FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549

[ X ]         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)

For the fiscal year ended                December 31, 1999
                        --------------------------------------------------------

                                       or

[   ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from                     to
                               --------------------   --------------------------
Commission file number                          1-10104
                               -------------------------------------------------

                              UNITED CAPITAL CORP.
--------------------------------------------------------------------------------
               (Exact name of Company as specified in its charter)


          Delaware                                        04-2294493
------------------------------------------       -------------------------------
 (State or other jurisdiction of                      I.R.S. Employer
 incorporation or organization)                    Identification Number)

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

Company's telephone number, including area code:       (516) 466-6464
                                                --------------------------------
Securities registered pursuant to Section 12(b) of the Act:

        Title of Each Class            Name of Each Exchange on Which Registered
-------------------------------------------------------------------------------
Common Stock (Par Value $.10 Per Share)           American Stock Exchange

Indicate by check mark whether the Company (1) has filed all reports required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding  12 months  (or for such  shorter  period  that the  Company  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes X   No
                                      ---     ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Company's  knowledge,  in  definitive  proxy or  information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K  X .
          ---

The  aggregate  market  value  of  the  shares  of  the  voting  stock  held  by
nonaffiliates of the Company as of March 15, 2000 was approximately $18,781,000.

The number of shares of the Company's $.10 par value common stock outstanding as
of March 15, 2000 was 4,735,915.

                       DOCUMENTS INCORPORATED BY REFERENCE

The  information  required  by Part III of Form  10-K  will be  incorporated  by
reference to certain  portions of a definitive proxy statement which is expected
to be filed by the Company  pursuant to Regulation 14A within 120 days after the
close of its fiscal year.


<PAGE>

                                     PART I

ITEM 1.                    BUSINESS

General
-------

United  Capital  Corp.  (the  "Company"),  incorporated  in 1980 in the State of
Delaware, currently has two industry segments:

1.                Real Estate Investment and Management.

2.                Manufacture and Sale of Engineered Products.

The Company also invests  excess  available  cash in marketable  securities  and
other financial instruments.

Description of Business
-----------------------

                  Real Estate Investment and Management
                  -------------------------------------

The Company 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.  Most real estate  properties  owned by the Company are leased under
net leases  pursuant  to which the  tenants  are  responsible  for all  expenses
relating to the leased  premises,  including  taxes,  utilities,  insurance  and
maintenance. The Company also owns properties that it manages which are operated
by the City of New York as day-care  centers  and  offices and other  properties
leased as department stores,  hotels and shopping centers around the country. In
addition,  the Company  owns  properties  available  for sale and lease with the
assistance of a consultant or a realtor working in the locale of the premises.

The  majority  of  properties  are leased to single  tenants.  Exclusive  of the
Company's  former Dorne & Margolin  ("D&M")  manufacturing  facility and a South
Plainfield  property,  96.5%  of the  total  square  footage  of  the  Company's
properties are leased as of December 31, 1999.

                  Engineered Products
                  -------------------

The  Company's   engineered   products  are  manufactured   through  Metex  Mfg.
Corporation   ("Metex")  and  AFP   Transformers,   LLC  ("AFP   Transformers"),
wholly-owned  subsidiaries  of  the  Company.  The  knitted  wire  products  and
components  manufactured by Metex must function in adverse environments and meet
rigid performance requirements. The principal areas in which these products have
application  are as  high  temperature  gaskets,  seals,  components  for use in
airbags, shock and vibration isolators, noise reduction elements and air, liquid
and solid filtering devices.

Metex has been an original  equipment  manufacturer for the automobile  industry
since 1974 and presently  supplies many  automobile  manufacturers  with exhaust
seals and components for use in exhaust emission control devices.

                                       1
<PAGE>

The Company also  manufactures  transformer  products  which are marketed  under
several brand names including AFP Transformers,  Field  Transformer,  ISOREG and
EPOXYCAST for a wide variety of industrial and research  applications  including
machine power transformers, rectifier and inverter transformers and transformers
for heating.

Sales by the engineered  products  segment to its largest customer (in excess of
10.0% of the segment's net sales) accounted for 17.0% of the segment's sales for
1999. During 1998, sales to its three largest  customers  accounted for 34.7% of
the segment's sales.

                  Summary Financial Information
                  -----------------------------

The following table sets forth the revenues,  operating  income and identifiable
assets of each  continuing  business  segment of the Company for 1999,  1998 and
1997.

(In Thousands)                                      1999       1998       1997
                                                  --------   --------   -------

Real Estate Investment and Management
-------------------------------------

Rental revenues                                   $ 29,202   $ 26,349   $ 24,042
                                                  ========   ========   ========

Operating income                                  $ 14,079   $ 12,133   $  7,718
                                                  ========   ========   ========

Identifiable assets, including corporate assets   $122,112   $114,406   $ 95,080
                                                  ========   ========   ========

Engineered Products
-------------------

Net sales                                         $ 30,500   $ 32,170   $ 36,204
                                                  ========   ========   ========

Operating income                                  $  1,855   $  3,239   $  3,419
                                                  ========   ========   ========

Identifiable assets                               $ 11,620   $ 11,706   $ 11,432
                                                  ========   ========   ========

                  Distribution
                  ------------

The Company's  manufactured products are distributed by a direct sales force and
through   distributors   to   industrial   consumers   and  original   equipment
manufacturers.

                  Product Methods and Sources of Raw Materials
                  --------------------------------------------

The  Company's  products are  manufactured  at its own  facilities  and a leased
facility in Mexico.  Raw materials are purchased  from a wide range of suppliers
of such  materials.  Most raw  materials  purchased by the Company are available
from several suppliers.  Certain raw materials used by the Company have been the
subject of  international  trade disputes  regarding price dumping in the United
States. Although management does not expect such matters to adversely effect the
Company's financial position,  an unfavorable outcome could result in higher raw
material costs and adversely  effect the Company's  results of  operations.  The
Company has not had and does not expect to have any problems  fulfilling its raw
material requirements during 2000.

               Patents and Trademarks
               ----------------------

The Company owns several  patents,  patent  licenses and  trademarks.  While the
Company  considers that in the aggregate its patents and trademarks  used in the
engineered  products
                                       2

<PAGE>

operations  are  significant  to this  segment,  it does not believe that any of
these patents or trademarks are of such  importance that the loss of one or more
of them would materially affect its consolidated  financial condition or results
of operations.

                  Employees
                  ---------

At March 15, 2000, the Company employed approximately 320 persons, approximately
190 of which were covered by a collective  bargaining  agreement that expires in
February 2004. The Company believes that its relationship  with its employees is
good.

                  Competition
                  -----------

The Company  competes with at least 20 other companies in the sale of engineered
products.  The Company emphasizes product  performance and service in connection
with the sale of these products.  The principal competition faced by the Company
results from the sales price of the products sold by its competitors.

                  Backlog
                  -------

The dollar value of unfilled orders of the Company's engineered products segment
was approximately $2.4 million at December 31, 1999 and $2.1 million at December
31, 1998. It is  anticipated  that  substantially  all such 1999 backlog will be
filled in 2000.  Substantially  all of the 1998 backlog was filled in 1999.  The
order backlog  referred to above does not include any order backlog with respect
to sales of knitted wire mesh components for exhaust  emission  control devices,
exhaust  seals or airbag  components  because  of the  manner in which  customer
orders are received.

                  Environmental Regulations
                  -------------------------

Federal, state and local requirements regulating the discharge of materials into
the environment or otherwise relating to the protection of the environment, have
had and will  continue to have a significant  impact upon the  operations of the
Company.  It is the policy of the Company to manage,  operate and  maintain  its
facilities in compliance,  in all material respects,  with applicable  standards
for the prevention,  control and abatement of environmental pollution to prevent
damage to the quality of air, land and resources.

The Company has  undertaken  the  completion  of  environmental  studies  and/or
remedial action at Metex' two New Jersey facilities.  The Company has recorded a
liability 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



                                       3
<PAGE>

anticipated to require initial  expenditures  of $860,000  including the cost of
capital equipment,  and $86,000 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 $2.3 million in
initial costs, including capital equipment expenditures,  and $258,000 in annual
operating and maintenance costs over a 10 year period.  These estimated costs of
future expenses for 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  believes  that  it  is  entitled  to  full  defense  and
indemnification  with respect to  environmental  investigation  and  remediation
costs under its  insurance  policies,  the  Company's  insurers have denied such
coverage. Accordingly, the Company has 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 (see
Item 3,  "Legal  Proceedings").  At December  31,  1999,  settlements  have been
reached  with all but one  carrier  in this  matter.  Settlement  with the final
carrier was completed in February 2000.

In the opinion of  management,  amounts  recovered  from its insurance  carriers
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.

ITEM 2.                    PROPERTIES

Real Property Held for Rental

As of March 15,  2000 the Company  owned 211  properties  strategically  located
throughout  the  United  States.  The  properties  are  primarily  leased  under
long-term net leases.  The Company's  classification and gross carrying value of
its properties at December 31, 1999 are as follows (Dollars in Thousands):

                                               Gross
                                              Carrying                Number of
       Description                             Value      Percentage  Properties
       -----------                             -----      ----------  ----------

Shopping centers and retail outlets          $ 69,330         50.2%          28
Commercial properties                          51,845         37.5%         133
Day-care centers and offices                    8,080          5.9%          12
Hotel properties                                4,628          3.3%           2
Other                                           4,309          3.1%          39
                                             --------        -----     --------

       Total                                 $138,192        100.0%         214
                                             ========        =====     ========


                                       4
<PAGE>



               Shopping Centers and Retail Outlets
               -----------------------------------

Shopping  centers  and retail  outlets  include 20  department  stores and other
properties which are primarily leased under net leases.  Taxes,  maintenance and
all other expenses of the properties are the responsibility of the tenants.  The
leases for certain  shopping  centers and retail outlets  provide for additional
rents based on sales volume and renewal options at higher rents.  The department
stores  include  11 K-Mart  stores  and  three  Macy's  stores,  with a total of
approximately 1.1 million, and 538,000,  square feet,  respectively.  The K-Mart
stores are primarily  located in the Midwest  region of the United  States.  The
Macy's stores are located in the Pacific Coast region of the United States.

               Commercial Properties
               ---------------------

Commercial  properties consist of properties leased as 85 restaurants,  23 Midas
Muffler Shops, three convenience stores, nine office buildings and miscellaneous
other  properties.  Commercial  properties are primarily leased under net leases
which in certain cases,  have renewal options at higher rents.  Certain of these
leases  also  provide  for  additional  rents  based  on  sales  volume.  The 85
restaurants,  located throughout the United States, include properties leased as
McDonalds,  Burger  King,  Dunkin'  Donuts,  Pizza Hut,  Hardee's,  Wendy's  and
Kentucky Fried Chicken.  Included in commercial  properties at December 31, 1999
is the 90,000  square foot  facility  previously  utilized in the  Company's D&M
business. This facility was sold in January 2000.

               Day-Care Centers and Offices
               ----------------------------

The ten  day-care  centers and two  offices  are  located in New York City,  and
leased to the City of New York.

               Hotel Properties
               ----------------

The Company's two hotel properties are located in Georgia and California and are
managed through a local on-site  management  company that is responsible for all
day-to-day operations of the hotels.

The following  summarizes  real  property held for rental by geographic  area at
December 31, 1999 (Dollars in Thousands):

                                                        Gross          Number
                                                       Carrying          of
                                                        Value        Properties
                                                       ---------    ------------

                  Northeast                           $ 47,511           110
                  Southeast                             25,814            38
                  Midwest                               31,183            40
                  Southwest                              6,332             8
                  Pacific Coast                         23,090             8
                  Pacific Northwest                        981             5
                  Rocky Mountain                         3,281             5
                                                      --------      --------

                                                      $138,192           214
                                                      ========      ========

                                       5
<PAGE>

Manufacturing Facilities
------------------------

The  Company's  engineered  products  are  manufactured  at 970 New Durham Road,
Edison, New Jersey, in a one-story building having  approximately  53,000 square
feet of floor  space  and  also in a second  facility  at 206  Talmadge  Road in
Edison,  New Jersey which has  approximately  54,000 square feet of floor space.
The Company owns these facilities  together with the sites.  Metex also leases a
manufacturing facility in Tijuana,  Mexico with approximately 10,000 square feet
of floor space. Production at this facility began in February 1999.

ITEM 3.                    LEGAL PROCEEDINGS

Rosatelli vs. United Capital Corp.
----------------------------------

In August 1996, Dennis  Rosatelli,  the Company's former Chief Financial Officer
commenced an action in Superior Court of New Jersey, Law Division, Bergen County
("Superior Court"),  seeking,  among other things,  payment under his employment
contract,  and  indemnification  for claims against him by the Internal  Revenue
Service and other  matters in  connection  with his tenure.  In March 1997,  Mr.
Rosatelli  amended his  complaint  to include  Bank of America  Illinois,  Metex
Corporation,  Kentile Inc.  ("Kentile"),  A.F. Petrocelli and another officer of
Kentile as additional  defendants.  The Company believes that as a result of Mr.
Rosatelli's  gross  negligence,  recklessness  and/or  willful  disregard of his
duties and responsibilities,  Mr. Rosatelli is not entitled to the recoveries he
seeks. Mr. Rosatelli's  employment was terminated by the Company in May 1996 for
cause.  In May 1998, Mr.  Rosatelli  amended his complaint to include  Kentile's
assignee for the benefit of creditors as an  additional  defendant and to remove
the officer of Kentile  previously  named as a defendant  from this action.  The
material  allegations  of the complaint  were  unchanged.  The Company  asserted
counterclaims  against Mr. Rosatelli for, among other things breach of fiduciary
duty and set off of the amounts by which he has damaged the Company  against his
claims under his employment contract. While management continues to believe that
the allegations were false and without merit, as a result of escalating  defense
costs and the  uncertainty  present in any litigation  the Company  settled such
litigation in September 1999. The costs of such  litigation,  including  amounts
paid in settlement,  were not material to the Company's  consolidated results of
operations  or  financial  position  and had  been  previously  recorded  by the
Company.


Metex Corporation vs. Affiliated FM Insurance Co., et al.
---------------------------------------------------------

On June 27,  1990,  Metex filed an action in the  Superior  Court of New Jersey,
Chancery Division,  Middlesex County,  against several insurance  companies that
provided Metex with liability  insurance between 1967 and 1986. The action seeks
both declaratory relief and monetary damages in connection with reimbursement of
the costs incurred and to be incurred by Metex in connection with the completion
of  environmental  studies and remedial action  required at its two Edison,  New
Jersey  facilities.  The declaratory  relief sought is a determination  that the
terms of the liability  insurance  policies at issue  obligate the defendants to
defend and  indemnify  Metex with respect to all costs and  expenses  related to
these environmental matters. Metex also seeks monetary damages in an unspecified
amount for breach of the  defendants'  duty to indemnify  Metex. At December 31,
1999,  the  Company  had  settled  with all but one of the  insurance  carriers.
Settlement with the final carrier was completed in February 2000.


                                       6
<PAGE>


Other Litigation
----------------

The Company is involved in various other  litigation and legal matters which are
being defended and handled in the ordinary course of business.

None of the  foregoing  is  expected  to result in a judgment  having a material
adverse effect on the Company's  consolidated  financial  position or results of
operations.

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

                                    None.

                                     PART II

ITEM 5.                    MARKET FOR THE COMPANY'S COMMON STOCK
                                AND RELATED SECURITY HOLDER MATTERS

The Company's  Common Stock is traded on the American  Stock  Exchange under the
symbol AFP.  The table below shows the high and low sales  prices as reported in
the composite transactions for the American Stock Exchange.

                                         High           Low
                                      ---------     ---------

1999           First quarter            $18.38        $16.00
               Second quarter            16.75         13.00
               Third quarter             17.13         14.00
               Fourth quarter            19.50         17.00

1998           First quarter            $26.50        $23.13
               Second quarter            23.75         20.50
               Third quarter             24.25         17.00
               Fourth quarter            18.88         14.00

As of March 15,  2000,  there  were  approximately  440  record  holders  of the
Company's  Common Stock.  The closing sales price for the Company's Common Stock
on such date was $15.25.  The Company has never paid any cash  dividends  on its
Common Stock. The payment of dividends is within the discretion of the Company's
Board of Directors,  however in view of potential  working  capital needs and in
order to finance  future growth and as a result of certain  restrictions  in the
Company's  credit  agreement,  it is unlikely that the Company will pay any cash
dividends on its Common Stock in the near future.

                                       7
<PAGE>



ITEM 6.                       SELECTED CONSOLIDATED FINANCIAL DATA

The  selected  consolidated  financial  data  presented  below should be read in
conjunction  with,  and is  qualified  in its  entirety  by  reference  to,  the
Consolidated Financial Statements and the Notes thereto.
<TABLE>
<CAPTION>

(In Thousands, Except Per Share Data)                         Year Ended December 31,
---------------------------------------------------------------------------------------------------------------------------

                                                    1999             1998           1997             1996            1995
                                                    ------         ---------       --------         ------         --------

<S>                                                <C>             <C>             <C>             <C>             <C>
Total revenues (1)                                 $ 59,702        $ 58,519        $ 60,246        $ 65,991        $ 64,340
                                                   ========        ========        ========        ========        ========

Income from continuing operations                  $ 13,326        $ 10,583        $  7,465        $  6,634        $  3,910
                                                   ========        ========        ========        ========        ========

Income from continuing operations
     per basic common share (2)                    $   2.68        $   2.03        $   1.41        $   1.21        $    .67
                                                   ========        ========        ========        ========        ========

Total assets                                       $133,732        $126,112        $113,353        $116,761        $110,366
Total liabilities                                    74,676          73,694          75,873          87,186          84,137
Stockholders' equity                                 59,056          52,418          37,480          29,575          26,229
                                                   ========        ========        ========        ========        ========

</TABLE>

Notes to Selected Consolidated Financial Data
---------------------------------------------

(1)               Certain reclassifications have been reflected in the financial
                  data  to   conform   prior   years'   data   to  the   current
                  classifications.

(2)               Earnings per share amounts prior to 1997 have been restated as
                  required  to comply with  Statement  of  Financial  Accounting
                  Standards No. 128,  "Earnings per Share" ("SFAS No. 128"). For
                  further  discussion of earnings per share see Note 1, "Summary
                  of Significant  Accounting  Policies" of Notes to Consolidated
                  Financial Statements.

ITEM 7.                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                                FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations 1999 and 1998
-----------------------------------

                  General
                  -------

The following  discussion of the  Company's  financial  condition and results of
operations  should be read in conjunction  with the description of the Company's
business  and  properties  contained  in  Items  1  and  2 of  Part  I  and  the
Consolidated Financial Statements and Notes thereto,  included elsewhere in this
report.

Total revenues generated by the Company during 1999 were $59.7 million resulting
in income from continuing  operations of $13.3 million, or $2.68 per basic share
versus revenues of $58.5 million and income from continuing  operations of $10.6
million,  or $2.03 per basic share in 1998.  This represents a 32.0% increase in
earnings per basic share from  continuing  operations  for the current  year. In
1998,  the Company  sold its antenna  business,  resulting in a pretax gain from
discontinued operations of approximately $8.6 million or $.93 per basic share on
an after tax basis.  Net income  was $13.3  million or $2.68 per basic  share in
1999 versus $15.4 million or $2.96 per basic share in 1998.


                                       8
<PAGE>


               Real Estate Operations
               ----------------------

Rental revenues from real estate  operations  during 1999 increased $2.9 million
or 10.8% over those of the prior year.  This increase is primarily  attributable
to increased  revenues from the accounting  treatment of certain property leases
resulting in the recognition of non-recurring revenues in the fourth quarter and
also from revenues associated with properties acquired in 1998.

Mortgage  interest  expense  for 1999  decreased  by $41,000 as compared to such
expense  incurred during 1998. This decrease of 1.5% results from the continuing
amortization  of  mortgages  during  the  current  year,   including  repayments
associated with properties sold.

Depreciation  expense  associated with real properties held for rental decreased
approximately $320,000 or 5.8% from such expense incurred in the preceding year.
This decrease is primarily attributable to properties sold in 1999 and 1998.

Other  operating  expenses  associated  with the  management of real  properties
increased  approximately  $1.3 million during 1999 versus such expenses incurred
in 1998.  This increase is primarily due to 1998 expenses having been reduced by
a non-recurring  real estate tax abatement of  approximately  $1.0 million.  The
remainder  of the  increase  was  principally  due to expenses  incurred for the
maintenance of properties acquired in 1998.

               Engineered Products
               -------------------

The Company's  engineered  products segment includes Metex and AFP Transformers.
The operating  results of the  engineered  products  segment for the years ended
December 31, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
<S>                                                                 <C>                          <C>
             (In Thousands)                                         1999                         1998
                                                              -------------------          -------------------

             Net sales                                            $30,500                      $32,170
                                                              ===================          ===================

             Cost of sales                                        $21,808                      $22,260
                                                              ===================          ===================

             Selling, general and administrative expenses          $6,837                       $6,671
                                                              ===================          ===================

             Operating income                                      $1,855                       $3,239
                                                              ===================          ===================
</TABLE>

Net sales of the engineered products segment were $30.5 million, a 5.2% decrease
from prior year's  revenues.  This modest decrease  reflects the continued price
competition within the worldwide  automotive  industry.  Management continues to
pursue new revenue  opportunities  including  new  geographical  markets for its
existing products and new applications for its core technologies.

Cost of sales as a percentage of net sales increased  approximately 2.3% between
1998 and 1999.  This increase is primarily due to continued  price  competition,
non-recurring  costs  associated  with  a  labor  strike  and  subsequent  union
settlement in the first  quarter of 1999,  start up operations in Mexico and the
mix of products sold.

Selling,  general and administrative expenses of the engineered products segment
increased  $166,000 or 2.5% during 1999, as compared to such costs in 1998. This
increase is principally



                                       9
<PAGE>

due to amounts  invested to expand the Company's  product  offerings and improve
competitiveness.

               General and Administrative Expenses
               -----------------------------------

General  and  administrative  expenses  not  associated  with the  manufacturing
operations  decreased  approximately  $250,000  during  1999 as compared to such
expenses  incurred in the  preceding  year.  This decrease is primarily due to a
reduction  in  professional  fees  offset by an  increase  in salary  and salary
related expenses.

               Other Income and Expense, Net
               -----------------------------

Other income and expense, net for 1999 increased approximately $3.3 million from
$5.0 million in 1998 to $8.3 million in 1999. The increase is principally due to
an  increase  in gain on the sale of real estate  assets of  approximately  $1.5
million and an approximate $1.2 million increase in gain from equity investments
resulting from the sale of the Company's 50.0%  partnership  interest in a Miami
Beach hotel. The remainder of the increase relates to an increased gain from the
sale of trading securities and various increases in other income.

Results of Operations 1998 and 1997
-----------------------------------

Total  revenues  generated by the Company  during 1998 were $58.5 million versus
$60.2  million in 1997.  Income from  continuing  operations  for 1998 was $10.6
million or $2.03 per basic share,  a 44.0% increase over 1997 earnings per basic
share of $1.41. Income from continuing  operations during 1997 was $7.5 million.
Income from the disposal of  discontinued  operations,  net of tax for 1998, was
$4.8 million or $.93 per basic share versus income from discontinued  operations
of $1.0 million or $.19 per basic share in 1997.  Net income  increased to $15.4
million or $2.96 per basic share in 1998 versus $8.5  million or $1.60 per basic
share in 1997, an 85.0% increase in basic earnings per share.

               Real Estate Operations
               ----------------------

Rental revenues from real estate  operations  during 1998 increased $2.3 million
or 9.6% over those of the prior year. This increase is primarily due to revenues
associated with properties acquired in 1998 and 1997.

Mortgage  interest  expense for 1998  decreased  by $397,000 as compared to such
expense incurred during 1997. This decrease of 13.0% results from the continuing
amortization  of mortgages  during 1998,  including  repayments  associated with
properties sold.  Additionally,  the Company  refinanced three mortgages in 1998
with a total  principal  value of  approximately  $12.3  million,  reducing  the
weighted average interest rate on the three mortgages from 10.3% to 6.6%.

Depreciation  expense  associated with real properties held for rental decreased
approximately $308,000 or 5.3% from such expense incurred in 1997. This decrease
is primarily  attributable to properties sold,  partially offset by depreciation
expense on acquisitions.



                                       10
<PAGE>

Other  operating  expenses  associated  with the  management of real  properties
decreased  approximately  $1.4 million during 1998 versus such expenses incurred
in 1997.  This  decrease is  principally  due to a one time  adjustment  in 1998
associated with real estate tax abatements.

               Engineered Products
               -------------------

The Company's  engineered  products segment includes Metex and AFP Transformers.
The operating  results of the  engineered  products  segment for the years ended
December 31, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
<S>                                                                   <C>                      <C>
                 (In Thousands)                                       1998                     1997
                                                                  -----------              -------------

                 Net sales                                           $32,170                    $36,204
                                                                  ===========              =============

                 Cost of sales                                       $22,260                    $25,972
                                                                  ===========              =============

                 Selling, general and administrative expenses         $6,671                     $6,813
                                                                  ===========              =============

                 Income from operations                               $3,239                     $3,419
                                                                  ===========              =============
</TABLE>

Net sales of the  engineered  products  segment  were  $32.2  million,  an 11.1%
decrease from 1997  revenues.  This decrease  resulted  primarily from continued
price  competition  and declining  worldwide  automotive  sales.  Management has
continued  to  aggressively  pursue  new  revenue  opportunities  including  new
geographical  markets for its existing  products as well as new applications for
its core technologies.

Cost of sales as a percentage of net sales decreased  approximately 2.5% between
1997 and 1998. This decline is primarily due to a favorable market for stainless
steel  purchases,  and a  continued  emphasis on cost  reductions,  productivity
improvements and product mix.

Selling,  general and administrative expenses of the engineered products segment
decreased  $142,000 or 2.1% during 1998, as compared to such costs in 1997. This
reduction is principally due to reduced selling  expenses,  primarily salary and
salary related expenses.

               General and Administrative Expenses
               -----------------------------------

General  and  administrative  expenses  not  associated  with the  manufacturing
operations  increased  approximately  $769,000  during  1998 as compared to such
expenses  incurred  in  the  preceding  year  primarily  due to an  increase  in
professional fees.

               Other Income and Expense, Net
               -----------------------------

Other income and expense, net for 1998 increased approximately $1.8 million from
$3.2 million in 1997 to $5.0 million in 1998. The increase is principally due to
an increase in gain on the sale of real estate properties of approximately  $2.0
million partially offset by increases in other net expenses.




                                       11
<PAGE>

Liquidity and Capital Resources
-------------------------------

At December 31, 1999, the Company's cash and  marketable  securities  were $40.9
million  and  working  capital  was  approximately  $28.4  million.   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.   Management  believes  that  the
available  working  capital along with the $60.0 million of  availability on the
revolving credit facility  discussed below, puts it in an opportune  position to
fund acquisitions and grow the portfolio as attractive  long-term  opportunities
become  available.  The current  liabilities  of the Company  have  historically
exceeded its current assets  principally due to the financing of the purchase of
long-term assets utilizing short-term  borrowings and from the classification of
current mortgage  obligations  without the corresponding  current asset for such
properties.  Future  financial  statements  may reflect  current  liabilities in
excess of  current  assets.  Management  is  confident  that  through  cash flow
generated  from  operations,   together  with  borrowings  available  under  the
revolving  credit facility  discussed  below and the sale of select assets,  all
obligations will be satisfied as they come due.

The Company's portfolio of available for sale securities had a fair market value
of  approximately  $27.3  million  at  December  31,  1999,   reflecting  pretax
unrealized holding gains of approximately $6.0 million.

Effective  December 31, 1999, the Company  entered into a credit  agreement with
three banks which provides for both a $60.0 million  revolving  credit  facility
("Revolver") and a $1.9 million term loan ("Term Loan"). Each of the three banks
participates in the Revolver while only one of the banks is a participant in the
Term Loan.

Under the terms of the Revolver,  the Company will be provided with  eligibility
based  upon the sum of (i)  60.0% of the  aggregate  annualized  and  normalized
year-to-date  net  operating  income of  unencumbered  eligible  properties,  as
defined,  capitalized at 10.5%,  (ii) the lesser of $6.0 million or 60.0% of the
aggregate  annualized  and  normalized  year-to-date  net  operating  income  of
unencumbered eligible hotel properties, as defined,  capitalized at 10.5%, (iii)
the lesser of $10.0 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% and (iv) the lesser of $10.0 million or the sum of 75.0% of
eligible accounts  receivable and 50.0% of eligible  inventory,  as defined.  At
December 31, 1999,  eligibility under the Revolver was $60.0 million, based upon
the above terms. The credit agreement contains certain financial and restrictive
covenants,  including  minimum  consolidated  equity,  interest  coverage,  debt
service  coverage and capital  expenditures  (other than for real  estate).  The
Company was in compliance  with all  covenants at December 31, 1999.  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 ("Prime") or at
the London  Interbank  Offered Rate ("LIBOR") plus 2.0%. The Revolver expires on
December 31, 2002. At December 31, 1999, there were no amounts outstanding under
the Revolver.

The Term Loan bears  interest  at 90 day LIBOR plus 1.4% (7.4% at  December  31,
1999) and is payable in quarterly principal  installments of $175,000,  with the
final payment due on September  30, 2002.  At December 31, 1999,  there was $1.9
million outstanding on the Term Loan.



                                       12
<PAGE>

Prior to obtaining the Revolver and Term Loan,  the Company  maintained a credit
agreement  with two banks which provided for both a $7.0 million term loan and a
$40.0 million  revolving credit  facility.  This credit agreement was terminated
effective  December  31,  1999 in  conjunction  with  the  execution  of the new
Revolver and Term Loan. The termination  included the retirement of $1.9 million
under the term loan to a bank that is not participating in the current facility.
The  remaining  term loan balance of $1.9 million was converted to the Term Loan
under arrangements similar to the original facility. At December 31, 1998, there
were no amounts outstanding under the revolving credit facility and $5.3 million
outstanding on the term loan.

The Company has an  interest-rate  swap  agreement  (the "Swap") to  effectively
convert its  floating  rate Term Loan to a fixed rate basis,  thus  reducing the
impact of interest rate changes on future  expense.  Under the Swap, the Company
agreed to exchange  with the  counterparty  (a commercial  bank) the  difference
between the fixed and floating rate interest  amounts.  The  differential  to be
paid or received on the Swap is recognized  over the term of the agreement as an
adjustment to interest expense.  The fair value of the Swap is not recognized in
the financial statements.

The Company has  undertaken  the  completion  of  environmental  studies  and/or
remedial  action at Metex'  two New  Jersey  facilities  and has filed an action
against certain insurance  carriers seeking recovery of costs incurred and to be
incurred in these matters.  At December 31, 1999,  settlements have been reached
with all but one carrier in this matter.  Settlement  with the final carrier was
completed  in  February  2000.  See  Item 3  "Legal  Proceedings"  and  Note 19,
"Contingencies"  of Notes  to  Consolidated  Financial  Statements  for  further
discussion on this matter.

In August 1999, the Company's  Board of Directors  authorized a "Dutch  Auction"
self-tender  offer for up to 500,000  shares of the Company's  common stock,  or
approximately  10.0% of its outstanding  shares.  Under the terms of this offer,
which expired on September 30, 1999, the Company invited  shareholders to tender
shares at prices between $15.00 and $17.50 per share.

In October 1999, the Company purchased and retired  approximately 278,000 shares
validly  tendered  at a price of $17.50  per share.  The $4.9  million of shares
repurchased in connection with this self-tender offer represented  approximately
5.5% of the  Company's  outstanding  shares  at that  time.  As a result  of the
repurchase, the Company's additional paid-in capital was reduced to zero and the
Company's  retained earnings was reduced by approximately  $4.1 million.  Future
repurchases of the Company's common stock will also reduce retained  earnings by
amounts in excess of the par value.

The cash  needs of the  Company  have been  satisfied  from funds  generated  by
current  operations  and  additional  borrowings.  It is  expected  that  future
operational  cash needs and the cash required to repurchase the Company's common
stock will also be satisfied from existing cash balances, ongoing operations and
additional borrowings under the Revolver.  The primary source of capital to fund
additional real estate  acquisitions and to make additional  high-yield mortgage
loans will come from existing funds,  additional  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





                                       13
<PAGE>

the future  with  borrowings  from  institutional  lenders  and/or the public or
private offerings of debt or equity securities.

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

Market Risk
-----------

The Company's interest income is most sensitive to changes in the general levels
of U.S.  interest  rates.  Changes in U.S.  interest  rates  affect the interest
earned   on  the   Company's   cash  and   cash   equivalents.   The   Company's
available-for-sale  securities  consist of U.S.  investments  in both common and
preferred  equity issues as well as corporate debt securities and are subject to
the fluctuations in U.S. stock markets.  Most of the Company's mortgages payable
are fixed  rate and self  amortizing  from the net cash  flow on the  underlying
properties.  The  Company's  Term Loan has a  variable  rate but is  effectively
hedged by an  interest-rate  swap  agreement,  whose notional amount matches the
principal balance of the variable rate debt it hedges.

The Company  manufactures its products in the United States and Mexico and sells
its products in those markets as well as the European,  South American and Asian
markets.  Most of the Company's  sales are  denominated in U.S.  dollars and the
Company's  operating  results are not materially  exposed to changes in exchange
rates. The Company's manufacturing  operations utilize various metal commodities
(principally stainless steel) in the manufacturing  process.  Global competition
has  stabilized  or  reduced  prices  in the key  metals  used in the  Company's
manufacturing  processes.  While key metals  purchased from foreign entities are
generally  denominated in U.S.  dollars,  fluctuations  in the suppliers'  local
currencies may impact materials  pricing.  The Company is unable to quantify the
effects of such fluctuations,  however, it does enter into purchase  commitments
for certain key metals that  generally do not exceed  twelve  months and tend to
minimize  short-term  currency  fluctuations.  The Company's  financial results,
however,  could be  significantly  affected by  fluctuations  in metals pricing.
Certain raw materials used by the Company have been the subject of international
trade disputes regarding price dumping in the United States. Although management
does not  expect  such  matters to  adversely  effect  the  Company's  financial
position,  an unfavorable  outcome could result in higher raw material costs and
adversely effect the Company's results of operations.

                                       14
<PAGE>

The following is a tabular presentation of quantitative market risks at December
31, 1999:

<TABLE>
<CAPTION>

                                                  Principal (Notional) Aount by Expected Maturity
                                      -----------------------------------------------------------------------------      Fair
                                                                                                   There-               Value
(Dollars in Thousands)                     2000       2001        2002       2003        2004      after     Total    12/31/99
------------------------------------------------------------------------------------------------------------------- -------------

<S>                                    <C>          <C>         <C>         <C>        <C>        <C>        <C>       <C>
Assets

Available-for-sale securities          $  27,296    $      0    $      0    $     0    $     0    $     0    $27,296   $27,296
Mortgage notes receivable              $      28    $     28    $     30    $    34    $    39    $   139    $   298   $   354
Average interest rate                      10.6%       10.3%       10.9%      10.9%      10.9%     10.0%

Liabilities

Long-term debt, including
current portion
Fixed rate                             $   5,990    $  5,531    $  5,047    $ 4,391    $ 5,866    $ 6,481    $33,306   $31,134
Average interest rate                       7.7%        7.6%        7.4%       7.4%       7.3%      6.9%

Variable rate                          $     700    $    700    $    525    $     0    $     0    $     0    $ 1,925   $ 1,902
Average interest rate-                      6.9%        6.9%        6.9%
LIBOR +1.40%

Interest Rate Derivative Financial Instruments Related to Variable Rate Debt

Interest rate swap
     Pay fixed/receive variable        $     700    $    700    $    525    $     0    $     0    $     0    $ 1,925   $    14
     Average pay rate                       7.8%        7.8%        7.8%
     Average receive rate                   6.9%        6.9%        6.9%
</TABLE>

Business Trends
---------------

Total 1999 revenues of the Company increased  approximately $1.2 million or 2.0%
from 1998 levels to $59.7 million.  This increase is primarily  attributable  to
increased  revenues from the  accounting  treatment of certain  property  leases
resulting in the recognition of non-recurring revenues in the fourth quarter and
also from revenues  associated with properties  acquired in 1998 offset by lower
sales in the engineered  products  segment.  Income from  continuing  operations
increased to $13.3 million in 1999 from $10.6 million in 1998.  This increase is
principally  due to  the  results  of  the  Company's  real  estate  operations,
partially offset by reduced operating profit in the engineered  products segment
resulting  from the  reduction  in revenues  and amounts  invested to expand the
Company's product offerings and improve competitiveness.

The  results of the  Company's  real  estate  operations  reflect an increase in
operating  income of $1.9  million on a revenue  increase of $2.9  million.  The
increase in operating profits is primarily due to the revenue increase discussed
above and lower depreciation expense associated with properties sold in 1999 and
1998 offset by increases  in other real estate  operating  expenses.  Continuing
lease renewals and mortgage amortization will continue to have a positive effect
upon the revenues  and  operating  profit of this  segment.  Where  appropriate,
management  may use permanent  long-term  financing  rather than its  short-term
revolving credit facility to finance its real estate acquisitions.

The Company's  engineered  products  segment  posted a 5.2% decrease in revenues
during the twelve  months  ended  December 31, 1999,  from the  comparable  1998
period.   The  modest  decrease  in  net  sales  reflects  the  continued  price
competition within the worldwide automotive




                                       15
<PAGE>

industry.  Management is aggressively pursuing new sales opportunities including
new geographical  markets for its existing products and new applications for its
core technologies.

Year 2000 Conversion
--------------------

The Company has taken reasonable steps in preparing for the Year 2000 issue. The
costs directly  associated  with Year 2000  compliance  were not material to the
Company's  financial  condition or results of  operations.  Although the Company
believes that it successfully  avoided any significant  disruption from the Year
2000 issue, it will continue to monitor all critical  systems for the appearance
of latent Year 2000 disruptions and problems  encountered  through third parties
with whom the Company deals to ensure that such matters get addressed  promptly.
Any resulting disruption could have a material adverse impact on its business.

Forward Looking Statements
--------------------------

This Form 10-K contains certain forward-looking statements within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe harbors created thereby.  All forward-looking  statements involve risks
and uncertainties  including without  limitation the statements  expressed under
"Business  Trends"  and "Year  2000  Conversion"  above.  Although  the  Company
believes  that  the  assumptions   underlying  the  forward-looking   statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore,  there  can  be no  assurance  that  the  forward-looking  statements
included  in  this  Form  10-K  will  prove  to be  accurate.  In  light  of the
significant  uncertainties  inherent in the forward-looking  statements included
herein,  the  inclusion  of  such  information  should  not  be  regarded  as  a
representation  by the Company or any other person that the objectives and plans
of the Company will be achieved.

ITEM 8.                    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial  statements and  supplementary  information  filed as part of this
Item 8 are listed under Item 14, "Exhibits,  Financial  Statements and Schedules
and Reports on Form 8-K" and are contained in this Form 10-K,  beginning on page
F-1.

ITEM 9.                    CHANGES IN THE COMPANY'S CERTIFYING ACCOUNTANT

The Company's auditors for the year ended December 31, 1998 were Arthur Andersen
LLP ("Arthur Andersen"). As stated in the Company's proxy statement dated May 6,
1999, the Company  annually  reviews the selection of its independent  auditors.
The Company had previously solicited bids from independent  accountants to audit
the Company's  financial  statements for the year ended December 31, 1999 and on
October 4, 1999, Arthur Andersen informed the Company that it was resigning. The
Audit  Committee voted to appoint Ernst & Young LLP ("Ernst & Young") as its new
independent accountants on October 4, 1999.




                                       16
<PAGE>


Pursuant to item 304(a) of Regulation S-K, the Company reports the following:

(a)  Previous Independent Accountants

(i)               On October 4, 1999, the Company  retained Ernst & Young as its
                  independent  certified  public  accountants in place of Arthur
                  Andersen.

(ii)              The reports of Arthur Andersen on the financial statements for
                  the past two fiscal  years of the  Company did not contain any
                  adverse   opinion  or  disclaimer  of  opinion  and  were  not
                  qualified  or  modified  as to  uncertainty,  audit  scope  or
                  accounting principles.

(iii)             The  decision to change  accountants  was  recommended  by the
                  Company's  management  and  separately  approved  by the Audit
                  Committee of the Board of Directors and the Board of Directors
                  of the Company.

(iv)              In  connection  with its audits for the two most recent fiscal
                  years ended December 31, 1997 and 1998 and through  October 4,
                  1999, there have been no disagreements with Arthur Andersen on
                  any matter of accounting  principles  or practices,  financial
                  statement  disclosure,  or auditing  scope or procedure  which
                  disagreement,  if not resolved to the  satisfaction  of Arthur
                  Andersen,  would  have  caused it to make a  reference  to the
                  subject  matter of the  disagreement  in  connection  with its
                  report on the  financial  statements  for each of the years or
                  interim periods.

(v)               During the Company's two most recent fiscal years,  and during
                  the subsequent  interim  periods,  no "reportable  events" (as
                  described  in Item  304 (a) (1) (v) of  Regulation  S-K)  have
                  occurred.

(vi)              The Company has requested that Arthur Andersen furnish it with
                  a letter  addressed to the Securities and Exchange  Commission
                  stating  whether  or  not  Arthur  Andersen  agrees  with  the
                  statements  made by the Company  above in response to Item 304
                  of  Regulation  S-K. A copy of such letter,  dated  October 4,
                  1999,  is listed as Exhibit  10.7  under  Item 14,  "Exhibits,
                  Financial Statements and Schedules and Reports on Form 8-K" in
                  this Form 10-K.

(b)   New Independent Accountants

(i)               The  Company  engaged  Ernst  & Young  as its new  independent
                  accountants  effective  October 4,  1999.  During the two most
                  recent fiscal years and through  October 4, 1999,  the Company
                  has not consulted with Ernst & Young  concerning the Company's
                  financial statements,  including the application of accounting
                  principles to a specified  transaction (proposed or completed)
                  or the type of audit  opinion  that might be  rendered  on the
                  Company's  financial  statements or any matter that was either
                  the subject of a "disagreement" or "reportable event" (as such
                  terms  are  defined  in Item 304 of  Regulation  S-K) with the
                  previous   independent   accountants.   The  Company's   Audit
                  Committee  chose  to  engage  Ernst &  Young  to  reaudit  the
                  Company's  financial  statements  for the years ended December
                  31, 1998 and 1997  rather  than  obtain a consent  from Arthur
                  Andersen as it was  determined to be more  economical  for the
                  Company.





                                       17
<PAGE>

                                    PART III

ITEM 10.                   DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

This information will be contained in the Proxy Statement of the Company for the
2000 Annual Meeting of  Stockholders  under the caption  "Election of Directors"
and is incorporated herein by reference.

ITEM 11.                   EXECUTIVE COMPENSATION

This information will be contained in the Proxy Statement of the Company for the
2000 Annual Meeting of Stockholders under the caption  "Executive  Compensation"
and is incorporated herein by reference.

ITEM 12.                   SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL OWNERS AND
                           MANAGEMENT

This information will be contained in the Proxy Statement of the Company for the
2000 Annual Meeting of Stockholders  under the caption "Security  Ownership" and
is incorporated herein by reference.

ITEM 13.                   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

This information will be contained in the Proxy Statement of the Company for the
2000 Annual Meeting of Stockholders under the caption "Certain Relationships and
Related Transactions" and is incorporated herein by reference. Also see Note 14,
"Transactions  with  Related  Parties,"  of  Notes  to  Consolidated   Financial
Statements, contained elsewhere in this report.

                                     PART IV

ITEM 14.                   EXHIBITS,  FINANCIAL  STATEMENTS  AND  SCHEDULES  AND
                           REPORTS ON FORM 8-K

(a) (1) Consolidated Financial Statements.  The following Consolidated Financial
        Statements and Consolidated Financial Statement Schedules of the Company
        are included in this Form 10-K at the pages indicated:

                   Index to Consolidated Financial Statements
                   ------------------------------------------

                                                                            Page
                                                                            ----

        Report of Independent Auditors                                      F-1
        Consolidated Balance Sheets as of December 31, 1999 and 1998        F-2
        Consolidated Statements of Income for the Years                     F-3
             Ended December 31, 1999, 1998 and 1997
        Consolidated Statements of Stockholders' Equity                     F-4
             for the Years Ended December 31, 1999, 1998 and 1997
        Consolidated Statements of Cash Flows for the                       F-5
             Years Ended December 31, 1999, 1998 and 1997                   F-6
        Notes to Consolidated Financial Statements                          F-7
                                                                         to F-24


                                       18
<PAGE>

         (2)      Consolidated Financial Statement Schedules
                  ------------------------------------------

                  Schedule II      --    Allowance for Doubtful Accounts    F-25
                  Schedule III     --    Real Property Held for Rental and  F-26
                                             Accumulated Depreciation
                  Schedule IV      --    Mortgage Loans on Real Estate      F-27

         (3)      Supplementary Data
                  ------------------

                  Quarterly Financial Data (Unaudited)                      F-28

                  Schedules  not listed above are omitted as not  applicable  or
                  the  information  is presented in the financial  statements or
                  related notes.

(b) Reports on Form 8-K

On October 4, 1999,  the Company filed a Current Report on Form 8-K under Item 4
to report a change in its certifying accountant, as more fully discussed in Item
9.

(c) Exhibits

        3.1.      Amended  and  restated  Certificate  of  Incorporation  of the
Company  (incorporated  by  reference  to exhibit  3.1 filed with the  Company's
report on Form 10-K for the fiscal year ended December 31, 1993).

        3.2.      By-laws of the Company (incorporated by reference to exhibit 3
filed with the Company's  report on Form 10-K for the fiscal year ended December
31, 1980).

       10.1.      1988  Incentive  Stock Option Plan of the Company,  as amended
incorporated  by reference to exhibit  10.1 filed with the  Company's  report on
Form 10-K for the fiscal year ended December 31, 1998).

       10.2.      1988 Joint Incentive and  Non-Qualified  Stock Option Plan, as
amended  (incorporated  by reference  to exhibit  10.2 filed with the  Company's
report on Form 10-K for the fiscal year ended December 31, 1998).

       10.3.      Employment  Agreement  dated  as of  January  1,  1990  by and
between the Company and A. F. Petrocelli  (incorporated  by reference to exhibit
10.9 filed  with the  Company's  report on Form 10-K for the  fiscal  year ended
December 31, 1989).

       10.4.      Amendment dated as of December 3, 1990 to Employment Agreement
dated as of January 1, 1990,  by and between  the  Company and A. F.  Petrocelli
(incorporated  by reference to exhibit 10.10 filed with the Company's  report on
Form 10-K for the fiscal year ended December 31, 1990).

       10.5.      Amendment  dated as of June 8,  1993 to  Employment  Agreement
dated as of January 1, 1990 by and  between  the  Company  and A. F.  Petrocelli
(incorporated  by reference to exhibit 10.5 filed with the  Company's  report on
Form 10-K for the fiscal year ended December 31, 1993).



                                       19
<PAGE>

       *10.6.     Revolving Credit Agreement dated as of December 31, 1999, with
the financial parties thereto.

       10.7.      Letter dated October 4, 1999 from Arthur  Andersen LLP related
to the change in certifying accountants (incorporated by reference to Exhibit 16
filed with the Company's report on Form 8-K dated October 4, 1999).

       *21.       Subsidiaries of the Company

       *23.       Auditors'   consent  to  the  incorporation  by  reference  in
Company's  Registration  Statements  on Form S-8 of the  Report  of  Independent
Auditors included herein.

       *27.       Financial Data Schedule

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

* Filed herewith

                                       20
<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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:  March 15, 2000                       By: /s/ A.F. Petrocelli
        --------------                        -----------------------
                                                  A. F. Petrocelli
                                                  Chairman, President and
                                                  Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the  following  persons on behalf of the Company and in
the capacities and on the date indicated.

Dated:  March 15, 2000                   By: /s/ A.F. Petrocelli
        --------------                    -----------------------
                                              A. F. Petrocelli
                                              Chairman, President and
                                              Chief Executive Officer


Dated:  March 15, 2000                   By: /s/ Howard M. Lorber
        --------------                    -----------------------
                                             Howard M. Lorber
                                             Director

Dated:  March 15, 2000                   By: /s/ Anthony J. Miceli
        --------------                    -----------------------
                                              Anthony J. Miceli
                                              Chief Financial Officer,
                                              Chief Accountant, Secretary and
                                              Director

Dated:  March 15, 2000                   By: /s/ Arnold S. Penner
        --------------                    -----------------------
                                              Arnold S. Penner
                                              Director



                                       21
<PAGE>
                         REPORT OF INDEPENDENT AUDITORS
                         ------------------------------


To the Board of Directors
and Stockholders of
United Capital Corp. :


We have audited the accompanying  consolidated  balance sheets of United Capital
Corp. and subsidiaries (the "Company") as of December 31, 1999 and 1998, and the
related consolidated  statements of income,  stockholders' equity and cash flows
for each of the three years in the period ended  December 31, 1999. We have also
audited the financial  statement  schedules  listed in the Index at Item 14(a)2.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial  position of United Capital
Corp. and  subsidiaries  as of December 31, 1999 and 1998, and the  consolidated
results of their  operations and their cash flows for each of the three years in
the period ended  December 31, 1999, in conformity  with  accounting  principles
generally  accepted in the United  States.  Also,  in our  opinion,  the related
financial  statement  schedules,  when  considered  in  relation  to  the  basic
financial  statements taken as a whole,  present fairly in all material respects
the information set forth therein.


                                                  ERNST & YOUNG LLP


New York, NY
February 11, 2000



                                       F-1

<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      -------------------------------------
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------
                        AS OF DECEMBER 31, 1999 AND 1998
                        --------------------------------
                      (In Thousands, Except Per Share Data)
                      -------------------------------------

<TABLE>
<CAPTION>
                                                                                                   1999           1998
                                                                                                --------        --------
Assets

<S>                                                                                            <C>              <C>
Current assets:
     Cash and cash equivalents                                                                 $ 13,575         $  8,154
     Marketable securities                                                                       27,296           14,290
     Notes and accounts receivable, net of allowance for doubtful
       accounts of $390 in 1999 and 1998                                                          5,626            7,819
     Inventories                                                                                  4,207            4,339
     Prepaid expenses and other current assets                                                      254              209
                                                                                               --------         --------

         Total current assets                                                                    50,958           34,811
                                                                                               --------         --------

Property, plant and equipment, net                                                                5,077            4,686
Real property held for rental, net                                                               66,939           71,437
Noncurrent notes receivable                                                                         270              593
Other assets                                                                                     10,488           11,296
Deferred income taxes                                                                                 0            3,289
                                                                                               --------         --------

         Total assets                                                                          $133,732         $126,112
                                                                                               ========         ========

Liabilities and Stockholders' Equity

Current liabilities:
     Current maturities of long-term debt                                                      $  5,990         $  5,875
     Borrowings under credit facilities                                                             700            1,400
     Accounts payable and accrued liabilities                                                     9,835           10,821
     Income taxes payable                                                                         5,000            6,355
     Deferred income taxes                                                                        1,019              152
                                                                                               --------         --------

         Total current liabilities                                                               22,544           24,603
                                                                                               --------         --------

Borrowings under credit facilities                                                                1,225            3,850
Long-term debt                                                                                   27,316           26,929
Other long-term liabilities                                                                      22,917           18,312
Deferred income taxes                                                                               674                0
                                                                                               --------         --------

         Total liabilities                                                                       74,676           73,694
                                                                                               --------         --------

Commitments and contingencies

Stockholders' equity:
     Common stock $.10 par value, authorized 7,500 shares;
       issued and outstanding 4,736 and 5,148 shares, respectively                                  474              515
     Additional paid-in capital                                                                       0            3,536
     Retained earnings                                                                           54,671           45,429
     Accumulated other comprehensive income, net of tax                                           3,911            2,938
                                                                                               --------         --------

         Total stockholders' equity                                                              59,056           52,418
                                                                                               --------         --------

         Total liabilities and stockholders' equity                                            $133,732         $126,112
                                                                                               ========         ========
</TABLE>

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

                                       F-2

<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      -------------------------------------
                        CONSOLIDATED STATEMENTS OF INCOME
                        ---------------------------------
              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------
                      (In Thousands, Except Per Share Data)
                      -------------------------------------

<TABLE>
<CAPTION>
                                                                                      1999          1998           1997
                                                                                    -------        ------         -------

<S>                                                                                 <C>            <C>            <C>
Revenues:
     Net sales                                                                      $ 30,500       $ 32,170       $ 36,204
     Rental revenues from real estate operations                                      29,202         26,349         24,042
                                                                                    --------       --------       --------
                   Total revenues                                                     59,702         58,519         60,246
                                                                                    --------       --------       --------

Costs and expenses:
     Cost of sales                                                                    21,808         22,260         25,972
     Real estate operations:
         Mortgage interest expense                                                     2,620          2,661          3,058
         Depreciation expense                                                          5,210          5,530          5,838
         Other operating expenses                                                      7,293          6,025          7,428
     General and administrative expenses                                               5,810          6,057          5,038
     Selling expenses                                                                  3,875          3,712          4,104
                                                                                    --------       --------       --------
                   Total costs and expenses                                           46,616         46,245         51,438
                                                                                    --------       --------       --------
                   Operating income                                                   13,086         12,274          8,808
                                                                                    --------       --------       --------

Other income (expense):
     Interest income                                                                   1,886          1,961          2,613
     Interest expense                                                                   (614)          (962)        (1,408)
     Other income and expense, net                                                     8,266          5,035          3,262
                                                                                    --------       --------       --------
                   Total other income                                                  9,538          6,034          4,467
                                                                                    --------       --------       --------

     Income from continuing operations before
         income taxes                                                                 22,624         18,308         13,275

     Provision for income taxes                                                        9,298          7,725          5,810
                                                                                    --------       --------       --------

     Income from continuing operations                                                13,326         10,583          7,465
                                                                                    --------       --------       --------

Discontinued operations:
     Operating income, net of tax provision of $635                                        0              0          1,016
     Gain on disposal of discontinued operations, net
         of tax provision of $3,700                                                        0          4,849              0
                                                                                    --------       --------       --------

     Income from discontinued operations                                                   0          4,849          1,016
                                                                                    --------       --------       --------

     Net income                                                                     $ 13,326       $ 15,432       $  8,481
                                                                                    ========       ========       ========

Basic earnings per common share:
     Income from continuing operations                                              $   2.68       $   2.03       $   1.41
     Discontinued operations                                                             .00            .93            .19
                                                                                    --------       --------       --------

     Net income per common share                                                    $   2.68       $   2.96       $   1.60
                                                                                    ========       ========       ========

Diluted earnings per common share:
     Income from continuing operations                                              $   2.66       $   2.00       $   1.40
     Discontinued operations                                                             .00            .92            .19
                                                                                    --------       --------       --------

     Net income per common share assuming dilution                                  $   2.66       $   2.92       $   1.59
                                                                                    ========       ========       ========
</TABLE>

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


                                       F-3


<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      -------------------------------------
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 -----------------------------------------------
              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------
                                 (In Thousands)
                                 --------------

<TABLE>
<CAPTION>

                                                                                            Accumulated
                                                                                              Other
                                              Common Stock Issued    Additional            Comprehensive   Total
                                              --------------------    Paid-in    Retained      Income,   Stockholders' Comprehensive
                                               Shares      Amount     Capital    Earnings    Net of Tax     Equity         Income
                                              --------    --------   ----------  --------  ------------- ------------- -------------

<S>                                              <C>      <C>         <C>         <C>         <C>        <C>            <C>
Balance - January 1, 1997                        5,346    $    534    $  7,416    $ 21,516    $    109   $ 29,575

Purchase and retirement of common shares           (67)         (7)       (659)          0           0       (666)
Proceeds from the exercise of stock options          7           1          62           0           0         63
Net income                                           0           0           0       8,481           0      8,481       $  8,481
Other comprehensive income, net of tax:
  Change in net unrealized gain on
  available-for-sale securities,
  net of tax provision of $14                        0           0           0           0          27         27             27
                                                                                                                        --------
Comprehensive income                                                                                                    $  8,508
                                              --------    --------    --------    --------    --------   --------       ========

Balance - December 31, 1997                      5,286         528       6,819      29,997         136     37,480
                                              --------    --------    --------    --------    --------   --------

Purchase and retirement of common shares          (189)        (18)     (3,846)          0           0     (3,864)
Proceeds from the exercise of stock options         51           5         563           0           0        568
Net income                                           0           0           0      15,432           0     15,432       $ 15,432
Other comprehensive income, net of tax:
   Change in net unrealized gain on
   available-for-sale securities,
   net of tax provision of $1,444                    0           0           0           0       2,802      2,802          2,802
                                                                                                                        --------
Comprehensive income                                                                                                    $ 18,234
                                              --------    --------    --------    --------    --------   --------       ========

Balance - December 31, 1998                      5,148         515       3,536      45,429       2,938     52,418
                                              --------    --------    --------    --------    --------   --------

Purchase and retirement of common shares          (441)        (44)     (3,675)     (4,084)          0     (7,803)
Proceeds from the exercise of stock options         29           3         139           0           0        142
Net income                                           0           0           0      13,326           0     13,326       $ 13,326
Other comprehensive income, net of tax:
   Change in net unrealized gain on
   available-for-sale securities,
   net of tax provision of $593                      0           0           0           0         973        973            973
                                                                                                                        --------
Comprehensive income                                                                                                    $ 14,299
                                              --------    --------    --------    --------    --------   --------       ========

Balance - December 31, 1999                      4,736    $    474    $      0    $ 54,671    $  3,911   $ 59,056
                                              ========    ========    ========    ========    ========   ========

</TABLE>


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




                                       F-4

<PAGE>
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      -------------------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------
                                 (In Thousands)
                                 --------------

<TABLE>
<CAPTION>

                                                                                             1999         1998         1997
                                                                                           --------     ---------    ---------


<S>                                                                                       <C>           <C>           <C>
Cash flows from operating activities:
     Net income                                                                           $ 13,326      $ 15,432      $  8,481
                                                                                          --------      --------      --------
     Adjustments to  reconcile  net  income
         to net cash  provided  by  operating activities:
              Depreciation and amortization                                                  6,628         6,566         6,657
              Gain on sale of real estate assets                                            (6,957)       (5,444)       (3,481)
              Purchase of trading securities                                                  (700)       (5,891)            0
              Proceeds from sale of trading securities                                         844         5,966             0
              Gain on sale of trading securities                                              (144)          (75)            0
              (Gain) loss from equity investments                                           (3,601)       (1,222)          263
              Gain on sale of discontinued operations, net of tax                                0        (4,849)            0
              Changes in assets and liabilities, net of effects from
                  business disposals (A)                                                    10,920           (15)       10,007
                                                                                          --------      --------      --------

                                Total adjustments                                            6,990        (4,964)       13,446
                                                                                          --------      --------      --------

                                Net cash provided by operating activities                   20,316        10,468        21,927
                                                                                          --------      --------      --------

Cash flows from investing activities:
     Acquisition of real estate assets                                                      (2,304)      (12,539)       (2,276)
     Proceeds from sale of real estate assets                                                9,064         8,293         7,063
     Investments in and advances to affiliates                                                 743           503        (5,395)
     Purchase of available-for-sale securities                                             (11,439)       (9,690)            0
     Proceeds from sale of equity investments                                                1,300             0             0
     Acquisition of property, plant and equipment                                           (1,775)       (1,846)         (806)
     Proceeds from sale of discontinued operations                                               0        16,000             0
     Investing activities of discontinued operations                                             0             0          (569)
                                                                                          --------      --------      --------

                                Net cash (used in) provided by investing activities         (4,411)          721        (1,983)
                                                                                          --------      --------      --------

Cash flows from financing activities:
     Principal payments on mortgage commitments, notes
         and loans                                                                          (6,058)      (18,141)       (6,715)
     Proceeds from mortgage commitments, notes and loans                                     6,560        19,153             0
     Net repayments under credit facilities                                                 (3,325)       (6,000)       (8,570)
     Purchase and retirement of common shares                                               (7,803)       (3,865)         (666)
     Proceeds from the exercise of stock options                                               142           568            63
     Financing activities of discontinued operations                                             0             0        (1,385)
                                                                                          --------      --------      --------

                                Net cash used in financing activities                      (10,484)       (8,285)      (17,273)
                                                                                          --------      --------      --------

                                Net increase in cash and cash equivalents                    5,421         2,904         2,671

Cash and cash equivalents, beginning of year                                                 8,154         5,250         2,579
                                                                                          --------      --------      --------

Cash and cash equivalents, end of year                                                    $ 13,575      $  8,154      $  5,250
                                                                                          ========      ========      ========
</TABLE>


                                       F-5

<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      -------------------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
        FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (CONTINUED)
        ----------------------------------------------------------------
                                 (In Thousands)
                                 --------------

<TABLE>
<CAPTION>
                                                                                                1999          1998        1997
                                                                                               -------      -------     -------

<S>                                                                                            <C>          <C>          <C>
Supplemental  disclosures  of cash flow  information:
         Cash paid during the year for:
              Interest                                                                         $3,177       $3,640       $4,832
                                                                                               ======       ======       ======

              Taxes                                                                            $4,749       $7,874       $3,655
                                                                                               ======       ======       ======

Supplemental schedule of noncash
     investing and financing activities:
         Noncash investing activities:
              Capital lease obligations                                                        $    0       $    0       $  511
                                                                                               ======       ======       ======
</TABLE>


              (A)      Changes in assets  and  liabilities  for the years  ended
                       December  31,  1999,  1998 and 1997,  net of effects from
                       business disposal are as follows:


<TABLE>
<CAPTION>
                                                                           1999                1998                  1997
                                                                           ----                ----                  ----


<S>                                                                     <C>                  <C>                  <C>
Notes and accounts receivable, net                                      $  2,049             $  3,500             $  7,425
Inventories                                                                  132                 (646)                 659
Prepaid expenses and other current assets                                    (45)                  84                  414
Deferred income taxes                                                      4,236                 (395)                (958)
Noncurrent notes receivable                                                  (49)              (1,512)              (1,455)
Other assets                                                               2,333                  607                 (257)
Accounts payable and accrued liabilities                                    (986)              (3,918)                  16
Income taxes payable                                                      (1,355)              (3,217)               1,635
Other long-term liabilities                                                4,605                5,482                1,810
Discontinued operations:  noncash charges and
  working capital changes                                                     0                    0                  718
                                                                        --------             --------             --------
              Total                                                     $ 10,920             ($    15)            $ 10,007
                                                                        ========             ========             ========
</TABLE>


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


                                       F-6

<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      -------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        DECEMBER 31, 1999, 1998 AND 1997
                        --------------------------------
                 (In Thousands, Except Share And Per Share Data)
                 -----------------------------------------------

(1)      Summary of Significant Accounting Policies:
         -------------------------------------------

              Nature of Business:
              -------------------

                  United Capital Corp. (the "Company") and its  subsidiaries are
                  currently  engaged in the  investment  and  management of real
                  estate and in the manufacture and sale of engineered products.

              Principles of Consolidation:
              ----------------------------

                  The consolidated  financial statements include the accounts of
                  the Company and its wholly-owned subsidiaries. All significant
                  intercompany  accounts and transactions  have been eliminated.
                  The equity method of accounting is used for investments in 50%
                  or less owned companies over which the Company has the ability
                  to exercise significant influence.

              Income Recognition - Real Estate Operations:
              --------------------------------------------

                  The Company  leases  substantially  all of its  properties  to
                  tenants under net leases. Under this type of lease, the tenant
                  is  obligated  to pay  all  operating  costs  of the  property
                  including  real  estate  taxes,   insurance  and  repairs  and
                  maintenance.  Rental income is  recognized in accordance  with
                  generally  accepted  accounting   principles.   Certain  lease
                  agreements  provide for additional  rent based on a percentage
                  of  tenants'  sales.  Such  additional  rents are  recorded as
                  income when they can be reasonably  estimated.  Gains on sales
                  of real estate assets and equity investments are recorded when
                  the  gain  recognition   criteria  under  generally   accepted
                  accounting principles have been met.

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

              Revenue Recognition - Manufacturing Operations:
              -----------------------------------------------

                  Sales are recorded when products are shipped to the customer.

              Cash and Cash Equivalents:
              --------------------------

                  The Company  considers  all highly liquid  investments  with a
                  maturity,  at the purchase date, of three months or less to be
                  cash equivalents.

              Marketable Securities:
              ----------------------

                  The  Company  determines  the  appropriate  classification  of
                  securities  at  the  time  of  purchase  and   reassesses  the
                  appropriateness  of the classification at each reporting date.
                  At December 31, 1999

                                       F-7

<PAGE>

                  and 1998, all marketable  securities  have been  classified as
                  available-for-sale and, as a result, are stated at fair value.
                  Unrealized gains and losses on  available-for-sale  securities
                  are recorded as a separate component of stockholders'  equity.
                  Marketable securities defined as trading securities are stated
                  at fair  value and  unrealized  holding  gains and  losses are
                  reflected in earnings.  Realized  gains and losses on the sale
                  of  securities,  as  determined  on a specific  identification
                  basis, are included in the Consolidated Statements of Income.

              Inventories:
              ------------

                  Inventories  are  stated at the  lower of cost or  market  and
                  include  material,   labor  and  manufacturing  overhead.  The
                  first-in,  first-out  (FIFO)  method is used to determine  the
                  cost of inventories.

                  Inventory consists of the following components at December 31:

                                                    1999               1998
                                                  -------            -------

                  Raw materials                   $2,369             $1,851
                  Work in process                    334                403
                  Finished goods                   1,504              2,085
                                                  ------             ------

                                                  $4,207             $4,339
                                                  ======             ======

              Depreciation and Amortization:
              ------------------------------

                  Depreciation  and amortization are provided on a straight-line
                  basis over the estimated useful lives of the related assets as
                  follows:

                       Real property held for rental:
                           Buildings                         5 to 39 years
                           Equipment                          5 to 7 years

                       Property, plant and equipment:
                           Buildings and improvements       18 to 20 years
                           Machinery and equipment           3 to 10 years

                       Intangible Assets:
                           Patents, trademarks and other
                             intellectual property           5 to 20 years

              Real Property Held for Rental:
              ------------------------------

                  Real  property  held  for  rental  is  carried  at  cost  less
                  accumulated  depreciation.  Major renewals and betterments are
                  capitalized. Maintenance and repairs are expensed as incurred.

              Property, Plant and Equipment:
              ------------------------------

                  Property,  plant  and  equipment  is  recorded  at cost,  less
                  accumulated depreciation and amortization.  Major improvements
                  are  capitalized  and  maintenance and repairs are expensed as
                  incurred.


                                       F-8


<PAGE>

              Research and Development:
              -------------------------

                  The  Company  expenses   research,   development  and  product
                  engineering costs as incurred.  Approximately $95, $63 and $77
                  of such costs were  incurred by the Company in 1999,  1998 and
                  1997, respectively.

              Earnings Per Common Share:
              --------------------------

                  Basic  earnings per common share is calculated by dividing net
                  income  by  the  weighted-average   number  of  common  shares
                  outstanding  and  excludes  any  dilutive   effects  of  stock
                  options. Diluted earnings per common share gives effect to all
                  potentially  dilutive  common  shares  that  were  outstanding
                  during  the  period.   Dilutive  common  shares  used  in  the
                  computation  of diluted  earnings per common share result from
                  the assumed  exercise  of stock  options,  using the  treasury
                  stock method.

              Derivative Financial Instruments:
              ---------------------------------

                  The Company has entered into an interest  rate swap  agreement
                  (the  "Swap")  to modify  the  interest  characteristics  of a
                  particular  term loan by  effectively  converting its floating
                  rate to a fixed  rate,  thus  reducing  the impact of interest
                  rate changes on future  expense.  The Swap is designated  with
                  the  principal  balance and term of the term loan.  The amount
                  paid or received on the Swap is accrued and  recognized  as an
                  adjustment  of  interest  expense  related  to the  debt  (the
                  accrual  accounting  method).  The fair  value of the Swap and
                  changes  in the fair  value as a result of  changes  in market
                  interest rates are not recognized in the financial statements.
                  The Company has not otherwise  traded in derivative  financial
                  instruments.

              Prior Year Financial Statements:
              --------------------------------

                  Certain  amounts  have been  reclassified  in the December 31,
                  1998 and 1997  Consolidated  Financial  Statements  and  Notes
                  thereto to present them on a basis consistent with the current
                  year.

              Use of Estimates:
              -----------------

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

              Recent Pronouncements of the Financial Accounting Standards Board:
              ------------------------------------------------------------------

                  Statement   of   Financial   Accounting   Standards   No.  133
                  "Accounting for Derivative Instruments and Hedging Activities"
                  ("SFAS No. 133"), issued in June 1998,  establishes accounting
                  and reporting standards for derivative  instruments.  SFAS No.
                  133  requires  that an entity  recognize  all  derivatives  as
                  either  assets or  liabilities  in the  statement of financial
                  position  and measure  those  instruments  at fair value.  The
                  statement requires that changes in the derivative's fair value
                  be recognized currently


                                       F-9


<PAGE>

                  in earnings unless specific hedge accounting criteria are met.
                  Special accounting for qualifying hedges allows a derivative's
                  gains and losses to offset related  results on the hedged item
                  in the income statement.  In June 1999, Statement of Financial
                  Accounting   Standards  No.  137  "Accounting  for  Derivative
                  Instruments and Hedging Activities - Deferral of the Effective
                  Date of FASB  Statement  No. 133" was issued which changes the
                  effective  date to all fiscal  quarters  of all  fiscal  years
                  beginning  after June 15, 2000. SFAS No. 133 cannot be applied
                  retroactively  prior to the  issuance  of the  statement.  The
                  Company is in the process of  evaluating  the  accounting  and
                  reporting  requirements  of SFAS No. 133 and believes  that it
                  will not have a material impact on the consolidated results of
                  operations, financial position or cash flows.

(2)      Disposal of Operating Company:
         ------------------------------

                  On January  2, 1998,  the  Company  completed  the sale of the
                  stock of its Dorne & Margolin,  Inc. ("D&M") subsidiary to AIL
                  Systems, Inc. for $16,000, in cash, resulting in a pretax gain
                  from discontinued  operations of $8,549. The operating results
                  of  D&M  are  presented  as a  discontinued  operation  in the
                  accompanying  Consolidated  Financial  Statements  for periods
                  prior to the sale. The Company retained the D&M  manufacturing
                  facility,  which  was sold in  January  2000 for an  amount in
                  excess of carrying value.

                  Revenues applicable to discontinued operations were $19,985 in
                  1997.

(3)      Real Property Held for Rental:
         ------------------------------

                  The  Company  is the  lessor of real  estate  under  operating
                  leases which expire in various years through 2078.

                  The following is a summary of real property held for rental at
                  December 31:

                                                       1999              1998
                                                     --------           ------

                  Land                              $  21,084         $  19,732
                  Buildings                           117,108           120,370
                                                    ---------         ---------

                                                      138,192           140,102

                  Less: Accumulated depreciation      (71,253)          (68,665)
                                                     ---------        ---------

                                                    $  66,939         $  71,437
                                                    =========         =========

                  As of December 31, 1999,  total minimum  future  rentals to be
                  received under noncancellable leases for each of the next five
                  years and thereafter are as follows:

                  Year Ended December 31,
                  2000                                          $ 16,183
                  2001                                            15,088
                  2002                                            13,185
                  2003                                            11,115
                  2004                                             8,558
                  Thereafter                                      66,276
                                                                --------
                  Total minimum future rentals                  $130,405
                                                                ========

                                      F-10

<PAGE>

              Minimum future rentals do not include  additional rentals that may
              be received  under  certain  leases which provide for such rentals
              based  upon a  percentage  of  lessees'  sales.  Percentage  rents
              included  in the  determination  of net income for 1999,  1998 and
              1997 were approximately $1,131, $1,018 and $1,603, respectively.

(4)      Property, Plant and Equipment:
         ------------------------------

              Property, plant and equipment is principally used in the Company's
              manufacturing operations and consists of the following at December
              31:
                                                         1999            1998
                                                      --------         --------

                  Land                                $     37         $     37
                  Buildings and improvements             1,413            1,010
                  Machinery and equipment                9,909            8,556
                                                      --------         --------

                                                        11,359            9,603

                  Less: Accumulated depreciation        (6,282)          (4,917)
                                                      --------         --------

                                                      $  5,077         $  4,686
                                                      ========         ========

(5)        Marketable Securities:
           ----------------------

              The aggregate market value of marketable securities, which are all
              classified  as  available-for-sale,  was  $27,296  and  $14,290 at
              December 31, 1999 and 1998, respectively, while unrealized holding
              gains were $3,911 and $2,938 on a net of tax basis,  respectively.
              Marketable securities consist of the following at December 31:

                                                           1999           1998
                                                          ------         ------
              Available-for-sale securities:
              Corporate equities                         $21,685         $14,290
              Corporate debts                              5,611               0
                                                         -------         -------

                                                         $27,296         $14,290
                                                         =======         =======

              Corporate debt securities have contractual maturities ranging from
              approximately  one  to  eight  years,  with  the  majority  of the
              maturities being five years or less.

              There were no sales of  marketable  securities  in 1997.  Proceeds
              from  the  sale of  trading  securities  and the  resulting  gross
              realized  gains and losses  included in the  determination  of net
              income  for the  years  ended  December  31,  1999 and 1998 are as
              follows:

                                                        1999              1998
                                                       ------             ------

              Proceeds                                 $  844             $5,966
                                                       ======             ======

              Realized gains                           $  144             $   75
                                                       ======             ======



                                      F-11

<PAGE>
(6)      Notes Receivable:
         -----------------

              Notes receivable consist of the following at December 31:
<TABLE>
<CAPTION>
                                                                   1999     1998
                                                                 ------   ------
<S>                                                              <C>      <C>
                  High yield mortgage loans (a)                  $    0   $1,963
                  Other                                             298      751
                                                                 ------   ------

                                                                    298    2,714
                  Less: Current portion included in notes
                    and accounts receivable                          28    2,121
                                                                 ------   ------
                                                                 $  270   $  593
                                                                 ======   ======
</TABLE>

                  (a) The  Company  participates  in high yield  mortgage  loans
                      which in certain  instances,  may  include  related  party
                      participants  (see Note  14).  These  loans are  generally
                      secured  by a first or second  mortgage  lien on  property
                      which  is  generally   fully  leased  with  a  substantial
                      value-to-loan  ratio  or  other  appropriate   collateral.
                      Management  believes that sufficient  collateral exists to
                      satisfy such  obligations.  The loans are interest bearing
                      and, in most cases,  the Company receives a commitment fee
                      of 4.0%.  The  effective  yield on such  loans is  usually
                      18.0%.  No such loans were  outstanding  at  December  31,
                      1999.   At  December  31,  1998  there  were  three  loans
                      outstanding with balances ranging from $400 to $863, which
                      were fully satisfied in 1999.

(7)      Other Assets:
         -------------

         Other assets consist of the following at December 31:

                                                               1999      1998
                                                              -------   -------

                      Lease financing (a)                     $ 7,812    $ 5,792
                      Other                                     2,930      5,713
                                                              -------    -------
                                                               10,742     11,505
                      Less: Amounts included in prepaid
                        expenses and other current assets        254        209
                                                              -------    -------

                                    Total other assets        $10,488    $11,296
                                                              =======    =======

                  (a) Lease financing  consists of a 50.0% interest in a limited
                      partnership,  whose  principal  assets  are two  leveraged
                      leases with Kmart  Corporation.  The following  represents
                      the  components  of the net  investment  in the  leveraged
                      leases at December 31:

                                                             1999        1998
                                                           --------     -------

                      Rentals receivable                  $ 89,573     $ 93,601
                      Residual values                       10,000       10,000
                      Non recourse debt service            (69,003)     (72,252)
                      Unearned income                      (22,758)     (25,557)
                                                          --------     --------
                                                             7,812        5,792

                      Less: Deferred taxes arising
                             from leveraged leases           4,722          503
                                                          --------     --------

                                                            $3,090       $5,289
                                                          ========     ========

                                      F-12
<PAGE>

(8)      Accounts Payable and Accrued Liabilities:
         ----------------------------------------

              Accounts payable and accrued  liabilities consist of the following
              at December 31:

                                                           1999           1998
                                                         --------       --------

              Accounts payable                          $  3,760        $  2,822
              Accrued wages and benefits                   1,417           1,946
              Liabilities for discontinued operations      1,806           2,758
              Other accrued expenses                       2,852           3,295
                                                        --------        --------

                                                        $  9,835        $ 10,821
                                                        ========        ========

(9)       Long-term Debt:
          ---------------

              Long-term debt consists of the following at December 31:

                                                           1999           1998
                                                        ---------        -------

              Mortgages on real property (a)             $32,571         $31,339
              Loan payable to bank (b)                       472           1,102
              Capital lease obligation                       263             363
                                                         -------         -------

                                                          33,306          32,804

              Less: Current maturities                     5,990           5,875
                                                         -------         -------

                                                         $27,316         $26,929
                                                         =======         =======

              (a)   First mortgages  bearing interest at rates ranging from 4.0%
                    to 10.3% per annum are  collateralized  by the related  real
                    property.  Such  amounts are  scheduled to mature at various
                    dates from October 2000 through  October 2015. In 1998,  the
                    Company  refinanced three mortgages with a total outstanding
                    principal  value of $12,308 and interest  rates ranging from
                    10.0% to 10.5%. The new mortgages bear interest ranging from
                    6.5% to 6.7% and have  maturities  similar  to the  original
                    obligations.

              (b)   The Company has a fixed rate note  bearing  interest at 7.9%
                    per annum, which is due in 60 equal principal  installments,
                    together with accrued interest  thereon,  through  September
                    2000.  The loan  agreement  contains,  among  other  things,
                    several   financial   covenants   regarding  net  worth  and
                    debt-to-equity  ratios.  The Company was in compliance  with
                    all covenants at December 31, 1999 and 1998.



                                      F-13


<PAGE>
                  The approximate  aggregate  maturities of these obligations at
                  December 31, 1999 are as follows:

<TABLE>
<CAPTION>
                                                                   Long-term          Capital Lease
                                                                     Debt               Obligation
                                                                  ------------       ----------------

<S>                                                                 <C>                    <C>
                       2000                                         $5,883                 $124
                       2001                                          5,416                  124
                       2002                                          5,006                   43
                       2003                                          4,391                    0
                       2004                                          5,866                    0
                  Thereafter                                         6,481                    0
                                                                  ------------       ----------------

                  Total minimum payments                           $33,043                  291
                                                                  ============

                  Less: Amount representing interest                                         28
                                                                                     ----------------

                  Total present value of minimum lease payments                             263

                  Less: Current portion                                                     107
                                                                                     ----------------

                  Total noncurrent portion                                                 $156
                                                                                     ================
</TABLE>

(10)          Credit Facilities:
              ------------------

                  Effective December 31, 1999, the Company entered into a credit
                  agreement  with three banks which  provides for both a $60,000
                  revolving credit facility  ("Revolver") and a $1,925 term loan
                  ("Term  Loan").  Each of the three banks  participates  in the
                  Revolver  while only one of the banks is a participant  in the
                  Term Loan.

                  Under the terms of the Revolver,  the Company will be provided
                  with  eligibility  based  upon  the  sum of (i)  60.0%  of the
                  aggregate annualized and normalized year-to-date net operating
                  income  of  unencumbered  eligible  properties,   as  defined,
                  capitalized  at 10.5%,  (ii) the  lesser of $6,000 or 60.0% of
                  the  aggregate  annualized  and  normalized  year-to-date  net
                  operating income of unencumbered eligible hotel properties, as
                  defined,  capitalized at 10.5%, (iii) the lesser of $10,000 or
                  50.0% of the aggregate annualized and normalized  year-to-date
                  net operating  income of encumbered  eligible  properties,  as
                  defined,  capitalized  at 12.0% and (iv) the lesser of $10,000
                  or the sum of 75.0% of eligible accounts  receivable and 50.0%
                  of eligible  inventory,  as defined.  At  December  31,  1999,
                  eligibility  under the Revolver  was  $60,000,  based upon the
                  above terms. The credit agreement  contains certain  financial
                  and  restrictive  covenants,  including  minimum  consolidated
                  equity,  interest coverage,  debt service coverage and capital
                  expenditures (other than for real estate).  The Company was in
                  compliance with all covenants at December 31, 1999. 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") plus
                  2.0%.  The Revolver  expires on December 31, 2002. At December
                  31,  1999,  there  were  no  amounts   outstanding  under  the
                  Revolver.

                  The Term Loan bears  interest  at 90 day LIBOR plus 1.4% (7.4%
                  at December 31,  1999) and is payable in  quarterly  principal
                  installments  of $175, with the final payment due on September
                  30, 2002. At December 31, 1999,  there was $1,925  outstanding
                  under the Term Loan.


                                      F-14


<PAGE>


                  Prior to obtaining the Revolver and Term Loan discussed above,
                  the Company maintained a credit agreement with two banks which
                  provided  for both a $7,000 term loan and a $40,000  revolving
                  credit   facility.   This  credit   agreement  was  terminated
                  effective  December 31, 1999 in conjunction with the execution
                  of the new Revolver and Term Loan.  The  termination  included
                  the retirement of $1,925 under the term loan to a bank that is
                  not participating in the current facility.  The remaining term
                  loan  balance of $1,925 was  converted  to the Term Loan under
                  arrangements similar to the original facility. At December 31,
                  1998,  there were no amounts  outstanding  under the revolving
                  credit facility and $5,250 outstanding under the term loan.

(11)          Fair Value of Financial Instruments:
              ------------------------------------

                  The Company has limited involvement with financial instruments
                  and has not used  them for  trading  purposes.  The  following
                  methods and assumptions were used by the Company in estimating
                  its fair value disclosures for financial instruments:

                  The  carrying  amount  reported  in the  Consolidated  Balance
                  Sheets for cash and cash  equivalents and accounts  receivable
                  approximate their fair value.

                  The  fair  value  of  notes  receivable  are  estimated  using
                  discounted cash flow analyses,  with interest rates comparable
                  on loans with similar  terms and  borrowers of similar  credit
                  quality.  The fair value of notes  receivable  at December 31,
                  1999 and 1998 was approximately $354 and $2,763  respectively,
                  while  the  carrying  value was $298 and  $2,714  for the same
                  periods.

                  Marketable securities  available-for-sale,  which are held for
                  investment  purposes are carried at fair value based on quoted
                  market  prices or dealer  quotes.  If a quoted market price is
                  not  available,  fair value is estimated  using quoted  market
                  prices for similar securities.

                  Carrying  amounts of  borrowings  under the credit  facilities
                  approximate their fair value. The fair value of long-term debt
                  was calculated based on interest rates available for debt with
                  terms and due dates  similar to the  Company's  existing  debt
                  arrangements. The fair value of long-term debt at December 31,
                  1999  and  1998  was   approximately   $31,134   and   $32,705
                  respectively, while the carrying value was $33,306 and $32,804
                  for the same periods.

                  The fair value of the Swap (used for hedging  purposes) is the
                  estimated  amount  that  the  bank  would  receive  or  pay to
                  terminate the Swap at the reporting date,  taking into account
                  current interest rates and the current creditworthiness of the
                  Swap  counterparties.  At December 31, 1999 and 1998, the fair
                  values  of  the  Swap  were   estimated  at  $14  and  ($125),
                  respectively.

(12)          Stockholders' Equity:
              ---------------------

                  In  October   1999,   the   Company   purchased   and  retired
                  approximately  278,000  shares in  connection  with its "Dutch
                  Auction" self-tender offer. As a result of this repurchase the
                  Company's  additional  paid-in capital was reduced to zero and
                  the Company's  retained  earnings was reduced by approximately
                  $4.1 million. Future repurchases of the Company's common stock
                  will also reduce retained earnings by amounts in excess of the
                  par value.


                                      F-15

<PAGE>

                  Stock Options:
                  --------------

                  The Company has two stock option  plans under which  qualified
                  and  nonqualified  options may be granted to key  employees to
                  purchase the  Company's  common stock at the fair market value
                  on the date of grant.  Under both plans, the options typically
                  become exercisable in three equal installments,  beginning one
                  year from the date of grant.  Stock  options  expire ten years
                  from the date of grant.  The 1988 Incentive  Stock Option Plan
                  (the "Incentive  Plan") provides for the granting of incentive
                  stock options and the 1988 Joint  Incentive and  Non-Qualified
                  Stock Option Plan (the "Joint Plan") provides for the granting
                  of incentive or  nonqualified  stock  options.  The  Company's
                  shareholders  have  approved  an  amendment  to the  Company's
                  Incentive  Plan and  Joint  Plan to  increase  the  number  of
                  authorized shares reserved for issuance pursuant to each plan,
                  from 325,000 shares to 1,325,000 shares, respectively,  and to
                  extend the term of the Incentive Plan and Joint Plan to 2008.

                  At December 31, 1999, there were 1,031,380 and 223,001 options
                  outstanding   under  the  Joint  Plan  and   Incentive   Plan,
                  respectively.  At  December  31,  1998,  647,630  and  224,251
                  options were  outstanding  under the Joint Plan and  Incentive
                  Plan, respectively.

                  A summary of the  Company's  stock  options as of December 31,
                  1999,  1998 and 1997,  and changes during the years then ended
                  are summarized below:

<TABLE>
<CAPTION>
                                                                                    Weighted-
                                                                                     Average
                                                                                    Exercise
                                                                   Shares             Price
                                                                ------------       ----------

<S>                                                                <C>                <C>
                       Outstanding at January 1, 1997              169,428            $9.45

                           Granted                                 319,381           $17.31
                           Exercised                                (6,700)           $9.48
                           Forfeited                                (3,228)          $10.88
                                                                ------------

                       Outstanding at December 31, 1997            478,881           $14.68

                           Granted                                 444,000           $23.08
                           Exercised                               (51,000)          $11.13
                                                                ------------

                       Outstanding at December 31, 1998            871,881           $19.16

                           Granted                                 434,000           $14.06
                           Exercised                               (28,500)           $5.00
                           Forfeited                               (23,000)          $20.52
                                                                ------------

                       Outstanding at December 31, 1999          1,254,381           $17.69
                                                                ============

</TABLE>


                                      F-16

<PAGE>
The  following  table  summarizes  information  about  options  outstanding  and
exercisable at December 31, 1999:
<TABLE>
<CAPTION>

                           Options Outstanding                                        Options Exercisable
-----------------------------------------------------------------------------   -------------------------------
                                             Weighted-
                                              Average             Weighted-                           Weighted-
                                             Remaining             Average                            Average
    Range of              Number            Contractual           Exercise          Number            Exercise
 Exercise Price         Outstanding            Life                Price         Exercisable           Price
---------------------  -----------------    ---------------   ---------------   --------------       ----------

<S>                        <C>              <C>                 <C>                 <C>              <C>
$7.25 - $11.00             80,000           4.5 years           $   10.06           80,000           $   10.06
$14.06 - $18.75           742,381           8.7 years           $   15.40          205,254           $   17.29
$22.88 - $25.16           432,000           8.5 years           $   23.05          144,000           $   23.05
                        ---------                                                  -------

$7.25 - $25.16          1,254,381           8.3 years           $   17.69          429,254           $   17.87
                        =========                                                  =======
</TABLE>

The Company applies Accounting  Principles Board Opinion No. 25, "Accounting for
Stock  Issued to  Employees"  and  related  Interpretations  ("APB  No.  25") in
accounting  for  stock-based  compensation  plans.  Under APB No.  25,  when the
exercise  price of the Company's  employee stock options equals the market price
of the  underlying  stock on the  date of  grant,  no  compensation  expense  is
recognized.  Accordingly,  no  compensation  expense has been  recognized in the
financial  statements  for  employee  stock  option  arrangements.  Statement of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation,"  requires the  disclosure of proforma net income and earnings per
share had the  Company  adopted  the fair  value  method of  accounting  for its
stock-based  compensation  plans.  If  stock-based  compensation  costs had been
recognized  based on the estimated  fair values at the dates of grant of options
awarded during 1999,  1998 and 1997 proforma net income and net income per basic
share for 1999, 1998 and 1997 would have been $11,758 or $2.37, $14,234 or $2.74
and $8,091 or $1.53 per basic share, respectively. Proforma compensation expense
may not be  indicative  of proforma  expense in future  years.  For  purposes of
estimating  the fair  value of each  option  on the date of grant,  the  Company
utilized the  Black-Scholes  option pricing model. The  weighted-average  option
fair values and the assumptions used to estimate these values are as follows:


                                               Grants Issued During
                                               --------------------

                                           1999         1998          1997
                                           ----         ----          ----

Expected life (years)                       5            5            5
Risk free interest rate                     5.6%         5.6%         6.3%
Expected volatility                        32.4%        32.7%        39.3%
Dividend yield                              0.0%         0.0%         0.0%
Weighted-average option fair value         $5.42        $8.78        $7.42



                                      F-17


<PAGE>

(13)         Earnings Per Common Share:
             --------------------------

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

                                                     1999      1998      1997
                                                    -------   -------   -------
                       Numerator:
    Income from continuing operations               $13,326   $10,583   $7,465
                                                    =======   =======   ======

Denominator:
    Denominator for basic earnings per common
         share--weighted-average shares               4,968     5,203    5,288
Effect of dilutive securities:
    Employee stock options                               45        85       51
                                                    -------   -------   ------
Denominator for diluted earnings per common
    share--adjusted weighted-average shares
    and assumed conversions                           5,013     5,288    5,339
                                                    =======   =======   ======

Basic earnings per common share                     $  2.68   $  2.03   $ 1.41
                                                    =======   =======   ======

Diluted earnings per common share                   $  2.66   $  2.00   $ 1.40
                                                    =======   =======   ======

 (14)         Transactions with Related Parties:
              ----------------------------------

                  The Company has a 50.0% interest in an unconsolidated  limited
                  liability   corporation,   whose  principal   assets  are  two
                  leveraged leases with Kmart. A group that includes the wife of
                  the Board Chairman,  two Directors of the Company and the wife
                  of one of the  Directors  have an 8.0% interest in this entity
                  (see Note 7).

                  In July  1998,  the  Company  participated  in a  $3,000  loan
                  transaction  secured by stock in a corporation whose principal
                  assets  were  leased  equipment  and  stock  in a  cooperative
                  apartment.   The  Company  advanced  approximately  $1,800  in
                  connection with this loan. The remaining amounts were advanced
                  by the Board Chairman of the Company, $250; and the balance by
                  the wife of the Board  Chairman.  The note,  which  matured in
                  August 1999, bore interest at 14.0% per annum payable monthly.
                  The  participants  also  received a commitment  fee of 4.0% in
                  connection with the loan.

                  In September 1996, the Company purchased a 50.0% interest in a
                  limited  partnership  that owns and  operates a hotel in Miami
                  Beach,  Florida.  At the time of the acquisition,  the Company
                  participated  in a  $2,500  loan  transaction  to the  limited
                  partnership  secured by a mortgage  lien against the property.
                  The Company  advanced  approximately  $683 in connection  with
                  this  note.  The  remaining   amounts  were  advanced  by  the
                  following:  a Director of the Company,  $250;  the wife of the
                  Board  Chairman,  $1,000;  an officer of the Company $100; and
                  the balance by unrelated  parties.  The note bore  interest at
                  14.0% per annum  payable  monthly  and the  participants  also
                  received  a  commitment  fee of 4.0%.  This  note  matured  in
                  September  1997  and  was  extended  in  accordance  with  the
                  original terms of the note, for one year, in  consideration of
                  a 4.0% commitment fee. The limited partnership repaid the full
                  amount  outstanding  together  with  accrued  interest in July
                  1998. All amounts  invested in and advanced to the partnership
                  by the Company were  classified as investments in and advances
                  to affiliates and included in other assets in the Consolidated
                  Financial  Statements.  In January 1999, the Company sold this
                  investment for $1,300 resulting in a pretax gain of $838.

                                      F-18


<PAGE>

                  The Company's two hotel  properties  are managed by a publicly
                  traded  company  for  which  the Board  Chairman  and  another
                  Director of the Company are  directors.  In  addition,  during
                  1998 the Company's  Board Chairman was also named Chairman and
                  President of this  company.  Fees paid for the  management  of
                  these  properties  are based upon a percentage  of revenue and
                  were  approximately  $134,  $139 and $143 for  1999,  1998 and
                  1997,  respectively.  Included  in  marketable  securities  at
                  December  31, 1999 was $11,089 of common stock in this company
                  which   represents   approximately   2.6%  of  such  company's
                  outstanding shares.

                  During 1997 the Company advanced, in the aggregate $398 to the
                  Board  Chairman  and $375 to a  Director  and  Officer  of the
                  Company.   Such   advances  bore  interest  at  the  Company's
                  borrowing rate under its revolving  credit  facility which was
                  8.5% at December 31, 1997. Amounts outstanding at December 31,
                  1997 of $398  together  with  accrued  interest  thereon  were
                  repaid in  January  1998.  No such  advances  were made by the
                  Company in 1999 and 1998.

(15)          Income Taxes:
              -------------

                  Deferred  income taxes are determined on the liability  method
                  in accordance with Statement of Financial Accounting Standards
                  No. 109, "Accounting for Income Taxes" ("SFAS No. 109"). Under
                  SFAS  No.  109,   deferred  tax  assets  and  liabilities  are
                  determined based on the difference between the tax basis of an
                  asset or liability and its reported amount in the Consolidated
                  Financial  Statements  using  enacted  tax  rates.  Future tax
                  benefits  attributable to these  differences are recognized to
                  the extent that  realization  of such  benefits is more likely
                  than not.

                  The  components of the net deferred tax  (liability)  asset at
                  December 31, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                                                                 1999                  1998
                                                                                              ---------               --------

<S>                                                                                               <C>                    <C>
                       Realization allowances related to
                           accounts receivable and inventories                                    $257                   $276
                       Net unrealized gain on marketable securities                             (2,106)                (1,514)
                       Basis differences relating to real
                           property held for rental                                              2,812                  3,239
                       Accrued expenses, deductible when paid, net                               4,472                  4,190
                       Basis differences relating to business acquisitions                      (1,863)                (1,859)
                       Leveraged lease                                                          (4,722)                  (503)
                       Property, plant and equipment                                              (432)                  (582)
                       Pensions                                                                    (81)                   (81)
                       Other, net                                                                  (30)                   (29)
                                                                                             ----------               ---------


                                                  Net deferred tax (liability) asset            (1,693)                 3,137

                       Current portion                                                          (1,019)                  (152)
                                                                                             ----------               ---------

                                                  Noncurrent portion                             ($674)                $3,289
                                                                                             ==========               =========
</TABLE>

                  Based upon the Company's  historical  and projected  levels of
                  pretax income,  management believes it is more likely than not
                  that the Company will realize the benefits of its deferred tax
                  assets  and,  accordingly,   no  valuation  reserve  has  been
                  recorded.


                                      F-19


<PAGE>

                  The  income  tax   provision   (benefit)   reflected   in  the
                  accompanying Consolidated Statements of Income for each of the
                  years presented herein is as follows:

<TABLE>
<CAPTION>
                                           1999              1998             1997
                                         ------------    ------------     ------------

<S>                                        <C>              <C>              <C>
                       Current:
                           Federal         $5,175           $6,325           $4,823
                           State            1,831            1,900            1,860
                       Deferred             2,292             (500)            (873)
                                         ------------    ------------     ------------

                                           $9,298           $7,725           $5,810
                                         ============    ============     ============
</TABLE>

                  A  reconciliation  of the tax provision  computed at statutory
                  rates to the amounts  shown in the  accompanying  Consolidated
                  Statements  of Income for the years ended  December  31, 1999,
                  1998 and 1997 is as follows:
<TABLE>
<CAPTION>

                                                                           1999     1998     1997
                                                                           ----    -----     ----

<S>                                                                       <C>      <C>      <C>
                  Computed federal income
                       tax provision at statutory rates                   $7,918   $6,408   $4,513
                  State income taxes, net of federal income tax benefit    1,236    1,293    1,272
                  Other, net                                                 144       24       25
                                                                          ======   ======   ======
                                                                          $9,298   $7,725   $5,810
                                                                          ======   ======   ======
</TABLE>

(16)          Other Income and Expense, Net:
              ------------------------------

                  The  components  of  other  income  and  expense,  net  in the
                  accompanying  Consolidated  Statements of Income for the years
                  ended December 31, 1999, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>

                                                                       1999      1998       1997
                                                                     -------   -------     ------

<S>                                                                  <C>       <C>        <C>
                  Gain on sale of real estate assets                 $ 6,957   $ 5,444    $ 3,481
                  Gain (loss) from equity investments (a)                838      (402)      (319)
                  Gain on the sale of trading securities (Note 5)        144        75          0
                  Other, net                                             327       (82)       100
                                                                     -------   -------    -------

                                                                     $ 8,266   $ 5,035    $ 3,262
                                                                     =======   =======    =======
</TABLE>

                  (a)  In January 1999,  the Company sold its 50.0%  partnership
                       interest in a Miami Beach hotel for $1,300 resulting in a
                       pretax gain of $838. Loss from equity investments in 1998
                       and 1997  principally  represents the Company's  share of
                       losses in this hotel.

(17)          Retirement Plan:
              ----------------

                  The Company has a noncontributory defined benefit pension plan
                  that covers  substantially  all  full-time  employees  and the
                  former employees of the Company's discontinued resilient vinyl
                  flooring segment.


                                      F-20

<PAGE>

The following table sets forth the change in benefit  obligation,  the change in
plan assets and the funded status of the plan as of December 31:

                                                              1999       1998
                                                          ---------     --------
       Change in benefit obligation:

       Benefit obligation, beginning of year               $  9,290    $  9,052
              Service cost                                      332         308
              Interest cost                                     730         640
              Actuarial (gain) loss                            (339)        326
              Benefits paid                                  (1,034)     (1,036)
                                                           --------    --------
       Benefit obligation, end of year                        8,979       9,290
                                                           --------    --------

       Change in plan assets:

       Fair value of plan assets, beginning of year          12,217      12,643
               Actual return on plan assets                      58         610
               Benefits paid                                 (1,034)     (1,036)
                                                           --------    --------
       Fair value of plan assets, end of year                11,241      12,217
                                                           --------    --------

       Funded status                                          2,262       2,927
                                                           --------    --------

       Unrecognized net actuarial loss                           10         349
       Unrecognized net gain                                 (1,441)     (2,436)
                                                           --------    --------

       Prepaid benefit obligation                          $    831    $    840
                                                           ========    ========

Net periodic pension  (expense) income consists of the following  components for
the years ended December 31:

                                                  1999        1998       1997
                                                -------     -------     -------

Service cost                                    ($  332)    ($  308)    ($  325)
Interest cost                                      (730)       (640)       (626)
Actual return on plan assets                         58         610       1,013
Net amortization and deferral                       995         456          87
                                                -------     -------     -------

  Net periodic pension (expense) income         ($    9)    $   118     $   149
                                                =======     =======     =======

                  In determining the projected  benefit  obligation for 1999 and
                  1998, the weighted  average assumed discount rate was 8.0% and
                  7.0%,  respectively,  while the rate of expected  increases in
                  future  salary  levels was 3.5% for both years.  The  expected
                  long-term  rate of return on assets  used in  determining  net
                  periodic  pension cost for all years  presented  was 9.0%.  No
                  contributions  were  made  during  1999 or 1998 as the plan is
                  overfunded.  Plan  assets  consist  primarily  of U.S.  bonds,
                  government backed mortgage obligations,  equity securities and
                  mutual funds.

(18)          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


                                      F-21


<PAGE>
                  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.

                  Information on the Company's  business  segments for the years
                  ended December 31, 1999, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>

                                                                                            1999         1998         1997
                                                                                         ---------    ---------    ---------
<S>                                                                                      <C>          <C>          <C>
                       Net revenues and sales:
                           Real estate investment and management                         $  29,202    $  26,349    $  24,042
                           Engineered products                                              30,500       32,170       36,204
                                                                                         ---------    ---------    ---------

                                                                                         $  59,702    $  58,519    $  60,246
                                                                                         =========    =========    =========

                       Operating income:
                           Real estate investment and management                         $  14,079    $  12,133    $   7,718
                           Engineered products                                               1,855        3,239        3,419
                                                                                         ---------    ---------    ---------

                                                                                            15,934       15,372       11,137

                       General corporate expenses                                           (2,848)      (3,098)      (2,329)
                       Other income, net                                                     9,538        6,034        4,467
                                                                                         ---------    ---------    ---------

                                             Income from continuing
                                                  operations before income taxes         $  22,624    $  18,308    $  13,275
                                                                                         =========    =========    =========

                       Identifiable assets:
                           Real estate investment and management  and corporate assets
                                                                                         $ 122,112    $ 114,406    $  95,080
                           Engineered products                                              11,620       11,706       11,432
                           Discontinued operations                                               0            0        6,841
                                                                                         ---------    ---------    ---------

                                                                                         $ 133,732    $ 126,112    $ 113,353
                                                                                         =========    =========    =========

                       Depreciation and amortization expense:
                           Real estate investment and management                         $   5,210    $   5,530    $   5,838
                           Engineered products                                                 737          662          577
                           General corporate expenses                                          681          374          242
                                                                                         ---------    ---------    ---------
                                                                                         $   6,628    $   6,566    $   6,657
                                                                                         =========    =========    =========

                       Mortgage interest expense:
                           Real estate investment and management                         $   2,620    $   2,661    $   3,058
                                                                                         =========    =========    =========

                       Additions to long-lived assets:
                           Real estate investment and management                         $   3,194    $  13,878    $   2,885
                           Engineered products                                                 885          507          197
                                                                                         ---------    ---------    ---------

                                                                                         $   4,079    $  14,385    $   3,082
                                                                                         =========    =========    =========
</TABLE>

Sales by the  Company's  engineered  products  segment  to  automobile  original
equipment


                                      F-22
<PAGE>

                  manufacturers  accounted for  approximately  21.8%,  24.6% and
                  30.8%  of  1999,   1998   and  1997   consolidated   revenues,
                  respectively.  Approximately  14.5%,  12.9% and 13.1% of 1999,
                  1998 and  1997  total  sales  generated  from  the  engineered
                  products  segment were from foreign  customers.  Substantially
                  all assets held by the Company's  engineered  products segment
                  are located  within the United States,  however  manufacturing
                  operations of this segment were commenced in Mexico in 1999.

                  Included  in  the  identifiable  assets  of  the  real  estate
                  investment  and  management  segment at December  31, 1998 and
                  1997 are  approximately  $1,963 and $5,056,  respectively,  of
                  high yield mortgage loans  receivable (see Note 6). There were
                  no  such  loans  outstanding  at  December  31,  1999.  Income
                  generated  by these loans  receivable  is included in interest
                  income.

(19)   Contingencies:
       --------------

                  The Company has  undertaken  the  completion of  environmental
                  studies  and/or  remedial  action  at  Metex'  two New  Jersey
                  facilities.  The  Company  has  recorded  a  liability  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  believes  that it is  entitled to full
                  defense  and  indemnification  with  respect to  environmental
                  investigation   and  remediation  costs  under  its  insurance
                  policies,  the Company's  insurers have denied such  coverage.
                  Accordingly,  the Company has 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. At December 31,
                  1999,  settlements  have been reached with all but one carrier
                  in  this  matter.   Settlement  with  the  final  carrier  was
                  completed in February 2000.

                  In the  opinion  of  management,  amounts  recovered  from its
                  insurance carriers should be

                                      F-23


<PAGE>

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

                  The Company is involved in various other  litigation and legal
                  matters  which are being  defended and handled in the ordinary
                  course of  business.  None of these  matters  are  expected to
                  result in a judgment  having a material  adverse effect on the
                  Company's   consolidated  financial  position  or  results  of
                  operations.




                                      F-24

<PAGE>

                                                                     SCHEDULE II


                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      -------------------------------------
                         ALLOWANCE FOR DOUBTFUL ACCOUNTS
                         -------------------------------
                                 (In Thousands)
                                 --------------


<TABLE>
<CAPTION>

                                                                                               Write-offs
                                                                                                 Net of
                                                                                               Recoveries
                                                         Balance             Charged           of Accounts        Balance
                                                           at                   to             Previously           at
                                                        Beginning           Costs and            Written          End of
                                                        of Period            Expenses              Off            Period
                                                       -----------          ---------          -----------        -------

<S>                                                       <C>                <C>                <C>                <C>
Allowance for doubtful accounts:

Year ended December 31, 1999                              $390               $  0               $  0               $390

Year ended December 31, 1998                               326                 70                  6                390

Year ended December 31, 1997                               377                  0                 51                326

</TABLE>



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


                                      F-25

<PAGE>
                                                                    SCHEDULE III
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      -------------------------------------
           REAL PROPERTY HELD FOR RENTAL AND ACCUMULATED DEPRECIATION
           ----------------------------------------------------------
                                DECEMBER 31, 1999
                                -----------------
                                 (In Thousands)
                                 --------------

<TABLE>
<CAPTION>


                                                    Initial Cost to Company       Costs              Gross Amount at Which
                                        Mortgage   ------------------------   Capitalized        Carried at Close of Period
                                         Loans                                Subsequent to  ---------------------------------------
                                        Payable                Building and   Acquisition/              Building and
       Description                      (Gross)       Land     Improvements   Improvements     Land     Improvements  Total (a), (c)
------------------------------------  -----------  ---------   ------------   -------------  ---------  ------------  --------------

<S>                                    <C>         <C>           <C>             <C>         <C>           <C>          <C>
Shopping Centers and Retail Outlets:
   Culver, CA                          $  4,010    $    842      $  7,576        $      0    $    842      $  7,576     $  8,418
   Northbrook, IL                         4,328         898         8,075               0         898         8,075        8,973
   Miscellaneous Investments             14,763       5,172        45,776             990       5,172        46,766       51,938
                                       --------    --------      --------        --------    --------      --------     --------

                                         23,101       6,912        61,427             990       6,912        62,417       69,329
                                       --------    --------      --------        --------    --------      --------     --------

Commercial Properties:
   Miscellaneous Investments              9,171       9,512        41,358             975       9,512        42,333       51,845
Day Care Centers and Offices:
   Miscellaneous Investments                299         643         5,292           2,145         643         7,437        8,080
Hotel Properties:
   Miscellaneous Investments                  0       1,712         2,868              48       1,712         2,916        4,628
Other:
   Miscellaneous Investments                  0       2,305           997           1,008       2,305         2,005        4,310
                                       --------    --------      --------        --------    --------      --------     --------

                                       $ 32,571    $ 21,084      $111,942        $  5,166    $ 21,084      $117,108     $138,192
                                       ========    ========      ========        ========    ========      ========     ========
</TABLE>

<TABLE>
<CAPTION>
                                                                                           Life on Which
                                                                                           Depreciation
                                                                                            in Latest
                                                                                           Statement of
                                         Accumulated         Date of          Date           Income is
       Description                      Depreciation (b)  Construction       Acquired    Computed (Years)
------------------------------------    ----------------  ------------     -----------   ----------------

<S>                                       <C>                  <C>               <C>          <C>
Shopping Centers and Retail Outlets:
   Culver, CA                             $  5,445              N/A              1986         18
   Northbrook, IL                            5,664              N/A              1987         18
   Miscellaneous Investments                32,452              N/A           1986-98       10-39
                                           -------

                                            43,561
                                           -------

Commercial Properties:
   Miscellaneous Investments                17,844              N/A           1986-98       5-39
Day Care Centers and Offices:
   Miscellaneous Investments                 6,004              N/A           1986-91       5-39
Hotel Properties:
   Miscellaneous Investments                 2,868              N/A           1986-99       7-10
Other:
   Miscellaneous Investments                   976              N/A           1986-97       10-28
                                           -------

                                           $71,253
                                           =======
</TABLE>

<PAGE>

     Notes:

     (a)  Reconciliations of the carrying value of real property held for rental
          for the three years ended December 31, 1999 are as follows:
<TABLE>
<CAPTION>
                                                                                     1999        1998      1997
                                                                                   ---------  ---------  --------

<S>                                                                                <C>        <C>        <C>
     Real property held for rental at beginning of period                          $140,102   $124,346   $126,876
     Additions during the period:
        Acquisitions and improvements                                                 2,304     12,539      2,276
        Transfers to real property held for rental                                        0      8,584          0
                                                                                   --------   --------   --------

                                                                                    142,406    145,469    129,152
     Deductions during period:
        Cost of real estate sold                                                      4,214      5,367      4,806
                                                                                   --------   --------   --------

                                                                                   $138,192   $140,102   $124,346
                                                                                   ========   ========   ========

      (b) Reconciliations of accumulated  depreciation for the three years ended
          December 31, 1999 are as follows:
                                                                                     1999       1998       1997
                                                                                   --------   --------   --------

     Accumulated depreciation at beginning of period                               $ 68,665   $ 65,768   $ 61,187
     Additions during the period:
        Provision for depreciation                                                    5,210      5,530      5,838
                                                                                   --------   --------   --------

                                                                                     73,875     71,298     67,025
     Deductions during period:
        Accumulated depreciation of real estate sold                                  2,622      2,633      1,257
                                                                                   --------   --------   --------

                                                                                   $ 71,253   $ 68,665   $ 65,768
                                                                                   ========   ========   ========
</TABLE>

     (c)  The aggregate  cost for federal  income tax purposes is  approximately
          $178,000.


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

                                      F-26

<PAGE>
                                                                     SCHEDULE IV
                     UNITED CAPITAL CORP. AND SUBSIDIARIES
                     -------------------------------------
                         MORTGAGE LOANS ON REAL ESTATE
                         -----------------------------
                                DECEMBER 31, 1999
                                -----------------
                                 (In Thousands)
                                 --------------

<TABLE>
<CAPTION>

                                                                 Final                                                    Prior
            Description                 Interest Rate         Maturity Date                  Periodic Payment Terms       Liens
-------------------------------   ---------------------   ---------------------- -----------------------------------   ----------

Mortgage loans secured by
commercial property:

<S>                               <C>                        <C>                 <C>                                        <C>
Augusta, Georgia                            9.0%             December 2008       Principal and interest due monthly         $0
Philadelphia, Pennsylvania        Varies from 9.0%-12.0%      January 2005       Principal and interest due monthly          0
                                                                                                                        ---------
                                                                                                                            $0
                                                                                                                        =========


                                                                                                Principal
                                                                                                Amount of
                                                                   Carrying                   Loans Subject
                                            Face                   Amount of                  to Delinquent
                                          Amount of                Mortgages                    Principal
            Description                   Mortgages              (a), (b), (c)                 or Interest
----------------------------------   --------------------   ---------------------------     ---------------------

Mortgage loans secured by
commercial property:

Augusta, Georgia                             $45                       $10                        $0
Philadelphia, Pennsylvania                    77                        77                         0
                                   --------------------    --------------------------     ---------------------
                                            $122                       $87                        $0
                                   ====================    ==========================     =====================

</TABLE>

(a)   A  reconciliation  of  mortgage  loans on real  estate  for the year ended
      December 31, 1999 is as follows:

     Balance at beginning of period                              $1,226
     Additions during period:
          New mortgage loans                                         77
     Deductions during period:
          Collection of principal                                (1,216)
                                                                 ------
     Balance at end of period                                       $87
                                                                 ======


(b)   In accordance with generally accepted accounting  principles certain gains
      from the sale of real property are being  recognized under the installment
      method  and,  accordingly,  notes  receivable  have  been  reduced  by the
      following deferred gains at December 31, 1999:

        Mortgage note receivable in connection with sale of property in:

             Augusta, Georgia                                       $24
                                                                 ======


(c)   The carrying value for federal income tax purposes is substantially  equal
      to the carrying amount for book purposes.


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


                                      F-27

<PAGE>

                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      -------------------------------------
                            QUARTERLY FINANCIAL DATA
                            ------------------------
                                   (Unaudited)
                                   -----------
                      (In Thousands, Except Per Share Data)
                      -------------------------------------


<TABLE>
<CAPTION>
                                                                 First            Second            Third             Fourth
                                                                Quarter           Quarter          Quarter           Quarter
                                                               --------         ---------         ---------         ---------

<S>                                                             <C>               <C>               <C>               <C>
For the year 1999:
     Revenues                                                   $14,175           $14,713           $14,339           $16,475
                                                                =======           =======           =======           =======

     Costs and expenses                                         $12,167           $11,695           $11,243           $11,511
                                                                =======           =======           =======           =======

     Other income                                               $ 4,148           $ 1,473           $ 1,945           $ 1,972
                                                                =======           =======           =======           =======

     Net income                                                 $ 3,586           $ 2,576           $ 2,916           $ 4,248
                                                                =======           =======           =======           =======

Per share data:
Earnings per common share:
     Basic                                                      $   .70           $   .51           $   .58           $   .89
                                                                =======           =======           =======           =======
     Diluted                                                    $   .70           $   .51           $   .58           $   .87
                                                                =======           =======           =======           =======



For the year 1998:
     Revenues                                                   $14,548           $14,996           $13,883           $15,092
                                                                =======           =======           =======           =======

     Costs and expenses                                         $10,747           $12,734           $10,814           $11,950
                                                                =======           =======           =======           =======

     Other income                                               $   349           $ 3,753           $   400           $ 1,532
                                                                =======           =======           =======           =======

     Income from continuing operations                          $ 2,414           $ 3,423           $ 1,961           $ 2,785
                                                                =======           =======           =======           =======

     Income from discontinued operations,
         net of tax                                             $ 4,849           $     0           $     0           $     0
                                                                -------           -------           -------           -------

     Net income                                                 $ 7,263           $ 3,423           $ 1,961           $ 2,785
                                                                =======           =======           =======           =======

Per share data:
Basic earnings per common share:
     Income from continuing operations                          $   .46           $   .66           $   .38           $   .54
     Discontinued operations, net of tax                            .92               .00               .00               .00
                                                                -------           -------           -------           -------
     Net income per common share                                $  1.38           $   .66           $   .38           $   .54
                                                                =======           =======           =======           =======

Diluted earnings per common share:
     Income from continuing operations                          $   .45           $   .64           $   .37           $   .54
     Discontinued operations, net of tax                            .90               .00               .00               .00
                                                                -------           -------           -------           -------
   Net income per common share assuming
            dilution                                            $  1.35           $   .64           $   .37           $   .54
                                                                =======           =======           =======           =======

</TABLE>

                                      F-28