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, 2000
                              -----------------
                                       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 2, 2001 was approximately $21,220,000.

The number of shares of the Company's $.10 par value common stock outstanding as
of March 2, 2001 was 4,704,915.

                       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 a South
Plainfield,  New  Jersey  property,  96.8% of the total  square  footage  of the
Company's properties are leased as of December 31, 2000.

         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(TM)  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 15.8% and 17.0% of the segment's
sales for 2000 and 1999,  respectively.  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 business segment of the Company for 2000, 1999 and 1998.

<TABLE>
<CAPTION>

(In Thousands)                              2000           1999          1998
                                        -----------    -----------   -----------

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

<S>                                      <C>             <C>          <C>
Rental revenues                          $ 28,237        $ 29,202     $ 26,349
                                        ============   ===========   =========

Operating income                         $ 14,147        $ 14,079     $ 12,133
                                        ============   ===========   =========

Identifiable assets, including
  corporate assets                       $136,189        $122,112     $114,406
                                        ============   ===========   =========

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

Net sales                               $ 34,095        $ 30,500     $ 32,170
                                       =============   ===========   =========

Operating income                        $  2,261        $  1,855     $  3,239
                                       =============   ===========   =========

Identifiable assets                     $ 11,807        $ 11,620     $ 11,706
                                       =============   ===========   =========
</TABLE>

         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.  The Company has not had and does not expect to have any
problems fulfilling its raw material requirements during 2001.

                                       2

<PAGE>


         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  operations are  significant  to this segment,  it does not
believe that any of them 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 2, 2001, the Company employed approximately 310 persons,  approximately
210 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 $3.8 million at December 31, 2000 and $2.4 million at December
31, 1999. The increase in backlog is principally  due to growth in the Company's
transformer  products  business.  It is anticipated that  substantially all such
2000 backlog will be filled in 2001.  Substantially  all of the 1999 backlog was
filled in 2000.  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.

                                       3

<PAGE>


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  $860,000  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  believed  that  it was  entitled  to  full  defense  and
indemnification  with respect to  environmental  investigation  and  remediation
costs under its insurance policies, the Company's insurers denied such coverage.
Accordingly,  the Company filed an action  against  certain  insurance  carriers
seeking defense and  indemnification  with respect to all prior and future costs
incurred in the investigation  and remediation of these sites.  Settlements have
been reached with all carriers in this matter.

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

                                       4

<PAGE>


ITEM 2.  PROPERTIES

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

As of March 2, 2001 the  Company  owned  203  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, 2000 are as follows (Dollars in Thousands):
<TABLE>
<CAPTION>

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

<S>                                     <C>             <C>            <C>
Shopping centers and retail outlets     $68,213         52.1%          26
Commercial properties                    45,562         34.8%         125
Day-care centers and offices              8,245          6.3%          12
Hotel properties                          4,628          3.5%           2
Other                                     4,347          3.3%          39
                                     ----------       -------       -----
         Total                         $130,995        100.0%         204
                                     ==========       -------       -----
</TABLE>

The following  summarizes  real  property held for rental by geographic  area at
December 31, 2000 (Dollars in Thousands):

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

         Northeast                                    $41,946         105
         Southeast                                     25,708          36
         Midwest                                       30,321          39
         Southwest                                      6,071           7
         Pacific Coast                                 23,090           8
         Pacific Northwest                                980           5
         Rocky Mountain                                 2,879           4
                                                  -----------      ------
                                                     $130,995         204
                                                  ===========      ======

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

Shopping  centers  and retail  outlets  include 19  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  ten K-Mart  stores  and three  Macy's  stores,  with a total of
approximately 1.0 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.

                                       5

<PAGE>


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

Commercial  properties consist of properties leased as 63 restaurants,  20 Midas
Muffler  Shops,   three   convenience   stores,   eight  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 63
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.

         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.  The lease at one such  location has expired and
the Company is  currently  negotiating  a new  long-term  lease with the tenant.
Although  there can be no  assurance  that the Company will in fact enter into a
lease  agreement,  the Company  believes that with continued  negotiations a new
long-term lease should be forthcoming.

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

The Company's two hotel properties are located in Georgia and California and are
managed through a national hotel company with local on-site  management which is
responsible for all day-to-day  operations of the hotels. The Board Chairman and
another  Director of the Company are  directors  of this  publicly  traded hotel
company.

         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.

ITEM 3.  LEGAL PROCEEDINGS

Litigation
----------

The Company is involved in various  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.

                                       6
<PAGE>


                                     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
                                             ----              ---


2000       First quarter                    $18.38           $11.75
----       Second quarter                    13.75            11.88
           Third quarter                     17.50            13.38
           Fourth quarter                    17.00            14.00

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

As of  March 2,  2001,  there  were  approximately  420  record  holders  of the
Company's  Common Stock.  The closing sales price for the Company's Common Stock
on such date was $18.02.  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.

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,
------------------------------------------------------------------------------------------------

                                         2000          1999        1998        1997      1996
                                       ---------    ---------    --------    -------    -------

<S>                                     <C>          <C>          <C>        <C>         <C>
Total revenues (1)                      $62,332      $59,702      $58,519    $60,246     $65,991
                                      =========   ==========      =======    =======     =======

Income from continuing operations       $18,278      $13,326      $10,583    $ 7,465     $ 6,634
                                      =========   ==========      =======    =======     =======

Income from continuing operations
     per basic common share (2)           $3.86        $2.68        $2.03      $1.41       $1.21
                                      =========   ==========     ========   ========    ========

Total assets                           $147,996     $133,732     $126,112   $113,353    $116,761
Total liabilities                        70,877       74,676       73,694     75,873      87,186
Stockholders' equity                     77,119       59,056       52,418     37,480      29,575
                                      =========   ==========     ========   ========    ========
</TABLE>

                                       7

<PAGE>

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".  For further discussion of earnings per share see
         Note 1,  "Summary  of  Significant  Accounting  Policies"  of  Notes of
         Consolidated Financial Statements.

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

Results of Operations 2000 and 1999
-----------------------------------

         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 2000 were $62.3 million versus
revenues of $59.7 million during 1999.  Operating  income during this period was
$14.3 million versus $13.1 million in 1999, an increase of $1.2 million or 8.9%.
Net  income  was $18.3  million or $3.86 per basic  share in 2000  versus  $13.3
million or $2.68 per basic share in 1999.

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

Rental revenues from real estate  operations  during 2000 decreased  $965,000 or
3.3% over those of the prior year.  This decrease is primarily  attributable  to
increased  revenues in 1999 from the  accounting  treatment of certain  property
leases  resulting in the  recognition  of  non-recurring  revenues in the fourth
quarter.  Absent this item, rental revenues increased $983,000 or 3.6% primarily
from an increase in the Company's hotel revenues.

Mortgage  interest  expense for 2000  decreased  by $388,000 as compared to such
expense incurred during 1999. This decrease of 14.8% 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 $217,000 or 4.2% from such expense incurred in the preceding year.
This decrease is primarily attributable to properties sold in 2000 and 1999.

Other  operating  expenses  associated  with the  management of real  properties
decreased  approximately  $428,000 or 5.9%  during  2000  versus  such  expenses
incurred in 1999.  This

                                       8

<PAGE>

decrease is primarily due to reduced  expenses  incurred for the  maintenance of
properties acquired in prior years.

         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, 2000 and 1999 are as follows:

    (In Thousands)                                      2000          1999
                                                       --------      --------

    Net sales                                          $34,095       $30,500
                                                       =======       =======
    Cost of sales                                      $24,738       $21,808
                                                       =======       =======
    Selling, general and administrative expenses        $7,096        $6,837
                                                       =======       =======
    Operating income                                    $2,261        $1,855
                                                       =======       =======

Net sales of the  engineered  products  segment  were  $34.1  million,  an 11.8%
increase  from prior year's  revenues.  This increase is primarily the result of
higher sales of transformer  products as well as in the engineered  products and
European automotive markets of knitted wire products.

Cost of sales as a percentage of net sales increased  approximately 1.1% between
1999 and 2000.  This  increase is  primarily  due to the mix of  products  sold,
primarily from the increase in transformer sales, noted above.

Selling,  general and administrative expenses of the engineered products segment
increased  $259,000 or 3.8% during 2000, as compared to such costs in 1999. This
increase is principally related to the increase in sales volume and represents a
1.6% decline as a percentage of net sales from the prior year.

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

General  and  administrative  expenses  not  associated  with the  manufacturing
operations decreased  approximately $695,000 or 24.4% during 2000 as compared to
such expenses  incurred in the preceding year. This decrease is primarily due to
a reduction in professional fees.

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

Other income and expense, net for 2000 increased approximately $1.5 million from
$8.3 million in 1999 to $9.8 million in 2000. The increase is principally due to
increased gains on the sale of marketable securities of $4.4 million offset by a
$1.7 million  decrease in gain on the sale of real estate  assets and a $838,000
decrease in gain from equity investments resulting from the 1999 sale of a 50.0%
partnership interest in a Miami Beach hotel.

                                       9

<PAGE>

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

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 1999.  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.

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

Rental revenues from real estate  operations  during 1999 increased $2.9 million
or  10.8%  over  those of 1998.  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 1999,  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 1998. 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:

      (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
                                                       =======      =======

                                       10

<PAGE>

Net sales of the engineered products segment were $30.5 million, a 5.2% decrease
from  1998'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 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 1998.  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.

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

At December 31, 2000, the Company's cash and  marketable  securities  were $60.4
million  and  working  capital  was  approximately  $52.3  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 Company's portfolio of available-for-sale securities had a fair market value
of  approximately  $43.3  million  at  December  31,  2000,   reflecting  pretax
unrealized  holding  gains of  approximately  $6.0  million.  Included  in these
marketable  securities  was  approximately  $29.1  million of common  stock in a
publicly traded company for which the Board Chairman and another Director of the
Company are directors.

                                       11

<PAGE>

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 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, 2000,
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, 2000.  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, 2000, there were no amounts outstanding under the Revolver.

The Term Loan bears  interest  at 90 day LIBOR plus 1.4% (7.8% at  December  31,
2000) and is payable  in  quarterly  installments  of  $175,000,  with the final
payment due on September 30, 2002. At December 31, 2000, there was approximately
$1.2 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 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 differential to be paid or
received  on the  Swap  is  recognized  over  the  term of the  agreement  as an
adjustment to interest expense.

The Company has  undertaken  the  completion  of  environmental  studies  and/or
remedial action at Metex' two New Jersey  facilities and filed an action against
certain insurance carriers seeking recovery of costs incurred and to be incurred
in these  matters.  Settlements  have been  reached  with all  carriers  in this
matter.  See  Note  19,  "Contingencies"  of  Notes  to  Consolidated  Financial
Statements for further discussion on this matter.

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

                                       12

<PAGE>

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.

Previous  purchases of the  Company's  common  stock have reduced the  Company's
additional  paid-in  capital to zero and  accordingly  current year purchases in
excess of par value have reduced  retained  earnings.  During 2000,  the Company
purchased  and  retired  16,000  shares  of  the  Company's   common  stock  for
approximately  $234,000.  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,  equity  securities,
ongoing  operations  and  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,  borrowings  under the
Revolver,  the sale,  financing and refinancing of the Company's  properties and
from third party  mortgages and purchase money notes obtained in connection with
specific acquisitions.

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

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
-----------

Market  risk  generally  represents  the risk of loss that may  result  from the
potential  change  in  the  value  of a  financial  instrument  as a  result  of
fluctuations in interest and currency exchange rates and in equity and commodity
prices.  Derivative financial instruments are used by the Company principally in
the management of its interest rate exposure.

The primary  objective of the  Company's  investment  activities  is to preserve
principal and maximize yields without  significantly  increasing market risk. To
achieve  this,   management  maintains  a  portfolio  of  cash  equivalents  and
investments  in a variety of  securities,  primarily  U.S.  investments  in both
common and preferred equity issues.

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  and trading securities  consist of U.S.  investments

                                       13

<PAGE>

in both common and preferred  equity issues 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 of 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.  As a result,  the  Company's  operating  results  could be affected by
factors  such as changes in foreign  currency  exchange  rates or weak  economic
conditions in the foreign markets in which the Company distributes its products.
Most of the Company's  sales are denominated in U.S.  dollars.  A portion of the
Company's  receivables  are  denominated  in French  Francs  and are  exposed to
changes in exchange rates with the U.S. dollar. When the U.S. dollar strengthens
against  the  French  Franc,  the  value  of the  nonfunctional  currency  sales
decreases.  When the U.S. dollar weakens the functional currency amount of sales
increases. Overall, the Company is a net receiver of French Francs and, as such,
benefits  from a weaker  dollar but is adversely  affected by a stronger  dollar
relative to the French Franc.

The  Company's  manufacturing   operations  utilize  various  metal  commodities
(principally  stainless steel) in the  manufacturing  process.  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  which  tend  to  minimize   short-term   currency
fluctuations.  The Company's financial results,  however, could be significantly
affected by fluctuations in metals pricing.

The following is a tabular presentation of quantitative market risks at December
31, 2000:
<TABLE>
<CAPTION>
                                                        Principal (Notional) Amount by Expected Maturity
                                             -------------------------------------------------------------   Fair
                                                                                                    There-   Value
(Dollars in Thousands)              2001      2002       2003      2004       2005       After      Total   12/31/00
--------------------------------------------------------------------------------------------------------------------

Assets

<S>                               <C>       <C>        <C>        <C>        <C>        <C>        <C>       <C>
Available-for-sale securities     $41,488   $     0    $     0    $     0    $     0    $     0    $41,488   $41,488
Trading securities                $ 1,765   $     0    $     0    $     0    $     0    $     0    $ 1,765   $ 1,765
Notes receivable                  $ 3,894   $    30    $    34    $    39    $    27    $   113    $ 4,137   $ 4,174
Average interest rate                14.0%     10.9%      10.9%      10.9%      10.1%      10.0%

Liabilities

Long-term debt, including current portion
Fixed rate                        $ 5,498   $ 5,047    $ 4,391    $ 5,866    $ 2,338    $ 4,142    $27,282   $25,500
Average interest rate                 7.3%      7.2%       7.1%       7.0%       6.9%       6.9%

Variable rate                     $   700   $   525    $     0    $     0    $     0    $     0    $ 1,225   $ 1,188
Average interest rate
     LIBOR +1.40%                     7.8%      7.8%

Interest Rate Derivative Financial Instruments Related to Variable Rate Debt

Interest rate swaps
     Pay fixed/receive variable   $   700    $  525     $    0    $     0    $     0    $     0    $ 1,225  ($     6)
     Average pay rate                 7.8%      7.8%
     Average receive rate             7.7%      7.7%
</TABLE>

                                       14

<PAGE>


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

Total 2000  revenues  were $62.3  million  versus  $59.7  million  during  1999.
Operating  income during this period was $14.3  million  versus $13.1 million in
1999, an increase of $1.2 million or 8.9%. Net income was $18.3 million or $3.86
per basic share in 2000 versus  $13.3  million or $2.68 per basic share in 1999,
representing a 44.0% increase in earnings per basic share over the prior year.

Real estate operations  continue to contribute to the Company's strong financial
performance.  Operating income generated from this segment during 2000 was $14.1
million on revenues of $28.2  million.  The  long-term  nature of the  Company's
property leases as well as continued mortgage amortization  continues to provide
the solid financial base for these results.

The Company's  engineered  products segment posted a 21.9% increase in operating
profit as  compared  to 1999.  This  increase is  primarily  attributable  to an
increase in sales from this  segment of $3.6  million or 11.8% over 1999 levels.
These results reflect management's continued commitment to grow this segment and
pursue new sales  opportunities,  including  new  geographical  markets  for its
existing products and new applications for its core technologies.

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. 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 information  required  herein has been previously  reported in the Company's
report on Form10-K for the fiscal year ended December 31, 1999.

                                       15

<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
2001 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
2001 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
2001 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
2001 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, 2000 and 1999  F-2
            Consolidated Statements of Income for the Years                 F-3
             Ended December 31, 2000, 1999 and 1998
            Consolidated Statements of Stockholders' Equity for the Years   F-4
             Ended December 31, 2000, 1999 and 1998

                                       16

<PAGE>


            Consolidated Statements of Cash Flows for the                   F-5
             Years Ended December 31, 2000, 1999 and 1998                to F-6
            Notes to Consolidated Financial Statements                      F-7
                                                                        to F-23
     (2)    Consolidated Financial Statement Schedules
            ------------------------------------------

            Schedule II       --  Allowance for Doubtful Accounts          F-24
            Schedule III      --  Real Property Held for Rental and        F-25
                                   Accumulated Depreciation
            Schedule IV       --  Mortgage Loans on Real Estate            F-26

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

            Quarterly Financial Data (Unaudited)                           F-27

            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

No  reports  on Form 8-K were filed by the  Company  during the last  quarter of
fiscal 2000.

(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  and  Non-Qualified  Stock  Option  Plan of the
Company, as amended.

         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).

                                       17

<PAGE>

         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).

         10.6.  Revolving  Credit  Agreement dated as of December 31, 1999, with
the financial  parties thereto  (incorporated by reference to exhibit 10.6 filed
with the  Company's  report on Form10-K  for the fiscal year ended  December 31,
1999).

         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.

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

* Filed herewith


                                       18

<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 2, 2001                      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 2, 2001                      By: /s/ A.F. Petrocelli
        -------------                          --------------------------------
                                               A. F. Petrocelli
                                               Chairman, President and
                                               Chief Executive Officer

Dated:  March 2, 2001                      By: /s/ Howard M. Lorber
        -------------                          --------------------------------
                                               Howard M. Lorber
                                               Director

Dated:  March 2, 2001                      By: /s/ Anthony J. Miceli
        -------------                          --------------------------------
                                               Anthony J. Miceli
                                               Chief Financial Officer,
                                               Chief Accountant, Secretary and
                                               Director

Dated:  March 2, 2001                      By: /s/ Arnold S. Penner
        -------------                          --------------------------------
                                               Arnold S. Penner
                                               Director

                                       19

<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, 2000 and 1999, and the
related consolidated  statements of income,  stockholders' equity and cash flows
for each of the three years in the period ended  December 31, 2000. We have also
audited the financial  statement  schedules  listed in the Index at Item 14(a)2.
These financial statements and schedules are the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedules 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, 2000 and 1999, and the  consolidated
results of their  operations and their cash flows for each of the three years in
the period ended  December 31, 2000, 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, New York
February 14, 2001

                                      F-1

<PAGE>


                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 2000 AND 1999
                      (In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>

                                                                         2000         1999
                                                                         ----         ----

Assets

Current assets:
<S>                                                                    <C>        <C>
     Cash and cash equivalents                                         $ 17,134   $ 13,575
     Marketable securities                                               43,253     27,296
     Notes and accounts receivable, net of allowance for doubtful
       accounts of $328 and  $390, respectively                           9,057      5,626
     Inventories                                                          4,613      4,207
     Prepaid expenses and other current assets                              652        254
                                                                       --------   --------

         Total current assets                                            74,709     50,958
                                                                       --------   --------

Property, plant and equipment, net                                        4,557      5,077
Real property held for rental, net                                       57,133     66,939
Noncurrent notes receivable                                                 243        270
Other assets                                                             11,354     10,488
                                                                       --------   --------

         Total assets                                                  $147,996   $133,732
                                                                       ========   ========

Liabilities and Stockholders' Equity

Current liabilities:
     Current maturities of long-term debt                              $  5,498   $  5,990
     Borrowings under credit facilities                                     700        700
     Accounts payable and accrued liabilities                             9,193      9,835
     Income taxes payable                                                 6,093      5,000
     Deferred income taxes                                                  954      1,019
                                                                       --------   --------

         Total current liabilities                                       22,438     22,544
                                                                       --------   --------

Borrowings under credit facilities                                          525      1,225
Long-term debt                                                           21,784     27,316
Other long-term liabilities                                              24,961     22,917
Deferred income taxes                                                     1,169        674
                                                                       --------   --------

         Total liabilities                                               70,877     74,676
                                                                       --------   --------

Commitments and contingencies

Stockholders' equity:
     Common stock $.10 par value, authorized 7,500 shares;
         issued and outstanding 4,720 and 4,736 shares, respectively        472        474
     Retained earnings                                                   72,717     54,671
     Accumulated other comprehensive income, net of tax                   3,930      3,911
                                                                       --------   --------

         Total stockholders' equity                                      77,119     59,056
                                                                       --------   --------

         Total liabilities and stockholders' equity                    $147,996   $133,732
                                                                       ========   ========
</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, 2000, 1999 AND 1998
                      (In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>

                                                              2000       1999        1998
                                                              ----       ----        ----
Revenues:
<S>                                                        <C>         <C>         <C>
     Net sales                                             $ 34,095    $ 30,500    $ 32,170
     Rental revenues from real estate operations             28,237      29,202      26,349
                                                           --------    --------    --------

                                Total revenues               62,332      59,702      58,519
                                                           --------    --------    --------

Costs and expenses:
     Cost of sales                                           24,738      21,808      22,260
     Real estate operations:
         Mortgage interest expense                            2,232       2,620       2,661
         Depreciation expense                                 4,993       5,210       5,530
         Other operating expenses                             6,865       7,293       6,025
     General and administrative expenses                      5,295       5,810       6,057
     Selling expenses                                         3,954       3,875       3,712
                                                           --------    --------    --------

                                Total costs and expenses     48,077      46,616      46,245
                                                           --------    --------    --------

                                Operating income             14,255      13,086      12,274
                                                           --------    --------    --------

Other income (expense):
     Interest and dividend income                             2,230       1,886       1,961
     Interest expense                                          (564)       (614)       (962)
     Other income and expense, net                            9,797       8,266       5,035
                                                           --------    --------    --------

                                Total other income           11,463       9,538       6,034
                                                           --------    --------    --------

     Income from continuing operations before
         income taxes                                        25,718      22,624      18,308

     Provision for income taxes                               7,440       9,298       7,725
                                                           --------    --------    --------

     Income from continuing operations                       18,278      13,326      10,583
                                                           --------    --------    --------

Discontinued operations:
     Gain on disposal of discontinued operations, net
         of tax provision of $3,700                               0           0       4,849
                                                           --------    --------    --------

     Net income                                            $ 18,278    $ 13,326    $ 15,432
                                                           ========    ========    ========

Basic earnings per common share:
     Income from continuing operations                     $   3.86    $   2.68    $   2.03
     Discontinued operations                                    .00         .00         .93
                                                           --------    --------    --------

     Net income per common share                           $   3.86    $   2.68    $   2.96
                                                           ========    ========    ========

Diluted earnings per common share:
     Income from continuing operations                     $   3.83    $   2.66    $   2.00
     Discontinued operations                                    .00         .00         .92
                                                           --------    --------    --------

     Net income per common share assuming dilution         $   3.83    $   2.66    $   2.92
                                                           ========    ========    ========
</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, 2000, 1999 AND 1998
                                 (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>
Balance - January 1, 1998                      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
                                             -------    --------    --------    --------   --------    --------

Purchase and retirement of common shares         (16)         (2)          0        (232)          0       (234)
Net income                                         0           0           0      18,278           0     18,278         $ 18,278
Other comprehensive income, net of tax:
   Change in net unrealized gain on
   available-for-sale securities,
   net of tax provision of $10                     0           0           0           0          19         19               19
                                                                                                                        --------
Comprehensive income                                                                                                    $ 18,297
                                             -------    --------    --------    --------    --------   --------         ========

Balance - December 31, 2000                    4,720    $    472    $      0    $ 72,717    $  3,930   $ 77,119
                                             =======    ========    ========    ========   ========    ========
</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, 2000, 1999 AND 1998
                                 (In Thousands)
<TABLE>
<CAPTION>

                                                                                        2000        1999        1998
                                                                                        ----        ----        ----

Cash flows from operating activities:
<S>                                                                                   <C>         <C>         <C>
     Net income                                                                       $ 18,278    $ 13,326    $ 15,432
                                                                                      --------    --------    --------
     Adjustments to  reconcile net income
      to net cash  provided  by  operating activities:
         Depreciation and amortization                                                   6,328       6,628       6,566
         Gain on sale of real estate assets                                             (5,269)     (6,957)     (5,444)
         Gain on sale of available-for-sale securities                                  (4,513)          0           0
         Gain on sale of trading securities                                                  0        (144)        (75)
         Gain from equity investments                                                   (1,227)     (3,601)     (1,222)
         Gain on sale of discontinued operations, net of tax                                 0           0      (4,849)
         Purchase of trading securities                                                 (1,772)       (700)     (5,891)
         Proceeds from sale of trading securities                                            0         844       5,966
         Unrealized loss on trading securities                                               7           0           0
         Changes in assets and liabilities (A)                                            (755)     10,920         (15)
                                                                                      --------    --------    --------
                      Total adjustments                                                 (7,201)      6,990      (4,964)
                                                                                      --------    --------    --------
                      Net cash provided by operating activities                         11,077      20,316      10,468
                                                                                      --------    --------    --------

Cash flows from investing activities:
     Purchase of available-for-sale securities                                         (25,024)    (11,439)     (9,690)
     Proceeds from sale of available-for-sale securities                                15,372           0           0
     Proceeds from sale of real estate assets                                            9,890       9,064       8,293
     Acquisition of real estate assets                                                    (767)     (2,304)    (12,539)
     Distributions from equity investments, net                                            767         743         503
     Proceeds from sale of equity investments                                                0       1,300           0
     Acquisition of property, plant and equipment                                         (798)     (1,775)     (1,846)
     Proceeds from sale of discontinued operations                                           0           0      16,000
                                                                                      --------    --------    --------

                      Net cash (used in) provided by investing activities                 (560)     (4,411)        721
                                                                                      --------    --------    --------

Cash flows from financing activities:
     Principal payments on mortgage commitments, notes
         and loans                                                                      (6,024)     (6,058)    (18,141)
     Proceeds from mortgage commitments, notes and loans                                     0       6,560      19,153
     Net repayments under credit facilities                                               (700)     (3,325)     (6,000)
     Purchase and retirement of common shares                                             (234)     (7,803)     (3,865)
     Proceeds from the exercise of stock options                                             0         142         568
                                                                                      --------    --------    --------

                      Net cash used in financing activities                             (6,958)    (10,484)     (8,285)
                                                                                      --------    --------    --------

                      Net increase in cash and cash equivalents                          3,559       5,421       2,904

Cash and cash equivalents, beginning of year                                            13,575       8,154       5,250
                                                                                      --------    --------    --------

Cash and cash equivalents, end of year                                                $ 17,134    $ 13,575    $  8,154
                                                                                      ========    ========    ========
</TABLE>


                                       F-5
<PAGE>


                      UNITED CAPITAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (CONTINUED)
                                 (In Thousands)

<TABLE>
<CAPTION>

                                                 2000        1999          1998
                                                 ----        ----          ----

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

<S>                                              <C>        <C>          <C>
     Interest                                    $2,726     $3,177       $3,640
                                                 ======     ======       ======
     Taxes                                       $4,114     $4,749       $7,874
                                                 ======     ======       ======
</TABLE>

Supplemental schedule of noncash
     investing and financing activities:
         See Notes to Consolidated Financial Statements



      (A)   Changes in assets and  liabilities  for the years ended December 31,
            2000, 1999 and 1998, are as follows:


                                                  2000       1999         1998
                                                  ----       ----         ----

Notes and accounts receivable, net            ($ 3,431)   $  2,049    $  3,500
Inventories                                       (406)        132        (646)
Prepaid expenses and other current assets         (398)        (45)         84
Deferred income taxes                              420       4,236        (395)
Noncurrent notes receivable                         27         (49)     (1,512)
Other assets                                      (475)      2,333         607
Accounts payable and accrued liabilities          (642)       (986)     (3,918)
Income taxes payable                             1,093      (1,355)     (3,217)
Other long-term liabilities                      3,057       4,605       5,482
                                              --------    --------    --------

              Total                           ($   755)   $ 10,920    ($    15)
                                              ========    ========    ========


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, 2000, 1999 AND 1998
                 (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.  The Company also invests
         excess  available  cash in marketable  securities  and other  financial
         instruments.

         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 which are accounted for as operating leases. Under this type
         of lease,  the tenant is  obligated to pay all  operating  costs of the
         property  including  real  estate  taxes,  insurance  and  repairs  and
         maintenance.   Gains  on  sales  of  real  estate   assets  and  equity
         investments  are  recorded  when the gain  recognition  criteria  under
         generally accepted accounting principles have been met.

         Certain  lease  agreements  provide  for  additional  rent  based  on a
         percentage  of  tenants'  sales.  In the fourth  quarter  of 2000,  the
         Company  adopted  the  Securities  and  Exchange   Commission's   Staff
         Accounting Bulletin No. 101 ("SAB No. 101") which provides, among other
         things, guidance as to the recognition of contingent rents. SAB No. 101
         requires  that such  additional  rent be  recorded  as income  when the
         tenants' actual sales are known. The impact of adopting SAB No. 101 was
         not material to the  Company's  results of  operations or the timing of
         revenue recognition.

         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.



                                       F-7


<PAGE>

         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,  2000  all
         marketable  securities  held by the  Company  have been  classified  as
         either  available-for-sale  or trading 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.  Realized  gains  and  losses  on the  sale of  securities,  as
         determined on a specific  identification  basis,  as well as unrealized
         holding  gains and losses on trading  securities  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:

                                                    2000           1999
                                                    ----           ----

         Raw materials                             $2,533        $2,369
         Work in process                              402           334
         Finished goods                             1,678         1,504
                                                   ------        ------
                                                   $4,613        $4,207
                                                   ======        ======

         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 and improvements                          5 to 39 years
             Equipment                                           5 to 7 years

           Property, plant and equipment:
             Buildings and improvements                          18 to 39 years
             Machinery and equipment                             3 to 8 years

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



                                       F-8


<PAGE>


         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.

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

         The Company  expenses  research,  development  and product  engineering
         costs as  incurred.  Approximately  $52, $95 and $63 of such costs were
         incurred by the Company in 2000, 1999 and 1998, 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:
         ---------------------------------

         Derivative financial instruments are used by the Company principally in
         the management of its interest rate  exposure.  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 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.

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

         Certain  amounts  have been  reclassified  in the December 31, 1999 and
         1998  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 accounting
         principles  generally accepted in the United States requires management
         to make estimates and assumptions that


                                       F-9


<PAGE>


         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"), as
         amended,  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  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 into income or other  comprehensive  income,  depending on whether
         its  qualifies as a fair value hedge or cash flow hedge,  respectively.
         The effective date of SFAS No. 133, as amended,  is all fiscal quarters
         of all fiscal years  beginning after June 15, 2000, and accordingly the
         Company  will adopt SFAS No.  133 in the first  quarter of 2001.  Based
         upon its current use of derivatives the Company  believes that SFAS No.
         133 will not have a  material  impact on the  consolidated  results  of
         operations, financial position or cash flows of the Company.

(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.  Such gain on disposal of D&M is presented net of
         $3,700 in tax in the accompanying Consolidated Financial Statements.

(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:

                                                       2000          1999
                                                     --------     -----------

             Land                                    $20,710        $21,084
             Buildings                               110,285        117,108
                                                     -------        -------
                                                     130,995        138,192

             Less: Accumulated depreciation          (73,862)       (71,253)
                                                     -------        -------
                                                     $57,133        $66,939
                                                     =======        =======


         In 1998, the Company acquired a property subject to certain  contingent
         liabilities  which  were  estimated  and  capitalized  at the  time  of
         acquisition.   During  2000,   these   liabilities  were  resolved  for
         approximately $1.0 million less than originally estimated. As a result,
         real property held for rental was reduced accordingly.


                                      F-10
<PAGE>


         As of December 31, 2000,  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,
          2001                                                  $16,561
          2002                                                   15,109
          2003                                                   13,224
          2004                                                   10,703
          2005                                                    9,176
          Thereafter                                             78,422
                                                               --------
         Total minimum future rentals                          $143,195
                                                               ========

         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 2000, 1999 and 1998 were  approximately
         $527, $1,131 and $1,018, 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:

                                                    2000           1999
                                                  ---------     ----------

             Land                                     $28          $37
             Buildings and improvements             1,372        1,413
             Machinery and equipment               10,630        9,909
                                                   ------       ------
                                                   12,030       11,359

             Less: Accumulated depreciation        (7,473)      (6,282)
                                                  -------      -------
                                                   $4,557       $5,077
                                                  =======      =======

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

         At December 31, 2000 and 1999, the aggregate market value of marketable
         securities was $43,253 and $27,296,  respectively,  while the aggregate
         cost  of  such  securities  was  $37,217  and  $21,279,   respectively.
         Unrealized  holding gains at December 31, 2000 and 1999 were $3,930 and
         $3,911 on a net of tax basis,  respectively.  Unrealized holding losses
         on trading  securities  held at  December  31,  2000,  included  in the
         determination  of net  income  for 2000 were $7.  The  Company  held no
         trading securities at December 31, 1999.  Marketable securities consist
         of the following at December 31:

                                                     2000         1999
                                                     ----         ----

            Available-for-sale securities:
               Corporate equities                  $41,488      $21,685
               Corporate debts                           0        5,611
                                                   -------      -------
                                                    41,488       27,296
                                                   -------      -------
            Trading securities:
               Corporate equities                    1,765            0
                                                   -------      -------
                                                   $43,253      $27,296
                                                   =======      =======

                                      F-11


<PAGE>


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

                                                   2000      1999      1998
                                                   ----      ----      ----

         Available-for-sale securities:
           Proceeds                               $15,372   $     0   $     0
           Realized gains                         $ 4,513   $     0   $     0
         Trading securities:
           Proceeds                               $     0   $   844   $ 5,966
           Realized gains                         $     0   $   144   $    75


(6)      Notes Receivable:
         -----------------

         Notes receivable consist of the following at December 31:

                                                         2000         1999
                                                         ----         ----

         High yield mortgage loans (a)                  $3,500      $    0
         Other                                             637         298
                                                        ------      ------

                                                         4,137         298
         Less: Current portion included in notes
             and accounts receivable                     3,894          28
                                                        ------      ------
                                                        $  243      $  270
                                                        ======      ======

         (a)   At December 31, 2000, the Company holds a participation in a high
               yield  mortgage loan with a related party  participant  (see Note
               14).  This  loan  is  secured  by a  first  mortgage  lien on the
               property.  The  loan  bears  interest  at 14.0%  and the  Company
               received a commitment fee of 4.0%.

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

         Other assets consist of the following at December 31:

                                                          2000          1999
                                                          ----          ----

           Lease financing (a)                           $8,272       $7,812
           Other                                          3,734        2,930
                                                         ------       ------
                                                         12,006       10,742

           Less: Amounts included in prepaid expenses
                   and other current assets                 652          254
                                                        -------      -------
                                                        $11,354      $10,488
                                                        =======      =======



                                      F-12


<PAGE>


        (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:
<TABLE>
<CAPTION>

                                                          2000       1999
                                                          ----       ----
<S>                                                     <C>        <C>
        Rentals receivable                              $85,611    $89,573
        Residual values                                  10,000     10,000
        Non recourse debt service                       (68,111)   (69,003)
        Unearned income                                 (19,228)   (22,758)
                                                        -------    --------
                                                          8,272      7,812

        Less: Deferred taxes arising
          from leveraged leases                           5,561      4,722
                                                        -------    --------
                                                         $2,711     $3,090
                                                        =======    ========
</TABLE>

         The Company's  share of income arising from this investment was $1,227,
         $3,601 and $1,222 in 2000, 1999 and 1998,  respectively and is included
         in rental income in the accompanying Consolidated Statements of Income.



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

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

                                                          2000       1999
                                                          ----       ----

              Accounts payable                          $4,098     $3,760
              Accrued wages and benefits                 1,412      1,417
              Liabilities for discontinued operations    1,613      1,806
              Other accrued expenses                     2,070      2,852
                                                        ------     ------

                                                        $9,193     $9,835
                                                        ======     ======

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

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

                                                         2000       1999
                                                         ----       ----

              Mortgages on real property (a)            $27,126   $32,571
              Loan payable to bank                            0       472
              Capital lease obligation                      156       263
                                                        -------   -------

                                                         27,282    33,306

              Less: Current maturities                    5,498     5,990
                                                        -------   -------

                                                        $21,784   $27,316
                                                        =======   =======

         (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 July
             2001 through October 2015.


                                      F-13
<PAGE>

         The approximate  aggregate  maturities of these obligations at December
         31, 2000 are as follows:
<TABLE>
<CAPTION>

                                                    Long-term     Capital Lease
                                                       Debt        Obligation
                                                    ---------     -------------

<S>         <C>                                      <C>             <C>
            2001                                     $5,383          $124
            2002                                      5,006            43
            2003                                      4,391             0
            2004                                      5,866             0
            2005                                      2,338             0
           Thereafter                                 4,142             0
                                                     ------          -----
           Total minimum payments                   $27,126           167
                                                    =======
           Less: Amount representing interest                          11
                                                                    ------
           Total present value of minimum
              lease payments                                          156
           Less: Current portion                                      115
                                                                    -----
           Total noncurrent portion                                   $41
                                                                    =====
</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, 2000,  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,  2000.  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,  2000,  there  were  no  amounts  outstanding  under  the
         Revolver.

         The Term  Loan  bears  interest  at 90 day  LIBOR  plus  1.4%  (7.8% at
         December 31, 2000) and is payable in quarterly  principal  installments
         of $175,  with the final payment due on September 30, 2002. At December
         31, 2000, there was $1,225 outstanding under the Term Loan.

                                      F-14
<PAGE>

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

         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,  accounts  receivable and accounts  payable
         approximate their fair value due to the short maturity of such items.

         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, 2000 and 1999 was  approximately  $4,174 and
         $354 respectively, while the carrying value was $4,137 and $298 for the
         same periods.

         At December 31, 2000 and 1999,  all marketable  securities  held by the
         Company have been  classified as either  available-for-sale  or trading
         and,  as a result,  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, 2000 and 1999 was approximately  $25,500
         and  $31,134  respectively,  while the  carrying  value was $27,282 and
         $33,306 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 then current interest rates and the
         current  creditworthiness of the Swap  counterparties.  At December 31,
         2000 and 1999,  the fair values of the Swap were  estimated at ($6) and
         $14, respectively.

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

         Previous  purchases  of the  Company's  common  stock have  reduced the
         Company's  additional  paid-in capital to zero and accordingly  current
         year purchases in excess of par value have reduced  retained  earnings.
         During 2000,  the Company  purchased  and retired  16,000 shares of the
         Company's common stock for approximately  $234.  Future  repurchases of
         the  Company's  common  stock will also  reduce  retained  earnings  by
         amounts in excess of the par value.

         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 and
         Non-Qualified  Stock  Option Plan (the  "Incentive  Plan") and the 1988
         Joint Incentive and Non-Qualified  Stock Option Plan (the "Joint Plan")
         both  provide  for the  granting of  incentive  or  nonqualified  stock
         options. The number of authorized shares reserved for issuance pursuant
         to each plan is 1,325,000.

                                      F-15
<PAGE>


         At  December  31,  2000,  there  were  1,198,380  and  417,001  options
         outstanding under the Joint Plan and Incentive Plan,  respectively.  At
         December 31, 1999, 1,031,380 and 223,001 options were outstanding under
         the Joint Plan and Incentive Plan, respectively.

         A summary of the Company's  stock options as of December 31, 2000, 1999
         and 1998, and changes during the years then ended are summarized below:

                                                                  Weighted-
                                                                   Average
                                                                   Exercise
                                                      Shares        Price
                                                    ---------    ----------


               Outstanding at January 1, 1998        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

                   Granted                           371,000    $   13.06
                   Forfeited                         (10,000)   $   18.57
                                                 -----------

               Outstanding at December 31, 2000    1,615,381    $   16.62
                                                 ===========

The  following  table  summarizes  information  about  options  outstanding  and
exercisable at December 31, 2000:
<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>            <C>
$7.25 - $11.00       80,000       3.5 years   $   10.06        80,000         $   10.06
$13.06 - $18.75   1,106,381       8.3 years   $   14.61       448,048         $   16.25
$22.88 - $25.16     429,000       7.4 years   $   23.04       286,000         $   23.04
                  ---------                                  --------

$7.25 - $25.16    1,615,381       7.8 years   $   16.63       814,048         $   18.03
                 ==========                                  ========
</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,

                                      F-16


<PAGE>


"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 2000, 1999 and 1998 proforma net income
and net income per basic share for 2000,  1999 and 1998 would have been  $16,532
or $3.49,  $11,758 or $2.37 and $14,234 or $2.74 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 Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options,  which have no vesting  restrictions and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different  from those of traded  options and because  changes in the  subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.

The  weighted-average  option fair values and the  assumptions  used to estimate
these values are as follows:
<TABLE>
<CAPTION>

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

                                                     2000      1999    1998
                                                     ----      ----    ----

<S>                                                    <C>       <C>       <C>
            Expected life (years)                      5         5         5
            Risk free interest rate                  6.1%      5.6%      5.6%
            Expected volatility                     35.3%     32.4%     32.7%
            Dividend yield                           0.0%      0.0%      0.0%
            Weighted-average option fair value     $5.40     $5.42     $8.78
</TABLE>

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

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


(Share Data in Thousands)                           2000     1999       1998
                                                    ----     ----       ----

Numerator:
    Income from continuing operations             $18,278   $13,326   $10,583
                                                  =======   =======   =======

Denominator:
    Denominator for basic earnings per common
         share--weighted-average shares             4,731     4,968     5,203
Effect of dilutive securities:
    Employee stock options                             42        45        85
                                                  -------   -------   -------

    Denominator for diluted earnings per common
         share--adjusted weighted-average shares
         and assumed conversions                   4,773     5,013     5,288
                                                  =======   =======   =======

Basic earnings per common share                   $  3.86   $  2.68   $  2.03
                                                  =======   =======   =======

Diluted earnings per common share                 $  3.83   $  2.66   $  2.00
                                                  =======   =======   =======


                                      F-17


<PAGE>


(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 January 2000, the Company  participated in a $4,500 loan transaction
         secured by mortgage  liens  against three  properties in New York,  New
         York.  The Company  advanced  $3,500 in connection  with this loan. The
         remaining  $1,000 was advanced by the wife of the Board  Chairman.  The
         note matures in February 2001 with a one year renewal  option and bears
         interest at 14.0% per annum  payable  monthly.  The  participants  also
         received a commitment fee of 4.0% in connection with the loan.

         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.  In January
         1999, the Company sold this investment for $1,300 resulting in a pretax
         gain of $838.

         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  $165,  $134 and $139 for 2000, 1999
         and 1998,  respectively.  Included in marketable securities at December
         31, 2000 was $29,101 of common stock in this company  which  represents
         approximately 5.6% of such company's outstanding shares.

(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

                                      F-18


<PAGE>


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 at December 31, 2000 and 1999
are as follows:

                                                        2000        1999
                                                        ----        ----

Realization allowances related to
    accounts receivable and inventories               $   282    $   257
Net unrealized gain on marketable securities           (2,113)    (2,106)
Basis differences relating to real
    property held for rental                            3,468      2,812
Accrued expenses, deductible when paid,  net            4,190      4,472
Basis differences relating to business acquisitions    (1,863)    (1,863)
Leveraged lease                                        (5,561)    (4,722)
Property, plant and equipment                            (431)      (432)
Pensions                                                  (65)       (81)
Other, net                                                (30)       (30)
                                                      -------    -------

Net deferred tax liability                             (2,123)    (1,693)

Less:  Current portion                                   (954)    (1,019)
                                                      -------    -------

Noncurrent portion                                    ($1,169)   ($  674)
                                                      =======    =======

The income tax provision reflected in the accompanying  Consolidated  Statements
of Income for each of the years presented herein is as follows:
<TABLE>
<CAPTION>

                                                          2000      1999      1998
                                                          ----      ----      ----

<S>                                                     <C>       <C>       <C>
Current:
    Federal                                             $ 5,233   $ 5,175   $ 6,325
    State                                                 1,864     1,831     1,900
Deferred                                                    343     2,292      (500)
                                                        -------   -------   -------

                                                        $ 7,440   $ 9,298   $ 7,725
                                                        =======   =======   =======
</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, 2000, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>

                                                          2000       1999      1998
                                                          ----       ----      ----

<S>                                                     <C>        <C>       <C>
Computed federal income
     tax provision at statutory rates                   $ 9,001    $ 7,918   $ 6,408
State income taxes, net of federal income tax benefit     1,255      1,236     1,293
Realization of capital loss deductions                   (2,805)         0         0
Other, net                                                  (11)       144        24
                                                        -------    -------   -------
                                                        $ 7,440    $ 9,298   $ 7,725
                                                        =======    =======   =======
</TABLE>



                                      F-19

<PAGE>

(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,
             2000, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                            2000       1999      1998
                                                            ----       ----      ----

<S>                                                        <C>       <C>       <C>
         Gain on sale of real estate assets                $ 5,269   $ 6,957   $ 5,444
         Gain (loss) from equity investments (a)                 0       838      (402)
         Gain on the sale of available-for-sale
             securities (Note 5)                             4,513         0         0
         Gain on the sale of trading securities (Note 5)         0       144        75
         Other, net                                             15       327       (82)
                                                           -------   -------   -------

                                                           $ 9,797   $ 8,266   $ 5,035
                                                           =======   =======   =======
</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  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.

         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:
<TABLE>
<CAPTION>

                                                                2000        1999
                                                                ----        ----
         Change in benefit obligation:

<S>                                                          <C>         <C>
              Benefit obligation, beginning of year          $  8,979    $  9,290
                     Service cost                                 336         332
                     Interest cost                                681         730
                     Actuarial gain                              (570)       (339)
                     Benefits paid                               (929)     (1,034)
                                                             --------    --------
              Benefit obligation, end of year                   8,497       8,979
                                                             --------    --------
         Change in plan assets:

              Fair value of plan assets, beginning of year     11,241      12,217
                      Actual return on plan assets                141          58
                      Benefits paid                              (929)     (1,034)
                                                             --------    --------
              Fair value of plan assets, end of year           10,453      11,241
                                                             --------    --------

         Funded status                                          1,956       2,262
                                                             --------    --------

              Unrecognized net actuarial (gain) loss             (560)         10
              Unrecognized net gain                              (612)     (1,441)
                                                             --------    --------

         Prepaid benefit obligation                          $    784    $    831
                                                             ========    ========
</TABLE>

                                      F-20
<PAGE>


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

                                                                2000        1999        1998
                                                                ----        ----        ----

<S>                                                            <C>      <C>      <C>
          Service cost                                         ($336)      ($332)      ($308)
          Interest cost                                         (681)       (730)       (640)
          Actual return on plan assets                           141          58         610
          Net amortization and deferral                          829         995         456
                                                               -----       -----       -----
            Net periodic pension (expense) income              ($ 47)      ($  9)      $ 118
                                                               =====       =====       =====
</TABLE>

         In determining the projected benefit  obligation for 2000 and 1999, the
         weighted  average  assumed  discount  rate was 8.0%,  while the rate of
         expected  increases  in future  salary  levels was 3.5%.  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 2000 or 1999 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 the  business  of
         investing  in and  managing  real estate  properties  and the making of
         high-yield,   short-term   loans   secured  by  desirable   properties.
         Engineered products are manufactured through wholly-owned  subsidiaries
         of the Company  and  primarily  consist of knitted  wire  products  and
         components and transformer products.

         Operating  information on the Company's business segments for the years
         ended December 31, 2000, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>

                                                                2000        1999        1998
                                                                ----        ----        ----

          Net revenues and sales:
          <S>                                               <C>         <C>        <C>
              Real estate investment and management         $ 28,237    $ 29,202    $ 26,349
              Engineered products                             34,095      30,500      32,170
                                                            --------    --------    --------

                                                            $ 62,332    $ 59,702    $ 58,519
                                                            ========    ========    ========

          Operating income:
              Real estate investment and management         $ 14,147    $ 14,079    $ 12,133
              Engineered products                              2,261       1,855       3,239
                                                            --------    --------    --------

                                                              16,408      15,934      15,372

          General corporate expenses                          (2,153)     (2,848)     (3,098)
          Other income, net                                   11,463       9,538       6,034
                                                            --------    --------    --------

                      Income from continuing
                           operations before income taxes   $ 25,718    $ 22,624    $ 18,308
                                                            ========    ========    ========
</TABLE>


                                      F-21


<PAGE>
<TABLE>
<CAPTION>

                                                                2000        1999        1998
                                                                ----        ----        ----

          Depreciation and amortization expense:
<S>                                                           <C>         <C>         <C>
              Real estate investment and management           $4,993      $5,210      $5,530
              Engineered products                                772         737         662
              General corporate expenses                         563         681         374
                                                              ------      ------      ------
                                                              $6,328      $6,628      $6,566
                                                              ======      ======      ======

          Mortgage interest expense:
             Real estate investment and management            $2,232      $2,620      $2,661
                                                              ======      ======      ======
</TABLE>

Sales by the  Company's  engineered  products  segment  to  automobile  original
equipment  manufacturers  accounted for approximately  19.9%, 19.4% and 21.2% of
2000, 1999 and 1998 consolidated revenues,  respectively.  Sales by this segment
to its  largest  customer  (in  excess  of 10.0%  of the  segment's  net  sales)
accounted  for  15.8%  and  17.0% of the  segment's  sales  for  2000 and  1999,
respectively.  During 1998, sales to its three largest  customers  accounted for
34.7% of the segment's sales.

Approximately  13.1%,  14.5%  and  12.9% of 2000,  1999  and  1998  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.  In 1999  manufacturing  operations  of this
segment were commenced at a leased facility in Mexico.

         Selected  information on the Company's business segments as of December
         31, 2000 and 1999 is as follows:

                                                               2000         1999
                                                               ----         ----

          Identifiable assets:
             Real estate investment and management
                and corporate assets                       $136,189     $122,112
              Engineered products                            11,807       11,620
                                                           --------     --------
                                                           $147,996     $133,732
                                                           ========     ========

          Additions to long-lived assets:
              Real estate investment and management        $  1,244     $  3,194
              Engineered products                               321          885
                                                           --------     --------

                                                           $  1,565     $  4,079
                                                           ========     ========

Included in the identifiable assets of the real estate investment and management
segment at December  31,  2000 is  approximately  $3,500 of high yield  mortgage
loans (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.

                                      F-22

<PAGE>


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

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

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

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

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

         In 1998, the Company acquired a property subject to certain  contingent
         liabilities  which  were  estimated  and  capitalized  at the  time  of
         acquisition.   During  2000,   these   liabilities  were  resolved  for
         approximately $1.0 million less than originally estimated. As a result,
         real  property  held for rental and other  long-term  liabilities  were
         reduced accordingly.

         The  Company  is  subject  to  various  other  litigation,   legal  and
         regulatory  matters  that  arise in the  ordinary  course  of  business
         activities.  When  management  believes it is probable that a liability
         has been incurred and such amounts are reasonably estimable the Company
         provides for amounts that include  judgments and penalties  that may be
         assessed.  None of these  matters are  expected to result in a material
         adverse  effect on the  Company's  consolidated  financial  position or
         results of operations.


                                      F-23


<PAGE>

                                                                     SCHEDULE II


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

<TABLE>
<CAPTION>

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

Allowance for doubtful accounts:

<S>                                               <C>                   <C>           <C>             <C>
     Year ended December 31, 2000                 $390                  $0            $62             $328

     Year ended December 31, 1999                  390                   0              0              390

     Year ended December 31, 1998                  326                  70              6              390

</TABLE>



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


                                      F-24
<PAGE>

                                                                    SCHEDULE III
                      UNITED CAPITAL CORP. AND SUBSIDIARIES
           REAL PROPERTY HELD FOR RENTAL AND ACCUMULATED DEPRECIATION
                                DECEMBER 31, 2000
                                 (In Thousands)
<TABLE>
<CAPTION>


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



Shopping Centers and Retail Outlets:
<S>                                    <C>        <C>           <C>           <C>            <C>          <C>            <C>
   Culver, CA                          $  3,417   $    842      $  7,576      $      0       $    842     $  7,576       $  8,418
   Northbrook, IL                         3,747        898         8,075             0            898        8,075          8,973
   Miscellaneous Investments             12,150      5,079        44,529         1,214          5,079       45,743         50,822
                                       --------   --------      --------      --------       --------     --------       --------

                                         19,314      6,819        60,180         1,214          6,819       61,394         68,213
                                       --------   --------      --------      --------       --------     --------       --------

Commercial Properties:
   Miscellaneous Investments              7,634      8,865        36,395           302          8,865       36,697         45,562
Day Care Centers and Offices:
   Miscellaneous Investments                178        643         5,292         2,310            643        7,602          8,245
Hotel Properties:
   Miscellaneous Investments                  0      1,712         2,868            48          1,712        2,916          4,628
Other:
   Miscellaneous Investments                  0      2,671           630         1,046          2,671        1,676          4,347
                                       --------   --------      --------      --------       --------     --------       --------
                                       $ 27,126   $ 20,710      $105,365      $  4,920       $ 20,710     $110,285       $130,995
                                       ========   ========      ========      ========       ========     ========       ========
</TABLE>


<TABLE>
<CAPTION>

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

Shopping Centers and Retail Outlets:
<S>                                      <C>                  <C>           <C>              <C>
   Culver, CA                            $  5,866              N/A            1986             18
   Northbrook, IL                           6,113              N/A            1987             18
   Miscellaneous Investments               33,661              N/A          1986-98         12-39
                                          -------

                                           45,640
                                          -------

Commercial Properties:
   Miscellaneous Investments               18,268              N/A          1986-98          5-39
Day Care Centers and Offices:
   Miscellaneous Investments                6,073              N/A          1986-91          5-39
Hotel Properties:
   Miscellaneous Investments                2,872              N/A          1986-99          7-10
Other:
   Miscellaneous Investments                1,009              N/A          1986-97         10-28
                                          -------
                                          $73,862
                                          =======
</TABLE>
<PAGE>

  Notes:

(a) Reconciliations of the carrying value of real property held for rental
for the three years ended December 31, 2000 are as follows:
<TABLE>
<CAPTION>

                                                                              2000        1999        1998
                                                                             --------   --------   --------

<S>                                                                          <C>        <C>        <C>
Real property held for rental at beginning of period                         $138,192   $140,102   $124,346
Additions during the period:
   Acquisitions and improvements                                                  767      2,304     12,539
   Transfers to real property held for rental                                       0          0      8,584
                                                                             --------   --------   --------

                                                                              138,959    142,406    145,469
Deductions during the period:
   Cost of real estate sold                                                     6,951      4,214      5,367
   Other (see Note 3)                                                           1,013          0          0
                                                                             --------   --------   --------

                                                                             $130,995   $138,192   $140,102
                                                                             ========   ========   ========
</TABLE>

(b)  Reconciliations  of  accumulated  depreciation  for the three  years  ended
December 31, 2000 are as follows:

<TABLE>
<CAPTION>

                                                                              2000        1999        1998
                                                                            -------      -------    -------

<S>                                                                          <C>         <C>        <C>
Accumulated depreciation at beginning of period                              $ 71,253    $ 68,665   $ 65,768
Additions during the period:
   Provision for depreciation                                                   4,993       5,210      5,530
                                                                              -------     -------    -------

                                                                               76,246      73,875     71,298
Deductions during the period:
   Accumulated depreciation of real estate sold                                 2,384       2,622      2,633
                                                                              -------     -------    -------

                                                                             $ 73,862    $ 71,253   $ 68,665
                                                                              =======     =======    =======
</TABLE>

(c) The  aggregate  cost  for  federal  income  tax  purposes  is  approximately
$174,000.

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

                                      F-25
<PAGE>
                                                                     SCHEDULE IV
                     UNITED CAPITAL CORP. AND SUBSIDIARIES
                         MORTGAGE LOANS ON REAL ESTATE
                               DECEMBER 31, 2000
                                 (In Thousands)
<TABLE>
<CAPTION>





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

Mortgage loans secured by
  commercial property:

<S>                                   <C>                         <C>                   <C>
    New York, New York                       14%                  January 2002          Interest due monthly,
                                                                                        with principal
                                                                                        due at maturity
    Other                             Varies from 9.0%-12.0%      From September        Principal and interest due
                                                                  2001- December 2008   monthly

</TABLE>

<TABLE>
<CAPTION>

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

    Mortgage loans secured by
      commercial property:
<S>                                                         <C>        <C>         <C>                <C>

      New York, New York                                    $0         $3,500      $3,500             $0

      Other                                                  0            192          85              0
                                                            ---        ------      ------           ----

                                                            $0         $3,692      $3,585             $0
                                                            ===        ======      ======           ====
</TABLE>


(a)   A  reconciliation  of  mortgage  loans on real  estate  for the year ended
      December 31, 2000 is as follows:

     Balance at beginning of period                               $98
     Additions during the period:
       New mortgage loans                                       3,500
     Deductions during the period:
       Collection of principal                                    (13)
                                                               -------
     Balance at end of period                                  $3,585
                                                               =======


(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 $20 in
       deferred gains at December 31, 2000.

(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-26
<PAGE>

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


                             First      Second    Third    Fourth
                            Quarter     Quarter  Quarter   Quarter
                            -------     -------  -------   -------


For the year 2000:
     Revenues                $15,098   $16,070   $15,589   $15,575
                             =======   =======   =======   =======

     Costs and expenses      $11,949   $12,346   $12,098   $11,684
                             =======   =======   =======   =======

     Other income            $ 3,087   $ 2,932   $ 4,191   $ 1,253
                             =======   =======   =======   =======

     Net income              $ 3,681   $ 3,821   $ 4,672   $ 6,104
                             =======   =======   =======   =======



Net income per common share:
     Basic                   $   .78   $   .81   $   .99   $  1.29
                             =======   =======   =======   =======
     Diluted                 $   .77   $   .81   $   .97   $  1.27
                             =======   =======   =======   =======



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
                             =======   =======   =======   =======


Net income per common share:
     Basic                   $   .70   $   .51   $   .58   $   .89
                             =======   =======   =======   =======
     Diluted                 $   .70   $   .51   $   .58   $   .87
                             =======   =======   =======   =======


                                      F-27