`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                For the quarterly period ended September 30, 2003


                         COMMISION FILE NUMBER: 1-10104
                         ------------------------------

--------------------------------------------------------------------------------

                              UNITED CAPITAL CORP.
                              --------------------
             (Exact name of registrant 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, NY                            11021
     ----------------------------                            -----
(Address of principal executive offices)                   (Zip Code)

                                  516-466-6464
                                  ------------
              (Registrant'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 registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the  Securities  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. [X] Yes [ ] No

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No

The registrant had 9,079,342 shares of common stock, $.10 par value, outstanding
as of November 10, 2003.







                      UNITED CAPITAL CORP. AND SUBSIDIARIES

                                      INDEX


                                                                                   PAGE
                                                                                   ----
                         PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

           Consolidated Balance Sheets as
           of September 30, 2003 (Unaudited) and December 31, 2002....................3

           Consolidated Statements of Income for the
           Three and Nine Months Ended September 30, 2003 and 2002 (Unaudited)........4

           Consolidated Statements of Cash Flows for the
           Nine Months Ended September 30, 2003 and 2002 (Unaudited)................5-6

           Notes to Consolidated Financial Statements..............................7-16

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS..........................16-21

ITEM 3.    QUANTATIVE AND QUALITATIVE DISCLOSURE OF
           MARKET RISK...............................................................21

ITEM 4.    CONTROLS AND PROCEDURES...................................................21


                           PART II - OTHER INFORMATION

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......................21

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K..........................................22


SIGNATURES ..........................................................................22

                                       2





                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

                                                                    September 30, December 31,
                                                                         2003        2002
                                                                    ------------  ------------
                                                                    (Unaudited)
Assets

Current assets:
   Cash and cash equivalents                                          $ 60,257     $ 48,893
   Marketable securities                                                39,664       25,893
   Notes and accounts receivable, net                                    7,010        5,667
   Inventories                                                           3,914        3,677
   Prepaid expenses and other current assets                               636        1,477
   Deferred income taxes                                                  --            207
   Current assets of discontinued operations                                11          121
                                                                      --------     --------

      Total current assets                                             111,492       85,935
                                                                      --------     --------

Property, plant and equipment, net                                       3,209        3,569
Real property held for rental, net                                      42,372       44,515
Investments in joint ventures                                           20,009       31,389
Noncurrent notes receivable                                              2,935        2,994
Other assets                                                             3,300        3,707
Noncurrent assets of discontinued operations                               139        4,438
                                                                      --------     --------

      Total assets                                                    $183,456     $176,547
                                                                      ========     ========

Liabilities and Stockholders' Equity

Current liabilities:
   Current maturities of long-term debt                               $  6,157     $  3,977
   Accounts payable and accrued liabilities                             10,346        9,253
   Income taxes payable                                                  7,565        5,260
   Deferred income taxes                                                 2,017         --
   Current liabilities of discontinued operations                           12          455
                                                                      --------     --------

      Total current liabilities                                         26,097       18,945
                                                                      --------     --------

Long-term debt                                                           7,111       12,347
Other long-term liabilities                                             31,420       31,016
Deferred income taxes                                                    2,077        2,605
                                                                      --------     --------

      Total liabilities                                                 66,705       64,913
                                                                      --------     --------

Commitments and contingencies

Stockholders' equity:
   Common stock $.10 par value, authorized 17,500 shares;
      issued and outstanding 9,079 and 9,038 shares, respectively          908          904
   Retained earnings                                                   110,103      109,644
   Accumulated other comprehensive income, net of tax                    5,740        1,086
                                                                      --------     --------

      Total stockholders' equity                                       116,751      111,634
                                                                      --------     --------

      Total liabilities and stockholders' equity                      $183,456     $176,547
                                                                      ========     ========

The accompanying Notes to Consolidated Financial Statements are an integral part
      of these statements. Share amounts and common stock at par have been
 retroactively adjusted to reflect the two-for-one stock split in August 2003.

                                       3



                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                      (In thousands, except per share data)

                                                              Three Months Ended        Nine Months Ended
                                                                  September 30,           September 30,
                                                             ---------------------    ---------------------
                                                                2003        2002        2003         2002
                                                              --------    --------    ---------   ---------
Revenues:
    Net sales                                                 $  8,599    $  8,439    $ 25,081    $ 25,700
    Rental revenues from real estate operations                  5,886       5,864      18,346      17,723
                                                              --------    --------    --------    --------

          Total revenues                                        14,485      14,303      43,427      43,423
                                                              --------    --------    --------    --------

Costs and expenses:
    Cost of sales                                                5,849       6,010      17,729      18,771
    Real estate operations:
       Mortgage interest expense                                   252         299         802       1,034
       Depreciation expense                                        791         806       2,344       2,451
       Other operating expenses                                  2,155       1,871       6,370       5,448
    General and administrative expenses                          1,588       1,351       4,753       4,152
    Selling expenses                                               913         866       2,653       2,706
                                                              --------    --------    --------    --------

          Total costs and expenses                              11,548      11,203      34,651      34,562
                                                              --------    --------    --------    --------

          Operating income                                       2,937       3,100       8,776       8,861
                                                              --------    --------    --------    --------

Other income (expense):
    Interest and dividend income                                   445         545       1,360       1,426
    Interest expense                                              (110)       (112)       (329)       (354)
    Other income and expense, net                                  572       3,875       2,046       8,264
                                                              --------    --------    --------    --------

          Total other income                                       907       4,308       3,077       9,336
                                                              --------    --------    --------    --------

Income from continuing operations before income taxes            3,844       7,408      11,853      18,197

Provision for income taxes                                       1,225       1,867       4,064       5,998
                                                              --------    --------    --------    --------

Income from continuing operations                                2,619       5,541       7,789      12,199
                                                              --------    --------    --------    --------

Discontinued operations:
    Income from discontinued operations, net of income
       taxes of $4, $111, $186 and $530, respectively                5         167         279         796
    Net gain on disposal of discontinued operations, net of
       income taxes of $224, $118, $1,231 and $118,
       respectively                                                336         176       1,845         176
                                                              --------    --------    --------    --------

Income from discontinued operations                                341         343       2,124         972
                                                              --------    --------    --------    --------

Net income                                                    $  2,960    $  5,884    $  9,913    $ 13,171
                                                              ========    ========    ========    ========

Basic earnings per share:
    Income from continuing operations                         $    .29    $    .61    $    .86    $   1.33
    Income from discontinued operations                            .04         .04         .23         .10
                                                              --------    --------    --------    --------
    Net income per share                                      $    .33    $    .65    $   1.09    $   1.43
                                                              ========    ========    ========    ========

Diluted earnings per share:
    Income from continuing operations                         $    .24    $    .57    $    .73    $   1.23
    Income from discontinued operations                            .03         .03         .20         .10
                                                              --------    --------    --------    --------
    Net income per share assuming dilution                    $    .27    $    .60    $    .93    $   1.33
                                                              ========    ========    ========    ========

Dividends paid per share                                      $   --      $   --      $   2.00    $   --
                                                              ========    ========    ========    ========

The accompanying Notes to Consolidated Financial Statements are an integral part
    of these statements. Per share amounts, except dividends paid, have been
 retroactively adjusted to reflect the two-for-one stock split in August 2003.

                                       4




                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)

                                                                                 Nine Months Ended
                                                                                   September 30,
                                                                             ------------------------
                                                                                2003          2002
                                                                             ---------     ----------

Cash flows from operating activities:
   Net income                                                                $  9,913      $ 13,171
   Adjustments to reconcile net income
      to net cash provided by operating activities:
         Depreciation and amortization                                          2,995         3,432
         Net (gain) loss on sale of available-for-sale securities                 (36)        1,005
         Net gain on sale of real estate assets                                  (152)       (5,674)
         Equity in earnings of joint ventures                                  (1,088)         (506)
         Net gain on disposal of discontinued operations, net of tax           (1,845)         (176)
         Net realized and unrealized gain on derivative instruments            (1,096)       (3,629)
         Proceeds from sale of trading securities                                 884          --
         Net realized gain on trading securities                                  (57)         --
         Changes in assets and liabilities  (A)                                    19         3,371
                                                                             --------      --------

                     Net cash provided by operating activities                  9,537        10,994
                                                                             --------      --------

Cash flows from investing activities:
   Purchase of available-for-sale securities                                   (7,062)      (10,641)
   Proceeds from sale of available-for-sale securities                            179           268
   Proceeds from sale of real estate assets                                     7,523         6,710
   Proceeds from sale of derivative instruments                                 1,584         3,912
   Purchase of derivative instruments                                            --          (8,843)
   Purchase of note receivable                                                   --          (2,955)
   Acquisition of property, plant and equipment                                  (229)         (153)
   Principal payments on notes receivable                                          70            12
   Acquisition of/additions to real estate assets                                (200)         (193)
   Distributions from joint ventures, net of capital contributions             12,468           209
                                                                             --------      --------

                     Net cash provided by (used in) investing activities       14,333       (11,674)
                                                                             --------      --------

Cash flows from financing activities:
   Principal payments on mortgage commitments, notes
      and loans                                                                (3,056)       (3,165)
   Net repayments under credit facilities                                        --            (525)
   Purchase and retirement of common shares                                    (1,189)       (2,555)
   Proceeds from exercise of stock options                                        841           418
   Dividends paid                                                              (9,102)         --
                                                                             --------      --------

                     Net cash used in financing activities                    (12,506)       (5,827)
                                                                             --------      --------

Net increase (decrease) in cash and cash equivalents                           11,364        (6,507)

Cash and cash equivalents, beginning of period                                 48,893        68,170
                                                                             --------      --------

Cash and cash equivalents, end of period                                     $ 60,257      $ 61,663
                                                                             ========      ========

                                       5





                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                                   (Unaudited)


                                                  Nine Months Ended
                                                    September 30,
                                                 ---------------------
                                                    2003        2002
                                                 --------     --------

Supplemental disclosures of cash flow information:
   Cash paid during the period for:

          Interest                                $1,008      $1,307
                                                  ======      ======

          Taxes                                   $3,372      $4,097
                                                  ======      ======



(A) Changes in assets and liabilities are as follows:

                                                  Nine Months Ended
                                                    September 30,
                                                 ---------------------
                                                    2003        2002
                                                 --------     --------

Accounts receivable, net                          $(1,356)     $   131
Inventories                                          (237)       1,346
Prepaid expenses and other current assets             321          177
Deferred income taxes                                (809)       1,258
Other assets                                          350         (435)
Accounts payable and accrued liabilities              605          531
Income taxes payable                                1,074       (1,278)
Other long-term liabilities                           404        2,251
Discontinued operations - noncash charges and
   working capital changes                           (333)        (610)
                                                  -------      -------

         Total                                    $    19      $ 3,371
                                                  =======      =======



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

                                       6





                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      (In thousands, except per share data)
                                   (Unaudited)


1.      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, 2002.

In the opinion of management,  all  adjustments,  consisting  only of normal and
recurring adjustments,  necessary for a fair presentation 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.

2.      DIVIDENDS
-----------------

On June 10,  2003,  the Board of  Directors  of the  Company  declared a special
one-time  cash  dividend of $2.00 per common  share on a pre-split  basis to all
stockholders  of  record  as of June 20,  2003.  The  Company  has not paid cash
dividends in the past. The declaration of such dividend is within the discretion
of the Board of Directors.  While the Company does not  currently  expect to pay
additional dividends in the future, the Board of Directors could reevaluate this
position in the future.  This dividend,  totaling  $9,102,  was paid on July 10,
2003.

3.      STOCK SPLIT
-------------------

On June 10,  2003,  the  Company's  Board of  Directors  unanimously  adopted an
amendment to the Company's  Articles of  Incorporation to increase the number of
authorized  shares of the  Company's  Common Stock from 7,500 to 17,500  shares,
subject to  stockholder  approval.  The Company  received  the  approval of this
amendment by a majority of it's  stockholders  and declared a two-for-one  stock
split  during  August  2003.  All  references  to the number of shares of common
stock,  per share  prices and  earnings  per share  amounts in the  accompanying
Consolidated  Financial Statements and notes included in the Quarterly Report on
Form 10-Q for the current and prior  periods  have been  adjusted to reflect the
increase in authorized  capital and stock split on a retroactive  basis,  except
for dividends per share.

4.      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, 2003 and 2002, the Company purchased and retired 66 and 209 shares
of the  Company's  common  stock for $1,189  and  $2,555,  respectively.  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
may 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.

                                       7





5.      EARNINGS PER SHARE
--------------------------

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


                                                     Three Months Ended   Nine Months Ended
                                                        September 30,      September 30,
                                                     ------------------  ------------------
                                                       2003     2002      2003       2002
                                                     --------  -------   -------   --------
Numerator:

   Income from continuing operations                 $ 2,619   $ 5,541   $ 7,789   $12,199
                                                     =======   =======   =======   =======
Denominator:
   Basic -  weighted-average shares outstanding        9,096     9,141     9,050     9,186
   Dilutive effect of employee stock options           1,685       640     1,649       701
                                                     -------   -------   -------   -------
   Diluted - weighted-average shares outstanding      10,781     9,781    10,699     9,887
                                                     =======   =======   =======   =======

Basic earnings per share - continuing operations     $   .29   $   .61   $   .86   $  1.33
                                                     =======   =======   =======   =======
Diluted earnings per share - continuing operations   $   .24   $   .57   $   .73   $  1.23
                                                     =======   =======   =======   =======

Employee  stock  options to  purchase  758 shares for each of the three and nine
months ended  September 30, 2003 and 1,902 and 966 shares for the three and nine
months  ended  September  30,  2002,  respectively,  were  not  included  in the
computation  of diluted  earnings per share because their effect would have been
anti-dilutive.

6.      STOCK-BASED COMPENSATION
--------------------------------

The Company  accounts for  stock-based  compensation  using the intrinsic  value
method  in  accordance  with  Accounting   Principles   Board  Opinion  No.  25,
"Accounting  for Stock Issued to Employees," and related  Interpretations  ("APB
No. 25") and has adopted the  disclosure  provisions  of  Statement of Financial
Accounting  Standards  No.  148,  "Accounting  for  Stock-Based  Compensation  -
Transition  and  Disclosure,  an amendment of FASB Statement No. 123" ("SFAS No.
148"). Under APB No. 25, compensation expense is only recognized when the market
value  of the  underlying  stock  at the date of grant  exceeds  the  amount  an
employee must pay to acquire the stock. Accordingly, no compensation expense has
been  recognized in the  Consolidated  Financial  Statements in connection  with
employee stock option grants.

The following table  illustrates the effect on net income and earnings per share
had the Company  applied the fair value  recognition  provisions of Statement of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation," to stock-based employee compensation.

                                             Three Months Ended       Nine Months Ended
                                                September 30,           September 30,
                                            ---------------------   ---------------------
                                                2003       2002       2003          2002
                                            ---------   ---------   --------    ----------

Net income, as reported                     $   2,960   $   5,884   $   9,913   $   13,171

Deduct: Total stock-based employee
    compensation expense determined
    under fair value based method for all
    awards, net of related tax effects           (726)       (565)     (1,860)      (1,517)
                                            ---------   ---------   ---------   ----------
Pro forma net income                        $   2,234   $   5,319   $   8,053   $   11,654
                                            =========   =========   =========   ==========

Earnings per share:
    Basic - as reported                     $     .33   $     .65   $    1.09   $     1.43
                                            =========   =========   =========   ==========
    Basic - pro forma                       $     .25   $     .58   $     .89   $     1.27
                                            =========   =========   =========   ==========

    Diluted - as reported                   $     .27   $     .60   $     .93   $     1.33
                                            =========   =========   =========   ==========
    Diluted - pro forma                     $     .22   $     .58   $     .78   $     1.23
                                            =========   =========   =========   ==========

                                       8





Pro forma  compensation  expense may not be indicative of pro forma  expenses in
future periods.  For purposes of estimating the fair value of each option on the
grant date, the Company utilized the Black-Scholes option pricing model.

7.      MARKETABLE SECURITIES
-----------------------------

The cost, gross unrealized gains,  gross unrealized losses and fair market value
of marketable securities by type are as follows:

                                             Gross        Gross      Fair
                                           unrealized  unrealized   market
                                  Cost       gains       losses     value
                               --------   ------------ ---------- -----------
       September 30, 2003:
       -------------------
       Available-for-sale:
           Equity securities   $ 30,829   $  8,957    $   (127)   $ 39,659
           Bonds                      5       --          --             5
                               --------   --------    --------    --------
                               $ 30,834   $  8,957    $   (127)   $ 39,664
                               ========   ========    ========    ========

       December 31, 2002:
       ------------------
       Available-for-sale:
           Equity securities   $ 23,389   $  2,119    $   (447)   $ 25,061
           Bonds                      5       --          --             5
                               --------   --------    --------    --------
                                 23,394      2,119        (447)     25,066
       Trading:
           Equity securities        792         35        --           827
                               --------   --------    --------    --------

                               $ 24,186   $  2,154    $   (447)   $ 25,893
                               ========   ========    ========    ========

Included in  marketable  securities  at September 30, 2003 and December 31, 2002
was $30,760  and  $20,402,  respectively,  of common  stock at fair value,  in a
publicly-traded company for which the Board Chairman is an executive officer and
director and another Director of the Company is a director.

Proceeds  from the sale of  available-for-sale  and trading  securities  and the
resulting gross realized gains and losses included in the  determination  of net
income are as follows:

                                                     Nine Months Ended
                                                       September 30,
                                                   ----------------------
                                                     2003         2002
                                                    -------     --------

               Available-for-sale securities:
                  Proceeds                          $   179     $   268
                  Gross realized gains (losses)          36      (1,005)
               Trading securities:
                  Proceeds                          $   884     $  --
                  Gross realized gains                   57        --


8.      INVENTORIES
-------------------

The components of inventories are as follows:

                                                 September 30, December 31,
                                                     2003         2002
                                                 ------------- ------------

                  Raw materials                     $1,738      $1,765
                  Work in process                      488         367
                  Finished goods                     1,688       1,545
                                                    ------      ------
                                                    $3,914      $3,677
                                                    ======      ======

                                       9





9.      REAL ESTATE
-------------------

Property sales:
---------------

The  Company  adopted  the  provisions  of  Statement  of  Financial  Accounting
Standards  No. 144,  "Accounting  for the  Impairment  or Disposal of Long-Lived
Assets"  ("SFAS No.  144") in 2002.  SFAS No. 144  requires  that the  operating
results  through the date of sale,  as well as the gains on sales  generated  on
properties sold or held for sale, that meet the criteria of being a component of
an entity,  shall be  reclassified  as  discontinued  operations for all periods
presented.  As the statement  requires  implementation  on a prospective  basis,
properties  which were identified as held for sale prior to  implementation  are
presented in the Consolidated  Financial  Statements in a manner consistent with
the prior periods' presentation.

During the nine months ended September 30, 2003, the Company sold ten commercial
properties  from its real estate  investment and management  segment which had a
total net book value of $4,097.  The properties were sold for an aggregate sales
price of $4,349,  resulting in gains of $151 on a net of tax basis.  The Company
also sold a shopping  center  from its real  estate  investment  and  management
segment  which had a total net book value of $136.  The property was sold for an
aggregate  sales price of $3,020,  resulting  in gains of $1,730 on a net of tax
basis.  One  shopping  center  from the  Company's  real estate  investment  and
management  segment  was  donated  during the first  quarter of 2003 which had a
total net book value of $60. The Company  received no proceeds from the donation
and recorded a loss of ($36) on a net of tax basis.

The results of  operations  for these  properties  for the three and nine months
ended  September  30,  2003 and 2002  have  been  reclassified  to  discontinued
operations, on a net of tax basis, in accordance with SFAS No. 144. In addition,
the  assets  and  liabilities   associated  with  these   properties  have  been
reclassified to  discontinued  operations in the  Consolidated  Balance Sheet at
December 31, 2002.  These amounts  primarily  consist of real  property,  net of
accumulated  depreciation,  rents  receivable,  prepaid or accrued charges,  and
mortgage obligations, if any.

Summarized  financial  information  for  properties  sold and  accounted  for as
discontinued operations, is as follows:

                                   Three Months Ended     Nine Months Ended
                                      September 30,           September 30,
                                   -------------------------------------------
                                     2003       2002       2003       2002
                                   --------   --------   --------   ----------
Rental revenues from real estate
   operations                      $    13    $   315    $   502    $ 1,435
Mortgage interest expense             --           (9)        (4)       (41)
Depreciation expense                  --           (9)        (3)       (31)
Other operating expenses               (34)       (44)       (73)       (92)
                                   -------    -------    -------    -------

Income (loss) from operations      $   (21)   $   253    $   422    $ 1,271
                                   =======    =======    =======    =======

Properties held for sale:
------------------------

As of September 30, 2003, in accordance with the provisions of SFAS No. 144, the
Company considered a total of six commercial properties from its real estate and
investment  management  segment to be held for sale and reported as discontinued
operations.

In accordance with SFAS No. 144, the results of operations for these  properties
for the  three  and nine  months  ended  September  30,  2003 and 2002 have been
reclassified  to  discontinued  operations,  on a  net  of  tax  basis,  in  the
Consolidated  Statements  of Income.  In  addition,  the assets and  liabilities
associated with these properties,  which primarily consist of real property, net
of accumulated depreciation,  rents receivable,  prepaid or accrued charges, and
mortgage obligations,  if any, have been reclassified to discontinued operations
in the Consolidated Balance Sheets at September 30, 2003 and December 31, 2002.

                                       10





Summarized financial  information for properties held for sale and accounted for
as discontinued operations, is as follows:

                                       Three Months Ended          Nine Months Ended
                                          September 30,              September 30,
                                     ----------------------     -----------------------
                                        2003        2002           2003         2002
                                     --------     --------      ---------     --------
Rental revenues from real estate
  operations                            $ 38        $ 41           $ 59         $ 85
Depreciation expense                     --           (1)            (2)          (5)
Other operating expenses                  (8)        (15)           (14)         (25)
                                        ----        ----           ----         ----

Income from operations                  $ 30        $ 25           $ 43         $ 55
                                        ====        ====           ====         ====

10.     INVESTMENTS IN JOINT VENTURES
-------------------------------------

Investments in joint ventures consist of:

                                                 September 30,   December 31,
                                                    2003            2002
                                                 -------------  ------------

        Investment in hotel ventures (a)          $11,962          $23,128
        Lease financing (b)                         8,047            8,261
                                                  -------          -------

                                                  $20,009          $31,389
                                                  =======          =======

(a) In December  2002,  the Company  purchased a 50% interest in a joint venture
(the  "Hotel  Venture")  for  $23,128  together  with Prime  Hospitality,  Corp.
("Prime"),  a publicly-traded  company for which the Company's Board Chairman is
an  executive  officer and  director  and  another  Director of the Company is a
director.  The Hotel  Venture owns and operates a hotel in New Jersey.  In March
2003,  the Company and Prime each sold a 10% interest in the Hotel Venture to an
unrelated third party, at cost.

In April 2003,  the Hotel  Venture  entered  into a $25,000  mortgage  loan (the
"Mortgage")  with a bank,  secured by the underlying  hotel. The proceeds of the
loan  were  distributed  to the  partners  of the Hotel  Venture  based on their
ownership interest,  thereby reducing their respective investment. In connection
with the  Mortgage,  the  Company  and  Prime  entered  into a  direct  guaranty
agreement  with the bank whereby the Company and Prime,  jointly and  severally,
guaranteed not more than $4,000 of the Mortgage.  Amounts due under the guaranty
are reduced by the scheduled principal payments under the Mortgage. The guaranty
is  enforceable  upon the occurrence of certain  events,  including a default as
defined in the Mortgage and expires upon satisfaction of the loan in April 2006.
Pursuant to the operating agreement,  any payments made under the guaranty would
increase the  guarantors'  ownership  interest.  The Company  believes  that the
collateral of the underlying  hotel is sufficient to repay the Mortgage  without
requiring  enforcement  of the  guaranty.  Accordingly,  the  fair  value of the
guarantee was determined to be insignificant  and,  therefore,  no liability has
been recorded.

In January  2003,  the Company  purchased a 50% interest in a joint venture (the
"Quebec  Venture") for $6,114  together with Prime.  The Quebec Venture owns and
operates a hotel in Quebec,  Canada.  In March 2003,  the Company and Prime each
sold a 10% interest in the Quebec Venture to an unrelated  third party, at cost.
In July 2003, the Quebec Venture entered into an $8.2  (Canadian)  mortgage loan
with a Canadian Bank,  secured by the underlying hotel. The proceeds of the loan
were  distributed to the partners of the Quebec Venture based on their ownership
interest, thereby reducing their respective investment.

The equity  method of  accounting  is used for  investments  in 20% to 50% owned
joint  ventures in which the  Company  has the  ability to exercise  significant
influence,  but not control. Under the operating agreements of the Hotel Venture
and Quebec  Venture,  all significant  operating and capital  decisions are made
jointly and operating profits are allocated based on ownership interests.  These
investments were initially  recorded at cost and are  subsequently  adjusted for
equity in  earnings  (losses)  and cash  contributions  and  distributions.  The
Company's  equity in earnings of these hotel  ventures was $433 and $720 for the
three and nine months ended September 30, 2003, respectively.

                                       11





Summarized financial  information of the Hotel Venture and Quebec Venture are as
follows:

                                                       September 30, 2003   December 31, 2002
                                                       -------------------  -----------------

         Balance Sheets:
               Property, plant and equipment, net            $60,207            $46,397
                                                             =======            =======
               Current assets                                $ 4,398            $   347
                                                             =======            =======
               Current liabilities                           $ 2,740            $   500
                                                             =======            =======
               Long-term liabilities                         $30,729            $  --
                                                             =======            =======

                                                       Three Months Ended    Nine months Ended
                                                       September 30, 2003    September 30, 2003
                                                       ----------------------------------------

         Statements of Income:
               Revenues                                      $  7,062           $ 15,931
               Expenses                                        (5,979)           (14,227)
                                                             --------           --------
               Operating income                              $  1,083           $  1,704
                                                             ========           ========

The  accounts  of the Quebec  Venture are  recorded in Canadian  dollars and are
translated  into U.S.  dollars,  the reporting  currency of the Quebec  Venture.
Translation adjustments relating to results of operations are generally included
in the equity in  earnings  reported  by the Company  while the  translation  of
balance sheet accounts do not generally affect the Company's investment in joint
venture.

(b) Lease financing consists of a 50.0% interest in a limited  partnership whose
principal  assets  are two  distribution  centers  leased  to Kmart  Corporation
("Kmart"),  which are accounted for as leveraged leases.  The Company's share of
income arising from this  investment was $368 and $506 for the nine months ended
September 30, 2003 and 2002,  respectively,  and is included in rental income in
the Consolidated Statements of Income.

11.     DERIVATIVE FINANCIAL INSTRUMENTS
----------------------------------------

The Company recognizes all derivative financial  instruments,  such as its 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 accumulated  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 accumulated  other  comprehensive  income net of deferred taxes.
Changes in the fair value 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 and participate
in put and/or call options.

Management maintains a diversified 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,  including short stock sales and put
and/or call options. At September 30, 2003 and December 31, 2002, the fair value
of such derivatives was ($610) and ($122), respectively,  which is recorded as a
component  of  accounts  payable  and accrued  liabilities  in the  Consolidated
Balance  Sheets.  These  instruments  do not  qualify for hedge  accounting  and
therefore changes in the derivatives fair value are recognized in earnings.

The Company  recognized  $1,096 and $3,629 in net realized and unrealized  gains
from  derivative  instruments  for the nine months ended  September 30, 2003 and
2002,  respectively,  which are included in other income and expense, net in the
Consolidated Statements of Income.

                                       12





12.     RELATED PARTY TRANSACTIONS
----------------------------------

The  Company  has a  50.0%  interest  in  an  unconsolidated  limited  liability
corporation,  whose  principal  assets are two  distribution  centers  leased to
Kmart.  A group that  includes the wife of the  Company's  Board  Chairman,  two
Directors  of the  Company  and  the  wife of one of the  Directors  has an 8.0%
interest in this entity (See "Investments in Joint Ventures").

The  Company's  two hotel  properties,  as well as the hotels owned by the Hotel
Venture  and Quebec  Venture,  are managed by Prime (See  "Investments  in Joint
Ventures").  Fees paid for the management of the Company's two hotel  properties
are based upon a percentage  of revenue and were  approximately  $78 and $81 for
the nine months ended  September  30, 2003 and 2002,  respectively.  Included in
marketable  securities  at September  30, 2003 and December 31, 2002 was $30,760
and  $20,402,   respectively,   of  common  stock  in  Prime  which   represents
approximately 7.9% and 5.6% of Prime's outstanding shares, respectively.  During
the first nine months of 2003, the Company  purchased an additional 1,036 shares
of the common stock of Prime for $5,941.

13.     COMMITMENTS AND CONTINGENCIES
-------------------------------------

The Company has  undertaken  the  completion  of  environmental  studies  and/or
remedial action at Metex' (as hereafter defined) two New Jersey facilities.  The
Company  has  recorded  a  liability,  which  is  included  in  other  long-term
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  become  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.

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.

                                       13





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
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.

14.     COMPREHENSIVE INCOME (LOSS)
-----------------------------------

The components of comprehensive income (loss) are as follows:

                                                                         Three Months Ended         Nine Months Ended
                                                                            September 30,              September 30,
                                                                     ---------------------------------------------------
                                                                          2003        2002          2003        2002
                                                                     -----------    --------     ---------    ----------
Net income                                                             $  2,960     $  5,884      $  9,913     $ 13,171
Other comprehensive income (loss), net of tax:
    Change in net unrealized gain (loss) on available for
      sale securities, net of tax (provision) benefit of ($2,777),
      $2,820, ($2,505) and $1,033, respectively                           5,158       (5,236)        4,654       (1,917)

    Change in fair value of cash flow hedge, net of tax
      provision of $0, ($1), $0 and ($5), respectively                     --              1          --              6
                                                                       --------     --------      --------     --------

Comprehensive income                                                   $  8,118     $    649      $ 14,567     $ 11,260
                                                                       ========     ========      ========     ========

Accumulated other comprehensive income as of September 30, 2003 and December 31,
2002  consists of a net  unrealized  gain on  available-for-sale  securities  of
$5,740  and  $1,086,  which  is  net  of  tax  provision  of  $3,090  and  $586,
respectively.

15.     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 Ended          Nine Months Ended
                                                  September 30,               September 30,
                                            ------------------------     -----------------------
                                               2003          2002          2003          2002
                                            ---------      ---------     --------      ---------
Net revenues and sales:

   Real estate investment and management     $  5,886      $  5,864      $ 18,346      $ 17,723
   Engineered products                          8,599         8,439        25,081        25,700
                                             --------      --------      --------      --------
                                             $ 14,485      $ 14,303      $ 43,427      $ 43,423
                                             ========      ========      ========      ========
Operating income:
   Real estate investment and management     $  2,688      $  2,888      $  8,830      $  8,790
   Engineered products                          1,009           807         2,323         1,881
   General corporate expenses                    (760)         (595)       (2,377)       (1,810)
                                             --------      --------      --------      --------
                                                2,937         3,100         8,776         8,861

Other income, net                                 907         4,308         3,077         9,336
                                             --------      --------      --------      --------

Income from continuing operations before
   income taxes                              $  3,844      $  7,408      $ 11,853      $ 18,197
                                             ========      ========      ========      ========

                                       14





16.     RECENT ACCOUNTING PRONOUNCEMENTS
----------------------------------------

In April 2002, the Financial Accounting Standards Board ("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 30. SFAS No.
145 also requires sale-leaseback accounting for certain lease modifications that
have  economic  effects  that are similar to  sale-leaseback  transactions.  The
changes  related to lease  accounting are effective for  transactions  occurring
after May 15, 2002 and the changes related to debt  extinguishment are effective
for fiscal years  beginning after May 15, 2002. The adoption of SFAS No. 145 did
not 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 effective
for exit or disposal  activities that are initiated after December 31, 2002. The
adoption  of SFAS  No.  146 did not  have a  material  impact  on the  Company's
financial position or results of operations.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure,  an amendment of FASB Statement No.
123"  ("SFAS No.  148").  SFAS No.  148 amends  SFAS No.  123,  "Accounting  for
Stock-Based  Compensation," to provide  alternative methods of transition for an
entity that voluntarily changes to the fair value based method of accounting for
stock-based employee  compensation.  It also amends the disclosure provisions of
that Statement to require prominent disclosure about the effects on reported net
income of an entity's  accounting  policy  decision with respect to  stock-based
employee  compensation.  The  Company  has chosen to  continue  to  account  for
stock-based  compensation  using the  intrinsic  value method  prescribed in APB
Opinion No. 25 and related  interpretations  as provided  for under SFAS No.148.
Accordingly,  compensation  expense is only  recognized when the market value of
the Company's stock at the date of grant exceeds the amount an employee must pay
to acquire the stock. The Company adopted the interim  disclosure  provisions of
SFAS No. 148 in its financial  reports for the quarter ended March 31, 2003. The
adoption  of SFAS  No.  148 did not  have a  material  impact  on the  Company's
financial position or results of operations.

In  November  2002,  the FASB issued FASB  Interpretation  No. 45,  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness  of Others"  ("FIN 45").  FIN 45 requires that upon
issuance of a guarantee,  a guarantor  must  recognize a liability  for the fair
value  of an  obligation  assumed  under  a  guarantee.  FIN  45  also  requires
additional  disclosures  by a  guarantor  in its  interim  and annual  financial
statements  about  the  obligations   associated  with  guarantees  issued.  The
recognition  provisions  of FIN 45 are effective  for any  guarantees  issued or
modified after December 31, 2002. The disclosure  requirements are effective for
financial  statements  of interim or annual  periods  ending after  December 15,
2002. As a result of adopting the  disclosure  provisions of FIN 45, the Company
has provided  additional  disclosures  herein as required (See  "Investments  in
Joint Ventures").

In January 2003, the FASB issued FASB  Interpretation  No. 46  "Consolidation of
Variable Interest  Entities" ("FIN 46"). In general,  a variable interest entity
is a  corporation,  partnership,  trust,  or any other legal  structure used for
business  purposes  that either (a) does not have equity  investors  with voting
rights or (b) has equity  Investors  that do not  provide  sufficient  financial
resources for the entity to support its activities.  A variable  interest entity
often holds financial  assets,  including  loans or receivables,  real estate or
other property.  A variable interest entity may be essentially passive or it may
engage  in  activities  on behalf  of  another  company.  Until  now,  a company
generally has included another entity in its consolidated  financial  statements
only if it controlled the entity through voting  interests.  FIN 46 changes that
by requiring a variable  interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable  interest
entity's  activities or entitled to receive a majority of the entity's  residual
returns  or both.  FIN 46's  consolidation  requirements  apply  immediately  to
variable  interest  entities  created or acquired  after  January 31, 2003.  The
consolidation  requirements  apply to older entities in the first fiscal year or
interim  period  beginning  after  June  15,  2003.  Certain  of the  disclosure
requirements  apply in all financial  statements  issued after January 31, 2003,
regardless of when the variable  interest  entity was  established.  The Company

                                       15





adopted FIN 46 effective  January 31,  2003.  The adoption of FIN 46 has not had
and is not  expected  to  have a  material  impact  on the  Company's  financial
position or results of operations.

In April 2003,  the FASB released  SFAS No. 149,  "Amendment of Statement 133 on
Derivative  Instruments and Hedging  Activities.  "SFAS No. 149" clarifies under
what  circumstances  a  contract  with  an  initial  net  investment  meets  the
characteristics  of  a  derivative,  amends  the  definition  of  an  underlying
contract,  and  clarifies  when a derivative  contains a financing  component in
order to increase the comparability of accounting  practices under SFAS No. 133.
The  statement  is  effective  for  contracts  entered  into or  modified  after
September 30, 2003, and for hedging relationships designated after September 30,
2003. The adoption of SFAS No. 149 is not expected to have a material  impact on
the Company's financial position or results of operations.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments  with  Characteristics  of both  Liabilities  and Equity" ("SFAS No.
150").  SFAS No. 150  establishes  standards  for how an issuer  classifies  and
measures certain financial  instruments with characteristics of both liabilities
and equity.  It requires that an issuer classify a financial  instrument that is
within its scope as a liability  (or an asset in some  circumstances).  SFAS No.
150 is effective for financial  instruments  entered into or modified  after May
31, 2003,  and  otherwise is  effective  at the  beginning of the first  interim
period  beginning  after  June  15,  2003,  except  for  mandatorily  redeemable
financial  instruments of nonpublic  entities.  The Company has adopted SFAS No.
150 and it did not have a material impact on the Company's financial position or
results of operations.

17.     USE OF ESTIMATES
------------------------

The  preparation  of  Consolidated   Financial  Statements  in  conformity  with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to use judgment in making  estimates and  assumptions  that
affect the reported  amounts of assets,  liabilities,  revenues and expenses and
related  disclosure  of  contingent  assets  and  liabilities.  Certain  of  the
estimates  and  assumptions  required  to be made  relate  to  matters  that are
inherently uncertain as they pertain to future events. While management believes
that the  estimates  and  assumptions  used  were the most  appropriate,  actual
results  could  differ   significantly  from  those  estimates  under  different
assumptions and conditions.

18.         RECLASSIFICATIONS
-----------------------------

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


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

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

RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
-------------------------------------------------------

Total revenues for the quarter ended  September 30, 2003 were $14,485  resulting
in operating  income of $2,937  versus total  revenues of $14,303 and  operating
income of $3,100  during the  comparable  2002 period.  Net income for the three
month period ended  September 30, 2003 was $2,960 or $.33 per basic share versus
$5,884 or $.65 per basic share for the same  period in 2002.  The results of the
three months ended  September  30, 2002  include  $3,770 in gains on  derivative
instruments above those recognized in the current year period.

Revenues for the nine months ended  September 30, 2003 were $43,427  compared to
comparable 2002 revenues of $43,423.  Operating income for the nine months ended
September 30, 2003 was $8,776 versus $8,861 for the comparable 2002 period.  Net
income for the nine  months  ended  September  30,  2003 was $9,913 or $1.09 per
basic  share  compared to net income of $13,171 or $1.43 per basic share for the
same period in 2002.  The results of the 2002 period  include $5,273 in gains on
derivative  instruments and sales of real estate,  including those accounted for
as  discontinued  operations,  above those  recognized  in the nine month period
ended September 30, 2003.

                                       16





REAL ESTATE INVESTMENT AND MANAGEMENT
-------------------------------------

Rental revenues from real estate operations remained relatively  consistent with
the prior year,  totaling  $5,886 for the three month period ended September 30,
2003 versus $5,864 in the same 2002 period and $18,346 for the nine months ended
September 30, 2003, compared to $17,723 in the same 2002 period. Rental revenues
from 2003 property  sales and properties  held for sale have been  classified as
discontinued  operations  in  accordance  with  SFAS No.  144.  The  results  of
operations of properties  that have been sold and properties held for sale prior
to the  implementation  of SFAS No. 144 have not been similarly  reclassified to
discontinued operations.

Mortgage  interest  expense  continues  to  decrease  as a result of  continuing
mortgage  amortization.  Such expense totaled $252 during the three months ended
September  30, 2003 a decline of $47 from $299  incurred in the third quarter of
2002. For the nine months ended September 30, 2003,  mortgage  interest  expense
was $802 compared to $1,034 for the corresponding 2002 period, a decline of $232
or 22.4%.

Depreciation  expense  associated with real properties held for rental decreased
$15 or 1.9% and $107 or 4.4%, respectively,  for the three and nine months ended
September 30, 2003 compared to the same periods in 2002 primarily due to reduced
depreciation  expense associated with fully depreciated  building  improvements.
Depreciation  expense from property sales and  properties  held for sale in 2003
has been reclassified as discontinued operations in accordance with SFAS No.144.
Such  expense  on  property  sales  and  properties  held for sale  prior to the
implementation  of  SFAS  No.  144  have  not  been  similarly  reclassified  to
discontinued operations.

Other  operating  expenses  associated  with the  management of real  properties
increased  $284 or 15.2% for the three months ended  September 30, 2003 and $922
or  16.9%  for the  nine  months  ended  September  30,  2003,  compared  to the
comparable  periods  in 2002.  These  increases  are  primarily  the  result  of
increased property maintenance, insurance, payroll and hotel operating expenses.

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 Ended       Nine Months Ended
                                                     September 30,           September 30,
                                                 -------------------     --------------------
                                                   2003        2002        2003        2002
                                                 -------     -------     -------     --------

Net sales                                        $ 8,599     $ 8,439     $25,081     $25,700
Cost of sales                                      5,849       6,010      17,729      18,771
Selling, general and administrative expenses       1,741       1,622       5,029       5,048
                                                 -------     -------     -------     -------

Operating income                                 $ 1,009     $   807     $ 2,323     $ 1,881
                                                 =======     =======     =======     =======


Net sales of the  engineered  products  segment  increased  $160 or 1.9% for the
three months ended  September 30, 2003 and  decreased  $619 or 2.4% for the nine
months ended September 30, 2003,  compared with the results of the corresponding
2002 period.  Demand for the Company's automotive products continued to increase
in the three and nine month period ended  September  30,  2003,  however,  these
increases were offset by weakened demand for the Company's  engineered component
and transformer product lines especially in the first six months of 2003.

Cost of sales as a percentage of sales  decreased  3.2% and 2.3%,  respectively,
for the  three  and nine  months  ended  September  30,  2003,  compared  to the
corresponding  period in 2002,  principally  due to the  implementation  of cost
containment measures and the mix of products sold.

Selling,  general and administrative expenses of the engineered products segment
increased $119 or 7.3% for the three months ended  September 30, 2003 versus the
comparable 2002 period  primarily due to increases in professional fees, payroll
and  payroll  related  items.  For the nine months  ended  September  30,  2003,
selling,  general and administrative expenses decreased less than one percent as
compared to the results of the corresponding 2002 period.

                                       17





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

General  and  administrative  expenses  not  associated  with the  manufacturing
operations for the three and nine months ended September 30, 2003 increased $165
or 27.7% and $567 or 31.3%, respectively, compared to such expenses incurred for
the  comparable  2002 period.  These  increases are mainly due to higher pension
related expenses and salary and salary related expenses.

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

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

                                                                Three Months Ended       Nine Months Ended
                                                                   September 30,            September 30,
                                                             ---------------------     ---------------------
                                                               2003         2002         2003         2002
                                                             --------     -------      ---------    --------

Net realized and unrealized gain on derivative
   instruments                                               $   114      $ 3,884      $ 1,096      $ 3,629
Equity in earnings of hotel ventures                             433         --            720         --
Net gain (loss) on sale of available-for-sale securities          36         --             36       (1,005)
Net realized gain on trading securities                         --           --             57         --
Net gain on sale of real estate assets                          --           --            152        5,674
Other, net                                                       (11)          (9)         (15)         (34)
                                                             -------      -------      -------      -------
                                                             $   572      $ 3,875      $ 2,046      $ 8,264
                                                             =======      =======      =======      =======

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

Operating  income from  properties  sold or held for sale and  accounted  for as
discontinued  operations was $5 and $279 on a net of tax basis for the three and
nine months ended September 30, 2003,  versus $167 and $796,  respectively,  for
the  comparable  2002  periods.  Prior year  amounts have been  reclassified  to
reflect  results of  operations of real  properties  sold or held for sale as of
September  30, 2003 as  discontinued  operations.  Net gains on the sale of real
estate assets  accounted for as  discontinued  operations  were $336 and $1,845,
respectively,  for the three and nine months ended  September  30, 2003 and $176
for both the three and nine months ended  September  30,  2002,  on a net of tax
basis.  Prior to the adoption of SFAS No. 144,  gains or losses on sales of real
estate assets were not accounted for as a component of discontinued operations.

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

The Company experienced a net cash inflow from operations of $9,537 for the nine
months  ended  September  30,  2003 versus  $10,994  for the nine  months  ended
September 30, 2002. The $1,457 decrease in operating cash flow primarily results
from increases in accounts  receivable and  inventories  and a decrease in other
liabilities offset by an increase in income taxes payable.

For the nine months ended September 30, 2003,  $14,333 was provided by investing
activities which consisted  primarily of net  distributions  from investments in
joint  ventures of  $12,468,  proceeds  from the sale of real  estate  assets of
$7,523,  as well as proceeds from the sale of derivative  instruments of $1,584.
This amount was partially offset by purchases of  available-for-sale  securities
of $7,062.

For the nine months  ended  September  30,  2002,  $11,674 was used in investing
activities   which   consisted   primarily  of  $10,641  in  net   purchases  of
available-for-sale securities, $8,843 of purchases of derivative instruments and
$2,995 to purchase a note  receivable.  This amount was offset by proceeds  from
the sale of real estate  assets of $6,710,  as well as proceeds from the sale of
derivative instruments of $3,912.

Net cash used in financing  activities  was $12,506 during the nine months ended
September 30, 2003. This use of cash is primarily attributable to the payment of
dividends of $9,102 as well as debt reduction and the purchase and retirement of
the Company's common stock,  partially offset by cash proceeds from the exercise
of stock options.

                                       18





Net cash used in financing activities during the nine months ended September 30,
2002 was $5,827.  This use of cash was primarily  attributable to debt reduction
of $3,165  and the  purchase  and  retirement  of the  Company's  common  stock,
partially offset by cash proceeds from the exercise of stock options.

At September 30, 2003,  the Company's  cash and  marketable  securities  totaled
$99.9  million  and  working  capital  was $85.4  million  compared  to cash and
marketable  securities of $74.8 million and working  capital of $67.0 million at
December 31, 2002.

Management  believes  that the  available  working  capital along with the $80.0
million of availability on the revolving credit facility,  discussed below, puts
the Company in an opportune position to fund acquisitions and grow its portfolio
of real estate properties if and when attractive long-term  opportunities become
available.  Management  continues  to  believe  that the real  estate  market is
overvalued and accordingly recent acquisitions have been limited to those select
properties that meet the Company's stringent financial requirements.

On June 10,  2003,  the Board of  Directors  of the  Company  declared a special
one-time  cash  dividend of $2.00 per common  share on a pre-split  basis to all
stockholders of record as of June 20, 2003. While the Company does not currently
expect to pay additional  dividends in the future,  the Board of Directors could
reevaluate this position in the future. This dividend, totaling $9,102, was paid
on July 10, 2003.

On June 10,  2003,  the  Company's  Board of  Directors  unanimously  adopted an
amendment to the Company's  Articles of  Incorporation to increase the number of
authorized  shares of the  Company's  common stock from 7,500 to 17,500  shares,
subject to stockholder  approval.  A majority of the  outstanding  shares of the
Company  voted to approve this  proposal and the Company  declared a two-for-one
stock split during August 2003. All references to the number of shares of common
stock,  per share  prices and  earnings  per share  amounts in the  accompanying
Consolidated  Financial Statements and notes included in the Quarterly Report on
Form 10-Q for the current and prior  periods  have been  adjusted to reflect the
increase in authorized  capital and stock split on a retroactive  basis,  except
for dividends per share.

The cash  needs of the  Company  have been  satisfied  from funds  generated  by
current  operations.  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,  marketable  securities,  ongoing  operations  and
borrowings  under the Revolver (as hereinafter  defined).  The primary source of
capital to fund  additional  real  estate  acquisitions  and to 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 the  acquisition  of 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.   The  Company   currently  has  no   agreements,   commitments   or
understandings  with  respect to the  acquisition  of real  properties  or other
companies in exchange for 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.  Changes in U.S.
interest  rates  affect  the  interest  earned  on the  Company's  cash and cash
equivalent  balances.  Given the level of cash currently held by the Company and
the decline in U.S.  interest rates over the past several  years,  the Company's
earnings have been negatively impacted.

Effective  December 10, 2002, the Company  entered into a credit  agreement with
five  banks  which  provides  for an $80.0  million  revolving  credit  facility
("Revolver").  The Revolver may be increased  under  certain  circumstances  and
expires on December 31, 2005.

                                       19





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
10.0%,  (ii) 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%,  not to exceed the lesser of $10.0 million or 10% of total
eligibility,  (iii)  the  lesser  of $20.0  million  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%, (iv) the sum of 75.0% of
eligible accounts receivable,  50.0% of eligible inventory,  and 50% of eligible
loans, as defined,  (v) cash and cash  equivalents in excess of working capital,
as defined, and (vi) 50% of marketable securities,  as defined. At September 30,
2003,  eligibility  under the Revolver was $80.0  million,  based upon the above
terms and there  were no  amounts  outstanding  under the  Revolver.  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),   and  limitations  on
indebtedness.  The Company was in compliance with all covenants at September 30,
2003.  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 a 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") (1.12% at September 30,
2003)  plus  2.0%  for non  cash  collateralized  borrowings  and  1.0% for cash
collateralized borrowings.

In strategies designed to hedge overall market risk, the Company may sell common
stock short and participate in put and/or call options. These instruments do not
qualify for hedge  accounting  and therefore  changes in such  derivatives  fair
value are recognized in earnings.  These derivatives are recorded as a component
of accounts payable and accrued liabilities in the Consolidated Balance Sheets.

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 of
this matter.

The Company is subject to various 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  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.

The current  liabilities  of the Company have at times in the past  exceeded its
current assets  principally due to the financing 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.

RELATED PARTY TRANSACTIONS
--------------------------

Refer to Notes to Consolidated  Financial Statements for a discussion of related
party transactions.

CRITICAL ACCOUNTING POLICIES AND MANAGEMENT ESTIMATES
-----------------------------------------------------

Refer to the  Company's  2002 Annual Report on Form 10-K for a discussion of the
Company's critical  accounting  policies,  which include revenue recognition and
accounts   receivable,   marketable   securities,   inventories,   real  estate,
discontinued  operations,  long-lived assets and pension plans.  During the nine
months  ended  September  30,  2003,  there  were no  material  changes to these
policies.

                                       20





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

Refer to Notes to Consolidated  Financial  Statements for a discussion of recent
accounting pronouncements.

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

Certain  statements in this Report on Form 10-Q and other statements made by the
Company  or its  representatives  that are not  strictly  historical  facts  are
"forward-looking"  statements  within  the  meaning  of the  Private  Securities
Litigation  Reform Act of 1995 that should be  considered as subject to the many
risks and  uncertainties  that exist in the  Company's  operations  and business
environment.  The forward-looking  statements are based on current  expectations
and involve a number of known and  unknown  risks and  uncertainties  that could
cause the actual  results,  performance  and/or  achievements  of the Company to
differ  materially  from  any  future  results,   performance  or  achievements,
expressed or implied, by the forward-looking  statements.  Readers are cautioned
not to place undue  reliance on these  forward-looking  statements,  and that in
light of the significant  uncertainties inherent in forward-looking  statements,
the inclusion of such statements  should not be regarded as a representation  by
the Company or any other person that the objectives or plans of the Company will
be achieved. The Company also assumes no obligation to publicly update or revise
its  forward-looking  statements or to advise of changes in the  assumptions and
factors on which they are based.  See the  Company's  2002 Annual Report on Form
10-K for a discussion  of risk  factors  that could impact our future  financial
performance  and/or  cause  actual  results to differ  significantly  from those
expressed or implied by such statements.


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

As of the end of the period covered by this report,  the Company  carried out an
evaluation,  under the supervision and with the  participation  of the Company's
management,  including the Company's Chief Executive Officer and Chief Financial
Officer,  of the  effectiveness  of the design and  operation  of the  Company's
disclosure controls and procedures  pursuant to Exchange Act Rule 13a-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 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On August 4, 2003, by written consent, the stockholders approved the adoption of
an amendment to the Certificate of  Incorporation of the Company to increase the
number of common  shares,  $.10 par value,  which the Company has  authority  to
issue,  from  7,500,000  to  17,500,000  shares.  The vote on such matter was as
follows, on a pre-split basis:

                   FOR                    AGAINST          ABSTAIN
              -------------              --------       ------------
                 4,116,370                168,237          26,357

                                       21





ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

(a)  Reports on Form 8-K      None

(b)  Exhibits:

31.1    Certification of the Chief Executive Officer Pursuant to Rule 13a-14
31.2    Certification of the Chief Financial Officer Pursuant to Rule 13a-14
32.1    Certification of the Chief Executive  Officer Pursuant to Section 906 of
        Sarbanes-Oxley Act of 2002
32.2    Certification of the Chief Financial  Officer Pursuant to Section 906 of
        Sarbanes-Oxley Act of 2002





                                   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 10, 2003                    By: /s/ Anthony J. Miceli
                                                 -------------------------------
                                                 Anthony J. Miceli
                                                 Vice President, Chief Financial
                                                 Officer and Secretary of the
                                                 Company

                                       22`