenwich, CT - 1983 1993 10,000 0.2 3 100% Urstadt Biddle Properties
Greenwich, CT 1983 1953 1994 10,000 0.2 3 86% Prescott Investors
Greenwich, CT - 1978 2000 9,000 1.0 4 100% Insurance Center of
----- ---
Greenwich
2,659,000 449
========= =====
(1) The Company has a general partnership interest in this property.
8
Non-Core Properties
In a prior year, the Board of Directors of the Company expanded and refined the
strategic objectives of the Company to concentrate the real estate portfolio
into one of primarily retail properties located in the Northeast and authorized
a plan to sell the Company's non-core properties in the normal course of
business over a period of several years given prevailing market conditions and
the characteristics of each property.
At October 31, 2003, the Company's non-core properties consisted of one office
building, containing 202,000 square feet of GLA, one retail property containing
126,000 square feet and two industrial facilities with a total of 447,000 square
feet of GLA. The non-core properties collectively had 6 tenants and were 92%
leased at October 31, 2003.
The following table sets forth information concerning each non-core property in
which the Company owned an equity interest at October 31, 2003. The non-core
properties are 100% owned by the Company.
Year Year Year Rentable Number of
Location Renovated Completed Acquired Square Feet Acres Tenants Leased Principal Tenant
-------- --------- --------- -------- ----------- ----- ------- ------ ----------------
Southfield, MI - 1973 1983 202,000 7.8 2 70% Arcadis
Tempe, AZ 2000 1970 1970 126,000 8.6 2 100% Mervyn's, Inc.
Dallas, TX 1989 1970 1970 255,000 14.5 1 100% DaimlerChrysler Corporation
St. Louis, MO 2000 1970 1970 192,000 16.0 1 100% DaimlerChrysler Corporation
------- -
775,000 6
======= =
Total Portfolio 3,434,000 455
========= ===
9
Lease Expirations - Total Portfolio
The following table sets forth a summary schedule of the annual lease
expirations for the core and non-core properties for the leases in place as of
October 31, 2003, assuming that none of the tenants exercise renewal or
cancellation options, if any, at or prior to the scheduled expirations.
Year of Lease Number of Leases Square Footage of Percentage of Total
Expiration Expiring Expiring Leases Occupied Square Feet
- ---------- -------- --------------- --------------------
2004 (1) 80 126,046 3.84%
2005 44 240,094 7.31%
2006 46 151,394 4.61%
2007 44 361,087 11.00%
2008 53 452,435 13.78%
2009 38 417,448 12.71%
2010 22 187,253 5.70%
2011 31 382,476 11.65%
2012 42 267,722 8.15%
2013 24 128,291 3.91%
2014 11 61,267 1.87%
Thereafter 20 508,303 15.47%
-- ------- ------
455 3,283,816 100.00%
=== ========= =======
(1) Represents lease expirations from November 1, 2003 to October 31, 2004
and month-to-month leases.
Item 3. Legal Proceedings.
In the ordinary course of business, the Company is involved in legal
proceedings. However, there are no material legal proceedings presently pending
against the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during the fourth quarter
of the fiscal year ended October 31, 2003.
10
PART II
Item 5. Market for the Registrant's Common Equity and Related Shareholder
Matters.
(a) Price Range of Common Shares
Shares of Common stock and Class A Common stock of the Company are traded on the
New York Stock Exchange under the symbols "UBP" and "UBA", respectively. The
following table sets forth the high and low closing sales prices for the
Company's Common Stock and Class A Common Stock during the fiscal years ended
October 31, 2003 and 2002 as reported on the New York Stock Exchange:
Fiscal Year Ended Fiscal Year Ended
Common shares: October 31, 2003 October 31, 2002
- -------------- ---------------- ------------------------
Low High Low High
--- ---- --- ----
First Quarter $11.00 $12.70 $ 8.60 $10.65
Second Quarter $11.95 $13.03 $10.25 $12.28
Third Quarter $12.70 $13.80 $ 9.95 $12.80
Fourth Quarter $12.60 $13.40 $10.77 $11.60
Fiscal Year Ended Fiscal Year Ended
Class A Common shares: October 31, 2003 October 31, 2002
- ---------------------- ---------------- ------------------------------
Low High
--- ----
First Quarter $10.85 $11.72 $ 9.35 $10.28
Second Quarter $11.00 $12.54 $ 9.88 $12.00
Third Quarter $12.15 $13.80 $10.60 $12.00
Fourth Quarter $13.10 $14.30 $10.80 $11.97
(b) Approximate Number of Equity Security Holders
At January 9, 2004 (latest date available), there were 1,381 shareholders of
record of the Company's Common stock and 1,393 shareholders of record of the
Class A Common stock.
(c) Dividends Declared on Common stock and Class A Common stock and Tax Status
The following table sets forth the dividends declared per Common share and Class
A Common share and tax status for Federal income tax purposes of the dividends
paid during the fiscal years ended October 31, 2003 and 2002:
Dividends Paid Per: Common Share Class A Common Share
------------ --------------------
Gross Ordinary Gross Ordinary
Dividend Payment Dividend Paid Income Dividend Paid Income
Date Per Share Distribution Per Share Distribution
- ---------------- ------------- ------------ ------------- ------------
January 17, 2003 $0.19 $0.19 $0.21 $0.21
April 18, 2003 $0.19 $0.19 $0.21 $0.21
July 18, 2003 $0.19 $0.19 $0.21 $0.21
October 17, 2003 $0.19 $0.19 $0.21 $0.21
------ ------ ------ -----
$0.76 $0.76 $0.84 $0.84
====== ====== ====== =====
11
Dividends Paid Per: Common Share Class A Common Share
------------ --------------------
Gross Ordinary Gross Ordinary
Dividend Payment Dividend Paid Income Capital Gain Dividend Paid Income Capital Gain
Date Per Share Distribution Distribution Per Share Distribution Distribution
- ---------------- ------------- ------------ ------------ ------------- ------------ -------------
January 18, 2002 $0.185 $0.135 $0.05 $0.205 $0.15 $0.055
April 19, 2002 $0.185 $0.135 $0.05 $0.205 $0.15 $0.055
July 21, 2002 $0.185 $0.135 $0.05 $0.205 $0.15 $0.055
October 18, 2002 $0.185 $0.135 $0.05 $0.205 $0.15 $0.055
------- ------- ------ ------- ------ ------
$0.740 $0.540 $0.20 $0.820 $0.60 $0.220
======== ======= ====== ======= ====== ======
The Company has paid uninterrupted quarterly dividends since it commenced
operations as a real estate investment trust in 1969. During the fiscal year
ended October 31, 2003, the Company made distributions to stockholders
aggregating $.76 per Common share and $.84 per Class A Common share. On December
10, 2003, the Company's Board of Directors approved the payment of a quarterly
dividend payable January 16, 2004 to stockholders of record on January 5, 2004.
The dividends were declared in the amounts of $.195 per Common share and $.215
per Class A Common share.
In fiscal 1998, the Board of Directors declared and paid a special stock
dividend on the Company's Common stock consisting of one share of a new issue of
Class A Common Stock, par value $.01 per share, for each share of the Company's
Common Stock. The Class A Common Stock entitles the holder to 1/20 of one vote
per share. Each share of Common Stock and Class A Common Stock has identical
rights with respect to dividends except that each share of Class A Common Stock
receives not less than 110% of the regular quarterly dividends paid on each
share of Common Stock.
Although the Company intends to continue to declare quarterly dividends on its
Common shares and Class A Common shares, no assurances can be made as to the
amounts of any future dividends. The declaration of any future dividends by the
Company is within the discretion of the Board of Directors and will be dependent
upon, among other things, the earnings, financial condition and capital
requirements of the Company, as well as any other factors deemed relevant by the
Board of Directors. Two principal factors in determining the amounts of
dividends are (i) the requirement of the Internal Revenue Code that a real
estate investment trust distribute to shareholders at least 90% of its real
estate investment trust taxable income, and (ii) the amount of the Company's
funds from operations, as defined.
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. Shares are acquired pursuant to
the Plan at a price equal to the higher of 95% of the market price of such
shares on the dividend payment date or 100% of the average of the daily high and
low sales prices for the five trading days ending on the day of purchase without
payment of any brokerage commission or service charge.
(d) Recent Sales of Unregistered Securities
On May 28, 203, the Company entered into a Stock Purchase Agreement with Ferris,
Baker Watts Incorporated and Stifel, Nicolaus & Company Incorporated (the
"Initial Purchasers") pursuant to which the Initial Purchasers purchased 400,000
shares of the Company's 8.5% Series C Senior Cumulative Preferred Stock (the
"Shares") in a private placement pursuant to Section 4(2) of the Securities Act
of 1933, as amended (the "Securities Act"). The Initial Purchasers sold the
Shares to qualified institutional buyers pursuant to Rule 144A of the Securities
Act at an aggregate offering price of $40,000,000. The Initial Purchasers'
discount was $3.00 per share or $1,200,000 in the aggregate. In connection with
the transaction, the Company entered into a Registration Rights Agreement with
the Initial Purchasers, on behalf of the buyers, pursuant to which the Company
(i) agreed to use reasonable efforts to file and cause to become effective with
the SEC a registration statement covering re-sales of the Shares; and (ii) upon
the SEC declaring effective such registration statement, agreed to use
reasonable efforts to cause the listing of the Shares on the NYSE.
On September 9, 2003, the Company filed a registration statement with the SEC to
register the Shares pursuant to Section 12 of the Securities Exchange Act of
1934 which registration statement was declared effective on September 23, 2003.
The Shares were listed on the NYSE, effective September 23, 2003.
12
Item 6. Selected Financial Data.
(In thousands, except per share data)
Year Ended October 31, 2003 2002 2001 2000 1999
---- ---- ---- ---- ----
Balance Sheet Data:
Total Assets $392,718 $353,633 $218,352 $180,792 $183,774
======== ======== ======== ======== ========
Mortgage Notes Payable $104,588 $106,429 $47,115 $51,903 $51,263
======== ======== ======= ======= =======
Preferred Stock $52,747 $14,341 $33,462 $33,462 $33,462
======= ======= ======= ======= =======
Operating Data:
Total Revenues $ 60,361 $44,340 $36,093 $31,009 $29,430
======== ======= ======= ======= =======
Total Operating Expenses $ 39,626 $29,438 $26,154 $23,281 $21,596
======== ======= ======= ======= =======
Net Income Applicable to Common and Class A
Common Stockholders $ 17,576 $16,080 $10,540 $ 5,442 $ 6,043
======== ======= ======= ======= =======
Other Data :
Net Cash Provided by Operating Activities $ 31,176 $18,532 $21,308 $14,262 $14,423
======== ======= ======= ======= =======
Net Cash (Used in) Investing Activities $(69,818) $(64,960) $(11,394) $ (3,713) $(10,556)
========= ========= ========= ========= =========
Net Cash Provided by (Used in)
Financing Activities $ 14,749 $59,023 $22,040 $ (11,436) $ (5,009)
======== ======= ======= ========== =========
Per Share Data:
Net Income-Basic
Class A Common Stock $.74 $.89 $1.01 $.55 $.62
Common Stock $.67 $.80 $.91 $.50 $.55
Net Income - Diluted:
Class A Common Stock $.73 $.87 $.97 $.55 $.61
Common Stock $.66 $.78 $.88 $.49 $.54
Cash Dividends on:
Class A Common Stock $.84 $.82 $.80 $.78 $.76
Common Stock $.76 $.74 $.72 $.70 $.68
---- ---- ---- ---- ----
Total $1.60 $1.56 $1.52 $1.48 $1.44
===== ===== ===== ===== =====
Funds from Operations (Note 1) $ 27,964 $24,144 $14,611 $11,914 $11,878
======== ======= ======= ======= =======
Note 1: The Company has adopted the definition of Funds from Operations (FFO)
suggested by the National Association of Real Estate Investment Trusts (NAREIT)
and defines FFO as net income (computed in accordance with generally accepted
accounting principles), excluding gains (or losses) from sales of properties and
debt restructuring, plus depreciation, amortization and after adjustments for
unconsolidated joint ventures. For a reconciliation of net income and FFO, see
Management's Discussion and Analysis on page 14. FFO does not represent net cash
from operating activities in accordance with generally accepted accounting
principles and should not be considered an alternative to net income as an
indicator of the Company's operating performance or for cash flows as a measure
of liquidity or dividend paying capacity. The Company considers FFO an
appropriate supplemental measure of operating performance because it primarily
excludes the assumption that the value of real estate assets diminishes
predictably over time, and because industry analysts recognize it as a
performance measure. Comparison of the Company's presentation of FFO, using the
NAREIT definition, to similarly titled measures for other REITs may not
necessarily be meaningful due to possible differences in the application of the
NAREIT definition used by such REITs. FFO for 2002 has been adjusted to conform
with the revised guidance provided by NAREIT. For a further discussion of FFO,
see Management's Discussion and Analysis on page 14.
13
Item 7. 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 centers 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 containing 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 continued growth through strategic re-leasing, renovations
and expansion of its existing properties and selective acquisition of income
producing properties, primarily neighborhood and community shopping centers in
the northeastern part of the United States.
Forward Looking Statements
This report includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. All statements, other than statements of historical facts, included
in this report that address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future, including such
matters as future capital expenditures, dividends and acquisitions (including
the amount and nature thereof), expansion and other development trends of the
real estate industry, business strategies, expansion and growth of the Company's
operations and other such matters are forward-looking statements. These
statements are based on certain assumptions and analyses made by the Company in
light of its experience and its perception of historical trends, current
conditions, expected future developments and other factors it believes are
appropriate. Such statements are subject to a number of assumptions, risks and
uncertainties, general economic and business conditions, the business
opportunities that may be presented to and pursued by the Company, changes in
laws or regulations and other factors, many of which are beyond the control of
the Company. Any such statements are not guarantees of future performance and
actual results or developments may differ materially from those anticipated in
the forward-looking statements.
Critical Accounting Policies
Critical accounting policies are those that are both important to the
presentation of the Company's financial condition 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 management believes are
critical to the preparation of the consolidated 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 underlying leases is included in tenant receivables on the accompanying
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
determined 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.
14
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 negotiations, among other
things. Management's estimates of the required allowance is subject to revision
as these factors change and is sensitive to the effects of economic and market
conditions on tenants, particularly those at retail centers. 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 capitalized 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
Property Improvements 10-20 years
Furniture/Fixtures 3-10 years
Tenant Improvements Lease term
The Company is required to make subjective assessments as to the useful life of
its properties for purposes of determining the amount of depreciation. These
assessments 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 properties and mortgage notes receivable may be
impaired. A property value is considered impaired only if management'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, competition 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 proceeds 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,
capital financings and sales of real estate investments. Payments of expenses
related to real estate operations, debt service, management and professional
fees, and dividend requirements place demands on the Company's short-term
liquidity. The Company expects to meet its short-term liquidity requirements
primarily by generating net cash from the operations of its properties. The
Company believes that its net cash provided by operations will be sufficient to
fund its short-term liquidity requirements for fiscal 2004 and to meet its
dividend requirements necessary to maintain its REIT status. In fiscal 2003,
15
2002 and 2001, net cash provided by operations amounted to $31.2 million, $18.5
million and $21.3 million, respectively. 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 stockholders. 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 existing
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 uncertain economic times, in that
consumers still need to purchase basic staples and convenience items. However,
even in the geographic areas in which the Company owns properties, general
economic downturns may adversely impact the ability of the Company's tenants to
make lease payments and the Company's ability to re-lease space as leases
expire. In either of these cases, the Company's cash flow could be adversely
affected.
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 ability to incur additional debt is dependent
upon its existing leverage, the value of its unencumbered assets and borrowing
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 preferred 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 placement 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 primarily 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.
16
At October 31, 2003, the Company's contractual obligations for borrowings are as
follows:
Payments Due by Period Amount
Less than 1 year $ 1,985,000
1 to 3 years $11,066,000
4 to 5 years $64,486,000
After 5 years $27,051,000
Borrowings consist of $104,588,000 of fixed rate mortgage 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 maturity, through new mortgage loans on real estate.
The ability to do so, however, is dependent upon various factors, including the
income level of the properties, interest rates and credit 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 commercial 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 regularly incurs capital
expenditures in the ordinary course of business to maintain its properties. The
Company believes that such expenditures enhance the competitiveness of its
properties. In fiscal 2003, the Company incurred $2.8 million 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 operating cash flows or borrowings on its
credit facilities.
Acquisitions and Sales
The company seeks to acquire properties which are primarily 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 consisted 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 million, 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% interest 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.
17
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 properties in the normal course of business
over a period of several years. The non-core properties consist of two
distribution service facilities, one office building and one retail property
(all of which are located outside of the northeast region of the United States).
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 properties with a net
book value of approximately $11 million.
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 performance. FFO is calculated
as net income (computed in accordance with generally accepted accounting
principles (GAAP)), plus real estate related depreciation and amortization,
excluding gains (or losses) from sales of property and debt restructuring 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 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).
2003 2002 2001
---- ---- ----
Net Income Applicable to Common and Class A Common Stockholders $17,576 $16,080 $10,540
Plus: Real property depreciation 7,831 5,459 4,463
Amortization of tenant improvements and allowances 2,088 2,088 2,325
Amortization of deferred leasing cost 469 517 851
Less: Adjustments for unconsolidated joint venture - - (3,252)
Gains on sales of real estate investments - - (316)
------- ------- -------
Funds from Operations Applicable to Common and Class A Common Stockholders (1) $27,964 $24,144 $14,611
======= ======= =======
Net Cash Provided by (Used in):
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.
18
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.
Lease termination income of $80,000 represents a lease cancellation payment from
a tenant who terminated its lease early. This space was re-leased during the
year.
Interest income in fiscal 2003 decreased due to the utilization 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.
Expenses
Operating expenses, including depreciation and amortization 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 owed 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 approximately $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.
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 previously
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
addition of a $1.2 million note receivable.
19
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 principally 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 property acquisitions. The increase in interest
expense was partially offset by lower outstanding bank credit line borrowings
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
principally from the write-off in fiscal 2001 of unamortized leasing 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 compensation costs.
The Company repurchased 200,000 shares of its Series B Preferred Stock for
$16,050,000 in a negotiated 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.
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 environmental condition with respect to any of the Company's
properties, 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 conditions, 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
environmental conditions existing on properties or increasing the restrictions
on discharges or other conditions may result in significant unanticipated
expenditures or may otherwise adversely affect the operations of the Company's
tenants, which would adversely affect the Company's financial condition and
results of operations.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The Company is exposed to interest rate risk primarily 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.
As of October 31, 2003 and for the year then ended, the Company had no
outstanding borrowings under its bank line of credit arrangements. During the
year ended October 31, 2002, the average variable rate indebtedness during such
period had a combined weighted average interest rate of 3.38%. Had the weighted
average interest rate been 100 basis points higher, the Company's net income
would have been lower by approximately $12,000 in fiscal 2002.
20
Item 8. Financial Statements and Supplementary Data.
The consolidated financial statements required by this Item, together with the
report of the Company's independent public accountants thereon and the
supplementary financial information required by this Item are included under
Item 14 of this Annual Report.
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure.
There were no changes in, nor any disagreements with the Company's independent
accountants on accounting principles and practices or financial disclosure,
during the year ended October 31, 2003.
Item 9A. Controls and Procedures.
At the end of the period covered by this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e).
Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures are
effective. During the fourth quarter of 2003, there were no changes in the
Company's internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.
21
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Company will file its definitive Proxy Statement for its Annual
Meeting of Stockholders to be held on March 10, 2004 within the period required
under the applicable rules of the Securities and Exchange Commission. The
additional information required by this Item is included under the captions
"ELECTION OF DIRECTORS" and "COMPENSATION AND TRANSACTIONS WITH MANAGEMENT AND
OTHERS" of such Proxy Statement and is incorporated herein by reference.
Executive Officers of the Registrant.
The following sets forth certain information regarding the executive officers of
the Company:
Name Age Offices Held
Charles J. Urstadt 75 Chairman and Chief Executive Officer (since September 1989);
Mr. Urstadt has been the Chairman of the
Board of Directors since 1986, and a
Director since 1975. Mr. Urstadt also
serves as the Chairman of Urstadt Property
Company, Inc. and has served in such
capacity for more than five years.
Willing L. Biddle 42 President and Chief Operating Officer (since December 1996); Executive Vice
President (March 1996 to December 1996); Senior Vice President - Management
(June 1995 to March 1996); Vice President - Retail (April 1993 to June 1995);
Vice President - Asset Management (April 1993 to June 1994).
James R. Moore 55 Executive Vice President and Chief Financial Officer (since March 1996); Senior
Vice President and Chief Financial Officer (1989 to 1996); Treasurer ( since December
1987). Secretary (1987-1999) Vice President-Finance and Administration (1987 to
1989).
Raymond P. Argila 55 Senior Vice President and Chief Legal Officer (since June 1990); formerly Senior
Counsel, Cushman & Wakefield, Inc. (1987 to 1990).
The Directors elect officers of the Company annually.
The Company has adopted a code of ethics that applies to the chief executive
officer and senior financial officers. A copy of this code of ethics can be
found as Exhibit 14 to this Form 10-K. In the event of any amendment to, or
waiver from, the code of ethics, the Company will promptly disclose the
amendment or waiver as required by law or regulation of the SEC.
Item 11. Executive Compensation.
The Company will file its definitive Proxy Statement for its Annual
Meeting of Stockholders to be held on March 10, 2004 within the period required
under the applicable rules of the Securities and Exchange Commission. The
information required by this Item is included under the caption "ELECTION OF
DIRECTORS" and "COMPENSATION AND TRANSACTIONS WITH MANAGEMENT AND OTHERS" of
such Proxy Statement and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The Company will file its definitive Proxy Statement for its Annual
Meeting of Stockholders to be held on March 10, 2004 within the period required
under the applicable rules of the Securities and Exchange Commission . The
information required by this Item is included under the caption "ELECTION OF
DIRECTORS - Security Ownership of Certain Beneficial Owners and Management" and
"COMPENSATION AND TRANSACTIONS WITH MANAGEMENT AND OTHERS - Equity
Compensation Plan Information" of such Proxy Statement and is incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions.
The Company will file its definitive Proxy Statement for its Annual
Meeting of Stockholders to be held on March 10, 2004 within the period required
under the applicable rules of the Securities and Exchange Commission. The
information required by this Item is included under the caption "ELECTION OF
DIRECTORS" and "COMPENSATION AND TRANSACTIONS WITH MANAGEMENT AND OTHERS" of
such Proxy Statement and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services.
The Company will file its definitive Proxy Statement for its Annual
meeting of Stockholders to be held on March 10, 2004 within the period required
under the applicable rules of the Securities and Exchange Commission. The
information required by this Item is included under the caption "Fees Billed
by Independent Auditors" of such Proxy Statement and is incorporated herein
by reference.
22
PART IV
Item 15. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.
A. Financial Statements and Financial Statement Schedules
1. Financial Statements --
The consolidated financial statements listed in the accompanying index
to financial statements on Page 23 are filed as part of this Annual
Report.
2. Financial Statement Schedules --
The financial statement schedules required by this Item are filed with
this report and are listed in the accompanying index to financial
statements on Page 27. All other financial statement schedules are
inapplicable.
B. Reports on Form 8-K
During the Company's fourth quarter, the Registrant filed the following
Reports on Form 8-K with the Commission:
A Current Report on Form 8-K dated September 10, 2003. Such report
furnished under Item 12 a press release published by the Company on
September 10, 2003 announcing its earnings for the third quarter of
fiscal 2003.
C. Exhibits.
Listed below are all Exhibits filed as part of this report. Certain
Exhibits are incorporated by reference to documents previously filed by
the Company with the SEC pursuant to Rule 12b-32 under the Securities
Exchange Act of 1934, as amended.
Exhibit
(3) Articles of Incorporation and By-laws.
3.1 (a) Amended Articles of Incorporation of the Company,
(incorporated by reference to Exhibit C of Amendment No. 1 to
Registrant's Statement on Form S-4 (SEC File No. 333-19113)).
(b) Articles Supplementary of the Company (incorporated by
reference to Annex A of Exhibit 4.1 of the Registrant's
Current Report on Form 8-K dated August 3, 1998 (SEC File No.
001-12803)).
(c) Articles Supplementary of the Company (incorporated by
reference to Exhibit 4.1 of the Registrant's Current Report on
Form 8-K dated January 8, 1998 (SEC File No. 001-12803)).
(d) Articles Supplementary of the Company (incorporated by
reference to Exhibit A of Exhibit 4.1 of the Registrant's
Current Report on Form 8-K dated March 12, 1998 (SEC File No.
001-12803)).
(e) Articles Supplementary of the Company (incorporated by
reference to Exhibit 4.2 of the Registrant's Registration
Statement on Form S-3 (SEC File No. 333-107803)).
3.2 By-laws of the Company (incorporated by reference to
Exhibit D of Amendment No. 1 to Registrant's Registration
Statement on Form S-4 (SEC File No. 333-19113).
(4) Instruments Defining the Rights of Security Holders, Including
Indentures.
4.1 Common Stock: See Exhibits 3.1 (a)-(e) hereto.
4.2 Series B Preferred Shares: See Exhibits 3.1 (a)-(e), 10.13
- 10.15, 10.17 and 10.22 hereto.
4.3 Series C Preferred Shares: See Exhibits 3.1 (a)-(e) and 10.23
hereto.
23
4.4 Series A Preferred Share Purchase Rights: See Exhibits 3.1
(a)-(d), 10.3 and 10.16 hereto.
(10) Material Contracts.
10.1 Form of Indemnification Agreement entered into between the
Registrant and each of its Directors and for future use with
Directors and officers of the Company (incorporated herein by
reference to Exhibit 10.1 of the Registrant's Annual Report on
Form 10-K for the year ended October 31, 1989 (SEC File No.
001-12803)). (1)
10.2 Amended and Restated Change of Control Agreement between the
Registrant and James R. Moore dated November 15, 1990
(incorporated herein by reference to Exhibit 10.3 of the
Registrant's Annual Report on Form 10-K for the year ended
October 31, 1990 (SEC File No. 001-12803)). (1)
10.3 Amended and Restated Rights Agreement between the Company and
The Bank of New York, as Rights Agent, dated as of July 31,
1998 (incorporated herein by reference to Exhibit 10-1 of the
Registrant's Current Report on Form 8-K dated November 5, 1998
(SEC File No. 001-12803)).
10.4 Agreement dated December 19, 1991 between the Registrant and
Raymond P. Argila amending the Change of Control Agreement
dated as of June 12, 1990 between the Registrant and Raymond
P. Argila (incorporated herein by reference to Exhibit 10.6.1
of the Registrant's Annual Report on Form 10-K for the year
ended October 31, 1991 (SEC File No. 001-12803)). (1)
10.5 Change of Control Agreement dated as of December 20, 1990
between the Registrant and Charles J. Urstadt (incorporated
herein by reference to Exhibit 10.8 of the Registrant's
Annual Report on Form 10-K for the year ended October 31,
1990 (SEC File No. 001-12803)). (1)
10.6 Amended and Restated HRE Properties Stock Option Plan
(incorporated herein by reference to Exhibit 10.8 of the
Registrant's Annual Report on Form 10-K for the year ended
October 31, 1991 (SEC File No. 001-12803)). (1)
10.6.1 Amendments to HRE Properties Stock Option Plan dated June
9, 1993 (incorporated by reference to Exhibit 10.6.1 of
the Registrant's Annual Report on Form 10-K for the year
ended October 31, 1995 (SEC File No. 001-12803)). (1)
10.6.2 Form of Supplemental Agreement with Stock Option Plan
Participants (non-statutory options) (incorporated by
reference to Exhibit 10.6.2 of the Registrant's Annual
Report on Form 10-K for the year ended October 31, 1998 (SEC
File No. 001-12803)). (1)
10.6.3 Form of Supplemental Agreement with Stock Option Plan
Participants (statutory options) (incorporated by reference to
Exhibit 10.6.2 of the Registrant's Annual Report on Form 10-K
for the year ended October 31, 1998 (SEC File No.
001-12803)). (1)
10.7 Amended and Restated Dividend Reinvestment and Share
Purchase Plan (incorporated herein by reference to the
Registrant's Registration Statement on Form S-3 (See File No.
333-64381).
24
10.8 Amended and Restated Change of Control Agreement dated as
of November 6, 1996 between the Registrant and Willing L.
Biddle (incorporated by reference to Exhibit 10.7 of the
Registrant's Annual Report on Form 10-K for the year ended
October 31, 1996 (SEC File No. 001-12803)). (1)
10.10 Restricted Stock Plan (incorporated by reference to
Exhibit B of Amendment No. 1 to Registrant's Registration
Statement on Form S-4 (SEC File No. 333-19113)). (1)
10.10.1 Form of Supplemental Agreement with Restricted
Stockholders (incorporated by reference to Exhibit 10.6.2
of the Registrant's Annual Report on Form 10-K for the year
ended October 31, 1998 (SEC File No. 001-12803)). (1)
10.11 Excess Benefit and Deferred Compensation Plan (incorporated
by reference to Exhibit 10.10 of the Registrant's Annual
Report on Form 10-K for the year ended October 31, 1998
(SEC File No. 001-12803)). (1)
10.12 Purchase and Sale Agreement, dated September 9, 1998, by and
between Goodwives Center Limited Partnership, as seller, and
UB Darien, Inc., a wholly owned subsidiary of the Registrant,
as purchaser (incorporated by reference to Exhibit 10 of the
Registrant's Current Report on Form 8-K dated September 23,
1998 (SEC File No. 001-12803)).
10.13 Subscription Agreement, dated January 8, 1998, by and among
the Company and the Initial Purchasers (incorporated by
reference to Exhibit 4.2 of the Registrant's Current Report on
Form 8-K dated January 8, 1998 (SEC File No. 001-12803)).
10.14 Registration Rights Agreement, dated January 8, 1998, by and
among the Company and the Initial Purchasers (incorporated by
reference to Exhibit 4.3 of the Registrant's Current Report on
Form 8-K dated January 8, 1998 (SEC File No. 001-12803)).
10.15 Waiver and Amendment of Registration Rights Agreement, dated
as of April 16, 1999, by and among the Company and the Initial
Purchasers (incorporated by reference to Exhibit 10.15 of the
Registrant's Annual Report on Form 10-K for the year ended
October 31, 1999 (SEC File No. 001-12803)).
10.16 Amendment to Shareholder Rights Agreement dated as of
September 22, 1999 between the Company and the Rights Agent
(incorporated by reference to Exhibit 10.18 of the
Registrant's Annual Report on Form 10-K for the year ended
October 31, 1999 (SEC File No. 001-12803)).
10.17 Waiver and Amendment of Registration Rights Agreement dated as
of September 14, 2001 by and among the Company and the Initial
Purchasers (incorporated by reference to Exhibit 10.17 of the
Registrant's Annual Report on Form 10-K for the year ended
October 31, 2001 (SEC File No. 001-12803)).
10.18 Amended and Restated Restricted Stock Award Plan effective
December 9, 1999 (incorporated by reference to Exhibit 10.18
of the Registrant's Annual Report on Form 10-K for the year
ended October 31, 2000 (SEC File No. 001-12803)). (1)
10.19 Amended and Restated Stock Option Plan adopted June 28, 2000
(incorporated by reference to Exhibit 10.19 of the Registrant's
Annual Report on Form 10-K for the year ended October 31,
2000 (SEC File No. 001-12803)). (1)
25
10.20 Promissory Note and Stock Pledge Agreement dated July 3, 2002
by Willing L. Biddle in favor of the Registrant (incorporated
by reference to Exhibit 10.20 of the Registrant's Annual
Report on Form 10-K for the year ended October 31, 2002
(SEC File No. 001-12803)). (1)
10.21 Amended and Restated Restricted Stock Award Plan effective
December 12, 2001 as approved by the Registrant's
stockholders on March 13, 2002 (incorporated by reference
to Exhibit 10.21 of the Registrant's Annual Report on Form
10-K for the year ended October 31, 2002). (1)
10.22 Amendment to Registration Rights Agreement dated as of
December 31, 2001 by and among the Company and the Remaining
Initial Purchasers (incorporated by reference to Exhibit 10.22
of the Registrant's Annual Report on Form 10-K for the year
ended October 31, 2002).
10.23 Registration Rights Agreement dated as of May 29, 2003 by and
between the Company and Ferris, Baker Watts, Incorporated
(incorporated by reference to Exhibit 4.1 of the Registrant's
Registration Statement on Form S-3 (SEC File No. 333-107803)).
(14) Code of Ethics for Chief Executive Officer and Senior
Financial Officers
(21) Subsidiaries.
21.1 List of Company's subsidiaries
(23) Consents of Experts and Counsel.
23.1 The consent of Ernst & Young LLP to the incorporation by
reference of its report included herein in the Company's
Registration Statement is filed herewith as part of this
report
31.1 Certification pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934, as amended, signed and dated by
Charles J.Urstadt.
31.2 Certification pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934, as amended, signed and dated by James
R.Moore.
(32) Certification pursuant to 18 U.S.C. Section 1350, as adopted,
pursuant to section 906 of the Sarbanes-Oxley Act of 2002,
signed and dated by Charles J. Urstadt and James R. Moore.
(1) Management contract, compensatory plan or arrangement to be filed as an
exhibit to this Annual Report on Form 10-K pursuant to Item 15(c).
26
URSTADT BIDDLE PROPERTIES INC.
Item 15a. INDEX TO FINANCIAL STATEMENTS AND
- --------- ----------------------------------
FINANCIAL STATEMENT SCHEDULES
Page
Consolidated Balance Sheets at October 31, 2003 and 2002 28
Consolidated Statements of Income for each of the
three years in the period ended October 31, 2003 29
Consolidated Statements of Cash Flows for each of the
three years in the period ended October 31, 2003 30
Consolidated Statements of Stockholders' Equity
for each of the three years in the period ended October 31, 2003 31
Notes to Consolidated Financial Statements 32-42
Report of Independent Auditors 43
Schedule.
The following consolidated financial statement schedules of Urstadt Biddle
Properties Inc. are included in Item 15(d):
III Real Estate and Accumulated Depreciation - October 31, 2003 44
IV Mortgage Loans on Real Estate - October 31, 2003 46
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.
27
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
October 31,
--------------------------------
ASSETS 2003 2002
---- ----
Real Estate Investments:
Core properties-- at cost, net of accumulated depreciation $330,920 $252,711
Non-core properties - at cost, net of accumulated depreciation 11,215 11,944
Mortgage notes and other receivable 2,184 3,447
----- -----
344,319 268,102
Cash and cash equivalents 22,449 46,342
Restricted cash 516 514
Short-term investments 9,532 25,145
Tenant receivables, net allowances of $1,369 and $1,169 8,815 5,695
Prepaid expenses and other assets 3,858 4,541
Deferred charges, net of accumulated amortization 3,229 3,294
----- -----
Total Assets $392,718 $353,633
======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $104,588 $106,429
Accounts payable and accrued expenses 2,743 1,021
Deferred officers' compensation 401 287
Other liabilities 5,243 4,218
----- -----
Total Liabilities 112,975 111,955
------- -------
Minority Interests 7,320 7,320
----- -----
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 14,341 14,341
8.50% Series C Senior Cumulative Preferred Stock, (liquidation preference of $100
per share); 400,000 and -0- shares issued and outstanding 38,406 -
------ ------
Total Preferred Stock 52,747 14,341
------ ------
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 68 66
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 185 185
Additional paid in capital 258,296 254,266
Cumulative distributions in excess of net income (33,611) (30,487)
Unamortized restricted stock compensation and officers notes receivable (5,262) (4,013)
--------- -------
Total Stockholders' Equity 219,676 220,017
------- -------
Total Liabilities and Stockholders' Equity $392,718 $353,633
======= ========
The accompanying notes to consolidated financial statements are an
integral part of these statements.
28
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Year Ended October 31,
--------------------------------------------
2003 2002 2001
---- ---- ----
Revenues
Operating leases $59,247 $42,206 $34,209
Lease termination income 80 765 1,137
Interest and other 1,034 1,369 747
----- ------ ------
60,361 44,340 36,093
------ ------ ------
Operating Expenses
Property expenses 17,805 12,781 11,502
Interest 8,094 5,584 4,456
Depreciation 9,919 7,547 6,697
Amortization 469 517 871
General and administrative expenses 3,154 2,836 2,484
Directors' fees and expenses 185 173 144
------ ------ ------
39,626 29,438 26,154
------ ------ ------
Operating Income 20,735 14,902 9,939
Equity in Earnings of Unconsolidated Joint Venture - - 3,864
Minority Interests in Results of Consolidated Joint Ventures (365) (395) (432)
Gains on Sales of Real Estate Investments - - 316
------ ------- ------
Net Income 20,370 14,507 13,687
Preferred Stock Dividends (2,794) (1,498) (3,147)
Excess of Carrying Value Over Cost to Repurchase Preferred Shares
- 3,071 -
------ ------ ------
Net Income Applicable to Common and Class A Common Stockholders $17,576 $16,080 $10,540
======= ======= =======
Basic Earnings per Share:
Common $.67 $.80 $.91
==== ==== ====
Class A Common $.74 $.89 $1.01
==== ==== =====
Diluted Earnings Per Share:
Common $.66 $.78 $.88
==== ==== ====
Class A Common $.73 $.87 $.97
==== ==== ====
Dividends per share:
Common $.76 $.74 $.72
==== ==== ====
Class A Common $.84 $.82 $.80
==== ==== ====
The accompanying notes to consolidated financial statements are an
integral part of these statements.
29
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended October 31,
-------------------------------------------
2003 2002 2001
---- ---- ----
Operating Activities:
Net income $20,370 $14,507 $13,687
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 10,388 8,064 7,568
Amortization of restricted stock 1,105 942 769
Recovery of investment in properties owned
subject to financing leases - - 191
Equity in income of unconsolidated joint venture - - (3,864)
Minority interests 365 395 432
Gains on sales of real estate investments - - (316)
Increase in restricted cash (2) (181) (174)
(Increase) decrease in tenant receivables (3,120) (1,871) 98
Increase (decrease) in accounts payable and accrued expenses 243 (1,649) 1,448
Increase (decrease) in other assets and other liabilities, net 1,827 (1,675) 1,469
------ ------ ------
Net Cash Provided by Operating Activities 31,176 18,532 21,308
------ ------ ------
Investing Activities:
Sales (purchases) of short term investments 15,613