`SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

For the quarterly period ending              September 30, 2002
                               -------------------------------------------------

                                       or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

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

    Commission File Number:                       1-10104
                           -----------------------------------------------------

                              United Capital Corp.
--------------------------------------------------------------------------------
               (Exact name of Company as specified in its charter)

          Delaware                                    04-2294493
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

   9 Park Place, Great Neck, New York                     11021
--------------------------------------------------------------------------------
(Address of principal executive offices)               (Zip Code)


                                  516-466-6464
--------------------------------------------------------------------------------
                (Company's telephone number, including area code)


                                      N/A
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Company (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  Company  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                                       [X] Yes    [  ] No

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

            Common stock, $.10 par value 4,542,005 shares outstanding
                             as of November 1, 2002.

                                  Page 1 of 27





                      UNITED CAPITAL CORP. AND SUBSIDIARIES

                                      INDEX


                          PART I FINANCIAL INFORMATION
                                                                            PAGE
                                                                            ----



ITEM 1.    FINANCIAL STATEMENTS

           Consolidated Balance Sheets as
           of September 30, 2002 (Unaudited) and December 31, 2001            3

           Consolidated Statements of Income for the
           Three Months Ended September 30, 2002 and 2001 (Unaudited)         4

           Consolidated Statements of Income for the
           Nine Months Ended September 30, 2002 and 2001 (Unaudited)          5

           Consolidated Statements of Cash Flows for the
           Nine Months Ended September 30, 2002 and 2001 (Unaudited)      6 - 7

           Notes to Consolidated Financial Statements                     8 - 14

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS                 15 - 23

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURE OF
           MARKET RISK                                                        23

ITEM 4.    CONTROLS AND PROCEDURES                                            23



                            PART II OTHER INFORMATION



ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K                                   23


SIGNATURES                                                                    23

CERTIFICATIONS                                                             24-27

Page 2 of 27





                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
           AS OF SEPTEMBER 30, 2002 (UNAUDITED) AND DECEMBER 31, 2001
                                 (In Thousands)

                                                                       2002       2001
                                                                    ---------  ---------
Assets

Current assets:
   Cash and cash equivalents                                        $ 61,663   $ 68,170
   Marketable securities                                              35,051     28,633
   Notes and accounts receivable, net                                  6,335      6,385
   Inventories                                                         3,607      4,953
   Prepaid expenses and other current assets                             694        871
                                                                    --------   --------

      Total current assets                                           107,350    109,012
                                                                    --------   --------

Property, plant and equipment, net                                     3,757      4,525
Real property held for rental, net                                    49,789     52,815
Real property held for sale, net                                        --           55
Noncurrent notes receivable                                            3,195        250
Other assets                                                          11,982     11,308
Deferred income taxes                                                   --        1,026
                                                                    --------   --------

      Total assets                                                  $176,073   $178,991
                                                                    ========   ========

Liabilities and Stockholders' Equity

Current liabilities:
   Current maturities of long-term debt                             $  4,735   $  5,047
   Borrowings under credit facilities                                   --          525
   Accounts payable and accrued liabilities                            9,921     17,937
   Income taxes payable                                                6,425      7,585
   Deferred income taxes                                               1,782      1,481
                                                                    --------   --------

      Total current liabilities                                       22,863     32,575
                                                                    --------   --------

Long-term debt                                                        13,266     16,738
Other long-term liabilities                                           33,217     33,337
Deferred income taxes                                                  1,263       --
                                                                    --------   --------

      Total liabilities                                               70,609     82,650
                                                                    --------   --------

Commitments and contingencies

Stockholders' equity:
   Common stock $.10 par value, authorized 7,500 shares;
      issued and outstanding 4,561 and 4,641 shares, respectively        456        464
   Retained earnings                                                 101,042     90,000
   Accumulated other comprehensive income, net of tax                  3,966      5,877
                                                                    --------   --------

      Total stockholders' equity                                     105,464     96,341
                                                                    --------   --------

      Total liabilities and stockholders' equity                    $176,073   $178,991
                                                                    ========   ========


          The accompanying Notes to Consolidated Financial Statements
                    are an integral part of these statements.

                                  Page 3 of 27





                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                   (UNAUDITED)
                      (In Thousands, Except Per Share Data)


                                                                2002         2001
                                                             ---------   ----------

Revenues:
   Net sales                                                 $  8,439    $  8,119
   Rental revenues from real estate operations                  6,220       6,567
                                                             --------    --------

                     Total revenues                            14,659      14,686
                                                             --------    --------

Costs and expenses:
   Cost of sales                                                6,010       6,112
   Real estate operations:
      Mortgage interest expense                                   308         439
      Depreciation expense                                        817       1,052
      Other operating expenses                                  1,891       1,782
   General and administrative expenses                          1,351       1,344
   Selling expenses                                               866         860
                                                             --------    --------

                     Total costs and expenses                  11,243      11,589
                                                             --------    --------

   Operating income                                             3,416       3,097
                                                             --------    --------

Other income (expense):
   Interest and dividend income                                   545         457
   Interest expense                                              (112)       (108)
   Other income and expense, net                                3,875       5,025
                                                             --------    --------

                     Total other income                         4,308       5,374
                                                             --------    --------

   Income from continuing operations before income taxes        7,724       8,471

   Provision for income taxes                                   1,992       3,387
                                                             --------    --------

   Income from continuing operations                            5,732       5,084
                                                             --------    --------

Discontinued operations:
   (Loss) income from discontinued operations, net of tax
      (benefit) provision of ($15) and $73, respectively          (24)        109
   Gain on disposal of discontinued operations, net of tax
      provision of $118                                           176        --
                                                             --------    --------

   Income from discontinued operations                            152         109
                                                             --------    --------

   Net income                                                $  5,884    $  5,193
                                                             ========    ========

Basic earnings per share:
   Income from continuing operations                         $   1.26    $   1.09
   Income from discontinued operations                            .03         .02
                                                             --------    --------
   Net income per share                                      $   1.29    $   1.11
                                                             ========    ========

Diluted earnings per share:
   Income from continuing operations                         $   1.17    $   1.03
   Income from discontinued operations                            .03         .02
                                                             --------    --------
   Net income per share assuming dilution                    $   1.20    $   1.05
                                                             ========    ========

                The accompanying Notes to Consolidated Financial
              Statements are an integral part of these statements.

                                  Page 4 of 27





                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                   (UNAUDITED)
                      (In Thousands, Except Per Share Data)


                                                                2002        2001
                                                             ---------   ---------

Revenues:
   Net sales                                                 $ 25,700    $ 26,096
   Rental revenues from real estate operations                 18,765      20,757
                                                             --------    --------

                     Total revenues                            44,465      46,853
                                                             --------    --------

Costs and expenses:
   Cost of sales                                               18,771      19,441
   Real estate operations:
      Mortgage interest expense                                 1,074       1,387
      Depreciation expense                                      2,483       3,132
      Other operating expenses                                  5,494       5,873
   General and administrative expenses                          4,152       4,223
   Selling expenses                                             2,706       2,832
                                                             --------    --------

                     Total costs and expenses                  34,680      36,888
                                                             --------    --------

   Operating income                                             9,785       9,965
                                                             --------    --------

Other income (expense):
   Interest and dividend income                                 1,426       1,407
   Interest expense                                              (354)       (342)
   Other income and expense, net                                8,264       8,911
                                                             --------    --------

                     Total other income                         9,336       9,976
                                                             --------    --------

   Income from continuing operations before income taxes       19,121      19,941

   Provision for income taxes                                   6,367       7,976
                                                             --------    --------

   Income from continuing operations                           12,754      11,965
                                                             --------    --------

Discontinued operations:
   Income from discontinued operations, net of tax
      provision of $161 and $234, respectively                    241         351
   Gain on disposal of discontinued operations, net of tax
      provision of $118                                           176        --
                                                             --------    --------

   Income from discontinued operations                            417         351
                                                             --------    --------

   Net income                                                $ 13,171    $ 12,316
                                                             ========    ========

Basic earnings per share:
   Income from continuing operations                         $   2.78    $   2.55
   Income from discontinued operations                            .09         .08
                                                             --------    --------
   Net income per share                                      $   2.87    $   2.63
                                                             ========    ========

Diluted earnings per share:
   Income from continuing operations                         $   2.58    $   2.43
   Income from discontinued operations                            .08         .07
                                                             --------    --------
   Net income per share assuming dilution                    $   2.66    $   2.50
                                                             ========    ========

                The accompanying Notes to Consolidated Financial
              Statements are an integral part of these statements.

                                  Page 5 of 27





                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                   (UNAUDITED)
                                 (In Thousands)


                                                                              2002         2001
                                                                           --------    ---------

Cash flows from operating activities:
   Net income                                                              $ 13,171    $ 12,316
   Adjustments to reconcile net income
      to net cash provided by operating activities:
         Depreciation and amortization                                        3,462       4,195
         Net loss (gain) on sale of available-for-sale securities             1,005      (3,470)
         Net gain on sale of trading securities                                --          (461)
         Net gain on sale of real estate assets                              (5,792)     (3,936)
         Gain from equity investments                                          (506)       (651)
         Gain on disposal of discontinued operations, net of tax               (176)       --
         Net gain on sale of derivative instruments                          (1,439)     (1,304)
         Purchase of trading securities                                        --           (54)
         Proceeds from sale of trading securities                              --         2,287
         Net unrealized (gain) loss on derivative instruments                (2,190)        335
         Changes in assets and liabilities  (A)                               4,078       1,235
                                                                           --------    --------

                     Net cash provided by operating activities               11,613      10,492
                                                                           --------    --------

Cash flows from investing activities:
   Purchase of available-for-sale securities                                (10,641)     (4,158)
   Proceeds from sale of available-for-sale securities                          268      19,202
   Proceeds from sale of real estate assets                                   6,410       4,207
   Proceeds from disposal of discontinued operations                            300        --
   Proceeds from sale of derivative instruments                               3,912       2,351
   Purchase of derivative instruments                                        (8,843)       --
   Acquisition of property, plant and equipment                                (153)     (1,191)
   Purchase of note receivable                                               (2,955)       --
   Principal payments on note receivable                                         12        --
   Acquisition of/additions to real estate assets                              (193)     (1,400)
   Distributions from equity investments, net                                   209         586
                                                                           --------    --------

                     Net cash (used in) provided by investing activities    (11,674)     19,597
                                                                           --------    --------

Cash flows from financing activities:
   Principal payments on mortgage commitments, notes
      and loans                                                              (3,784)     (4,244)
   Net repayments under credit facilities                                      (525)       (525)
   Purchase and retirement of common shares                                  (2,555)     (1,019)
   Proceeds from exercise of stock options                                      418          72
                                                                           --------    --------

                     Net cash used in financing activities                   (6,446)     (5,716)
                                                                           --------    --------

Net (decrease) increase in cash and cash equivalents                         (6,507)     24,373

Cash and cash equivalents, beginning of period                               68,170      17,134
                                                                           --------    --------

Cash and cash equivalents, end of period                                   $ 61,663    $ 41,507
                                                                           ========    ========

                                  Page 6 of 27





                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (CONTINUED)
                                   (UNAUDITED)



         (A)   Changes  in assets  and  liabilities  for the nine  months  ended
               September 30, 2002 and 2001 are as follows:


                                                                              2002       2001
                                                                            --------   --------

            Notes and accounts receivable, net                              $    91    ($1,867)
            Inventories                                                       1,346       (561)
            Prepaid expenses and other current assets                           177          8
            Deferred income taxes                                             3,629     (2,133)
            Noncurrent notes receivable                                           2        (13)
            Other assets                                                       (435)        61
            Accounts payable and accrued liabilities                            544       (479)
            Income taxes payable                                             (1,160)      (473)
            Other long-term liabilities                                        (120)     6,660
            Discontinued operations - noncash charges and working capital
               changes                                                            4         32
                                                                            -------    -------

                     Total                                                  $ 4,078    $ 1,235
                                                                            =======    =======


                The accompanying Notes to Consolidated Financial
              Statements are an integral part of these statements.

                                  Page 7 of 27





                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      (In Thousands, Except Per Share Data)
                                   (UNAUDITED)

BASIS OF PRESENTATION
---------------------

            The accompanying  unaudited  Consolidated  Financial Statements have
been  prepared  in  accordance  with  the  instructions  to Form  10-Q  used for
quarterly  reports under Section 13 or 15(d) of the  Securities  Exchange Act of
1934, as amended,  and therefore,  do not include all  information and footnotes
necessary for a fair presentation of financial  position,  results of operations
and cash flows in conformity with accounting  principles  generally  accepted in
the United States of America.

            The consolidated  financial  information included in this report has
been  prepared  in  conformity  with the  accounting  principles  and methods of
applying those accounting  principles,  reflected in the Consolidated  Financial
Statements  included in the Annual Report on Form 10-K filed with the Securities
and Exchange Commission for the year ended December 31, 2001.

            All  adjustments  necessary for a fair  statement of the results for
the interim periods presented have been recorded.

            The  results  of  operations  for  the  periods  presented  are  not
necessarily indicative of the results to be expected for the full year.

RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------

            In October 2001,  the  Financial  Accounting  Standards  Board ("the
FASB") issued Statement of Financial  Accounting  Standards No. 144, "Accounting
for the Impairment or Disposal of Long-Lived  Assets" ("SFAS No. 144"). SFAS No.
144 provides accounting guidance for financial  accounting and reporting for the
impairment  or  disposal  of  long-lived  assets and  supercedes  SFAS No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed of" ("SFAS No. 121").  SFAS No. 144 requires that long-lived  assets
that are to be  disposed  of by sale be  measured  at the lower of book value or
fair value less cost to sell. SFAS No. 144 retains the  requirements of SFAS No.
121 regarding  impairment loss  recognition and measurement.  In addition,  this
statement retains the basic provisions of APB Opinion 30 for the presentation of
discontinued  operations in the income statement but broadens that  presentation
to include a component of an entity (rather than a segment of a business).  SFAS
No. 144 was adopted by the Company on January 1, 2002.  The adoption of SFAS No.
144 did not have a  material  impact  on the  Company's  financial  position  or
results of operations.

            In April 2002,  the FASB issued  SFAS No. 145,  "Rescission  of FASB
Statements No. 4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical
Corrections"  ("SFAS No. 145").  This statement  eliminates  the  requirement to
report gains and losses from extinguishment of debt as extraordinary unless they
meet  the  criteria  of  APB  Opinion  No.  30.  SFAS  No.  145  also   requires
sale-leaseback  accounting  for certain lease  modifications  that have economic
effects  that are  similar  to  sale-leaseback  transactions.  SFAS  No.  145 is
effective  for fiscal  years  beginning  after May 15,  2002.  The impact of the
adoption  of SFAS No.  145 is not  expected  to have a  material  impact  on the
Company's financial position or results of operations.

                                  Page 8 of 27





            In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs
Associated  with Exit or Disposal  Activities"  ("SFAS No.  146").  SFAS No. 146
nullifies  Emerging  Issues  Task  Force  Issue  No.  94-3 and  requires  that a
liability for a cost associated with an exit or disposal  activity be recognized
when the liability is incurred.  This statement also establishes that fair value
is the  objective  for initial  measurement  of the  liability.  SFAS No. 146 is
effective for exit or disposal  activities that are initiated after December 31,
2002.  The  impact of the  adoption  of SFAS No. 146 is not  expected  to have a
material impact on the Company's financial position or results of operations.

MARKETABLE SECURITIES
---------------------

            The aggregate market value of marketable  securities was $35,051 and
$28,633 at September  30, 2002 and December  31, 2001,  respectively,  while the
aggregate  cost of such  securities  at such  dates  was  $28,950  and  $19,582,
respectively.  Included  in  marketable  securities  at  September  30, 2002 was
$20,527 of common  stock in a  publicly-traded  company for which the  Company's
Chairman of the Board is the Chairman and President and another  Director of the
Company is a director. Marketable securities consist of the following:

                                   September 30, 2002   December 31, 2001
                                   ------------------   -----------------

Available-for-sale securities:
Corporate equities                      $34,506             $28,198
Corporate bonds                             545                 435
                                        -------             -------
                                        $35,051             $28,633
                                        =======             =======

INVENTORIES
-----------

            The components of inventory are as follows:

                                  September 30, 2002    December 31, 2001
                                  ------------------    -----------------

                 Raw materials          $1,860              $2,388
                 Work in process           570                 782
                 Finished goods          1,177               1,783
                                        ------              ------
                                        $3,607              $4,953
                                        ======              ======

DISCONTINUED OPERATIONS
-----------------------

            During the three months ended  September 30, 2002,  the Company sold
one of its properties  from its real estate  investment  and management  segment
which had a net book value of $51.  The  property  was sold for a sales price of
approximately  $3,400,  including  a mortgage  note  receivable  of  $3,100.  In
accordance with accounting principles generally accepted in the United States of
America,  the gain from the sale of this property is being  recognized under the
installment  method,  and,  accordingly,  the carrying value of noncurrent notes
receivable  has been reduced by the  deferred  gain.  The deferred  gain will be
recognized as income as payments are received  under the mortgage  note. For the
three months ended September 30, 2002,  gains of $176 on a net of tax basis have
been  recognized  from this sale. In  accordance  with SFAS No. 144, the gain on
sale and operating results through the date of sale are included in discontinued
operations, on a net of tax basis, in the Consolidated Statements of Income. The
results of  operations  of this  property  for the three and nine  months  ended
September 30, 2002 and 2001 have been  reclassified to discontinued  operations.
The net  assets  of  this  property  at  December  31,  2001  of $55  have  been
reclassified to real property held for sale, net.

                                  Page 9 of 27





            Summarized financial  information for the discontinued  operation is
as follows:

                                                Three Months            Nine Months
                                            Ended September 30,     Ended September 30,
                                            -------------------     -------------------

                                             2002        2001         2002       2001
                                             ----        ----         ----       ----
Results of operations:

Rental revenues from real estate operations   $-         $223         $478        $668
                                              ====       ====         ====        ====

(Loss) income from operations before income
     taxes                                    ($39)      $182         $402        $585
                                              ====       ====         ====        ====


                                        September 30, 2002    December 31, 2001
                                        ------------------    -----------------
Assets of discontinued operations:

Real property held for sale, net              $-                   $55
                                              =====                ===

DERIVATIVE FINANCIAL INSTRUMENTS
--------------------------------

            As of January 1, 2001,  the Company  adopted  Statement of Financial
Accounting Standards No. 133 "Accounting for Derivative  Instruments and Hedging
Activities" ("SFAS No. 133"), as amended.  As a result of adopting SFAS No. 133,
the  Company  recognizes  all  derivative  financial  instruments,  such  as its
interest rate swap agreement,  short stock sales and put and/or call options, in
the Consolidated Financial Statements at fair value regardless of the purpose or
intent for  holding  the  instrument.  Changes  in the fair value of  derivative
financial  instruments  are  either  recognized  periodically  in  income  or in
stockholders'  equity as a component of other comprehensive  income depending on
whether the derivative financial instrument qualifies for hedge accounting,  and
if so,  whether  it  qualifies  as a fair value or cash flow  hedge.  Generally,
changes in the fair value of derivatives  accounted for as fair value hedges are
recorded in income  along with the portions of the changes in the fair values of
the hedged items that relate to the hedged  risks.  Changes in the fair value of
derivatives  accounted for as cash flow hedges, to the extent they are effective
as hedges,  are recorded in other  comprehensive  income net of deferred  taxes.
Changes in fair values of  derivatives  not qualifying as hedges are reported in
income.

            In strategies  designed to hedge overall market risks and manage its
interest rate exposure, the Company may sell common stock short,  participate in
put and/or call options and enter into interest rate swap agreements.

            As of September 30, 2002, the Company's interest rate swap agreement
(the "Swap") expired together with the satisfaction of the underlying term loan.
The Swap  modified the  interest  characteristics  of a particular  term loan by
effectively  converting  its floating  rate to a fixed rate,  thus  reducing the
impact of interest rate changes on future expense.  The Swap was designated with
the  principal  balance and term of the term loan and  qualified as an effective
hedge under SFAS No. 133.  Since the Swap was  classified  as a cash flow hedge,
the fair value of ($11) at  December  31, 2001 was  recorded  as a component  of
accounts  payable  and  accrued  liabilities  in the  accompanying  Consolidated
Balance Sheets and accumulated other comprehensive income was reduced by exactly
the same amount, net of tax, as the derivative,  with no impact on earnings. The
amount paid or received on the Swap was accrued and  recognized as an adjustment
of interest expense related to the debt.

                                 Page 10 of 27





            Management  maintains a diversified and  well-balanced  portfolio of
cash  equivalents  and  investments in a variety of  securities,  primarily U.S.
investments  in both common and preferred  equity issues and  participates  on a
limited basis in transactions  involving derivative financial  instruments.  The
Company  is  highly  selective  when  participating  in  such  transactions.  At
September 30, 2002 and December 31, 2001, the fair value of such derivatives was
($1,595)  and  ($10,155),  respectively,  which is recorded  as a  component  of
accounts  payable  and  accrued  liabilities  in the  accompanying  Consolidated
Balance  Sheets.  These  instruments  do not  qualify for hedge  accounting  and
therefore changes in the derivatives fair value are recognized in earnings.  For
the nine months ended September 30, 2002 and 2001, the Company recognized $2,190
and ($335) in net unrealized gains (losses), respectively, and $1,439 and $1,304
in net realized  gains,  respectively,  from derivative  instruments,  which are
included  in other  income and  expense,  net in the  accompanying  Consolidated
Statements of Income.

CONTINGENCIES
-------------

            The  Company  is a lessor of eight (8)  department  stores  that are
currently leased to K-Mart  Corporation  ("K-Mart"),  which filed for protection
under Chapter 11 of the U.S.  Bankruptcy  Code on January 22, 2002. In addition,
the Company holds a 50% interest in a joint  venture that owns two  distribution
centers that are also leased to K-Mart. Although it is currently uncertain which
leases,  if any,  K-Mart  will  reject or affirm as part of its  reorganization,
management  believes  that its leases and the leases of the joint  venture  with
K-Mart are at or below the fair market rent for  comparable  properties and as a
result,  the  rejection of one or more leases is not expected to have a material
adverse effect on the consolidated financial position of the Company.

            The Company has undertaken the completion of  environmental  studies
and/or  remedial  action at Metex' two New Jersey  facilities.  The  Company has
previously recorded liabilities in the Consolidated Financial Statements for the
estimated potential remediation costs at these facilities.

            The process of remediation  has begun at one facility  pursuant to a
plan filed with the New Jersey Department of Environmental Protection ("NJDEP").
Environmental  experts  engaged  by the  Company  estimate  that  under the most
probable  remediation  scenario the  remediation  of this site is anticipated to
require initial  expenditures of $860,  including the cost of capital equipment,
and $86 in annual operating and maintenance costs over a 15 year period.

            Environmental   studies  at  the  second   facility   indicate  that
remediation  may  be  necessary.  Based  upon  the  facts  presently  available,
environmental  experts  have  advised the Company  that under the most  probable
remediation  scenario,  the estimated cost to remediate this site is anticipated
to require $2,300 in initial costs,  including capital  equipment  expenditures,
and $258 in annual operating and maintenance costs over a 10 year period.  These
estimated costs of future expenses for environmental remediation obligations are
not discounted to their present value.  The Company may revise such estimates in
the future due to the uncertainty regarding the nature, timing and extent of any
remediation  efforts  that may be required at this site,  should an  appropriate
regulatory agency deem such efforts to be necessary.

            The foregoing estimates may also be revised by the Company as new or
additional information in these matters becomes available or should the NJDEP or
other regulatory agencies require additional or alternative  remediation efforts
in the future.  It is not currently  possible to estimate the range or amount of
any such liability.

                                 Page 11 of 27





            Although the Company  believed  that it was entitled to full defense
and indemnification with respect to environmental  investigation and remediation
costs under its insurance policies, the Company's insurers denied such coverage.
Accordingly,  the Company filed an action  against  certain  insurance  carriers
seeking defense and  indemnification  with respect to all prior and future costs
incurred in the investigation  and remediation of these sites.  Settlements have
been reached with all carriers in this matter.

            In the opinion of management,  amounts  recovered from its insurance
carriers  under the terms of its settlement  agreements  should be sufficient to
address  these  matters  and  amounts  needed in  excess,  if any,  will be paid
gradually over a period of years.  Accordingly,  they should not have a material
adverse  effect  upon the  business,  liquidity  or  financial  position  of the
Company. However, adverse decisions or events,  particularly as to the merits of
the  Company's  factual and legal  basis,  could cause the Company to change its
estimate of liability with respect to such matters in the future.

            The  Company  is  subject to  various  other  litigation,  legal and
regulatory  matters  that arise in the ordinary  course of business  activities.
When  management  believes it is probable that a liability has been incurred and
such  amounts are  reasonably  estimable  the Company  provides for amounts that
include  judgments and penalties  that may be assessed.  These  liabilities  are
usually included in accounts payable and accrued  liabilities or other long-term
liabilities in the accompanying Consolidated Financial Statements,  depending on
the anticipated  payment date. None of these matters are expected to result in a
material  adverse  effect on the Company's  consolidated  financial  position or
results of operations.

STOCKHOLDERS' EQUITY
--------------------

            Previous  purchases of the  Company's  common stock have reduced the
Company's  additional  paid-in-capital  to zero  and  accordingly  current  year
purchases in excess of par value have reduced retained earnings. During the nine
months ended September 30, 2002, the Company purchased and retired 104 shares of
the Company's common stock for $2,555.

EARNINGS PER SHARE
------------------

      The  following  table  sets  forth the  computation  of basic and  diluted
earnings per share:

                                                        Three Months          Nine Months
                                                     Ended September 30,  Ended September 30,
                                                     -------------------  -------------------
                                                      2002       2001     2002      2001
                                                      ----       ----     ----      ----

Numerator:
   Income from continuing operations                 $5,732   $ 5,084   $12,754   $11,965
                                                     ======   =======   =======   =======
Denominator:
   Denominator for basic earnings per
           share--weighted-average shares             4,570     4,678     4,593     4,691
Effect of dilutive securities:
   Employee stock options                               320       289       351       229
                                                    -------   -------   -------   -------
   Denominator for diluted earnings per
           share--adjusted weighted-average shares
           and assumed conversions                    4,890     4,967     4,944     4,920
                                                     ======   =======   =======   =======

Basic earnings per share - continuing operations     $ 1.26   $  1.09   $  2.78   $  2.55
                                                     ======   =======   =======   =======

Diluted earnings per share - continuing operations   $ 1.17   $  1.03   $  2.58   $  2.43
                                                     ======   =======   =======   =======

                                 Page 12 of 27





            Employee  stock  options  to  purchase  951  and 890  shares  of the
Company's  common  stock that were  outstanding  during the three  months  ended
September 30, 2002 and 2001, respectively,  were not included in the computation
of  diluted   earnings   per  share   because   their  effect  would  have  been
anti-dilutive.  Employee  stock  options  to  purchase  29 and 890 shares of the
Company's  common  stock  that were  outstanding  during the nine  months  ended
September 30, 2002 and 2001, respectively,  were not included in the computation
of  diluted   earnings   per  share   because   their  effect  would  have  been
anti-dilutive.

COMPREHENSIVE INCOME
--------------------

            The components of comprehensive income are as follows:

                                                        Three Months             Nine Months
                                                     Ended September 30,      Ended September 30,
                                                     -------------------      -------------------

                                                        2002        2001      2002         2001
                                                     --------     -------    --------    --------

Net income                                           $  5,884    $  5,193    $ 13,171    $ 12,316

Other comprehensive income, net of tax:
   Change in net unrealized gain on
   available-for-sale securities, net of tax
   benefits of $2,820, $4,663, $1,033, and
   $910, respectively                                  (5,236)     (8,659)     (1,917)     (1,690)

   Change in fair value of cash flow hedge, net
   of tax (provision) benefit of $(1), ($5), ($5),
   and $1, respectively                                     1           8           6          (1)
                                                     --------    --------    --------    --------

Comprehensive income                                 $    649    ($ 3,458)   $ 11,260    $ 10,625
                                                     ========    ========    ========    ========

The components of accumulated other comprehensive income are as follows:

                                                 September 30, 2002  December 31, 2001
                                                 ------------------  -----------------
Net unrealized gain on available-
    for-sale securities, net of tax provision
      of $2,135 and $3,168, respectively               $ 3,966          $ 5,883

Unrealized loss on interest
    rate swap agreement, net
      of tax benefit of $5 at December 31, 2001           --                 (6)
                                                       -------          -------

                                                       $ 3,966          $ 5,877
                                                       =======          =======

                                 Page 13 of 27





BUSINESS SEGMENTS
-----------------

            The Company  operates  through two  business  segments:  real estate
investment and management and engineered  products.  The real estate  investment
and  management  segment is engaged in the business of investing in and managing
real estate properties and the making of high-yield, short-term loans secured by
desirable properties.  Engineered products are manufactured through wholly-owned
subsidiaries  of the Company and primarily  consist of knitted wire products and
components and transformer products.

            Operating results of the Company's business segments are as follows:

                                                Three Months            Nine Months
                                            Ended September 30,    Ended September 30,
                                            -------------------    -------------------
                                              2002        2001       2002        2001
                                              ----        ----       ----        ----

Net revenues and sales:
   Real estate investment and management   $  6,220    $  6,567    $ 18,765    $ 20,757
   Engineered products                        8,439       8,119      25,700      26,096
                                           --------    --------    --------    --------

                                           $ 14,659    $ 14,686    $ 44,465    $ 46,853
                                           ========    ========    ========    ========

Operating income:
   Real estate investment and management   $  3,204    $  3,294    $  9,714    $ 10,365
   Engineered products                          807         393       1,881       1,517
   General corporate expenses                  (595)       (590)     (1,810)     (1,917)
                                           --------    --------    --------    --------

                                              3,416       3,097       9,785       9,965

Other income, net                             4,308       5,374       9,336       9,976
                                           --------    --------    --------    --------

Income from continuing operations before
   income taxes                            $  7,724    $  8,471    $ 19,121    $ 19,941
                                           ========    ========    ========    ========

Identifiable assets of the Company's business segments are as follows:

                                                               September 30, 2002   December 31, 2001
                                                               ------------------   -----------------

               Real estate investment and management and
                     corporate assets                                 $165,244            $166,562

               Engineered products                                      10,829              12,429
                                                                      --------            --------

                                                                      $176,073            $178,991
                                                                      ========            ========
USE OF ESTIMATES
----------------

            The   preparation  of  financial   statements  in  conformity   with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

RECLASSIFICATIONS
-----------------

            Certain   amounts   have  been   reclassified   in  the  prior  year
Consolidated Financial Statements to present them on a basis consistent with the
current year.

                                 Page 14 of 27





ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS
         (In Thousands, Except Per Share Data)

            The  following  discussion  should be read in  conjunction  with the
accompanying  Consolidated  Financial  Statements of United  Capital Corp.  (the
"Company") and related notes thereto.

FORWARD-LOOKING STATEMENTS
--------------------------

            This Form 10-Q contains certain  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,  which are
intended to be covered by the safe harbors created thereby.  All forward-looking
statements  involve  risks  and  uncertainties,  including  without  limitation,
general economic conditions,  interest rates, competition,  potential technology
changes and potential changes in customer  spending and purchasing  policies and
procedures.  Although the Company  believes that the assumptions  underlying the
forward-looking   statements  contained  herein  are  reasonable,   any  of  the
assumptions could be inaccurate,  and therefore,  there can be no assurance that
the  forward-looking  statements  included  in this Form  10-Q will  prove to be
accurate.   In  light  of  the   significant   uncertainties   inherent  in  the
forward-looking  statements  included herein,  the inclusion of such information
should not be regarded as a  representation  by the Company or any other  person
that the objectives and plans of the Company will be achieved.

CRITICAL ACCOUNTING POLICIES
----------------------------

            The  Consolidated  Financial  Statements of the Company  include the
accounts of the Company and its  wholly-owned  subsidiaries.  The preparation of
the financial  statements in conformity  with  accounting  principles  generally
accepted in the United States of America  requires  management to make estimates
and  assumptions in certain  circumstances  that affect amounts  reported in the
Consolidated   Financial  Statements  and  related  notes.  In  preparing  these
financial  statements,  management has made its best  estimates and  assumptions
that affect the reported amounts of assets and liabilities.  These estimates are
based on, but not limited to, historical results, industry standards and current
economic  conditions,  giving due  consideration to materiality.  It is possible
that the ultimate  outcome as  anticipated  by  management  in  formulating  its
estimates inherent in these financial statements might not materialize. However,
application of the critical  accounting  policies below involves the exercise of
judgment and use of  assumptions  as to future  uncertainties  and, as a result,
actual results could differ from these estimates.  In addition,  other companies
may  utilize  different  estimates,  which may impact the  comparability  of the
Company's results of operations to those of companies in similar businesses.

          Revenue Recognition and Accounts Receivable - Manufacturing Operations
          ----------------------------------------------------------------------

                      Sales are  recorded  when the  products are shipped to the
            customer.  Estimates are used in determining the Company's allowance
            for doubtful  accounts based on historical  collections  experience,
            current economic trends and a percentage of its accounts  receivable
            by aging category.  In determining  these  percentages,  the Company
            looks at historical write-offs of its receivables.  The Company also
            looks at the credit  quality of its customer base as well as changes
            in  its  credit   policies.   The  Company   continuously   monitors
            collections  and payments  from its  customers.  While credit losses
            have  historically  been  within  expectations  and  the  provisions
            established,  the Company cannot  guarantee that it will continue to
            experience  the same credit loss rates that it has in the past.  The
            Company's net income is directly  affected by management's  estimate
            of the collectibility of accounts receivable.

                                 Page 15 of 27




            Revenue Recognition and Accounts Receivable - Real Estate Operations
            --------------------------------------------------------------------

                      The Company leases  substantially all of its properties to
            tenants  under net  leases  which  are  accounted  for as  operating
            leases. Under this type of lease, the tenant is obligated to pay all
            operating  costs  of  the  property  including  real  estate  taxes,
            insurance  and  repairs and  maintenance.  Gains on the sale of real
            estate  assets and equity  investments  are  recorded  when the gain
            recognition criteria under generally accepted accounting  principles
            in the United States of America have been met.

                      Certain lease agreements provide for additional rent based
            on a  percentage  of  tenants'  sales.  These  percentage  rents are
            recorded once the required sales levels are achieved.

                      Income on leveraged  leases is recognized by a method that
            produces a constant rate of return on the outstanding  investment in
            the lease, net of the related deferred tax liability in the years in
            which the net investment is positive.

                      The Company makes estimates of the uncollectibility of its
            accounts  receivable  related  to base  rents,  tenant  escalations,
            expense  reimbursements  and other  revenues.  The Company  analyzes
            accounts receivable and historical bad debt levels,  customer credit
            worthiness and current  economic trends when evaluating the adequacy
            of the  allowance  for doubtful  accounts.  In addition,  tenants in
            bankruptcy  are analyzed and estimates  are made in connection  with
            the expected recovery of pre-petition and post-petition  claims. The
            Company's net income is directly  affected by management's  estimate
            of the collectibility of accounts receivable.

            Real Estate
            -----------

                      Land,   buildings  and   improvements  and  equipment  are
            recorded at cost, less accumulated  depreciation  and  amortization.
            Expenditures  for  maintenance and repairs are charged to operations
            as incurred. Significant renovations and replacements, which improve
            the life of the asset,  are capitalized  and depreciated  over their
            estimated useful lives.

                      Depreciation  is  computed   utilizing  the  straight-line
            method over the estimated useful lives of five to thirty-nine  years
            for  buildings  and   improvements  and  five  to  seven  years  for
            equipment.

                      The Company is required to make subjective  assessments as
            to the useful lives of its  properties  for purposes of  determining
            the  amount of  depreciation  to  reflect  on an annual  basis  with
            respect to those properties.  These assessments have a direct impact
            on the  Company's  net  income.  Should  the  Company  lengthen  the
            expected useful life of a particular  asset, it would be depreciated
            over more years, and result in less depreciation  expense and higher
            annual income.

            Inventories
            -----------

                      The  Company  values  inventory  at the  lower  of cost or
            market,  cost being  determined on a first-in,  first-out basis. The
            Company regularly reviews inventory quantities on hand, particularly
            finished  goods,  and  records a provision  for excess and  obsolete
            inventory  based  primarily on existing and  anticipated  design and
            engineering  changes to the Company's  products as well as forecasts
            of future  product  demand.  The  Company's  net income is  directly
            affected  by   management's   estimate  of  the   realizability   of
            inventories.

                                 Page 16 of 27





            Long Lived Assets
            -----------------

                      On a periodic basis, management assesses whether there are
            any  indicators  that  the  value of its long  lived  assets  may be
            impaired.   An  asset's  value  is   considered   impaired  only  if
            management's  estimate of current and projected operating cash flows
            (undiscounted  and without  interest  charges) of the asset over its
            remaining  useful  life is less than the net  carrying  value of the
            asset. Such cash flow projections  consider factors such as expected
            future  operating  income,  trends  and  prospects,  as  well as the
            effects  of demand,  competition  and other  factors.  To the extent
            impairment has occurred,  the carrying  amount of the asset would be
            written  down to an  amount  which  reflects  the fair  value of the
            asset.

                      The Company is required to make subjective  assessments as
            to  whether  there are  impairments  in the value of its long  lived
            assets and other  investments.  The Company's reported net income is
            directly affected by management's estimate of impairments.

RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
-------------------------------------------------------

            Revenues for the three months ended  September 30, 2002 were $14,659
compared to comparable  2001 revenues of $14,686.  Operating  income during this
period was $3,416  versus  $3,097 for the  comparable  2001 period.  Income from
continuing  operations for the third quarter was $5,732 or $1.26 per basic share
compared to income from continuing operations of $5,084 or $1.09 per basic share
for the same period in 2001, a 15.6% increase in basic earnings per share.

            Total  revenues  for the nine months ended  September  30, 2002 were
$44,465 resulting in operating income of $9,785 versus total revenues of $46,853
and operating  income of $9,965 during the comparable  2001 period.  Income from
continuing  operations  for the nine month period was $12,754 or $2.78 per basic
share in 2002 versus  $11,965 or $2.55 per basic share in 2001, a 9.0%  increase
in basic earnings per share.

            Included  in the  results  for  the  three  and  nine  months  ended
September 30, 2002 is income from discontinued operations, net of tax, resulting
from the Company's adoption of Statement of Financial  Accounting  Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS No.
144").  SFAS No. 144 requires that the operating  results and gains on the sales
of real estate assets sold  subsequent to December 31, 2001 and  qualifying as a
component of an entity be reflected in the Consolidated  Statements of Income as
discontinued  operations.  The results of operations for properties sold for the
three and nine months ended  September 30, 2002 and 2001 have been  reclassified
to discontinued operations in accordance with SFAS No. 144.

REAL ESTATE OPERATIONS
----------------------

            Rental revenues from real estate  operations  decreased $347 or 5.3%
for the three months ended  September 30, 2002 and decreased  $1,992 or 9.6% for
the nine months ended September 30, 2002 compared to the  corresponding  periods
in 2001. These decreases are primarily attributable to decreased rental revenues
resulting  from the sale of properties  and decreased  hotel revenues due to the
continued weakness in the economy.

            Mortgage  interest  expense  decreased  $131 or 29.8%  for the three
months ended  September  30,  2002,  and $313 or 22.6% for the nine months ended
September  30,  2002,  compared  to  the  corresponding  2001  periods,  due  to
continuing  mortgage  amortization which approximated $4,967 during the 12 month
period ended September 30, 2002.

                                 Page 17 of 27





            Depreciation  expense  associated with rental  properties  decreased
$235 or 22.3% for the three months ended  September 30, 2002,  and $649 or 20.7%
for the nine months  ended  September  30, 2002  compared to the same periods in
2001.  These  decreases  are  primarily  due  to  reduced  depreciation  expense
associated  with fully  depreciated  properties and properties  sold in 2002 and
2001.

            Other  operating  expenses  associated  with the  management of real
properties increased $109 or 6.1% for the three months ended September 30, 2002,
and decreased $379 or 6.5% for the nine months ended September 30, 2002 compared
to the corresponding periods in 2001. The increase for the three month period is
principally  due to increased  property  maintenance  expenses,  including  real
estate taxes and insurance,  offset by decreased hotel operating expenses due to
the  decrease in hotel  revenues  noted above.  The decrease in other  operating
expenses for the year to date period is mainly  attributable  to the decrease in
hotel operating expenses due to the decrease in hotel revenues as noted above.

ENGINEERED PRODUCTS
-------------------

            The  Company's  engineered  products  segment  includes  Metex  Mfg.
Corporation  ("Metex")  and AFP  Transformers,  LLC  ("AFP  Transformers").  The
operating results of the engineered products segment are as follows:

                                       Three Months         Nine Months
      (In Thousands)                Ended September 30,  Ended September 30,
                                    -------------------  -------------------

                                       2002      2001      2002       2001
                                       ----      ----      ----       ----

      Net Sales                       $8,439   $ 8,119   $25,700   $26,096
                                      ======   =======   =======   =======

      Cost of Sales                   $6,010   $ 6,112   $18,771   $19,441
                                      ======   =======   =======   =======

      Selling, General and
            Administrative Expenses   $1,622   $ 1,614   $ 5,048   $ 5,138
                                      ======   =======   =======   =======

      Operating Income                $  807   $   393   $ 1,881   $ 1,517
                                      ======   =======   =======   =======

            Net sales of the engineered  products segment increased $320 or 3.9%
for the three months ended September 30, 2002 and decreased $396 or 1.5% for the
nine months ended  September 30, 2002 compared to the same periods in 2001.  The
increase  for the quarter  reflects  higher  sales in the  Company's  automotive
product line,  offset by lower sales in the Company's  engineered  component and
transformer  product lines. The decrease for the nine months ended September 30,
2002  results  primarily  from  lower  sales in the  Company's  transformer  and
engineered  component  product  lines,  partially  offset by higher sales in the
Company's automotive product line.

            Cost of sales as a percentage of sales  decreased  5.4% and 2.0% for
the three and nine months ended  September 30, 2002,  respectively,  compared to
the corresponding  periods in 2001,  principally due to the mix of products sold
noted above.

            Selling,  general  and  administrative  expenses  of the  engineered
products  segment  increased  less than one percent for the three  months  ended
September 30, 2002 and decreased $90 or 1.8% for the nine months ended September
30, 2002,  versus the  comparable  2001  periods.  The changes are mainly due to
changes in sales volume noted above.

                                 Page 18 of 27





GENERAL AND ADMINISTRATIVE EXPENSES
-----------------------------------

            General  and   administrative   expenses  not  associated  with  the
manufacturing  operations  for the three  months ended  September  30, 2002 were
comparable to the three months ended  September  30, 2001 and decreased  $107 or
5.6% for the nine months ended  September  30,  2002,  versus the same period in
2001. The overall  decrease for the year to date period is principally  due to a
decrease in salary and salary related expenses.

OTHER INCOME AND EXPENSE, NET
-----------------------------

            The components of other income and expense,  net in the accompanying
Consolidated Statements of Income are as follows:

                                                       Three Months         Nine Months
   (In Thousands)                                  Ended September 30,   Ended September 30,
                                                   -------------------   -------------------
                                                     2002        2001      2002      2001
                                                     ----        ----      ----      ----

   Net gain on sale of real estate assets          $  --      $   901    $ 5,674    $ 3,936

   Net gain on sale of trading securities             --         --         --          461

   Net gain (loss) on sale of available-for-sale      --        3,342     (1,005)     3,470
         securities

   Net gain on sale of derivative instruments        1,219        783      1,439      1,304

   Net unrealized gain (loss) on derivative
         instruments                                 2,665        (31)     2,190       (335)

   Other, net                                           (9)        30        (34)        75
                                                   -------    -------    -------    -------

                                                   $ 3,875    $ 5,025    $ 8,264    $ 8,911
                                                   =======    =======    =======    =======

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

            At September 30, 2002, the Company's cash and marketable  securities
were $96,714 and working  capital was $84,487.  Management  continues to believe
the real estate market is overvalued  and  accordingly  (1) recent  acquisitions
have  been  limited  to select  properties  that  meet the  Company's  stringent
financial  requirements  and (2) the  Company  has  divested  itself of  certain
assets. Management believes the available working capital along with the $60,000
of  availability  on the revolving  credit facility  discussed  below,  puts the
Company in an opportune  position to fund acquisitions and grow the portfolio if
and when attractive long-term opportunities become available.

            The Company's  portfolio of marketable  securities had a fair market
value of $35,051 at September 30, 2002,  reflecting  pretax  unrealized  holding
gains of $6,101.  Included in  marketable  securities  at September 30, 2002 was
$20,527 of common  stock in a  publicly-traded  company for which the  Company's
Chairman of the Board is the Chairman and President and another  Director of the
Company is a director.

                                 Page 19 of 27





            The  Company  is a lessor of eight (8)  department  stores  that are
currently leased to K-Mart  Corporation  ("K-Mart"),  which filed for protection
under Chapter 11 of the U.S.  Bankruptcy  Code on January 22, 2002. In addition,
the Company holds a 50% interest in a joint  venture that owns two  distribution
centers that are also leased to K-Mart. Although it is currently uncertain which
leases,  if any,  K-Mart  will  reject or affirm as part of its  reorganization,
management  believes  that its leases and the leases of the joint  venture  with
K-Mart are at or below the fair market rent for  comparable  properties and as a
result,  the  rejection of one or more leases is not expected to have a material
adverse effect on the consolidated financial position of the Company.

            Effective  December  31,  1999,  the Company  entered  into a credit
agreement  with three banks which provides for both a $60,000  revolving  credit
facility  ("Revolver")  and a $1,925 term loan ("Term Loan").  Each of the three
banks  participates in the Revolver while only one bank participated in the Term
Loan. The Term Loan was satisfied as of September 30, 2002.

            Under the Revolver,  the Company will be provided  with  eligibility
based  upon the sum of (i)  60.0% of the  aggregate  annualized  and  normalized
year-to-date  net  operating  income of  unencumbered  eligible  properties,  as
defined,  capitalized  at  10.5%,  (ii) the  lesser  of  $6,000  or 60.0% of the
aggregate  annualized  and  normalized  year-to-date  net  operating  income  of
unencumbered eligible hotel properties, as defined,  capitalized at 10.5%, (iii)
the  lesser of  $10,000  or 50.0% of the  aggregate  annualized  and  normalized
year-to-date net operating income of encumbered eligible properties, as defined,
capitalized  at 12.0%  and (iv) the  lesser  of  $10,000  or the sum of 75.0% of
eligible accounts  receivable and 50.0% of eligible  inventory,  as defined.  At
September 30, 2002,  eligibility under the Revolver was $60,000,  based upon the
above terms.  The credit agreement  contains  certain  financial and restrictive
covenants,  including  minimum  consolidated  equity,  interest  coverage,  debt
service  coverage and capital  expenditures  (other than for real  estate).  The
Company was in compliance  with all covenants at September 30, 2002.  The credit
agreement also contains provisions,  which allow the banks to perfect a security
interest in certain operating and real estate assets in the event of default, as
defined in the credit agreement. Borrowings under the Revolver, at the Company's
option,  bear  interest  at the  bank's  prime  lending  rate  or at the  London
Interbank Offered Rate ("LIBOR") plus 2.0%. The Revolver expires on December 31,
2002.  The Company is currently in  discussions  with a number of banks to renew
and/or expand the current facility. At September 30, 2002, there were no amounts
outstanding under the Revolver.

            As of September 30, 2002, the Company's interest rate swap agreement
(the "Swap") expired together with the satisfaction of the underlying Term Loan.
The Swap effectively  converted the Company's floating rate Term Loan to a fixed
rate basis, thus reducing the impact of interest rate changes on future expense.
Under  the Swap,  the  Company  agreed  to  exchange  with the  counterparty  (a
commercial  bank) the  difference  between the fixed and floating  rate interest
amounts.  The Swap was  classified  as a cash flow hedge and was  recorded  as a
component  of  accounts  payable  and accrued  liabilities  in the  accompanying
Consolidated   Balance  Sheet  at  December  31,  2001  and  accumulated   other
comprehensive  income was reduced by the same amount, net of tax, with no impact
on earnings.  The differential to be paid or received on the Swap was recognized
over the term of the agreement as an adjustment to interest expense.

            The Company has undertaken the completion of  environmental  studies
and/or remedial  action at Metex' two New Jersey  facilities and filed an action
against certain insurance  carriers seeking recovery of costs incurred and to be
incurred in these  matters.  Settlements  have been reached with all carriers in
this  matter.  See  Notes  to  Consolidated  Financial  Statements  for  further
discussion on this matter.

                                 Page 20 of 27





            The current  liabilities of the Company have  historically  exceeded
its current assets principally due to the financing of the purchase of long-term
assets utilizing  short-term  borrowings and from the  classification of current
mortgage   obligations   without  the  corresponding   current  asset  for  such
properties.  Future  financial  statements  may reflect  current  liabilities in
excess of  current  assets.  Management  is  confident  that  through  cash flow
generated from operations, together with borrowings available under the Revolver
and the sale of select assets,  all  obligations  will be satisfied as they come
due.

            Previous  purchases of the  Company's  common stock have reduced the
Company's  additional  paid-in  capital  to zero and  accordingly  current  year
purchases in excess of par value have reduced retained earnings. During the nine
months ended September 30, 2002, the Company purchased and retired 104 shares of
the  Company's  common stock for $2,555.  Future  repurchases  of the  Company's
common stock will also reduce retained  earnings by amounts in excess of the par
value.  Repurchases of the Company's common stock will be made from time to time
in the open  market at  prevailing  market  prices and may be made in  privately
negotiated transactions, subject to available resources.

            The  cash  needs of the  Company  have  been  satisfied  from  funds
generated by current operations and additional  borrowings.  It is expected that
future  operational cash needs and the cash required to repurchase the Company's
common  stock  will also be  satisfied  from  existing  cash  balances,  ongoing
operations and borrowings  under the Revolver.  The primary source of capital to
fund additional real estate acquisitions and make additional high-yield mortgage
loans will come from existing funds,  borrowings  under the Revolver,  the sale,
financing  and  refinancing  of the  Company's  properties  and from third party
mortgages  and  purchase  money  notes  obtained  in  connection  with  specific
acquisitions.

            In addition to acquiring properties for consideration  consisting of
cash and mortgage financing proceeds, the Company may acquire real properties in
exchange for the issuance of the Company's  equity  securities.  The Company may
also finance  acquisitions of other companies in the future with borrowings from
institutional  lenders and/or the public or private  offerings of debt or equity
securities.

            Funds of the Company in excess of that  needed for working  capital,
purchasing real estate and arranging  financing for real estate acquisitions are
invested  by the  Company  in  corporate  equity  securities,  corporate  notes,
certificates of deposit, government securities and other financial instruments.

            The   following   table   presents  the   Company's   expected  cash
requirements for contractual obligations outstanding as of September 30, 2002:

                                     Payments Due by Period
                           Less
                           than     1-3       4-5       After
Contractual Obligations   1 year   years     years     5 years     Total
-----------------------   ------   -----     -----     -------     -----

Long-Term Debt           $ 4,735   $ 8,717   $ 1,260   $ 3,289   $18,001

Operating Leases             490       627       461     3,391     4,969
                         -------   -------   -------   -------   -------

Total Contractual Cash
     Obligations         $ 5,225   $ 9,344   $ 1,721   $ 6,680   $22,970
                         =======   =======   =======   =======   =======

                                 Page 21 of 27





BUSINESS TRENDS
---------------

            Total revenues of the Company were $44,465 for the nine months ended
September  30,  2002,  a  decrease  of $2,388 or 5.1% from the  comparable  2001
period, principally due to decreased rental and hotel revenues and a decrease in
net  sales  from  the  engineered  products  segment.   Income  from  continuing
operations  during this period was $12,754 or $2.78 per basic share  compared to
income from  continuing  operations  of $11,965 or $2.55 per basic share for the
same period in 2001.

            Revenues  from the  Company's  real estate  operations  for the nine
months ended  September 30, 2002 were $18,765,  generating  operating  income of
$9,714.  The Company has  continued to take  advantage  of the current  economic
environment by divesting itself of certain assets.  During the nine months ended
September 30, 2002, the Company sold five properties  generating  $6,710 of cash
inflow and yielding pre-tax property gains of $5,968, inclusive of pre-tax gains
reflected as discontinued operations in the Consolidated Statements of Income.

            Management's  commitment to implementing cost containment  measures,
improved product offerings and price competitiveness during 2002 have helped the
Company  increase  operating  income and minimize the effects of lower  revenues
generated by the  engineered  products  segment  during the first nine months of
this year.  Operating  income from this segment  during the first nine months of
2002  increased 24% to $1,881  despite a 1.5% decline in revenues from the prior
year.

RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------

            In October 2001, the FASB issued  Statement of Financial  Accounting
Standards  No. 144,  "Accounting  for the  Impairment  or Disposal of Long-Lived
Assets"  ("SFAS  No.  144").  SFAS No.  144  provides  accounting  guidance  for
financial  accounting and reporting for the impairment or disposal of long-lived
assets and supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived  Assets to Be Disposed of" ("SFAS No. 121").  SFAS No.
144  requires  that  long-lived  assets  that are to be  disposed  of by sale be
measured  at the lower of book value or fair  value less cost to sell.  SFAS No.
144  retains  the  requirements  of  SFAS  No.  121  regarding  impairment  loss
recognition  and  measurement.  In addition,  this  statement  retains the basic
provisions of APB Opinion 30 for the presentation of discontinued  operations in
the income statement but broadens that presentation to include a component of an
entity  (rather than a segment of a  business).  SFAS No. 144 was adopted by the
Company on January 1, 2002. The adoption of SFAS No. 144 did not have a material
impact on the Company's financial position or results of operations.

            In April 2002,  the FASB issued  SFAS No. 145,  "Rescission  of FASB
Statements No. 4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical
Corrections"  ("SFAS No. 145").  This statement  eliminates  the  requirement to
report gains and losses from extinguishment of debt as extraordinary unless they
meet  the  criteria  of  APB  Opinion  No.  30.  SFAS  No.  145  also   requires
sale-leaseback  accounting  for certain lease  modifications  that have economic
effects  that are  similar  to  sale-leaseback  transactions.  SFAS  No.  145 is
effective  for fiscal  years  beginning  after May 15,  2002.  The impact of the
adoption  of SFAS No.  145 is not  expected  to have a  material  impact  on the
Company's financial position or results of operations.

            In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs
Associated  with Exit or Disposal  Activities"  ("SFAS No.  146").  SFAS No. 146
nullifies  Emerging  Issues  Task  Force  Issue  No.  94-3 and  requires  that a
liability for a cost associated with an exit or disposal  activity be recognized
when the liability is incurred.  This statement also establishes that fair value
is the  objective  for initial  measurement  of the  liability.  SFAS No. 146 is


                                 Page 22 of 27





effective for exit or disposal  activities that are initiated after December 31,
2002.  The  impact of the  adoption  of SFAS No. 146 is not  expected  to have a
material impact on the Company's financial position or results of operations.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK

            The  information  called  for by this  item is  provided  under  the
caption "Derivative Financial  Instruments" under Item 1 - Notes to Consolidated
Financial Statements.

ITEM 4.   CONTROLS AND PROCEDURES

            Within the 90 days  prior to the date of 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-14.  Based  upon that  evaluation,  the Chief  Executive  Officer  and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures  are  effective  in  timely  alerting  them to  material  information
relating to the Company (including its consolidated subsidiaries) required to be
included  in the  Company's  periodic  reports.  There have been no  significant
changes  in the  Company's  internal  controls  or in other  factors  that could
significantly affect these controls subsequent to the date of their evaluation.


PART II OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Reports on Form 8-K. None


                                   SIGNATURES

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

                                       UNITED CAPITAL CORP.

Dated:  November 1, 2002               By: /s/Anthony J. Miceli
                                           ----------------------------------
                                           Anthony J. Miceli
                                           Vice President, Chief Financial Officer
                                           and Secretary of the Company

                                 Page 23 of 27





          CERTIFICATION PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14
          -------------------------------------------------------------


I, A. F. Petrocelli, certify that:

1.    I have  reviewed  this  quarterly  report on Form  10-Q of United  Capital
      Corp.;

2.    Based on my knowledge,  this quarterly  report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the  circumstances  under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  quarterly  report,  fairly  present in all
      material respects the financial condition,  results of operations and cash
      flows of the  registrant  as of, and for,  the periods  presented  in this
      quarterly report;

4.    The  registrant's  other  certifying  officers and I are  responsible  for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
      have:

          a.  designed such  disclosure  controls and  procedures to ensure that
              material  information  relating to the  registrant,  including its
              consolidated  subsidiaries,  is made known to us by others  within
              those  entities,  particularly  during  the  period in which  this
              quarterly report is being prepared;

          b.  evaluated  the   effectiveness  of  the  registrant's   disclosure
              controls and  procedures  as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

          c.  presented  in this  quarterly  report  our  conclusions  about the
              effectiveness  of the disclosure  controls and procedures based on
              our evaluation as of the Evaluation Date;

5.    The registrant's other certifying officers and I have disclosed,  based on
      our most recent  evaluation,  to the  registrant's  auditors and the audit
      committee of the registrant's board of directors:

          a.  all  significant  deficiencies  in  the  design  or  operation  of
              internal  controls which could adversely  affect the  registrant's
              ability to record,  process,  summarize and report  financial data
              and have  identified  for the  registrant's  auditors any material
              weaknesses in internal controls; and

          b.  any fraud,  whether or not material,  that involves  management or
              other  employees who have a significant  role in the  registrant's
              internal controls; and

6.    The registrant's  other  certifying  officers and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other  factors  that could  significantly  affect  internal
      controls  subsequent to the date of our most recent evaluation,  including
      any  corrective  actions  with  regard  to  significant  deficiencies  and
      material weaknesses.

Date: November 1, 2002

                                   /s/ A. F. Petrocelli
                                   ----------------------------------------
                                   A. F. Petrocelli
                                   Chairman, President and Chief Executive Officer

                                 Page 24 of 27





          CERTIFICATION PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14
          -------------------------------------------------------------


I, Anthony J. Miceli, certify that:

1.    I have  reviewed  this  quarterly  report on Form  10-Q of United  Capital
      Corp.;

2.    Based on my knowledge,  this quarterly  report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the  circumstances  under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  quarterly  report,  fairly  present in all
      material respects the financial condition,  results of operations and cash
      flows of the  registrant  as of, and for,  the periods  presented  in this
      quarterly report;

4.    The  registrant's  other  certifying  officers and I are  responsible  for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
      have:

          a.   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b.   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c.   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5.    The registrant's other certifying officers and I have disclosed,  based on
      our most recent  evaluation,  to the  registrant's  auditors and the audit
      committee of the registrant's board of directors:

          a.   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b.   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

6.    The registrant's  other  certifying  officers and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other  factors  that could  significantly  affect  internal
      controls  subsequent to the date of our most recent evaluation,  including
      any  corrective  actions  with  regard  to  significant  deficiencies  and
      material weaknesses.


Date: November 1, 2002

                                      /s/ Anthony J. Miceli
                                      -----------------------------------------
                                      Anthony J. Miceli
                                      Chief Financial Officer

                                 Page 25 of 27`