SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDMENT NO. 1
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 9, 1998
URSTADT BIDDLE PROPERTIES INC.
- --------------------------------------------------------------------------------
(Exact name registrant as specified in charter)
Maryland 1-12803 04-2458402
(State or jurisdiction (Commission file (IRS Employer
or incorporation) number) 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
<PAGE>
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
On September 9, 1998, a wholly-owned subsidiary of Urstadt Biddle Properties
Inc. (formerly HRE Properties, Inc.) (the "Registrant") purchased the Goodwives
Shopping Center (the "Property") located in Darien, Connecticut from Goodwives
Center Limited Partnership (the "Sellers"). The purchase price was approximately
$21,400,000 including closing costs, fees and other expenses of approximately
$100,000.
The Property was acquired pursuant to a Purchase and Sale Agreement dated
September 9, 1998 by and between the Sellers and Registrant. There is no
relationship between any Director or Officer of the Registrant and Seller.
Registrant funded the purchase with cash of $1,900,000 and borrowings under its
existing bank credit lines of $19,500,000. Bank credit line borrowings bear
interest at rates tied to the prime rate or LIBOR (currently 8.08% per annum).
Material Factors Considered by the Registrant:
Market and Competition:
Prior to acquiring the Property, the Registrant considered general regional and
local economic conditions and the Property's competitive posture within that
market.
The Property acquired is a community shopping center located in Fairfield
County, Connecticut. The Property contains 95,628 square feet of gross leasable
area and is situated on 9.5 acres of land. The shopping center contains 21
tenants whose principal businesses are the sale of various retail products and
merchandise.
The Property was developed in 1955 and fully renovated in 1990. The Property is
located in a predominantly residential area in an affluent community in the town
of Darien, Fairfield County, Connecticut. Darien is a white-collar, bedroom
community with a population of 59,000 and average household income of
approximately $110,000 (more than double the national averages).
A significant factor of the Property is its location. Due to limited development
opportunity within the Darien town limits, the Property is only one of two
full-service neighborhood shopping centers servicing the community. The average
occupancy rate among competing centers is approximately 98%.
Tenants:
The Property's largest tenant is The Grand Union Company, a regional retail food
store, occupying 36,033 square feet of the Property (37.7% of the Property's
gross leasable area (GLA)). No other tenant rents more than 10% of the
Property's GLA.
All of the leases with tenants are for terms longer than one year and generally
provide for additional rental amounts based on each tenant's share of the cost
of maintaining common
2
<PAGE>
areas and certain operating expenses including insurance of the property. As of
September 30, 1998, the average effective annual base rental rate per square
foot is $22.50.
The following is a schedule of lease expirations of the Property by year:
<TABLE>
<CAPTION>
Number of Minimum
Tenants whose Total Annual Base
Year leases Expire Square Footage Rentals Percentage
---- ------------- -------------- ------- ----------
<S> <C> <C> <C> <C> <C>
1999 1 1,103 $33,090 1.5%
2000 3 7,696 $231,024 11.1%
2001 4 14,197 $284,750 13.7%
2002 4 10,617 $263,237 12.7%
2003 2 4,961 $140,465 6.7%
2004 - - - -
2005 1 1,103 $33,090 1.5%
2006 2 10,028 $311,696 15.0%
2007 - - - -
Thereafter 4 42,923 $786,875 37.8%
- ------ -------- -----
21 92,628 $2,084,227 100%
====== ========== ====
</TABLE>
Building and Capital Improvements:
The federal tax basis of the Property (including land) is $21,400,000. The
property will be depreciated over its estimated useful life (40 years) on a
straight line basis. The Registrant anticipates spending an additional $350,000
in the next twelve months for property improvements.
Property Taxes:
The annual realty taxes of the Property are $170,000 for the 1998 tax year.
Property Management:
The Registrant manages the Property directly.
After reasonable inquiry, the Registrant is not aware of any material factors
relating to the Property, other than those set forth above, that would cause the
reported financial information not to be necessarily indicative of future
operating results.
3
<PAGE>
ITEM 7 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements
(b) Pro Forma Financial Information
(c) Exhibits
Second Purchase and Sale Agreement between Registrant and Goodwives Center
Limited Partnership is hereby incorporated by reference from the
Registrant's Form 8-K dated September 9, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
URSTADT BIDDLE PROPERTIES INC.
------------------------------
(Registrant)
Date: November 11, 1998 By: /s/ Charles J. Urstadt
------------------------------
Charles J. Urstadt
Chairman and Chief Executive Officer
4
<PAGE>
GOODWIVES SHOPPING CENTER
URSTADT BIDDLE PROPERTIES INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item 7 Financial Statements, Pro Forma Financial Information Page
<S> <C>
(a) Financial Statements
Independent Auditors' Report 6
Statement of Revenue and Certain Expenses of Goodwives
Shopping Center for the Year Ended December 31, 1997 7
Notes to Statement of Revenues and Certain Expenses of Goodwives
Shopping Center For the Year Ended December 31, 1997 8
Statement of Revenues and Certain Expenses of Goodwives Shopping
Center for the Eight Months Ended August 31, 1998 (Unaudited) 10
Note to Statement of Revenues and Certain Expenses of Goodwives
Shopping Center for the Eight Months Ended August 31, 1998 (Unaudited) 11
(b) Pro Forma Financial Information
Pro Forma Consolidated Balance Sheet as of July 31, 1998 (Unaudited) 13
Pro Forma Consolidated Statement of Income
For the Nine Months Ended July 31, 1998 (Unaudited) 14
Notes and Management's Assumptions to Pro Forma Consolidated
Financial Statement For the Nine Months Ended July 31, 1998 (Unaudited) 15
Pro Forma Consolidated Statement of Income
For the Year Ended October 31, 1997 (Unaudited) 17
Notes and Management's Assumptions to Pro Forma Consolidated
Statement of Income For the Year Ended October 31, 1997 (Unaudited) 18
Pro Forma Estimated Taxable Income and Funds From Operations
For the Year Ended October 31, 1997 (Unaudited) 19
Notes and Management's Assumptions to Pro Forma Estimated
Taxable Income and Funds From Operations
For the Year Ended October 31, 1997 (Unaudited) 20
</TABLE>
5
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders of Urstadt Biddle Properties Inc.
We have audited the accompanying statement of revenues and certain expenses of
Goodwives Shopping Center ("Goodwives") for the year ended December 31, 1997.
This financial statement is the responsibility of management. Our responsibility
is to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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.
As described in Note 1, the accompanying statement of revenues and certain
expenses was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission for inclusion in the
current report on Form 8-K/A of Urstadt Biddle Properties Inc. and is not
intended to be a complete presentation of Goodwives' revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenues and certain expenses of Goodwives for the
year ended December 31, 1997, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
New York, New York
November 5, 1998
6
<PAGE>
GOODWIVES SHOPPING CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
REVENUES:
<S> <C>
Rental income $2,134,670
CERTAIN EXPENSES:
Real estate taxes $154,264
Repairs and maintenance 96,588
Property management and administration 182,430
Insurance 37,644
Utilities 58,717
------
TOTAL CERTAIN EXPENSES 529,643
-------
REVENUES IN EXCESS OF CERTAIN EXPENSES $1,605,027
==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
7
<PAGE>
GOODWIVES SHOPPING CENTER
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES:
The accompanying statement of revenues and certain expenses (the "financial
statement") reflects the operations of Goodwives Shopping Center (the
"Property"), a 95,628 square foot retail property located in Darien,
Connecticut. The Property was acquired by Urstadt Biddle Properties Inc. (the
"Company") from an unaffiliated party on September 9, 1998.
The accompanying financial statement was prepared in accordance with certain
rules and regulations of the Securities and Exchange Commission for inclusion in
the Company's current report on Form 8-K/A. The accompanying financial statement
excludes certain expenses such as interest, depreciation and amortization, and
other costs not directly related to the future operations of the Property.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted pursuant to those rules and regulations, although the Company
believes that the disclosures made are adequate to make the information
presented not misleading.
Revenue Recognition
Base rental income is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. LEASES
The Property is leased to tenants under operating leases that expire at various
dates through 2009. As of December 31, 1997, the occupancy rate of the Portfolio
was 94%. For the year ended December 31, 1997, The Grand Union Company is a
tenant that accounts for approximately 23% of rental income.
8
<PAGE>
2. LEASES (Continued)
Future minimum rents to be received from tenants under noncancellable operating
leases in effect as of December 31, 1997 were as follows:
1998 $1,762,148
1999 1,750,736
2000 1,586,402
2001 1,348,417
2002 1,123,403
Thereafter 4,782,743
The above amounts do not include tenant reimbursements, which are primarily
based upon the tenants' proportionate share reimbursement of real estate taxes
and operating expenses in accordance with their respective leases. The Property
is subject to the usual business risks associated with the collection of
scheduled rents.
3. RELATED PARTY TRANSACTIONS
The Property paid management fees to an affiliate of the former owners of the
Property. Such fees amounted to approximately $24,600 in 1997.
4. ENVIRONMENTAL COMMITMENT AND CONTINGENCIES
As is common in certain real estate properties similar to the Property, certain
improvements are required to alleviate the release of a hazardous contaminant
located at the Property. The Company is in the process of executing a
remediation plan which includes annual maintenance over the next three years.
The estimated cost of the remediation is approximately $190,000. In addition, to
mitigate any further risk associated with this environmental issue, the Company
has obtained insurance that it believes adequately covers against remediation
cost overruns and third party claims.
9
<PAGE>
GOODWIVES SHOPPING CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE EIGHT MONTHS ENDED AUGUST 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
REVENUES:
<S> <C>
Rental income $1,483,897
CERTAIN EXPENSES:
Real estate taxes $111,733
Repairs and maintenance 129,159
Property management and administration 94,545
Insurance 28,145
Utilities 27,920
------
TOTAL CERTAIN EXPENSES 391,502
-------
REVENUES IN EXCESS OF CERTAIN EXPENSES $1,092,395
==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
10
<PAGE>
GOODWIVES SHOPPING CENTER
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE EIGHT MONTHS ENDED AUGUST 31, 1998
(UNAUDITED)
1. BASIS OF PRESENTATION:
The accompanying statement of revenues and certain expenses (the "financial
statement") reflects the operations of Goodwives Shopping Center (the
"Property"), a 95,628 square foot retail property located in Darien, Connecticut
for the eight months ended August 31, 1998. The Property was acquired by Urstadt
Biddle Properties Inc. (the "Company") from an unaffiliated party on September
9, 1998.
The accompanying financial statement was prepared in accordance with certain
rules and regulations of the Securities and Exchange Commission and excludes
certain expenses such as interest, depreciation and amortization, and other
costs not directly related to the future operations of the Property. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted pursuant to those rules and regulations, although the Company believes
that the disclosures made are adequate to make the information presented not
misleading. The financial statement is not necessarily indicative of the results
of operations for future periods.
11
<PAGE>
ITEM 7 (B) PRO FORMA FINANCIAL INFORMATION
The following Pro Forma Consolidated Balance Sheet as of July 31, 1998 and the
Pro Forma Consolidated Statements of Income for the nine months ended July 31,
1998 and for the year ended October 31, 1997 have been prepared to reflect the
acquisition transaction and the adjustments described in the accompanying notes.
The pro forma financial information is based on the historical financial
statements of Urstadt Biddle Properties Inc. (formerly known as HRE Properties,
Inc.) and should be read in conjunction with the notes and management's
assumptions thereto. The Pro Forma Consolidated Balance Sheet were prepared as
if the acquisition transaction occurred on July 31, 1998. The pro forma
consolidated statements of income for the nine months ended July 31, 1998 and
for the year ended October 31, 1997 were prepared assuming the transaction
occurred on the first day of each period presented. The pro forma financial
information is unaudited and not necessarily indicative of the actual financial
position of the Company as of July 31, 1998 or what the actual results would
have been assuming the acquisition transaction had been consummated at the
beginning of the periods presented, nor does it purport to represent the future
financial position and results of operations for future periods.
12
<PAGE>
URSTADT BIDDLE PROPERTIES INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(in thousands, except per share data)
<TABLE>
<CAPTION>
July 31, 1998
------------------------------------------------
Company Pro Forma Company
Historical Adjustments Pro Forma
---------- ----------- ---------
Real Estate Investments:
<S> <C> <C> <C>
Properties owned - at cost, net of accumulated
depreciation $102,267 $21,400 (a) $123,667
Properties available for sale - at cost, net of
accumulated depreciation and recoveries 20,854 20,854
Investment in unconsolidated joint venture 9,100 9,100
Mortgage notes receivable 2,632 2,632
----- -----
134,853 156,253
Cash and cash equivalents 5,877 (1,900) (b) 3,977
Interest and rent receivable 2,154 2,154
Deferred charges, net of accumulated amortization 2,191 2,191
Other assets 1,202 1,202
----- -----
$146,277 $165,777
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Short-term bank loans $ - $19,500 (a) $19,500
Mortgage notes payable 19,440 19,440
Accounts payable and accrued expenses 1,133 1,133
Dividends payable 1,881 1,881
Deferred directors' fees and officers' compensation 615 615
Other liabilities 1,613 1,613
----- -----
24,682 44,182
------ ------
Minority Interest 2,125 2,125
Preferred Stock 33,462 33,462
Stockholders' Equity:
Common Stock 52 52
Class A Common Stock 52 52
Additional paid in capital 118,895 118,895
Distributions in excess of accumulated net income (31,246) (31,246)
Unamortized restricted stock compensation and
notes from officers (1,745) (1,745)
------- -------
86,008 86,008
------ ------
$146,277 $165,777
======== ========
</TABLE>
The accompanying notes and management's assumptions are an integral part of this
pro forma consolidated balance sheet.
13
<PAGE>
URSTADT BIDDLE PROPERTIES INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Nine Months Ended July 31, 1998
----------------------------------------------
Company Pro Forma Company
Historical Adjustments Pro Forma
<S> <C> <C> <C>
Revenues:
Operating Leases $17,055 $1,660 (a) $18,715
Financing Leases 275 275
Interest and other 1,084 (68) (d) 1,016
Equity income of unconsolidated joint venture 94 94
-- --
18,508 20,100
------ ------
Operating Expenses:
Property expenses 5,632 411 (a) 6,043
Interest 1,798 1,185 (b) 2,983
Depreciation and amortization 3,440 318 (c) 3,758
General and administrative expenses 1,504 1,504
Directors' fees and expenses 159 159
--- ---
12,533 14,447
------ ------
Operating Income 5,975 5,653
Minority Interest in Results of Consolidated Joint Venture 118 118
--- ---
5,857 5,535
Net Income
Preferred stock dividends 1,775 1,775
----- -----
Net Income Applicable to Common Stockholders $4,082 $3,760
====== ======
BASIC EARNINGS PER SHARE:
Common Shares $0.40 $0.37
===== =====
Class A Common Shares $0.40 $0.37
===== =====
WEIGHTED AVERAGE NUMBER OF :
Common Shares Outstanding 5,124 5,124
===== =====
Class A Common Shares Outstanding 5,124 5,124
===== =====
DILUTED EARNINGS PER SHARE:
Common Shares $0.39 $0.36
===== =====
Class A Common Shares $0.39 $0.36
===== =====
WEIGHTED AVERAGE NUMBER OF:
Common Shares and Common Equivalent Shares Outstanding 5,280 5,280
===== =====
Class A Common Shares and Common Equivalent Shares Outstanding 5,280 5,280
===== =====
</TABLE>
The accompanying notes and management's assumptions are an integral part of this
pro forma consolidaed statement.
14
<PAGE>
URSTADT BIDDLE PROPERTIES INC.
NOTES AND MANAGEMENT ASSUMPTIONS
TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JULY 31, 1998
(UNAUDITED)
1. BASIS OF PRESENTATION:
The accompanying unaudited pro forma consolidated balance sheet is presented as
if the Company's acquisition occurred on July 31, 1998.
The accompanying unaudited pro forma consolidated consolidated statement of
income is presented as if the Company's acquisition of Goodwives Shopping Center
had been made as of November 1, 1997.
The pro forma financial statements should be read in conjunction with the
historical financial statements and notes thereto of the Company as of July 31,
1998 and for the nine months then ended. In management's opinion, all material
adjustments necessary to reflect the effects of the acquisition of the Property
by the Company have been made.
The unaudited pro forma consolidated financial statements are not necessarily
indicative of the actual financial position of the Company at July 31, 1998 or
what the actual results of operations of the Company would have been assuming
the acquisition of the Property had been completed as of November 1, 1997, nor
are they necessarily indicative of the results of operations for future periods.
2. ADJUSTMENTS TO PRO FORMA CONSOLIDATED BALANCE SHEET:
(a) To reflect the pro forma acquisition of the Property for $21,400,000
and bank borrowings of $19,500,000 as if the Property was purchased on July
31, 1998.
(b) To reflect pro forma cash and cash equivalents as if the cash
investment of $1,900,000 in the Property had been made as of July 31, 1998.
15
<PAGE>
3. ADJUSTMENTS TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME:
(a) To reflect rental income and operating expenses as reported by the
Property as if the Company owned the Property for the entire period
November 1, 1997 to July 31, 1998.
(b) To reflect an increase in interest expense related to $19,500,000 of
bank borrowings at 8.08% for the acquisition of the Property as if the
borrowings has been outstanding for the entire period.
(c) To reflect an increase in depreciation expense for the Property over a
40-year estimated useful life for the Property's building and improvements
using a cost basis of $17,000,000 as if the Property had been owned for the
entire period.
(d) To reflect pro forma adjustments to interest income as if the cash
investment of $1,900,000 had been made prior to this period, using an
interest rate of 4.75% which approximated the Company's actual yield for
the nine month period ended July 31, 1998.
16
<PAGE>
URSTADT BIDDLE PROPERTIES INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Year Ended October 31, 1997
------------------------------------------------
Company Pro Forma Company
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Revenues:
Operating Leases $23,336 $2,135 (a) $25,471
Financing Leases 451 451
Interest and other 932 (95) (d) 837
Equity income of unconsolidated joint venture 108 108
--- ---
24,827 26,867
------ ------
Operating Expenses:
Property expenses 7,024 530 (a) 7,554
Interest 3,350 1,575 (b) 4,925
Depreciation and amortization 4,132 425 (c) 4,557
General and administrative expenses 1,550 1,550
Directors' fees and expenses 182 182
--- ---
16,238 18,768
------ ------
Net Income $8,589 $8,099
====== ======
BASIC EARNINGS PER SHARE:
Common Shares $0.84 $0.79
===== =====
Class A Common Shares $0.84 $0.79
===== =====
WEIGHTED AVERAGE NUMBER OF :
Common Shares Outstanding 5,115 5,115
===== =====
Class A Common Shares Outstanding 5,115 5,115
===== =====
DILUTED EARNINGS PER SHARE:
Common Shares $0.83 $0.78
===== =====
Class A Common Shares $0.83 $0.78
===== =====
WEIGHTED AVERAGE NUMBER OF:
Common Shares and Common Equivalent Shares Outstanding 5,192 5,192
===== =====
Class A Common Shares and Common Equivalent Shares Outstanding 5,192 5,192
===== =====
</TABLE>
The accompanying notes and management's assumptions are an integral part of this
pro forma consolidated statement.
17
<PAGE>
URSTADT BIDDLE PROPERTIES INC.
NOTES AND MANAGEMENT ASSUMPTIONS
TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED OCTOBER 31, 1997
(UNAUDITED)
1. BASIS OF PRESENTATION:
On September 9, 1998, Urstadt Biddle Properties Inc. (formerly HRE Properties,
Inc.) (the "Company") acquired Goodwives Shopping Center (the "Property"), a
retail property located in Darien, Connecticut, for a total cost of $21,400,000,
including closing costs, fees and other expenses of approximately $100,000. The
Company acquired the Property with available funds of $1,900,000 and short-term
bank borrowings of $19,500,000.
The accompanying unaudited pro forma consolidated statement of income is
presented as if the acquisition transaction had been made as of November 1,
1996.
The pro forma consolidated statement of income should be read in conjunction
with the historical financial statements and notes thereto of the Company as of
October 31, 1997. In management's opinion, all material adjustments necessary to
reflect the effects of the acquisition of the Property by the Company have been
made.
The unaudited pro forma consolidated statement of income is are not necessarily
indicative of what the actual results of operations of the Company would have
been assuming the acquisition of the Property had been completed as of November
1, 1996, nor are they necessarily indicative of the results of operations for
future periods.
2. ADJUSTMENTS TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME:
(a) To reflect rental income and operating expenses as reported by the
Property for the period November 1, 1996 to October 31, 1997.
(b) To reflect interest expense related to the $19,500,000 bank borrowings
at 8.08% for the acquisition of the Property as if the borrowings has been
outstanding for the entire period.
(c) To reflect depreciation expense for the Property over a 40-year
estimated useful life for the Property's building and improvements using a
cost basis of $17,000,000 as if the Property was purchased on November 1,
1996 (the remaining purchase price of $4,400,000 was allocated to land).
(d) To reflect a reduction in interest income as if the cash investment of
$1,900,000 had been made at the beginning of the period, using an interest
rate of 5.0% which approximates the Company's actual yield for the fiscal
year ended October 31, 1997.
18
<PAGE>
PRO FORMA ESTIMATE OF TAXABLE INCOME
AND FUNDS FROM OPERATIONS
OF THE REGISTRANT
YEAR ENDED OCTOBER 31, 1997
(UNAUDITED)
The following presents unaudited pro forma estimates of taxable income and funds
from operations of Urstadt Biddle Properties Inc. (the "Registrant") for the
year ended October 31, 1997 assuming that the purchase of Goodwives had been
consummated as of November 1, 1996. Net income is not taxable to the Registant
because it qualifies as a real estate investment trust under the Internal
Revenue Code. Accordingly, the Registrant will not be subject to federal income
tax so long as it continues to qualify as a real estate investment trust and
distributes substantially all of its federal taxable income. The Registrant
defines Funds From Operations as net income excluding gains (or losses) from
debt restructuring and sales of properties, plus depreciation, amortization, the
elimination of significant non-recurring charges and credits and after
adjustments for unconsolidated joint ventures. These estimates do not purport to
represent actual or expected results of operations of the Registrant for any
period in the future. The estimates were prepared on the basis described in the
accompanying notes, which should be read in conjunction herewith.
(In thousands)
PRO FORMA NET INCOME $8,099
Adjustments to Pro Forma Net Income to derive
Pro Forma Estimated Taxable Income 340
------
PRO FORMA ESTIMATED TAXABLE INCOME $8,439
======
(in thousands)
PRO FORMA NET INCOME $8,099
Adjustments to Pro Forma Net Income to derive
Pro Forma Funds from Operations 2,025
------
PRO FORMA FUNDS FROM OPERATIONS 10,124
======
The accompanying notes are an integral part of this statement.
19
<PAGE>
NOTES AND MANAGEMENT'S ASSUMPTIONS
TO PRO FORMA ESTIMATED TAXABLE INCOME
AND FUNDS FROM OPERATIONS
OF THE REGISTRANT
FOR THE YEAR ENDED OCTOBER 31, 1997
(UNAUDITED)
1. The pro forma net income is derived from the Pro Forma Consolidated
Statement of Income of the Registrant for the year ended October 31, 1997
contained elsewhere in this filing. The notes and assumptions to the
unaudited pro forma consolidated statement of income should be read in
conjunction with this statement.
2. The adjustments to pro forma net income to derive pro forma taxable income
consist of the following book/tax differences:
Operating and finance lease revenues $620
Adjustments to joint ventures (425)
Book/Tax Depreciation 252
Restricted Stock Compensation 112
Other (219)
-----
$340
=====
3. The pro forma adjustments to net income to derive at funds from operations
consist of the following:
Depreciation and amortization $5,224
Elimination of non recurring charges and credits (3,815)
Adjustments for unconsolidated joint venture 616
------
$2,025
======
20
