United States
Securities And Exchange Commission
Washington, DC 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from _____to_____

Commission File Number 1-12803

GRAPHIC

URSTADT BIDDLE PROPERTIES INC.
(Exact Name of Registrant as Specified in its Charter)

Maryland
04-2458042
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification Number)
   
321 Railroad Avenue, Greenwich CT
06830
(Address of principal executive offices)
(Zip Code)

Registrant's telephone number, including area code:  (203) 863-8200

N/A
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
         
Common Stock, par value $.01 per share
 
UBP
 
New York Stock Exchange
         
Class A Common Stock, par value $.01 per share
 
UBA
 
New York Stock Exchange
         
6.25% Series H Cumulative Preferred Stock
 
UBPPRH
 
New York Stock Exchange
         
5.875% Series K Cumulative Preferred Stock
 
UBPPRK
 
New York Stock Exchange
         
Common Stock Rights to Purchase Preferred Shares
 
N/A
 
New York Stock Exchange
         
Class A Common Stock Rights to Purchase Preferred Shares
 
N/A
 
New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐
Accelerated filer ☒
   
Non-accelerated filer ☐
Smaller reporting company ☐
   
Emerging growth company ☐
 
   

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐   No ☒

As of September 3, 2021 (latest date practicable), the number of shares of the Registrant's classes of Common Stock and Class A Common Stock outstanding was: 10,161,714 Common Shares, par value $.01 per share, and 30,081,736 Class A Common Shares, par value $.01 per share.





Index
 
Urstadt Biddle Properties Inc.
   
   
   
Part I. Financial Information
 
   
Item 1.
Financial Statements (Unaudited)
 
     
 
1
     
 
2
     
 
3
     
 
4
     
 
5
     
 
7
     
Item 2.
20
     
Item 3.
29
     
Item 4.
30
     
     
Part II. Other Information
 
     
Item 1.
31
     
Item 2.
32
     
Item 6.
33
     
34


URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

 
July 31, 2021
   
October 31, 2020
 
   
(Unaudited)
       
Assets
           
Real Estate Investments:
           
Real Estate– at cost
 
$
1,146,941
   
$
1,149,182
 
Less: Accumulated depreciation
   
(271,952
)
   
(261,325
)
     
874,989
     
887,857
 
Investments in and advances to unconsolidated joint ventures
   
28,807
     
28,679
 
     
903,796
     
916,536
 
                 
Cash and cash equivalents
   
22,991
     
40,795
 
Tenant receivables-net
   
23,311
     
25,954
 
Prepaid expenses and other assets
   
23,536
     
18,263
 
Deferred charges, net of accumulated amortization
   
8,488
     
8,631
 
Total Assets
 
$
982,122
   
$
1,010,179
 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
                 
Liabilities:
               
Revolving credit line
 
$
5,000
   
$
35,000
 
Mortgage notes payable and other loans
   
293,975
     
299,434
 
Accounts payable and accrued expenses
   
18,375
     
18,033
 
Deferred compensation – officers
   
48
     
20
 
Other liabilities
   
22,559
     
24,550
 
Total Liabilities
   
339,957
     
377,037
 
                 
Redeemable Noncontrolling Interests
   
67,396
     
62,071
 
                 
Commitments and Contingencies
   
     
 
                 
Stockholders’ Equity:
               
6.25% Series H Cumulative Preferred Stock (liquidation preference of $25 per share); 4,600,000 shares issued and outstanding
   
115,000
     
115,000
 
5.875% Series K Cumulative Preferred Stock (liquidation preference of $25 per share); 4,400,000 shares issued and outstanding
   
110,000
     
110,000
 
Excess Stock, par value $0.01 per share; 20,000,000 shares authorized; none issued and outstanding
   
-
     
-
 
Common Stock, par value $0.01 per share; 30,000,000 shares authorized; 10,161,714 and 10,073,652 shares issued and outstanding
   
103
     
102
 
Class A Common Stock, par value $0.01 per share; 100,000,000 shares authorized; 30,082,036 and 29,996,305 shares issued and outstanding
   
301
     
300
 
Additional paid in capital
   
528,024
     
526,027
 
Cumulative distributions in excess of net income
   
(167,070
)
   
(164,651
)
Accumulated other comprehensive loss
   
(11,589
)
   
(15,707
)
Total Stockholders' Equity
   
574,769
     
571,071
 
Total Liabilities and Stockholders' Equity
 
$
982,122
   
$
1,010,179
 

The accompanying notes to consolidated financial statements are an integral part of these statements.

1
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
 
Nine Months Ended
July 31,
   
Three Months Ended
July 31,
 
   
2021
   
2020
   
2021
   
2020
 
                         
Revenues
                       
Lease income
 
$
97,329
   
$
90,003
   
$
33,051
   
$
26,855
 
Lease termination
   
801
     
460
     
96
     
112
 
Other
   
3,403
     
3,964
     
1,183
     
1,832
 
Total Revenues
   
101,533
     
94,427
     
34,330
     
28,799
 
                                 
Expenses
                               
Property operating
   
17,733
     
15,085
     
5,284
     
4,355
 
Property taxes
   
17,785
     
17,615
     
6,009
     
5,897
 
Depreciation and amortization
   
21,773
     
21,587
     
7,063
     
7,304
 
General and administrative
   
6,876
     
8,495
     
2,139
     
2,111
 
Directors' fees and expenses
   
277
     
287
     
79
     
94
 
Total Operating Expenses
   
64,444
     
63,069
     
20,574
     
19,761
 
                                 
Operating Income
   
37,089
     
31,358
     
13,756
     
9,038
 
                                 
Non-Operating Income (Expense):
                               
Interest expense
   
(10,062
)
   
(10,123
)
   
(3,329
)
   
(3,475
)
Equity in net income from unconsolidated joint ventures
   
1,025
     
1,160
     
365
     
184
 
Unrealized holding gains arising during the periods
   
-
     
-
     
-
     
(109
)
Gain on sale of marketable securities
   
-
     
258
     
-
     
258
 
Gain (loss) on sale of property
   
12,214
     
(328
)
   
11,808
     
-
 
Interest, dividends and other investment income
   
171
     
359
     
75
     
27
 
Net Income
   
40,437
     
22,684
     
22,675
     
5,923
 
                                 
Noncontrolling interests:
                               
Net income attributable to noncontrolling interests
   
(2,724
)
   
(3,001
)
   
(887
)
   
(935
)
Net income attributable to Urstadt Biddle Properties Inc.
   
37,713
     
19,683
     
21,788
     
4,988
 
Preferred stock dividends
   
(10,238
)
   
(10,237
)
   
(3,413
)
   
(3,412
)
                                 
Net Income Applicable to Common and Class A Common Stockholders
 
$
27,475
   
$
9,446
   
$
18,375
   
$
1,576
 
                                 
Basic Earnings Per Share:
                               
Per Common Share:
 
$
0.65
   
$
0.22
   
$
0.44
   
$
0.04
 
Per Class A Common Share:
 
$
0.73
   
$
0.25
   
$
0.48
   
$
0.04
 
                                 
Diluted Earnings Per Share:
                               
Per Common Share:
 
$
0.64
   
$
0.22
   
$
0.43
   
$
0.04
 
Per Class A Common Share:
 
$
0.72
   
$
0.25
   
$
0.48
   
$
0.04
 
                                 
Dividends Per Share:
                               
 Common
 
$
0.457
   
$
0.5625
   
$
0.207
   
$
0.0625
 
  Class A Common
 
$
0.51
   
$
0.63
   
$
0.23
   
$
0.07
 

The accompanying notes to consolidated financial statements are an integral part of these statements.

2
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(In thousands)

 
Nine Months Ended
July 31,
   
Three Months Ended
July 31,
 
   
2021
   
2020
   
2021
   
2020
 
                         
Net Income
 
$
40,437
   
$
22,684
   
$
22,675
   
$
5,923
 
                                 
Other comprehensive income (loss):
                               
Change in unrealized losses on interest rate swaps
   
3,588
     
(8,965
)
   
(1,418
)
   
(864
)
Change in unrealized losses on interest rate swaps-equity investees
   
530
     
(1,030
)
   
(197
)
   
(83
)
                                 
Total comprehensive income (loss)
   
44,555
     
12,689
     
21,060
     
4,976
 
Comprehensive income attributable to noncontrolling interests
   
(2,724
)
   
(3,001
)
   
(887
)
   
(935
)
                                 
Total comprehensive income (loss) attributable to Urstadt Biddle Properties Inc.
   
41,831
     
9,688
     
20,173
     
4,041
 
Preferred stock dividends
   
(10,238
)
   
(10,237
)
   
(3,413
)
   
(3,412
)
Total comprehensive income (loss) applicable to Common and Class A Common Stockholders
 
$
31,593
   
$
(549
)
 
$
16,760
   
$
629
 

The accompanying notes to consolidated financial statements are an integral part of these statements.

3
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
 
Nine Months Ended
July 31,
 
   
2021
   
2020
 
Cash Flows from Operating Activities:
           
Net income
 
$
40,437
   
$
22,684
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
   
21,773
     
21,587
 
Straight-line rent adjustment
   
2,702
     
(1,744
)
Provision for tenant credit losses
   
3,261
     
5,266
 
(Gain) on sale of marketable securities
   
-
     
(258
)
(Gain)/loss on sale of property
   
(12,214
)
   
328
 
Restricted stock compensation expense and other adjustments
   
2,932
     
4,425
 
Deferred compensation arrangement
   
28
     
(30
)
Equity in net (income) of unconsolidated joint ventures
   
(1,025
)
   
(1,160
)
Distributions of operating income from unconsolidated joint ventures
   
1,025
     
1,160
 
Changes in operating assets and liabilities:
               
Tenant receivables
   
(3,328
)
   
(6,358
)
Accounts payable and accrued expenses
   
3,930
     
3,945
 
Other assets and other liabilities, net
   
(5,057
)
   
(3,589
)
Net Cash Flow Provided by Operating Activities
   
54,464
     
46,256
 
                 
Cash Flows from Investing Activities:
               
Deposits on acquisition of real estate investment
   
-
     
(1,030
)
Return of deposits on acquisition of real estate investment
   
-
     
530
 
Purchase of available for sale securities
   
(645
)
   
(6,983
)
Proceeds from the sale of available for sale securities
   
-
     
7,240
 
Proceeds from sale of property
   
16,707
     
3,732
 
Improvements to properties and deferred charges
   
(13,503
)
   
(17,118
)
Investment in note receivable
   
(1,546
)
   
-
 
Return of capital from unconsolidated affiliates
   
362
     
44
 
Net Cash Flow (Used in) Investing Activities
   
1,375
     
(13,585
)
                 
Cash Flows from Financing Activities:
               
Dividends paid -- Common and Class A Common Stock
   
(20,003
)
   
(24,560
)
Dividends paid -- Preferred Stock
   
(10,238
)
   
(10,776
)
Principal amortization repayments on mortgage notes payable
   
(5,179
)
   
(4,947
)
Proceeds from revolving credit line borrowings
   
-
     
35,000
 
Repayment of revolving credit line borrowings
   
(30,000
)
   
-
 
Acquisitions of noncontrolling interests
   
(4,566
)
   
(758
)
Distributions to noncontrolling interests
   
(2,724
)
   
(3,001
)
Payment of taxes on shares withheld for employee taxes
   
(320
)
   
(573
)
Redemption of preferred stock
   
-
     
(75,000
)
Repurchase of Common and Class A Common stock
   
(717
)
   
-
 
Net proceeds from the issuance of Common and Class A Common Stock
   
104
     
136
 
Net Cash Flow (Used in) Financing Activities
   
(73,643
)
   
(84,479
)
                 
Net Increase/(Decrease) In Cash and Cash Equivalents
   
(17,804
)
   
(51,808
)
Cash and Cash Equivalents at Beginning of Period
   
40,795
     
94,079
 
                 
Cash and Cash Equivalents at End of Period
 
$
22,991
   
$
42,271
 
                 
Supplemental Cash Flow Disclosures:
               
Interest Paid
 
$
9,944
   
$
9,988
 

The accompanying notes to consolidated financial statements are an integral part of these statements.

4
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)
Nine Months Ended July 31, 2021 and 2020
(In thousands, except share and per share data)

 
Series H
Preferred
Stock
Issued
   
Series H
Preferred
Stock Amount
   
Series K
Preferred
Stock
Issued
   
Series K
Preferred
Stock
Amount
   
Common
Stock
Issued
   
Common
Stock
Amount
   
Class A
Common
Stock
Issued
   
Class A
Common
Stock
Amount
   
Additional
Paid In
Capital
   
Cumulative
Distributions
In Excess of
Net Income
   
Accumulated
Other
Comprehensive
Income (loss)
   
Total
Stockholders’
Equity
 
                                                                         
Balances - October 31, 2020
   
4,600,000
   
$
115,000
     
4,400,000
   
$
110,000
     
10,073,652
   
$
102
     
29,996,305
   
$
300
   
$
526,027
   
$
(164,651
)
 
$
(15,707
)
 
$
571,071
 
Net income applicable to Common and Class A common stockholders
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
27,475
     
-
     
27,475
 
Change in unrealized losses on interest rate swap
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
4,118
     
4,118
 
Cash dividends paid :
                                                                                               
Common stock ($0.457 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(4,652
)
   
-
     
(4,652
)
Class A common stock ($0.51 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(15,351
)
   
-
     
(15,351
)
Issuance of shares under dividend reinvestment plan
   
-
     
-
     
-
     
-
     
2,506
     
-
     
3,874
     
-
     
104
     
-
     
-
     
104
 
Shares issued under restricted stock plan
   
-
     
-
     
-
     
-
     
105,850
     
1
     
125,800
     
1
     
(2
)
   
-
     
-
     
-
 
Shares withheld for employee taxes
   
-
     
-
     
-
     
-
     
-
     
-
     
(23,249
)
   
-
     
(319
)
   
-
     
-
     
(319
)
Forfeiture of restricted stock
   
-
     
-
     
-
     
-
     
-
     
-
     
(400
)
   
-
     
-
     
-
     
-
     
-
 
Repurchase of Common and Class A Common stock
   
-
     
-
     
-
     
-
     
(20,294
)
   
-
     
(20,294
)
   
-
     
(717
)
   
-
     
-
     
(717
)
Restricted stock compensation and other adjustments
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
2,931
     
-
     
-
     
2,931
 
Adjustments to redeemable noncontrolling interests
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(9,891
)
   
-
     
(9,891
)
Balances - July 31, 2021
   
4,600,000
   
$
115,000
     
4,400,000
   
$
110,000
     
10,161,714
   
$
103
     
30,082,036
   
$
301
   
$
528,024
   
$
(167,070
)
 
$
(11,589
)
 
$
574,769
 


 
Series H
Preferred
Stock
Issued
   
Series H
Preferred
Stock Amount
   
Series K
Preferred
Stock
Issued
   
Series K
Preferred
Stock
Amount
   
Common
Stock
Issued
   
Common
Stock
Amount
   
Class A
Common
Stock
Issued
   
Class A
Common
Stock
Amount
   
Additional
Paid In
Capital
   
Cumulative
Distributions
In Excess of
Net Income
   
Accumulated
Other
Comprehensive
Income
   
Total
Stockholders’
Equity
 
                                                                         
Balances - October 31, 2019
   
4,600,000
   
$
115,000
     
4,400,000
   
$
110,000
     
9,963,751
   
$
101
     
29,893,241
   
$
299
   
$
520,988
   
$
(158,213
)
 
$
(8,451
)
 
$
579,724
 
Net income applicable to Common and Class A common stockholders
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
9,446
     
-
     
9,446
 
Change in unrealized losses on interest rate swap
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(9,994
)
   
(9,994
)
Cash dividends paid :
                                                                                               
Common stock ($0.5625 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(5,664
)
   
-
     
(5,664
)
Class A common stock ($0.63 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(18,896
)
   
-
     
(18,896
)
Issuance of shares under dividend reinvestment plan
   
-
     
-
     
-
     
-
     
3,321
     
-
     
4,722
     
-
     
118
     
-
     
-
     
118
 
Shares issued under restricted stock plan
   
-
     
-
     
-
     
-
     
105,450
     
1
     
120,800
     
1
     
(2
)
   
-
     
-
     
-
 
Shares withheld for employee taxes
   
-
     
-
     
-
     
-
     
-
     
-
     
(23,873
)
   
-
     
(573
)
   
-
     
-
     
(573
)
Forfeiture of restricted stock
   
-
     
-
     
-
     
-
     
-
     
-
     
(500
)
   
-
     
-
     
-
     
-
     
-
 
Restricted stock compensation and other adjustments
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
4,443
     
-
     
-
     
4,443
 
Adjustments to redeemable noncontrolling interests
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
14,176
     
-
     
14,176
 
Balances - July 31, 2020
   
4,600,000
   
$
115,000
     
4,400,000
   
$
110,000
     
10,072,522
   
$
102
     
29,994,390
   
$
300
   
$
524,974
   
$
(159,151
)
 
$
(18,445
)
 
$
572,780
 

The accompanying notes to consolidated financial statements are an integral part of these statements
5

URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)
Three Months Ended July 31, 2021 and 2020
(In thousands, except share and per share data)

 
Series H
Preferred
Stock
Issued
   
Series H
Preferred
Stock Amount
   
Series K
Preferred
Stock
Issued
   
Series K
Preferred
Stock
Amount
   
Common
Stock
Issued
   
Common
Stock
Amount
   
Class A
Common
Stock
Issued
   
Class A
Common
Stock
Amount
   
Additional
Paid In
Capital
   
Cumulative
Distributions
In Excess of
Net Income
   
Accumulated
Other
Comprehensive
Income (loss)
   
Total
Stockholders’
Equity
 
                                                                         
Balances - April 30, 2021
   
4,600,000
   
$
115,000
     
4,400,000
   
$
110,000
     
10,181,005
   
$
103
     
30,100,790
   
$
301
   
$
527,695
   
$
(175,099
)
 
$
(9,973
)
 
$
568,027
 
Net income applicable to Common and Class A common stockholders
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
18,375
     
-
     
18,375
 
Change in unrealized losses on interest rate swap
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(1,616
)
   
(1,616
)
Cash dividends paid :
                                                                                               
Common stock ($0.207 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(2,107
)
   
-
     
(2,107
)
Class A common stock ($0.23 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(6,923
)
   
-
     
(6,923
)
Issuance of shares under dividend reinvestment plan
   
-
     
-
     
-
     
-
     
1,003
     
-
     
1,540
     
-
     
46
     
-
     
-
     
46
 
Forfeiture of restricted stock
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Repurchase of Common and Class A Common stock
                                   
(20,294
)
   
-
     
(20,294
)
   
-
     
(717
)
                   
(717
)
Restricted stock compensation and other adjustments
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
1,000
     
-
     
-
     
1,000
 
Adjustments to redeemable noncontrolling interests
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(1,316
)
   
-
     
(1,316
)
Balances - July 31, 2021
   
4,600,000
   
$
115,000
     
4,400,000
   
$
110,000
     
10,161,714
   
$
103
     
30,082,036
   
$
301
   
$
528,024
   
$
(167,070
)
 
$
(11,589
)
 
$
574,769
 


 
Series G
Preferred
Stock
Issued
   
Series G
Preferred
Stock Amount
   
Series H
Preferred
Stock
Issued
   
Series H
Preferred
Stock
Amount
   
Common
Stock
Issued
   
Common
Stock
Amount
   
Class A
Common
Stock
Issued
   
Class A
Common
Stock
Amount
   
Additional
Paid In
Capital
   
Cumulative
Distributions
In Excess of
Net Income
   
Accumulated
Other
Comprehensive
Income
   
Total
Stockholders’
Equity
 
                                                                         
Balances - April 30, 2020
   
4,600,000
   
$
115,000
     
4,400,000
   
$
110,000
     
10,071,981
   
$
102
     
29,994,064
   
$
300
   
$
524,050
   
$
(161,165
)
 
$
(17,498
)
 
$
570,789
 
Net income applicable to Common and Class A common stockholders
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
1,576
     
-
     
1,576
 
Change in unrealized losses on interest rate swap
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(947
)
   
(947
)
Cash dividends paid :
                                                                                               
Common stock ($0.0625 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(630
)
   
-
     
(630
)
Class A common stock ($0.07 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(2,100
)
   
-
     
(2,100
)
Issuance of shares under dividend reinvestment plan
   
-
     
-
     
-
     
-
     
541
     
-
     
826
     
-
     
14
     
-
     
-
     
14
 
Shares withheld for employee taxes
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Forfeiture of restricted stock
   
-
     
-
     
-
     
-
     
-
     
-
     
(500
)
   
-
     
-
     
-
     
-
     
-
 
Restricted stock compensation and other adjustments
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
910
     
-
     
-
     
910
 
Adjustments to redeemable noncontrolling interests
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
3,168
     
-
     
3,168
 
Balances - July 31, 2020
   
4,600,000
   
$
115,000
     
4,400,000
   
$
110,000
     
10,072,522
   
$
102
     
29,994,390
   
$
300
   
$
524,974
   
$
(159,151
)
 
$
(18,445
)
 
$
572,780
 

The accompanying notes to consolidated financial statements are an integral part of these statements
6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business
Urstadt Biddle Properties Inc. (“Company”), a Maryland Corporation, is a real estate investment trust ("REIT"), engaged in the acquisition, ownership and management of commercial real estate, primarily neighborhood and community shopping centers in the metropolitan tri-state area outside of the City of New York.  The Company's major tenants include supermarket chains and other retailers who sell basic necessities.  At July 31, 2021, the Company owned or had equity interests in 79 properties containing a total of 5.1 million square feet of Gross Leasable Area (“GLA”).

COVID-19 Pandemic
On March 11, 2020, the novel coronavirus disease (“COVID-19”) was declared a pandemic (“COVID-19 pandemic”) by the World Health Organization as the disease spread throughout the world.  During March 2020, measures to prevent the spread of COVID-19 were initiated, with federal, state and local government agencies issuing regulatory orders enforcing social distancing and limiting certain business operations and group gatherings in order to further prevent the spread of COVID-19.  While these regulatory orders vary by state and have changed over time, as of July 31, 2021 all of our tenants’ businesses were permitted to operate, in some cases subject to modified operation procedures. We have seen substantial improvement in foot traffic, retail activity and general business conditions for our tenants compared to the early days of the COVID-19 pandemic. The pandemic is still ongoing, however, with existing and new variants it is making the situation difficult to predict.

Principles of Consolidation and Use of Estimates
The accompanying consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and joint ventures in which the Company meets certain criteria in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “Consolidation”. The Company has determined that such joint ventures should be consolidated into the consolidated financial statements of the Company. In accordance with ASC Topic 970-323 “Real Estate-General-Equity Method and Joint Ventures,” joint ventures that the Company does not control but otherwise exercises significant influence over, are accounted for under the equity method of accounting. See Note 4 for further discussion of the unconsolidated joint ventures. All significant intercompany transactions and balances have been eliminated in consolidation.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Results of operations for the three and nine months ended July 31, 2021 are not necessarily indicative of the results that may be expected for the year ending October 31, 2021. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended October 31, 2020.

The preparation of financial statements requires management to make estimates and assumptions that affect the disclosure of contingent assets and liabilities, the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods covered by the financial statements. The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, revenue recognition, fair value estimates, and the collectability of tenant receivables and other assets and liabilities.  Actual results could differ from these estimates.  The consolidated balance sheet at October 31, 2020 has been derived from audited financial statements at that date.

Federal Income Taxes
The Company has elected to be treated as a REIT under Sections 856-860 of the Internal Revenue Code ("Code"). Under those sections, a REIT that, among other things, distributes at least 90% of real estate trust taxable income and meets certain other qualifications prescribed by the Code will not be taxed on that portion of its taxable income that is distributed.  The Company believes it qualifies as a REIT and intends to distribute all of its taxable income for fiscal 2021 in accordance with the provisions of the Code. Accordingly, no provision has been made for Federal income taxes in the accompanying consolidated financial statements.

The Company follows the provisions of ASC Topic 740, “Income Taxes” that, among other things, defines a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  Based on its evaluation, the Company determined that it has no uncertain tax positions and no unrecognized tax benefits as of July 31, 2021. As of July 31, 2021, the fiscal tax years 2017 through and including 2020 remain open to examination by the Internal Revenue Service. There are currently no federal tax examinations in progress.

Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and tenant receivables. The Company places its cash and cash equivalents with high quality financial institutions and the balances at times could exceed federally insured limits. The Company performs ongoing credit evaluations of its tenants and may require certain tenants to provide security deposits or letters of credit. Though these security deposits and letters of credit are insufficient to meet the terminal value of a tenant’s lease obligation, they are a measure of good faith and a source of funds to offset the economic costs associated with lost rent and the costs associated with re-tenanting the space. The Company has no dependency upon any single tenant.

Marketable Securities
Marketable equity securities are carried at fair value based upon quoted market prices in active markets with changes in fair value recognized in net income.

Derivative Financial Instruments
The Company occasionally utilizes derivative financial instruments, such as interest rate swaps, to manage its exposure to fluctuations in interest rates. The Company has established policies and procedures for risk assessment, and the approval, reporting and monitoring of derivative financial instruments. Derivative financial instruments must be effective in reducing the Company’s interest rate risk exposure in order to qualify for hedge accounting. When the terms of an underlying transaction are modified, or when the underlying hedged item ceases to exist, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income for each period until the derivative instrument matures or is settled. Any derivative instrument used for risk management that does not meet the hedging criteria is marked-to-market with the changes in value included in net income. The Company has not entered into, and does not plan to enter into, derivative financial instruments for trading or speculative purposes. Additionally, the Company has a policy of entering into derivative contracts only with major financial institutions.

As of July 31, 2021, the Company believes it has no significant risk associated with non-performance of the financial institutions that are the counterparties to its derivative contracts.  At July 31, 2021, the Company had approximately $124.8 million in secured mortgage financings subject to interest rate swaps. Such interest rate swaps converted the LIBOR-based variable rates on the mortgage financings to an average fixed annual rate of 3.94% per annum. As of July 31, 2021 and October 31, 2020, the Company had a deferred liability of $9.7 million and $13.3 million, respectively (included in accounts payable and accrued expenses on the consolidated balance sheets), relating to the fair value of the Company’s interest rate swaps applicable to secured mortgages.

Charges and/or credits relating to the changes in fair values of such interest rate swaps are made to other comprehensive income/(loss) as the swaps are deemed effective and are classified as a cash flow hedge.

Comprehensive Income (Loss)
Comprehensive income (loss) is comprised of net income applicable to Common and Class A Common stockholders and other comprehensive income (loss). Other comprehensive income (loss) includes items that are otherwise recorded directly in stockholders’ equity, such as unrealized gains and losses on interest rate swaps designated as cash flow hedges, including the Company's share from entities accounted for under the equity method of accounting. At July 31, 2021, accumulated other comprehensive loss consisted of net unrealized losses on interest rate swap agreements of $11.6 million, inclusive of the Company's share of accumulated comprehensive losses from joint ventures accounted for by the equity method of accounting.  At October 31, 2020, accumulated other comprehensive loss consisted of net unrealized losses on interest rate swap agreements of approximately $15.7 million, inclusive of the Company's share of accumulated comprehensive losses from joint ventures accounted for by the equity method of accounting. Unrealized gains and losses included in other comprehensive income/(loss) will be reclassified into earnings as gains and losses are realized.

Asset Impairment
On a periodic basis, management assesses whether there are any indicators that the value of its real estate investments may be impaired.  A property value is considered impaired when management’s estimate of current and projected operating cash flows (undiscounted and without interest) of the property over its remaining useful life is less than the net carrying value of the property.  Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors.  To the extent impairment has occurred, the loss is measured as the excess of the net carrying amount of the property over the fair value of the asset.  Changes in estimated future cash flows due to changes in the Company’s plans or market and economic conditions could result in recognition of impairment losses which could be substantial.  As of July 31, 2021, management does not believe that the value of any of its real estate investments is impaired.
7



Acquisitions of Real Estate Investments, Capitalization Policy and Depreciation

Acquisition of Real Estate Investments:
The Company evaluates each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly hold real estate assets) to determine if the integrated set of assets and activities acquired meet the definition of a business and need to be accounted for as a business combination. If either of the following criteria is met, the integrated set of assets and activities acquired would not qualify as a business:

•
Substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group of similar identifiable assets; or

•
The integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs (i.e. revenue generated before and after the transaction).

An acquired process is considered substantive if:

•
The process includes an organized workforce (or includes an acquired contract that provides access to an organized workforce), that is skilled, knowledgeable, and experienced in performing the process;

•
The process cannot be replaced without significant cost, effort, or delay; or

•
The process is considered unique or scarce.

Generally, the Company expects that acquisitions of real estate or in-substance real estate will not meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay.

Acquisitions of real estate and in-substance real estate that do not meet the definition of a business are accounted for as asset acquisitions. The accounting model for asset acquisitions is similar to the accounting model for business combinations except that the acquisition consideration (including acquisition costs) is allocated to the individual assets acquired and liabilities assumed on a relative fair value basis. As a result, asset acquisitions do not result in the recognition of goodwill or a bargain purchase gain. The relative fair values used to allocate the cost of an asset acquisition are determined using the same methodologies and assumptions as the Company utilizes to determine fair value in a business combination.

The value of tangible assets acquired is based upon our estimation of value on an “as if vacant” basis. The value of acquired in-place leases includes the estimated costs during the hypothetical lease-up period and other costs that would have been incurred in the execution of similar leases under the market conditions at the acquisition date of the acquired in-place lease. We assess the fair value of tangible and intangible assets based on numerous factors, including estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including the historical operating results, known trends, and market/economic conditions that may affect the property.

The values of acquired above and below-market leases, which are included in prepaid expenses and other assets and other liabilities, respectively, are amortized over the terms of the related leases and recognized as either an increase (for below-market leases) or a decrease (for above-market leases) to rental revenue. The values of acquired in-place leases are classified in other assets in the accompanying consolidated balance sheets and amortized over the remaining terms of the related leases.

Capitalization Policy:
Land, buildings, property improvements, furniture/fixtures and tenant improvements are recorded at cost. Expenditures for maintenance and repairs are charged to operations as incurred. Renovations and/or replacements, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives.

Depreciation:
The Company is required to make subjective assessments as to the useful life of its properties for purposes of determining the amount of depreciation. These assessments have a direct impact on the Company’s net income.

Properties are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:

Buildings
30-40 years
Property Improvements
10-20 years
Furniture/Fixtures
3-10 years
Tenant Improvements
Shorter of lease term or their useful life

Sale of Investment Property and Property Held for Sale
The Company reports properties that are either disposed of or are classified as held for sale in continuing operations in the consolidated statement of income if the removal, or anticipated removal, of the asset(s) from the reporting entity does not represent a strategic shift that has or will have a major effect on an entity's operations and financial results when disposed of.

In March 2021, the Company sold its property located in Hillsdale, NJ (the "Hillsdale Property") to an unrelated third party for a sale price of $1.3 million, as that property no longer met the Company's investment objectives.  In accordance with ASC Topic 840, Contracts with Customers, the Company recorded a gain on sale in the amount of $435,000 in its consolidated income statements for the nine months ended July 31, 2021, when the Company's performance obligation was met, the transfer of the property's title to the buyer and when consideration was received from the buyer for that performance obligation.

In June 2021, the Company sold its property located in Newington, NH (the "Newington Property") to an unrelated third party for a sale price of $13.4 million as that property no longer met the Company's investment objectives.  In accordance with ASC Topic 840, Contracts with Customers, the Company recorded a gain on sale in the amount of $11.8 million in its consolidated income statements for the nine and three months ended July 31, 2021, when the Company's performance obligation was met, the transfer of the property's title to the buyer and when consideration was received from the buyer for that performance obligation.

The operating results of the Hillsdale Property and Newington Property, which are included in continuing operations are as follows (amounts in thousands):

 
Nine Months Ended
July 31,
   
Three Months Ended
July 31,
 
   
2021
   
2020
   
2021
   
2020
 
Revenues
 
$
906
   
$
1,234
   
$
129
   
$
272
 
Property operating expense
   
(385
)
   
(438
)
   
(140
)
   
(131
)
Depreciation and amortization
   
(36
)
   
(131
)
   
-
     
(36
)
Net Income (Loss)
 
$
485
   
$
665
   
$
(11
)
 
$
105
 

8
Lease Income, Revenue Recognition and Tenant Receivables
Lease Income:

The Company accounts for lease income in accordance with ASC Topic 842 "Leases".

The Company's existing leases are generally classified as operating leases. However, certain longer-term leases (both lessee and lessor leases) may be classified as direct financing or sales type leases, which may result in selling profit and an accelerated pattern of earnings recognition.

The Company leases space to tenants under agreements with varying terms that generally provide for fixed payments of base rent, with designated increases over the term of the lease. Some of the lease agreements contain provisions that provide for additional rents based on tenants' sales volume ("percentage rent"). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. Additionally, most all lease agreements contain provisions for reimbursement of the tenants' share of actual real estate taxes, insurance and Common Area Maintenance ("CAM") costs (collectively, "Recoverable Costs") incurred.

Lease terms generally range from 1 to 5 years for tenant spaces under 10,000 square feet (“Shop Space”) and in excess of 5 years for spaces greater than 10,000 square feet (“Anchor Spaces”). Many leases also provide the option for the tenants to extend their lease beyond the initial term of the lease. If the tenants do not exercise renewal options and the leases mature, the tenants must relinquish their space so it can be leased to a new tenant, which generally involves some level of cost to prepare the space for re-leasing. These costs are capitalized and depreciated over the shorter of the life of the subsequent lease or the life of the improvement.

CAM is a non-lease component of the lease contract under ASC Topic 842, and therefore would be accounted for under ASC Topic 606, Revenue from Contracts with Customers, and presented separate from lease income in the accompanying consolidated statements of income, based on an allocation of the overall contract price, which is not necessarily the amount that would be billable to the tenants for CAM reimbursements per the terms of the lease contract. As the timing and pattern of providing the CAM service to the tenant is the same as the timing and pattern of the tenants' use of the underlying lease asset, the Company, in accordance with ASC Topic 842, combines CAM with the remaining lease components, along with tenants' reimbursement of real estate taxes and insurance, and recognize them together as lease income in the accompanying consolidated statements of income.

Lease income for operating leases with fixed payment terms is recognized on a straight-line basis over the expected term of the lease for all leases for which collectability is considered probable at the commencement date. At lease commencement, the Company expects that collectability is probable for all of its leases due to the Company’s credit checks on tenants and other creditworthiness analysis undertaken before entering into a new lease; therefore, income from all operating leases is initially recognized on a straight-line basis.  Lease income each period is reduced by amounts considered uncollectable on a lease-by-lease basis, with any changes in collectability assessments recognized as a current period adjustment to lease income. For operating leases in which collectability of lease income is not considered probable, lease income is recognized on a cash basis and all previously recognized uncollected lease income, including straight-line rental income, is reversed in the period in which the lease income is determined not to be probable of collection.

The Company, as a lessor, may only defer as initial direct costs the incremental costs of a tenant operating lease that would not have been incurred if the lease had not been obtained. These costs generally include third party broker payments, which are capitalized to deferred costs in the accompanying consolidated balance sheets and amortized over the expected term of the lease to depreciation and amortization expense in the accompanying consolidated statements of income.

COVID-19 Pandemic

Beginning in March 2020, many of the Company's properties were, and some continue to be, negatively impacted by the COVID-19 pandemic, as state governments mandated restrictions on the operation of non-essential businesses to prevent the spread of COVID-19, forcing many of our tenants’ businesses to close or reduce operations.  As a result, 402 of approximately 860 tenants in the Company's consolidated portfolio, representing 1.6 million square feet and approximately 45.3% of the Company's annualized base rent, asked for some type of rent deferral or concession. Approximately 117 of the 402 tenants withdrew their requests for rent relief or paid their rent in full. As public health and business conditions in the areas where our properties are located continue to improve, rent relief requests have greatly decreased and our properties are returning to normal operations. The primary strategy of the Company with respect to rent concession requests was to defer some portion of rents due for the months of April 2020 through the beginning of fiscal 2021 to be paid over a later part of the lease, preferably within a period of one year or less. In some instances, however, the Company determined that it was more appropriate to abate some portion of base rents. Most of the few base rent deferrals or abatements entered into with tenants in the third quarter of fiscal 2021 are additional deferrals or abatements for tenants who received prior rent concessions.

From the onset of COVID-19 through July 31, 2021, the Company completed 284 lease modifications, consisting of base rent deferrals totaling $3.9 million and rent abatements totaling $4.1 million. Included in the aforementioned amounts were 50  and 10 rent deferrals/abatements completed in the nine and three months ended July 31, 2021, respectively, which deferred $538,000 and $99,000 of base rents and abated $2.7 million and $414,000 of base rents in the nine and three months ended July 31, 2021, respectively.

In April 2020, in response to the COVID-19 pandemic, the FASB staff issued guidance that it would be acceptable for entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842, as if enforceable rights and obligations for those concessions existed (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the lease contract). Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each lease contract to determine whether enforceable rights and obligations for concessions exist in the lease contract and may elect to apply or not apply the lease modification guidance in Topic 842 to those contracts.

This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. For example, this election is available for concessions that result in the total payments required by the modified contract being substantially the same as or less than total payments required by the original contract. The FASB staff expects that reasonable judgment will be exercised in making those determinations.

Most concessions will provide a deferral of payments with no substantive changes to the consideration in the original lease contract. A deferral affects the timing, but the amount of the consideration is substantially the same as that required by the original lease contract. The FASB staff expects that there will be multiple ways to account for those deferrals, none of which the staff believes are preferable over others. The Company has made the election not to analyze each lease contract, and believes that, based on FASB guidance, the appropriate way to account for the concessions as described above is to account for such concessions as if no changes to the lease contracts were made. Under that accounting, a lessor would increase its lease receivable (straight-line rents receivable) and would continue to recognize income during the deferral period, assuming that the collectability of the future rents under the lease contract are considered collectable.  If it is determined that the future rents of any lease contract are not collectable, the Company would treat that lease contract on a cash basis as defined in ASC Topic 842.

When collection of substantially all lease payments during the lease term is not considered probable, total lease revenue is limited to the lesser of revenue recognized under accrual accounting or cash received. Determining the probability of collection of substantially all lease payments during a lease term requires significant judgment. This determination is impacted by numerous factors, including our assessment of the tenant’s credit worthiness, economic conditions, tenant sales productivity in that location, historical experience with the tenant and tenants operating in the same industry, future prospects for the tenant and the industry in which it operates, and the length of the lease term. If leases currently classified as probable are subsequently reclassified as not probable, any outstanding lease receivables (including straight-line rent receivables) would be written-off with a corresponding decrease in lease income.

Revenue Recognition

In those instances, in which the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition on operating leases will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. When the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin.

Lease termination amounts are recognized in operating revenues when there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and the termination consideration is probable of collection. Lease termination amounts are paid by tenants who want to terminate their lease obligations before the end of the contractual term of the lease by agreement with the Company. There is no way of predicting or forecasting the timing or amounts of future lease termination fees. Interest income is recognized as it is earned. Gains or losses on disposition of properties are recorded when the criteria for recognizing such gains or losses under U.S. GAAP have been met.

Percentage rent is recognized when a specific tenant’s sales breakpoint is achieved.

Tenant Receivables

The actions taken by federal, state and local governments to mitigate the spread of COVID-19, initially by ordering closures of non-essential businesses and ordering residents to generally stay at home, and subsequent phased re-openings have resulted in many of our tenants temporarily or even permanently closing their businesses, and for some, it has impacted their ability to pay rent although this situation is rapidly improving as a large part of the country becomes vaccinated and the pandemic continues to wane.

As a result, in accordance with ASC Topic 842, we revised our collectability assumptions for many of our tenants that were most significantly impacted by COVID-19. This amount includes changes in our collectability assessments for certain tenants in our portfolio from probable to not probable, which requires that revenue recognition for those tenants be converted to cash basis accounting, with previously uncollected billed rents reversed in the current period.  From the beginning of the COVID-19 pandemic through the end of our second quarter of fiscal 2021, we converted 89 tenants to cash basis accounting in accordance with ASC Topic 842.  We did not convert any additional tenants to cash basis accounting in the three months ended July 31, 2021.  In addition, when one of the Company’s tenants is converted to cash basis accounting in accordance with ASC Topic 842, all previously recorded straight-line rent receivables need to be reversed in the period that the tenant is converted to cash basis revenue recognition.

During the nine months ended July 31, 2021 and 2020, we recognized collectability adjustments totaling $4.5 million and $6.2 million, respectively.  During the three months ended July 31, 2020, we recognized collectability adjustment totaling $4.3 million.  We did not have any reductions of lease income for collectability adjustments in the three months ended July 31, 2021 as the amount of collections received from tenants for previously reserved rents and tenants accounted for on a cash basis in accordance with ASC Topic 842, equaled or exceeded any new reserves for uncollectable receivables or the quarterly billings for tenants accounted for on a cash basis.  In addition, as a result of not converting any tenants to cash basis accounting in the three months ended July 31, 2021, we did not have any write-offs of previously recorded straight-line rent in the three months ended July 31, 2021 related to those tenants. As of July 31, 2021, the revenue from approximately 10.3% of our tenants (based on total commercial leases) is being recognized on a cash basis.
 
At July 31, 2021 and October 31, 2020, $19,327,000 and $22,330,000, respectively, have been recognized as straight-line rents receivable (representing the current cumulative rents recognized prior to when billed and collectable as provided by the terms of the leases), all of which is included in tenant receivables in the accompanying consolidated financial statements.

The Company provides an allowance for doubtful accounts against the portion of tenant receivables that is estimated to be uncollectable. Such allowances are reviewed periodically. At July 31, 2021 and October 31, 2020, tenant receivables in the accompanying consolidated balance sheets are shown net of allowances for doubtful accounts of $7,706,000 and $8,769,000, respectively. Included in the aforementioned allowance for doubtful accounts is an amount for future tenant credit losses of approximately 10% of the deferred straight-line rents receivable which is estimated to be uncollectable.
9


Earnings Per Share
The Company calculates basic and diluted earnings per share in accordance with the provisions of ASC Topic 260, “Earnings Per Share.” Basic earnings per share (“EPS”) excludes the impact of dilutive shares and is computed by dividing net income applicable to Common and Class A Common stockholders by the weighted average number of Common shares and Class A Common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue Common shares or Class A Common shares were exercised or converted into Common shares or Class A Common shares and then shared in the earnings of the Company. Since the cash dividends declared on the Company’s Class A Common stock are higher than the dividends declared on the Common Stock, basic and diluted EPS have been calculated using the “two-class” method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to the weighted average of the dividends declared, outstanding shares per class and participation rights in undistributed earnings.

The following table sets forth the reconciliation between basic and diluted EPS (in thousands):

 
Nine Months Ended
July 31,
   
Three Months Ended
July 31,
 
   
2021
   
2020
   
2021
   
2020
 
Numerator
                       
Net income applicable to common stockholders – basic
 
$
6,013
   
$
2,047
   
$
4,035
   
$
342
 
Effect of dilutive securities:
                               
Restricted stock awards
   
136
     
53
     
124
     
4
 
Net income applicable to common stockholders – diluted
 
$
6,149
   
$
2,100
   
$
4,159
   
$
346
 
                                 
Denominator
                               
Denominator for basic EPS – weighted average common shares
   
9,249
     
9,144
     
9,247
     
9,145
 
Effect of dilutive securities:
                               
Restricted stock awards
   
315
     
335
     
450
     
136
 
Denominator for diluted EPS – weighted average common equivalent shares
   
9,564
     
9,479
     
9,697
     
9,281
 
                                 
Numerator
                               
Net income applicable to Class A common stockholders-basic
 
$
21,462
   
$
7,399
   
$
14,340
   
$
1,234
 
Effect of dilutive securities:
                               
Restricted stock awards
   
(136
)
   
(53
)
   
(124
)
   
(4
)
Net income applicable to Class A common stockholders – diluted
 
$
21,326
   
$
7,346
   
$
14,216
   
$
1,230
 
                                 
Denominator
                               
Denominator for basic EPS – weighted average Class A common shares
   
29,582
     
29,506
     
29,575
     
29,503
 
Effect of dilutive securities:
                               
Restricted stock awards
   
140
     
104
     
253
     
37
 
Denominator for diluted EPS – weighted average Class A common equivalent shares
   
29,722
     
29,610
     
29,828
     
29,540
 

Segment Reporting
The Company's primary business is the acquisition, ownership and management of commercial real estate, primarily neighborhood and community shopping centers, anchored by supermarkets, pharmacy/drug-stores and wholesale clubs, with a concentration in the metropolitan tri-state area of the City of New York. The Company reviews operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. The Company evaluates financial performance using property operating income, which consists of base rental income and tenant reimbursement income, less rental expenses and real estate taxes. Only one of the Company’s properties, located in Stamford, CT (“Ridgeway”), is considered significant as its revenue is in excess of 10% of the Company’s consolidated total revenues and accordingly is a reportable segment. The Company has aggregated the remainder of its properties as they share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in the same major metropolitan area, and have similar tenant mixes.

Ridgeway is located in Stamford, Connecticut and was developed in the 1950’s and redeveloped in the mid 1990’s. The property contains approximately 374,000 square feet of GLA.  It is the dominant grocery-anchored center and the largest non-mall shopping center located in the City of Stamford, Fairfield County, Connecticut.

Segment information about Ridgeway as required by ASC Topic 280 is included below:

 
Nine Months Ended
July 31,
   
Three Months Ended
July 31,
 
   
2021
   
2020
   
2021
   
2020
 
Ridgeway Revenues
   
10.5
%
   
11.2
%
   
10.6
%
   
11.1
%
All Other Property Revenues
   
89.5
%
   
88.8
%
   
89.4
%
   
88.9
%
Consolidated Revenue
   
100.0
%
   
100.0
%
   
100.0
%
   
100.0
%

 
July 31,
2021
   
October 31,
2020
 
Ridgeway Assets
   
6.3
%
   
6.4
%
All Other Property Assets
   
93.7
%
   
93.6
%
Consolidated Assets (Note 1)
   
100.0
%
   
100.0
%

Note 1 - Ridgeway did not have any significant expenditures for additions to long lived assets in the three and nine months ended July 31, 2021 or the year ended October 31, 2020.

 
July 31,
2021
   
October 31,
2020
 
Ridgeway Percent Leased
   
92
%
   
92
%

10


Ridgeway Significant Tenants (Percentage of Base Rent Billed):

 
Nine Months Ended
July 31,
   
Three Months Ended
July 31,
 
   
2021
   
2020
   
2021
   
2020
 
The Stop & Shop Supermarket Company 
   
21
%
   
21
%
   
21
%
   
25
%
Bed, Bath & Beyond
   
15
%
   
15
%
   
14
%
   
17
%
Marshall’s Inc.
   
11
%
   
12
%
   
11
%
   
17
%
All Other Tenants at Ridgeway (Note 2)
   
53
%
   
52
%
   
54
%
   
41
%
Total
   
100
%
   
100
%
   
100
%
   
100
%

Note 2 - No other tenant accounts for more than 10% of Ridgeway’s annual base rents in any of the periods presented. Percentages are calculated as a ratio of the tenants' base rent divided by total base rent of Ridgeway.


Income Statements (In Thousands):
 
Nine Months Ended
July 31, 2021
   
Three Months Ended
July 31, 2021
 
   
Ridgeway
   
All Other
Operating Segments
   
Total Consolidated
   
Ridgeway
   
All Other
Operating Segments
   
Total Consolidated
 
Revenues
 
$
10,612
   
$
90,921
   
$
101,533
   
$
3,623
   
$
30,707
   
$
34,330
 
Property Operating Expenses
 
$
3,380
   
$
32,138
   
$
35,518
   
$
1,079
   
$
10,214
   
$
11,293
 
Interest Expense
 
$
1,224
   
$
8,838
   
$
10,062
   
$
405
   
$
2,924
   
$
3,329
 
Depreciation and Amortization
 
$
1,718
   
$
20,055
   
$
21,773
   
$
546
   
$
6,517
   
$
7,063
 
Net Income
 
$
4,290
   
$
36,147
   
$
40,437
   
$
1,593
   
$
21,082
   
$
22,675
 

Income Statements (In Thousands):
 
Nine Months Ended
July 31, 2020
   
Three Months Ended
July 31, 2020
 
   
Ridgeway
   
All Other
Operating Segments
   
Total Consolidated
   
Ridgeway
   
All Other
Operating Segments
   
Total Consolidated
 
Revenues
 
$
10,580
   
$
83,847
   
$
94,427
   
$
3,195
   
$
25,604
   
$
28,799
 
Property Operating Expenses
 
$
3,281
   
$
29,419
   
$
32,700
   
$
1,063
   
$
9,189
   
$
10,252
 
Interest Expense
 
$
1,256
   
$
8,867
   
$
10,123
   
$
415
   
$
3,060
   
$
3,475
 
Depreciation and Amortization
 
$
1,911
   
$
19,676
   
$
21,587
   
$
714
   
$
6,590
   
$
7,304
 
Net Income
 
$
4,132
   
$
18,552
   
$
22,684
   
$
1,003
   
$
4,920
   
$
5,923
 

11

Stock-Based Compensation
The Company accounts for its stock-based compensation plans under the provisions of ASC Topic 718, “Stock Compensation”, which requires that compensation expense be recognized, based on the fair value of the stock awards less estimated forfeitures. The fair value of stock awards is equal to the fair value of the Company’s stock on the grant date.  The Company recognizes compensation expense for its stock awards by amortizing the fair value of stock awards over the requisite service periods of such awards.  In certain cases as defined in the participant agreements, the vesting of stock awards can be accelerated, which will result in the Company charging to compensation expense the remaining unamortized restricted stock compensation related to those stock awards.

Reclassifications
Certain prior period amounts have been reclassified to conform to the current period’s presentation.

New Accounting Standards
In March 2020, the FASB issued ASU No. 2020-04 “Reference Rate Reform (Topic 848).” ASU No. 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the three months ended April 30, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

The Company has evaluated all other new ASUs issued by FASB, and has concluded that these updates do not have a material effect on the Company's consolidated financial statements as of July 31, 2021.



12
(2) UNSECURED REVOLVING CREDIT FACILITY

Until it was terminated on March 30, 2021, the Company had a $100 million unsecured revolving credit facility with a syndicate of three banks led by The Bank of New York Mellon, as administrative agent.  The syndicate also included Wells Fargo Bank N.A and Bank of Montreal (co-syndication agents).  The Facility gave the Company the option, under certain conditions, to increase the Facility's borrowing capacity up $150 million (subject to lender approval).  The maturity date of the Facility was August 23, 2021. 

On March 30, 2021, the Company refinanced its existing Facility with a syndicate of three banks led by The Bank of New York Mellon, as administrative agent.  The syndicate also included Wells Fargo Bank N.A. and Bank of Montreal (co-syndication agents), increasing the capacity to $125 million from $100 million, with the ability under certain conditions to additionally increase the capacity to $175 million (subject to lender approval).  The maturity date of the new Facility is March 29, 2024, with a one year extension at the Company's option.  Borrowings under the Facility can be used for general corporate purposes and the issuance of letters of credit (up to $10 million).  Borrowings will bear interest at the Company's option of the Eurodollar rate plus 1.45% to 2.20% or The Bank of New York Mellon's prime lending rate plus 0.45% to 1.20% based on consolidated total indebtedness, as defined.  The Company pays a quarterly commitment fee on the unused commitment amount of 0.15% to 0.25% based on outstanding borrowings during the year. The Company's ability to borrow under the Facility is subject to its compliance with the covenants and other restrictions on an ongoing basis.  The principal financial covenants limit the Company's level of secured and unsecured indebtedness, including preferred stock, and additionally requires the Company to maintain certain debt coverage ratios. The Company was in compliance with such covenants at July 31, 2021. The Facility includes market standard provisions for determining the benchmark replacement rate for LIBOR.

During the nine months ended July 31, 2021, the Company repaid $30.0 million on its Facility with available cash and proceeds from the sale of an investment property (see note 1).

13

(3) CONSOLIDATED JOINT VENTURES AND REDEEMABLE NONCONTROLLING INTERESTS

The Company has an investment in five joint ventures, UB Orangeburg, LLC ("Orangeburg"), McLean Plaza Associates, LLC ("McLean"), UB Dumont I, LLC ("Dumont") and UB New City I, LLC ("New City"), each of which owns a commercial retail property, and UB High Ridge, LLC ("High Ridge"), which owns three commercial real estate properties.  The Company has evaluated its investment in these five joint ventures and has concluded that these joint ventures are fully controlled by the Company and that the presumption of control is not offset by any rights of any of the limited partners or non-controlling members in these ventures and that the joint ventures should be consolidated into the consolidated financial statements of the Company in accordance with ASC Topic 810 "Consolidation".  The Company’s investment in these consolidated joint ventures is more fully described below:

Orangeburg

The Company, through a wholly-owned subsidiary, is the managing member and owns a 43.8% interest in Orangeburg, which owns a CVS-anchored shopping center. The other member (non-managing) of Orangeburg is the prior owner of the contributed property who, in exchange for contributing the net assets of the property, received units of Orangeburg equal to the value of the contributed property less the value of the assigned first mortgage payable. The Orangeburg operating agreement provides for the non-managing member to receive a quarterly cash distribution equal to the regular quarterly cash distribution declared by the Company for one share of the Company’s Class A Common stock, which amount is attributable to each unit of Orangeburg ownership. The quarterly cash distribution is paid from available cash, as defined, of Orangeburg. The balance of available cash, if any, is fully distributable to the Company. Upon liquidation, proceeds from the sale of Orangeburg assets are to be distributed in accordance with the operating agreement. The non-managing member is not obligated to make any additional capital contributions to the partnership. Orangeburg has a defined termination date of December 31, 2097.  Since acquiring its initial interest in Orangeburg, the Company has made additional investments in the amount of $6.8 million in Orangeburg, and as a result, as of July 31, 2021 the Company's ownership percentage has increased to 43.8% from approximately 2.92% at inception.

McLean

The Company, through a wholly-owned subsidiary, is the managing member and owns a 53% interest in McLean, which owns an Acme grocery-anchored shopping center. The McLean operating agreement provides for the non-managing members to receive a fixed annual cash distribution equal to 5.05% of their invested capital.  The annual cash distribution is paid from available cash, as defined, of McLean. The balance of available cash, if any, is fully distributable to the Company. Upon liquidation, proceeds from the sale of McLean assets are to be distributed in accordance with the operating agreement. The non-managing members are not obligated to make any additional capital contributions to the entity.

High Ridge

The Company is the managing member and owns a 23.7% interest in High Ridge.  The Company's initial investment was $5.5 million, and the Company has purchased additional interests from non-managing members totaling $7.8 million and has contributed $1.5 million in additional equity to the venture through July 31, 2021.  High Ridge, either directly or through a wholly-owned subsidiary, owns three commercial real estate properties, High Ridge Shopping Center, a grocery-anchored shopping center ("High Ridge Center"), and two single tenant commercial retail properties, one leased to JP Morgan Chase and one leased to CVS.  Two properties are located in Stamford, CT and one property is located in Greenwich, CT.  High Ridge Center is a shopping center anchored by a Trader Joe's grocery store.  The properties were contributed to the new entities by the former owners who received units of ownership of High Ridge equal to the value of properties contributed less liabilities assumed.  The High Ridge operating agreement provides for the non-managing members to receive an annual cash distribution, currently equal to 4.72% of their invested capital.

Dumont

The Company is the managing member and owns a 36.4% interest in Dumont.  The Company's initial investment was $3.9 million, and the Company has purchased additional interests totaling $630,000 through July 31, 2021.  Dumont owns a retail and residential real estate property, which retail portion is anchored by a Stop & Shop grocery store.  The property is located in Dumont, NJ.  The property was contributed to the new entity by the former owners who received units of ownership of Dumont equal to the value of contributed property less liabilities assumed.   The Dumont operating agreement provides for the non-managing members to receive an annual cash distribution, currently equal to 5.0% of their invested capital.

New City

The Company is the managing member and owns an 84.3% equity interest in New City.  The Company's initial investment was $2.4 million, and the Company has purchased additional interests totaling $289,300 through July 31, 2021.  New City owns a single tenant retail real estate property located in New City, NY, which is leased to a savings bank.  In addition, New City rents certain parking spaces on the property to the owner of an adjacent grocery-anchored shopping center.  The property was contributed to the new entity by the former owners who received units of ownership of New City equal to the value of contributed property. The New City operating agreement provides for the non-managing member to receive an annual cash distribution, currently equal to 5.00% of his invested capital.

Noncontrolling Interests

The Company accounts for noncontrolling interests in accordance with ASC Topic 810, “Consolidation.” Because the limited partners or noncontrolling members in Orangeburg, McLean, High Ridge, Dumont and New City have the right to require the Company to redeem all or a part of their limited partnership or limited liability company units for cash, or at the option of the Company, shares of its Class A Common stock at prices as defined in the governing agreements, the Company reports the noncontrolling interests in the consolidated joint ventures in the mezzanine section, outside of permanent equity, of the consolidated balance sheets at redemption value which approximates fair value. The value of the Orangeburg, McLean, and a portion of the High Ridge and Dumont redemptions are based solely on the price of the Company’s Class A Common stock on the date of redemption.   For the nine months ended July 31, 2021 and 2020, the Company increased/(decreased) the carrying value of the noncontrolling interests by $9.9 million and $(14.2) million, respectively, with the corresponding adjustment recorded in stockholders’ equity.

The following table sets forth the details of the Company's redeemable non-controlling interests for the nine months ended July 31, 2021 and the fiscal year ended October 31, 2020 (amounts in thousands):

 
July 31, 2021
   
October 31, 2020
 
Beginning Balance
 
$
62,071
   
$
77,876
 
Change in Redemption Value
   
9,891
     
(15,047
)
Partial Redemption of High Ridge Noncontrolling Interest
   
(4,566
)
   
(560
)
Partial Redemption of New City Noncontrolling Interest
   
-
     
(198
)
                 
Ending Balance
 
$
67,396
   
$
62,071
 

14

(4) INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES

At July 31, 2021 and October 31, 2020 investments in and advances to unconsolidated joint ventures consisted of the following (with the Company’s ownership percentage in parentheses) (amounts in thousands):

 
July 31, 2021
   
October 31, 2020
 
Chestnut Ridge Shopping Center (50%)
 
$
12,410
   
$
12,252
 
Gateway Plaza (50%)
   
6,711
     
6,929
 
Putnam Plaza Shopping Center (66.67%)
   
2,879
     
2,599
 
Midway Shopping Center, L.P. (11.79%)
   
4,070
     
4,233
 
Applebee's at Riverhead (50%)
   
2,014
     
1,943
 
81 Pondfield Road Company (20%)
   
723
     
723
 
Total
 
$
28,807
   
$
28,679
 

Chestnut Ridge Shopping Center

The Company, through a wholly-owned subsidiary, owns a 50% undivided tenancy-in-common interest in the 76,000 square foot Chestnut Ridge Shopping Center located in Montvale, New Jersey (“Chestnut”), which is anchored by a Fresh Market grocery store.

Gateway Plaza and Applebee's at Riverhead

The Company, through two wholly-owned subsidiaries, owns a 50% undivided tenancy-in-common interest in the Gateway Plaza Shopping Center ("Gateway") and Applebee's at Riverhead ("Applebee's").  Both properties are located in Riverhead, New York. Gateway, a 198,500 square foot shopping center, is anchored by a 168,000 square foot Walmart, which also has 27,000 square feet of in-line space that is leased and a 3,500 square foot outparcel that is leased.  Applebee's has a 5,400 square foot free-standing Applebee’s restaurant and a 7,200 square foot pad site that is leased.

Gateway is subject to an $11.3 million non-recourse first mortgage.  The mortgage matures on March 1, 2024 and requires payments of principal and interest at a fixed rate of interest of 4.2% per annum.

Midway Shopping Center, L.P.

The Company, through a wholly-owned subsidiary, owns an 11.79% equity interest in Midway Shopping Center L.P. (“Midway”), which owns a 247,000 square foot ShopRite-anchored shopping center in Westchester County, New York. Although the Company only has an approximate 12% equity interest in Midway, it controls 25% of the voting power of Midway and as such, has determined that it exercises significant influence over the financial and operating decisions of Midway and accounts for its investment in Midway under the equity method of accounting.

The Company has allocated the $7.4 million excess of the carrying amount of its investment in and advances to Midway over the Company’s share of Midway’s net book value to real property and is amortizing the difference over the property’s estimated useful life of 39 years.

Midway is subject to a non-recourse first mortgage in the amount of $25.0 million.  The loan requires payments of principal and interest at the rate of 4.80% per annum and will mature in 2027.

Putnam Plaza Shopping Center

The Company, through a wholly-owned subsidiary, owns a 66.67% (noncontrolling) undivided tenancy-in-common interest in the 189,000 square foot Tops-anchored Putnam Plaza Shopping Center (“Putnam Plaza”) located in Carmel, New York.

Putnam Plaza is subject to a non-recourse first mortgage payable in the amount of $18.1 million.  The mortgage requires monthly payments of principal and interest at a fixed rate of 4.81% and will mature in 2028.

81 Pondfield Road Company

The Company’s other investment in an unconsolidated joint venture is a 20% interest in a retail and office building in Westchester County, New York.

Equity Method of Accounting

The Company accounts for the above investments under the equity method of accounting since it exercises significant influence, but does not control the joint ventures.  The other venturers in the joint ventures have substantial participation rights in the financial decisions and operation of the ventures or properties, which preclude the Company from consolidating the investments. The Company has evaluated its investment in the joint ventures and has concluded that the joint ventures are not VIE's. Under the equity method of accounting, the initial investment is recorded at cost as an investment in unconsolidated joint venture, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions from the venture. Any difference between the carrying amount of the investment on the Company’s balance sheet and the underlying equity in net assets of the venture is evaluated for impairment at each reporting period.
15


(5) LEASES

Lessor Accounting

The Company's Lease income is comprised of both fixed and variable income, as follows:

Fixed lease income includes stated amounts per the lease contract, which are primarily related to base rent. Income for these amounts is recognized on a straight-line basis.

Variable lease income includes recoveries from tenants, which represents amounts that tenants are contractually obligated to reimburse the Company for the tenants’ portion of Recoverable Costs.  Generally, the Company’s leases provide for the tenants to reimburse the Company for Recoverable Costs based on the tenants’ share of the actual costs incurred in proportion to the tenants’ share of leased space in the property.

The following table provides a disaggregation of lease income recognized during the nine and three months ended July 31, 2021 and 2020, under ASC Topic 842, Leases, as either fixed or variable lease income based on the criteria specified in ASC Topic 842 (In thousands):

 
Nine Months Ended
July 31,
   
Three Months Ended
July 31,
 
   
2021
   
2020
   
2021
   
2020
 
Operating lease income:
                       
Fixed lease income (Base Rent)
 
$
74,347
   
$
74,490
   
$
24,624
   
$
23,957
 
Variable lease income (Recoverable Costs)
   
27,043
     
21,166
     
8,251
     
7,056
 
Other lease related income, net:
                               
Above/below market rent amortization
   
455
     
523
     
166
     
173
 
Uncollectible amounts in lease income
   
(1,379
)
   
(3,490
)
   
-
     
(1,645
)
ASC Topic 842 cash basis lease income reversal
   
(3,137
)
   
(2,686
)
   
10
     
(2,686
)
                                 
Total lease income
 
$
97,329
   
$
90,003
   
$
33,051
   
$
26,855
 

Future minimum rents under non-cancelable operating leases for the next five years and thereafter, excluding variable lease payments, are as follows (In thousands):

Fiscal Year Ending
     
2021 (a)
 
$
23,844
 
2022
   
88,229
 
2023
   
72,750
 
2024
   
62,110
 
2025
   
51,475
 
Thereafter
   
227,438
 
Total
 
$
525,846
 

(a) The future minimum rental income for fiscal 2021 includes amounts due between August 1, 2021 through October 31, 2021.

(b) The amounts above are based on existing leases in place at July 31, 2021.


16

(6)  STOCKHOLDERS’ EQUITY

Authorized Stock
The Company's Charter authorizes 200,000,000 shares of stock.  The total number of shares of authorized stock consists of 100,000,000 shares of Class A Common Stock, 30,000,000 shares of Common Stock, 50,000,000 shares of Preferred Stock, and 20,000,000 shares of Excess Stock.

Restricted Stock Plan
The Company has a Restricted Stock Plan, as amended (the "Plan") that provides a form of equity compensation for employees of the Company.  The Plan, which is administered by the Company's compensation committee, authorizes grants of up to an aggregate of 5,500,000 shares of the Company’s common equity consisting of 350,000 Common shares, 350,000 Class A Common shares and 4,800,000 shares, which at the discretion of the compensation committee, may be awarded in any combination of Class A Common shares or Common shares.

During the nine months ended July 31, 2021, the Company awarded 105,850 shares of Common Stock and 125,800 shares of Class A Common Stock to participants in the Plan.  The grant date fair value of restricted stock grants awarded to participants in 2021 was approximately $3.0 million.

A summary of the status of the Company’s non-vested Common and Class A Common shares as of July 31, 2021, and changes during the nine months ended July 31, 2021 is presented below:

 
Common Shares
   
Class A Common Shares
 
Non-vested Shares
 
Shares
   
Weighted-Average
Grant-Date
Fair Value
   
Shares
   
Weighted-Average
Grant-Date
Fair Value
 
Non-vested at October 31, 2020
   
924,550
   
$
17.69
     
490,950
   
$
21.56
 
Granted
   
105,850
   
$
11.68
     
125,800
   
$
13.75
 
Vested
   
(102,600
)
 
$
17.06
     
(93,800
)
 
$
19.17
 
Forfeited
   
-
   
$
-
     
(400
)
 
$
18.85
 
Non-vested at July 31, 2021
   
927,800
   
$
17.08
     
522,550
   
$
20.11
 

As of July 31, 2021, there was $12.7 million of unamortized restricted stock compensation related to non-vested restricted stock grants awarded under the Plan.  The remaining unamortized expense is expected to be recognized over a weighted average period of 4.7 years. For the nine months ended July 31, 2021 and 2020 amounts charged to compensation expense totaled $2,950,000 and $4,518,000, respectively.  For the three months ended July 31, 2021 and 2020, amounts charged to compensation expense totaled $1,001,000 and $1,003,000, respectively. The nine months ended July 31, 2020 amount charged to compensation expense include $1.4 million related to the accelerated vesting of previously unamortized restricted stock compensation as the result of the death of our Chairman Emeritus, Charles J. Urstadt, in March 2020.

Share Repurchase Program
The Board of Directors of the Company has approved a share repurchase program (“Current Repurchase Program”) for the repurchase of up to 2,000,000 shares, in the aggregate, of Common stock and Class A Common stock in open market transactions.

For the three months ended July 31, 2021, the Company repurchased 20,294 shares of Class A Common Stock at an average price per Class A Common share of $19.00 and 20,294 shares of Common Stock at an average price per Common Share of $16.29. The Company has repurchased 215,707 shares of Class A Common Stock and 20,294 shares of Common Stock under the Current Repurchase Program.  From the inception of all repurchase programs, the Company has repurchased 940,285 shares of Class A Common Stock and 24,894 shares of Common Stock.

Preferred Stock
The 6.25% Series H Senior Cumulative Preferred Stock ("Series H Preferred Stock") is non-voting, has no stated maturity and is redeemable for cash at $25.00 per share at the Company's option on or after September 18, 2022. The holders of our Series H Preferred Stock have general preference rights with respect to liquidation and quarterly distributions. Except under certain conditions, holders of the Series H Preferred Stock will not be entitled to vote on most matters. In the event of a cumulative arrearage equal to six quarterly dividends, holders of Series H Preferred Stock, together with all of the Company's other series of preferred stock (voting as a single class without regard to series) will have the right to elect two additional members to serve on the Company's Board of Directors until the arrearage has been cured. Upon the occurrence of a Change of Control, as defined in the Company's Articles of Incorporation, the holders of the Series H Preferred Stock will have the right to convert all or part of the shares of Series H Preferred Stock held by such holders on the applicable conversion date into a number of the Company's shares of Class A common stock. Underwriting commissions and costs incurred in connection with the sale of the Series H Preferred Stock are reflected as a reduction of additional paid in capital.

The 5.875% Series K Senior Cumulative Preferred Stock ("Series K Preferred Stock") is non-voting, has no stated maturity and is redeemable for cash at $25.00 per share at the Company's option on or after October 1, 2024. The holders of our Series K Preferred Stock have general preference rights with respect to liquidation and quarterly distributions. Except under certain conditions, holders of the Series K Preferred Stock will not be entitled to vote on most matters. In the event of a cumulative arrearage equal to six quarterly dividends, holders of Series K Preferred Stock, together with all of the Company's other series of preferred stock (voting as a single class without regard to series) will have the right to elect two additional members to serve on the Company's Board of Directors until the arrearage has been cured. Upon the occurrence of a Change of Control, as defined in the Company's Articles of Incorporation, the holders of the Series K Preferred Stock will have the right to convert all or part of the shares of Series K Preferred Stock held by such holders on the applicable conversion date into a number of the Company's shares of Class A common stock. Underwriting commissions and costs incurred in connection with the sale of the Series K Preferred Stock are reflected as a reduction of additional paid in capital.

On November 1, 2019, we redeemed all of the outstanding shares of our Series G Cumulative Preferred Stock for $25.00 per share with proceeds from our sale of our Series K Cumulative Preferred Stock in October 2019.  The total redemption amount was $75 million.

17

(7) FAIR VALUE MEASUREMENTS

ASC Topic 820, “Fair Value Measurements and Disclosures” defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants.

ASC Topic 820’s valuation techniques are based on observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair value hierarchy:

•
Level 1- Quoted prices for identical instruments in active markets
•
Level 2- Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in

markets that are not active; and model-derived valuations in which significant value drivers are observable
•
Level 3- Valuations derived from valuation techniques in which significant value drivers are unobservable

The Company calculates the fair value of the redeemable noncontrolling interests based on either quoted market prices on national exchanges for those interests based on the Company's Class A Common stock (level 1), contractual redemption prices per share as stated in governing agreements (level 2) or unobservable inputs considering the assumptions that market participants would make in pricing the obligations (level 3). The level 3 inputs used include an estimate of the fair value of the cash flow generated by the limited partnership or limited liability company in which the investor owns the joint venture units capitalized at prevailing market rates for properties with similar characteristics or located in similar areas.

The fair values of interest rate swaps are determined using widely accepted valuation techniques, including discounted cash flow analysis, on the expected cash flows of each derivative. The analysis reflects the contractual terms of the swaps, including the period to maturity, and uses observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded, as of October 31, 2020 and July 31, 2021, that the fair value associated with the “significant unobservable inputs” relating to the Company’s risk of non-performance was insignificant to the overall fair value of the interest rate swap agreements and, as a result, the Company has determined that the relevant inputs for purposes of calculating the fair value of the interest rate swap agreements, in their entirety, were based upon “significant other observable inputs”.

The Company measures its redeemable noncontrolling interests and interest rate swap derivatives at fair value on a recurring basis. The fair value of these financial assets and liabilities was determined using the following inputs (amount in thousands):

       
Fair Value Measurements at Reporting Date Using
 
   
Total
   
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
   
Significant Other
Observable Inputs
(Level 2)
   
Significant
Unobservable Inputs
(Level 3)
 
July 31, 2021
                       
                         
Liabilities:
                       
Interest Rate Swap Agreement
 
$
9,713
   
$
-
   
$
9,713
   
$
-
 
Redeemable noncontrolling interests
 
$
67,396
   
$
19,724
   
$
47,126
   
$
546
 
                                 
October 31, 2020
                               
                                 
Liabilities:
                               
Interest Rate Swap Agreement
 
$
13,300
   
$
-
   
$
13,300
   
$
-
 
Redeemable noncontrolling interests
 
$
62,071
   
$
9,921
   
$
51,604
   
$
546
 


18

(8) COMMITMENTS AND CONTINGENCIES

In the normal course of business, from time to time, the Company is involved in legal actions relating to the ownership and operations of its properties.  In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company.  At July 31, 2021, the Company had commitments of approximately $2.7 million for capital improvements to its properties and tenant-related obligations.

(9) SUBSEQUENT EVENTS

On September 2, 2021, the Board of Directors of the Company declared cash dividends of $0.207 for each share of Common Stock and $0.23 for each share of Class A Common Stock.  The dividends are payable on October 15, 2021 to stockholders of record on October 1, 2021.
19

2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements of the company and the notes thereto included elsewhere in this report.

Forward Looking Statements:

This Quarterly Report on Form 10-Q of Urstadt Biddle Properties Inc. (the "Company") contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.  Such statements can generally be identified by such words as “anticipate”, “believe”, “can”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “seek”, “should”, “will” or variations of such words or other similar expressions and the negatives of such words.  All statements included in this report that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including such matters as future capital expenditures, dividends and acquisitions (including the amount and nature thereof), business strategies, expansion and growth of our operations and other such matters, are forward-looking statements.  These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate.  Such statements are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated.  Future events and actual results, performance or achievements, financial and otherwise, may differ materially from the results, performance or achievements expressed or implied by the forward-looking statements.  We caution not to place undue reliance upon any forward-looking statements, which speak only as of the date made. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.

Important factors that we think could cause our actual results to differ materially from expected results are summarized below. One of the most significant factors, however, is the ongoing impact of the current outbreak of the novel coronavirus ("COVID-19") on the U.S., regional and global economies, the U.S. retail market and the broader financial markets. The current outbreak of COVID-19 has also impacted, and is likely to continue to impact, directly or indirectly, many of the other important factors listed below.

New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. In particular, it is difficult to fully assess the impact of COVID-19 at this time due to, among other factors, uncertainty regarding the severity and duration of the outbreak domestically and internationally, uncertainty regarding the effectiveness of federal, state and local governments’ efforts to contain the spread of COVID-19 and respond to its direct and indirect impact on the U.S. economy and economic activity, and the uncertainty regarding medical responses to the pandemic. There is reason to believe that the success of vaccination efforts in the U.S. is mitigating the impact of COVID-19 amongst vaccinated persons, which is having a positive impact on businesses, as federal, state and local restrictions are lifted and individuals begin returning to pre-pandemic activities. The pandemic is still ongoing, however, with existing and new variants making the situation difficult to predict.

Important factors, among others, that may affect our actual results include:

•
negative impacts from the continued spread of COVID-19 or from the emergence of a new strain of novel corona virus, including on the U.S. or global economy or on our business, financial position or results of operations;

•
economic and other market conditions, including real estate and market conditions, that could impact us, our properties or the financial stability of our tenants;

•
consumer spending and confidence trends, as well as our ability to anticipate changes in consumer buying practices and the space needs of tenants;

•
our relationships with our tenants and their financial condition and liquidity;

•
any difficulties in renewing leases, filling vacancies or negotiating improved lease terms;

•
the inability of our properties to generate increased, or even sufficient, revenues to offset expenses, including amounts we are required to pay to municipalities for real estate taxes, payments for common area maintenance expenses at our properties and salaries for our management team and other employees;

•
the market value of our assets and the supply of, and demand for, retail real estate in which we invest;

•
risks of real estate acquisitions and dispositions, including our ability to identify and acquire retail real estate that meet our investment standards in our markets, as well as the potential failure of transactions to close;

•
risks of operating properties through joint ventures that we do not fully control;

•
financing risks, such as the inability to obtain debt or equity financing on favorable terms or the inability to comply with various financial covenants included in our Unsecured Revolving Credit Facility (the "Facility") or other debt instruments we currently have or may subsequently obtain, as well as the level and volatility of interest rates, which could impact the market price of our common stock and the cost of our borrowings;

•
environmental risk and regulatory requirements;

•
risks related to our status as a real estate investment trust, including the application of complex federal income tax regulations that are subject to change;

•
legislative and regulatory changes generally that may impact us or our tenants; and

•
other risks identified in our Annual Report on Form 10-K under Item 1A. Risk Factors for the fiscal year ended October 31, 2020 and in the other reports filed by the Company with the Securities and Exchange Commission (the “SEC”).
20

Executive Summary

Overview

We are a fully integrated, self-administered real estate company that has elected to be a Real Estate Investment Trust ("REIT") for federal income tax purposes, engaged in the acquisition, ownership and management of commercial real estate, primarily neighborhood and community shopping centers, anchored by supermarkets, pharmacy/drug-stores and wholesale clubs, with a concentration in the metropolitan tri-state area outside of the City of New York. Other real estate assets include office properties, two self-storage facilities, single tenant retail or restaurant properties and office/retail mixed-use properties.  Our major tenants include supermarket chains and other retailers who sell basic necessities.

At July 31, 2021, we owned or had equity interests in 79 properties, which include equity interests we own in five consolidated joint ventures and six unconsolidated joint ventures, containing a total of 5.1 million square feet of Gross Leasable Area (“GLA”).    Of the properties owned by wholly-owned subsidiaries or joint venture entities that we consolidate, approximately 91.2% of the GLA was leased (90.4% at October 31, 2020).  Of the properties owned by unconsolidated joint ventures, approximately 94.2% of the GLA was leased (91.1% at October 31, 2020).  In addition, we own and operate self-storage facilities at two of our retail properties.  Both self-storage facilities are managed for us by Extra Space Storage, a publicly traded REIT.  One of the self-storage facilities is located in the back of our Yorktown Heights, NY shopping center in below grade space.  As of July 31, 2021, the self-storage facility had 57,414 of available GLA, which was 99.9% leased.  The rent per available square foot was $27.65.  As discussed later in this Item 2, we have also developed a second self-storage facility located in Stratford, CT with 131,000 square feet of available GLA.  The facility has been operational for approximately 6 months and is 49.3% leased.

In addition to our business of owning and managing real estate, we are also involved in the beer, wine and spirits retail business, through our ownership of six subsidiary corporations formed as taxable REIT subsidiaries.  Each subsidiary corporation owns and operates a beer, wine and spirits retail store at one of our shopping centers.  To manage our operations, we have engaged an experienced third-party, retail beer, wine and spirits manager, which also owns many stores of its own.  Each of these stores occupies space at one of our shopping centers, fulfilling a strategic need for a beer, wine and spirits business at such shopping center.  These five stores are not currently providing material earnings in excess of what the Company would have earned from leasing the space to unrelated tenants at market rents.  However, these businesses are continuing to mature, and net sales and earnings may eventually become material to our financial position and net income.  Nevertheless, our primary business remains the ownership and management of real estate, and we expect that the beer, wine and spirts business will remain an ancillary aspect of our business model.  However, if the right opportunity presents itself, we may open additional beer, wine and spirits stores at other shopping centers if we determine that any such store would be a strategic fit for our overall business and the investment return analysis supports such a determination.

We have paid quarterly dividends to our stockholders continuously since our founding in 1969.

Impact of COVID-19

The following discussion is intended to provide stockholders with certain information regarding the impacts of the COVID-19 pandemic on our business and management’s efforts to respond to those impacts. Unless otherwise specified, the statistical and other information regarding our property portfolio and tenants are estimates based on information available to us as of August 20, 2021. As a result of the fluidity and uncertainty surrounding this situation, we expect that such statistical and other information will change going forward, potentially significantly, and may not be indicative of the actual impact of the COVID-19 pandemic on our business, operations, cash flows and financial condition for the remainder of fiscal 2021 and future periods.

The spread of COVID-19 has had a significant impact in fiscal 2020 and the early part of fiscal 2021 on the global economy, the U.S. economy, the economies of the local markets throughout the northeast region in which our properties are located, and the broader financial markets. Nearly every industry was impacted directly or indirectly, and the U.S. market came under severe pressure due to numerous factors, including preventive measures taken by local, state and federal authorities to alleviate the public health crisis, such as mandatory business closures, quarantines, restrictions on travel and “shelter-in-place” or “stay-at-home” orders.  During the early part of the pandemic, these containment measures, as implemented by the tri-state area of Connecticut, New York and New Jersey, generally permitted businesses designated as “essential” to remain open, thereby limiting the operations of different categories of our tenants to varying degrees.  Many (but not all) of these restrictions have been gradually lifted as the COVID-19 situation in the tri-state area has significantly improved since the early days of the pandemic as a result of various factors, including a large portion of the population getting vaccinated, with most businesses now permitted to open at full or close to full capacity, but under other limitations intended to control the spread of COVID-19. We have seen substantial improvement in foot traffic, retail activity and general business conditions for our tenants compared to the early days of the COVID-19 pandemic.   The pandemic is still ongoing, however, with existing and new variants making the situation difficult to predict.

Not all tenants have been impacted in the same way or to the same degree by the pandemic and the measures adopted to control the spread of COVID-19.   For example, grocery stores, pharmacies and wholesale clubs have been permitted to remain fully open throughout the pandemic and have generally performed well given their focus on food and necessities.  Many restaurants have also been considered essential, although social distancing and group gathering limitations, have until recently, prevented or limited dine-in activity, forcing tenants to evaluate alternate means of operations, such as outdoor dining, delivery and pick-up.  The large majority of our restaurant tenants are fast casual, rather than full-service restaurants.  For a number of our tenants that operate businesses involving high contact interactions with their customers, such as spas and salons, the negative impact of COVID-19 on their business has been more severe and the recovery more difficult.  Gyms and fitness tenants have experienced varying results, but with the increase in vaccinations are beginning to return to pre-pandemic normalcy. Dry cleaners have also suffered as a result of many workers continuing to work from home.  There is, however, reason to believe that the success of vaccination efforts in the U.S. is mitigating the impact of COVID-19 amongst vaccinated persons, and having a positive impact on businesses, as federal, state and local restrictions are lifted and individuals begin returning to pre-pandemic activities. The pandemic is still ongoing, however, with existing and new variants making the situation difficult to predict.

The following additional information reflects the impact of COVID-19 on our portfolio and tenants:

•
As of July 31, 2021, all of our 72 retail shopping centers, stand-alone restaurants and stand-alone bank branches are open and operating, with approximately 99.4% of our tenants (based on Annualized Base Rent ("ABR")) open and fully or partially operating and approximately 0.6% of our tenants currently closed.

•
As of July 31, 2021, all of our shopping centers include necessity-based tenants, with approximately 70.9% of our tenants (based on ABR) designated as “essential businesses” during the early stay-at-home period of the pandemic in the tri-state area or otherwise permitted to operate through curbside pick-up and other modified operating procedures in accordance with state guidelines.  These essential businesses are 99.8% open.

•
As of July 31, 2021, approximately 86% of our GLA is located in properties anchored by grocery stores, pharmacies or wholesale clubs, 4% of our GLA is located in outdoor retail shopping centers adjacent to regional malls and 8% of our GLA is located in outdoor neighborhood convenience retail, with the remaining 2% of our GLA consisting of six suburban office buildings located in Greenwich, Connecticut and Bronxville, New York, three retail bank branches and one childcare center.  All six suburban office buildings are open and all of the retail bank branches are open.

•
As of September 1, 2021, we have received payment of approximately 92.8%, 94.1% and 91.6% of lease income, consisting of contractual base rent (leases in place without consideration of any deferral or abatement agreements), common area maintenance reimbursement and real estate tax reimbursement billed for April 2020 through July 2021, the third quarter (May-July) of fiscal 2021 and the month of August 2021, respectively, not including the application of any security deposits.

•
Similar to other retail landlords across the United States, we received a number of requests for rent relief from tenants, with most requests received during the early days of the pandemic when stay-at-home orders were in place and many businesses were required to close. We continued to receive a smaller number of new requests even after businesses began to re-open, and in some cases, follow-on requests from tenants to which we had already provided rent relief, but these requests have tapered off. During the quarter ended July 31, 2021, we received no new requests from tenants who had not previously requested rent relief.

•
As of July 31, 2021, we have received 402 rent relief requests from the approximately 860 tenants in our consolidated portfolio. Subsequently, approximately 117 of the 402 tenants withdrew their requests for rent relief or paid their rent in full. Since the onset of COVID-19 through July 31, 2021, we have completed 284 lease modifications, consisting of base rent deferrals totaling $3.9 million or 4.1% of our ABR and rent abatements totaling $4.1 million, or 4.3% of our ABR. Included in the aforementioned amounts were the rent deferrals and abatements completed in the three months ended July 31, 2021, which amounted to 10 rent deferrals or abatements, which deferred $99,000 of base rents, or 0.1% of our ABR and abated $414,000 of base rents, or 0.4% of our ABR.

Each reporting period, we must make estimates as to the collectability of our tenants’ accounts receivable related to base rent, straight-line rent, expense reimbursements and other revenues. Management analyzes accounts receivable by considering tenant creditworthiness, current economic trends, including the impact of the COVID-19 pandemic on tenants’ businesses, and changes in tenants’ payment patterns when evaluating the adequacy of the allowance for doubtful accounts. 

As a result, in accordance with ASC Topic 842, we revised our collectability assumptions for many of our tenants that were most significantly impacted by COVID-19. This amount includes changes in our collectability assessments for certain tenants in our portfolio from probable to not probable, which requires that revenue recognition for those tenants be converted to cash basis accounting, with previously uncollected billed rents reversed in the current period.  From the beginning of the COVID-19 pandemic through the end of our second quarter of fiscal 2021, we converted 89 tenants to cash basis accounting in accordance with ASC Topic 842.  We did not convert any additional tenants to cash basis accounting in the three months ended July 31, 2021.  In addition, when one of the Company’s tenants is converted to cash basis accounting in accordance with ASC Topic 842, all previously recorded straight-line rent receivables need to be reversed in the period that the tenant is converted to cash basis revenue recognition.

During the nine months ended July 31, 2021 and 2020, we recognized collectability adjustments totaling $4.5 million and $6.2 million, respectively.  During the three months ended July 31, 2020, we recognized collectability adjustment totaling $4.3 million.  We did not have any reductions of lease income for collectability adjustments in the three months ended July 31, 2021, as the amount of collections received from tenants for previously reserved rents and tenants accounted for on a cash basis in accordance with ASC Topic 842 equaled or exceeded any new reserves for uncollectable receivables or the quarterly billings for tenants accounted for on a cash basis.  In addition, as a result of not converting any tenants to cash basis accounting in the three months ended July 31, 2021, we did not have any write-offs of previously recorded straight-line rent in the three months ended July 31, 2021 related to those tenants. As of July 31, 2021, the revenue from approximately 10.3% of our tenants (based on total commercial leases) is being recognized on a cash basis.

Each reporting period, management assesses whether there are any indicators that the value of its real estate investments may be impaired and has concluded that none of its investment properties are impaired at July 31, 2021. We will continue to monitor the economic, financial, and social conditions resulting from the COVID-19 pandemic and will assess our real estate asset portfolio for any impairment indicators as required under GAAP. If we determine that any of our real estate assets are impaired, we would be required to take impairment charges and such amounts could be material. See Footnote 1 to the Notes to the Company’s Consolidated Financial Statements for additional discussion regarding our policies on impairment charges.
21

Strategy, Challenges & Outlook

We have a conservative capital structure, which includes permanent equity sources of Common Stock, Class A Common Stock and two series of perpetual preferred stock, which are only redeemable at our option.  In addition, we have mortgage debt secured by some of our properties and a $125 million revolving credit agreement.  As mentioned earlier, we do not have any secured debt maturing until January of 2022.

Key elements of our growth strategy and operating policies are to:

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maintain our focus on community and neighborhood shopping centers, anchored principally by regional supermarkets, pharmacy chains or wholesale clubs, which we believe can provide a more stable revenue flow even during difficult economic times because of the focus on food and other types of staple goods;

•
acquire quality neighborhood and community shopping centers in the northeastern part of the United States with a concentration on properties in the metropolitan tri-state area outside of the City of New York, and unlock further value in these properties with selective enhancements to both the property and tenant mix, as well as improvements to management and leasing fundamentals, with hopes to grow our assets through acquisitions subject to the availability of acquisitions that meet our investment parameters;

•
selectively dispose of underperforming properties and re-deploy the proceeds into potentially higher performing properties that meet our acquisition criteria;

•
invest in our properties for the long-term through regular maintenance, periodic renovations and capital improvements, enhancing their attractiveness to tenants and customers (e.g. curbside pick-up), as well as increasing their value;

•
leverage opportunities to increase GLA at existing properties, through development of pad sites and reconfiguring of existing square footage, to meet the needs of existing or new tenants;

•
proactively manage our leasing strategy by aggressively marketing available GLA, renewing existing leases with strong tenants, anticipating tenant weakness when necessary by pre-leasing their spaces and replacing below-market-rent leases with increased market rents, with an eye towards securing leases that include regular or fixed contractual increases to minimum rents;

•
improve and refine the quality of our tenant mix at our shopping centers;

•
maintain strong working relationships with our tenants, particularly our anchor tenants;

•
maintain a conservative capital structure with low debt levels; and

•
control property operating and administrative costs.

We believe our strategy of focusing on community and neighborhood shopping centers, anchored principally by regional supermarkets, pharmacy chains or wholesale clubs, has been validated during the COVID-19 pandemic.  We believe the nature of our properties makes them less susceptible to economic downturns than other retail properties whose anchor tenants do not supply basic necessities.   During normal conditions, we believe that consumers generally prefer to purchase food and other staple goods and services in person, and even during the COVID-19 pandemic our supermarkets, pharmacies and wholesale clubs have been posting strong in-person sales.  Moreover, most of our grocery stores have also implemented or expanded curbside pick-up or partnered with delivery services to cater to the needs of their customers during the COVID-19 pandemic.

We recognize, however, that the pandemic may have accelerated a movement towards e-commerce that may be challenging for weaker tenants that lack an omni-channel sales or micro-fulfillment strategy.  We launched a program designating dedicated parking spots for curbside pick-up and are assisting tenants in many other ways to help them quickly adapt to these changing circumstances.  Many tenants have adapted to the new business environment through use of our curbside pick-up program and early industry data seems to indicate that micro-fulfillment from retailers with physical locations may be a new competitive alternative to e-commerce.  It is too early to know which tenants will or will not be successful in making any changes that may be necessary.  It is also too early to determine whether these changes in consumer behavior are temporary or reflect long-term changes.

Moreover, due to the disruptions that have taken place in the economy and our marketplace as a result of the COVID-19 pandemic and resulting changes to the short-term and possibly even long-term landscape for brick-and-mortar retail, we anticipate that it will be more difficult to actively pursue and achieve certain elements of our growth strategy.  For example, it could be more difficult for us to acquire or sell properties in fiscal 2021 (or possibly beyond), as it may be difficult to correctly value a property given changing circumstances. Additionally, parties may be unwilling to enter into transactions during such uncertainty. However, as the COVID-19 pandemic eases and the economy improves, some commercial properties are starting to trade in the marketplace. We may also be less willing to enter into developments or capital improvements that require large amounts of upfront capital if the expected return is perceived as delayed or uncertain.  While we believe we still maintain a conservative capital structure and low debt levels, particularly relative to our peers, our profile may evolve based on changing needs.

We have seen substantial improvement in foot traffic, retail activity and general business conditions for our tenants compared to the early days of the COVID-19 pandemic.   The pandemic is still ongoing, however, with existing and new variants making the situation difficult to predict. We expect that our rent collections will continue to be below our tenants’ contractual rent obligations during the early stages of this business recovery and potentially beyond. We will continue to accrue rental revenue during the deferral period, except for tenants for which revenue recognition was converted to cash basis accounting in accordance with ASC Topic 842. However, we anticipate that some tenants eventually will be unable to pay amounts due, and we will incur losses against our rent receivables. The extent and timing of the recognition of such losses will depend on future developments occurring after July 2021, which are highly uncertain and cannot be predicted. Rental income collections and rent relief requests to date may not be indicative of collections or requests in any future period.

We continue to have active discussions with existing and potential new tenants for new and renewed leases. With significant progress made in vaccinating the U.S. public and signs of business improvement as operating restrictions are relaxed and individuals begin returning to pre-pandemic activities, we have observed a marked increase in leasing activity, including interest from potential new tenants and tenants interested in renewing their leases. However, our tenants and other businesses are in the early stages of a potential recovery and many of them may still face an uncertain future.  Moreover, the pandemic is still ongoing, with existing and new variants making the situation difficult to predict. As a result, we may continue to experience higher than typical vacancy rates, take longer to fill vacancies and suffer potentially lower rental rates until the recovery becomes more robust.   

As a REIT, we are susceptible to changes in interest rates, the lending environment, the availability of capital markets and the general economy.  The impacts of any changes are difficult to predict, particularly during the course of the current COVID-19 pandemic.

Transaction Highlights of Fiscal 2021; Recent Developments

Set forth below are highlights of our recent property acquisitions, potential acquisitions under contract, other investments, property dispositions and financings:

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In December 2020, we redeemed 17,995 units of UB High Ridge, LLC from a noncontrolling member.  The total cash price paid for the redemption was $364,000. As a result of the redemption, our ownership percentage of High Ridge increased to 17.0% from 16.3%.

•
In March 2021, we sold one free standing restaurant retail property located in Hillsdale, NJ, as that property no longer met our investment objectives.  The property was sold for $1.3 million and we recorded a gain on sale of property in the nine months ended July 31, 2021 in the amount of $435,000.

•
In March 2021, we refinanced our Facility, increasing the borrowing capacity to $125 million and extending the maturity date to March 29, 2024 with a one-year extension at our option.  Please see note 2 in our financial statements included in Item 1 for more information.

•
In April 2021, we redeemed 178,804 units of UB High Ridge, LLC from a noncontrolling member.  The total cash price paid for the redemption was $4.2 million. As a result of the redemption, our ownership percentage of High Ridge increased to 23.7% from 17.0%.

•
In June 2021, we sold our property located in Newington, NH to an unrelated third party for a sale price of $13.4 million as that property no longer met the Company's investment objectives and recorded a gain on sale in the amount of $11.8 million on our consolidated income statements for the nine and three months ended July 31, 2021.

•
In July 2021, we repurchased 20,294 shares of our Class A Common stock at an average price of $19.00 per share and 20,294 shares of our Common stock at an average price per share of $16.29 as we believed the return on this investment was higher than the return we would get acquiring new grocery anchored shopping centers in the marketplace at that time.
22

Leasing

For the nine months ended July 31, 2021, we signed leases for a total of 560,000 square feet of retail space in our consolidated portfolio.  New leases for vacant spaces were signed for 89,000 square feet at an average rental decrease of 5.7% on a cash basis.  Renewals for 471,000 square feet of space previously occupied were signed at an average rental decrease of 1.2% on a cash basis.

For the three months ended July 31, 2021, we signed new leases for vacant space totaling 38,000 square feet at an average rental increase of 4.1% on a cash basis. For the three months ended July 31, 2021 we renewed leases totaling 97,000 square feet at average rental increases of 1.1% on a cash basis.

Tenant improvements and leasing commissions averaged $25.32 per square foot for new leases for the nine months ended July 31, 2021. We did not pay any tenant improvements and leasing commissions on renewal leases for the nine months ended July 31, 2021. The average term for new leases was 6 years and the average term for renewal leases was 3 years.

The rental increases/decreases associated with new and renewal leases generally include all leases signed in arms-length transactions reflecting market leverage between landlords and tenants during the period. The comparison between average rent for expiring leases and new leases is determined by including minimum rent paid on the expiring lease and minimum rent to be paid on the new lease in the first year. In some instances, management exercises judgment as to how to most effectively reflect the comparability of spaces reported in this calculation. The change in rental income on comparable space leases is impacted by numerous factors including current market rates, location, individual tenant creditworthiness, use of space, market conditions when the expiring lease was signed, the age of the expiring lease, capital investment made in the space and the specific lease structure. Tenant improvements include the total dollars committed for the improvement (fit-out) of a space as it relates to a specific lease but may also include base building costs (i.e. expansion, escalators or new entrances) that are required to make the space leasable.  Incentives (if applicable) include amounts paid to tenants as an inducement to sign a lease that do not represent building improvements.

The leases signed in 2021 generally become effective over the following one to two years. There is risk that some new tenants will not ultimately take possession of their space and that tenants for both new and renewal leases may not pay all of their contractual rent due to operating, financing or other reasons.

In the past, we had seen overall positive increases in rental income for renewal leases, but since the outbreak of the COVID-19 pandemic and the resulting regulatory restrictions on business operations, we have experienced average rental income decreases that exceed historic norms.  Moreover, notwithstanding the significant progress made in vaccinating the U.S. public and the early signs of business improvement as operating restrictions are relaxed and individuals begin returning to pre-pandemic activities, the long-term prospects of some of our tenants and the overall economic recovery is still uncertain.  Therefore, our average rental rates on renewal and new leases may continue to suffer.

Impact of Inflation on Leasing

Our long-term leases contain provisions to mitigate the adverse impact of inflation on our operating results. Such provisions include clauses entitling us to receive (a) scheduled base rent increases and (b) percentage rents based upon tenants’ gross sales, which could increase as prices rise. In addition, many of our non-anchor leases are for terms of less than ten years, which permits us to seek increases in rents upon renewal at then current market rates if rents provided in the expiring leases are below then existing market rates. Most of our leases require tenants to pay a share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation.

23

Critical Accounting Estimates

Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of estimation and uncertainty and are reasonably likely to have a material impact on the financial condition or results of operations of the Company and require management’s most difficult, complex or subjective judgments.  Our most significant accounting estimates are as follows:

•
Valuation of investment properties
•
Revenue recognition
•
Determining the amount of our allowance for doubtful accounts

Valuation of investment properties
At each reporting period management must assess whether the value of any of its investment properties are impaired.  The judgement of impairment is subjective and requires management to make assumptions about future cash flows of an investment property and to consider other factors.  The estimation of these factors has a direct effect on valuation of investment properties and consequently net income.  As of July 31, 2021, management does not believe that any of our investment properties are impaired based on information available to us at July 31, 2021. In the future, almost any level of impairment would be material to our net income.

Revenue Recognition
Our main source of revenue is lease income from our tenants to whom we lease space at our 79 shopping centers. The COVID-19 pandemic has caused distress for many of our tenants as some of those tenant businesses were forced to close early in the pandemic, and although most have been allowed to re-open and operate, some categories of tenants have been slower to recover.  As a result, we have many tenants who have had difficulty paying all of their contractually obligated rents and we have reached agreements with many of them to defer or abate portions of the contractual rents due under their leases with the Company.  In accordance with ASC Topic 842, where appropriate, we will continue to accrue rental revenue during the deferral period, except for tenants for which revenue recognition was converted to cash basis accounting in accordance with ASC Topic 842. However, we anticipate that some tenants eventually will be unable to pay amounts due, and we will incur losses against our rent receivables, which would reduce lease income. The extent and timing of the recognition of such losses will depend on future developments, which are highly uncertain and cannot be predicted and these future losses could be material.

Allowance for doubtful accounts
GAAP requires us to bill our tenants based on the terms in their leases and to record lease income on a straight-line basis. When a tenant does not pay a billed amount due under their lease, it becomes a tenant account receivable, or an asset of the Company.  GAAP requires that receivables, like most assets, be recorded at their realizable value.  Each reporting period we analyze our tenant accounts receivable, and based on the information available to management at the time, record an allowance for doubtful account for any unpaid tenant receivable that we believe is uncollectable.  This analysis is subjective and the conclusions reached have a direct impact on net income.  As of July 31, 2021, the portion of our billed but unpaid tenant receivables, excluding straight-line rent receivables that we believe are collectable, amounts to $1.7 million.

For a further discussion of our accounting estimates and critical accounting policies, please see Note 1 in our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q and Note 1 in our consolidated financial statements included in Item 8 of our October 31, 2020 Annual Report on Form 10-K.

24
Liquidity and Capital Resources

Overview

At July 31, 2021, we had cash and cash equivalents of $23.0 million, compared to $40.8 million at October 31, 2020. Our sources of liquidity and capital resources include operating cash flows from real estate operations, proceeds from bank borrowings and long-term mortgage debt, capital financings and sales of real estate investments.  Substantially all of our revenues are derived from rents paid under existing leases, which means that our operating cash flow depends on the ability of our tenants to make rental payments.   For the nine months ended July 31, 2021 and 2020, net cash flows from operating activities amounted to $54.5 million and $46.3 million, respectively.

Our short-term liquidity requirements consist primarily of normal recurring operating expenses and capital expenditures, debt service, management and professional fees, cash distributions to certain limited partners and non-managing members of our consolidated joint ventures, and regular dividends paid to our Common and Class A Common stockholders.  Cash dividends paid on Common and Class A Common stock for the nine months ended July 31, 2021 and 2020 totaled $20.0 million and $24.6 million, respectively.  Historically, we have met short-term liquidity requirements, which is defined as a rolling twelve month period, primarily by generating net cash from the operation of our properties.

During the first two quarters of fiscal 2021, the Board of Directors declared and the Company paid quarterly dividends that were reduced from pre-pandemic levels, as more extensively discussed under the "Impact of COVID-19" section earlier in this Item 2.  Subsequent to the end of the second quarter, the Board of Directors increased our Common and Class A Common stock dividends when compared to the reduced dividends that have been paid during the pandemic.  Future determinations regarding quarterly dividends will impact the Company's short-term liquidity requirements.

In June 2021, we sold our last non-core shopping center located in Newington, NH for a sale price of $13.4 million.

Our long-term liquidity requirements consist primarily of obligations under our long-term debt, dividends paid to our preferred stockholders, capital expenditures and capital required for acquisitions.  In addition, the limited partners and non-managing members of our five consolidated joint venture entities, McLean Plaza Associates, LLC, UB Orangeburg, LLC, UB High Ridge, LLC, UB Dumont I, LLC and UB New City I, LLC, have the right to require us to repurchase all or a portion of their limited partner or non-managing member interests at prices and on terms as set forth in the governing agreements.  See Note 3 to the consolidated financial statements included in Item 1 of this Report on Form 10-Q.  Historically, we have financed the foregoing requirements through operating cash flow, borrowings under our Facility, debt refinancings, new debt, equity offerings and other capital market transactions, and/or the disposition of under-performing assets, with a focus on keeping our debt level low.  We expect to continue doing so in the future.  We cannot assure you, however, that these sources will always be available to us when needed, or on the terms we desire.

Capital Expenditures

We invest in our existing properties and regularly make capital expenditures in the ordinary course of business to maintain our properties. We believe that such expenditures enhance the competitiveness of our properties. For the nine months ended July 31, 2021, we paid approximately $13.5 million for property improvements, tenant improvements and leasing commission costs ($5.4 million representing property improvements, $5.1 million in property improvements related to our Stratford project (see paragraph below) and approximately $3.0 million related to new tenant space improvements, leasing costs and capital improvements as a result of new tenant spaces).  The amount of these expenditures can vary significantly depending on tenant negotiations, market conditions and rental rates. We expect to incur approximately $2.7 million for anticipated capital improvements, tenant improvements/allowances and leasing costs related to new tenant leases and property improvements during the remainder of fiscal 2021 and fiscal 2022.  This amount is inclusive of commitments for the Stratford, CT development discussed directly below.  These expenditures are expected to be funded from operating cash flows, bank borrowings or other financing sources.  The above amounts do not include a potential new self-storage development at our Pompton Lakes, NJ property.  The cost for this development is still in the planning stages but the anticipated cost is estimated to be $7 million, which will be funded with available cash or borrowings on our Facility.

We are currently in the process of developing 3.4 acres of recently-acquired land adjacent to a shopping center we own in Stratford, CT.  We built one pad-site building that is leased to two retail chains and will be building another pad-site building once we receive approvals to move a cell tower to an alternate site on our property.  These two pad sites total approximately 5,200 square feet.  In addition, we built a recently opened self-storage facility of approximately 131,000 square feet, which is managed for us by a national self-storage company. The total project cost of the completed pad site and the completed self-storage facility was approximately $18.3 million (excluding land cost).  We plan on funding the development cost for the second pad site with available cash, borrowings on our Facility or other sources, as more fully described earlier in this Item 2.  The storage building is approximately 49.3% leased as of July 31, 2021.

Financing Strategy, Unsecured Revolving Credit Facility and other Financing Transactions

Our strategy is to maintain a conservative capital structure with low leverage levels by commercial real estate standards.  Mortgage notes payable and other loans of $294.0 million consist of $1.7 million in variable rate debt with an interest rate of 5.09% as of July 31, 2021 and $292.3 million in fixed-rate mortgage loans with a weighted average interest rate of 4.1% at July 31, 2021.  The mortgages are secured by 24 properties with a net book value of $511 million and have fixed rates of interest ranging from 3.4% to 4.9%.  The $1.7 million in variable rate debt is unsecured.  We may refinance our mortgage loans, at or prior to scheduled maturity, through replacement mortgage loans.  The ability to do so, however, is dependent upon various factors, including the income level of the properties, interest rates and credit conditions within the commercial real estate market. Accordingly, there can be no assurance that such re-financings can be achieved.  At July 31, 2021, we had 49 properties in our consolidated portfolio that were unencumbered by mortgages.

Included in the mortgage notes discussed above, we have eight promissory notes secured by properties we consolidate and three promissory notes secured by properties in joint ventures that we do not consolidate.  The interest rate on these 11 notes is based on some variation of the London Interbank Offered Rate (“LIBOR”) plus some amount of credit spread.  In addition, on the day these notes were executed by us, we entered into derivative interest rate swap contracts, the counterparty of which was either the lender on the aforementioned promissory notes or an affiliate of that lender.  These swap contracts are in accordance with the International Swaps and Derivatives Association, Inc ("ISDA").  These swap contracts convert the variable interest rate in the notes, which are based on LIBOR, to a fixed rate of interest for the life of each note. In July 2017, the United Kingdom regulator that regulates LIBOR announced its intention to phase out LIBOR rates by the end of 2021.  However, the ICE Benchmark Administration, in its capacity as administrator of USD LIBOR, has announced that it intends to extend publication of USD LIBOR (other than one-week and two-month tenors) by 18 months to June 2023.  Notwithstanding this possible extension, a joint statement by key regulatory authorities calls on banks to cease entering into new contracts that use USD LIBOR as a reference rate by no later than December 31, 2021.  At some point, all contracts, including our 11 promissory notes and 11 swap contracts that use LIBOR, will no longer have the reference rate available and the reference rate will need to be replaced.  We have good working relationships with all of our lenders to our notes, who are also the counterparties to our swap contracts.  All indications we have received from our lenders and counterparties is that their goal is to have the replacement reference rate under the notes match the replacement rates in the swaps.  If this were to happen, we believe there would be no material effect on our financial position or results of operations.  However, because this will be the first time any of the reference rates for our promissory notes or swap contracts will stop being published, we cannot be sure how the replacement rate event will conclude.  Until we have more clarity from our lenders and counterparties on how they plan on dealing with this replacement rate event, we cannot be certain of the impact on the Company.  See “Item 3. Quantitative and Qualitative Disclosures about Market Risk” included in this Report on Form 10-Q for additional information on our interest rate risk.

We currently maintain a ratio of total debt to total assets below 30.4% and a fixed charge coverage ratio of over 3.1 to 1 (excluding preferred stock dividends), which we believe will allow us to obtain additional secured mortgage loans or other types of borrowings, if necessary.  We own 49 properties in our consolidated portfolio that are not encumbered by secured mortgage debt.  At July 31, 2021, we had borrowing capacity of $119.2 million on our Facility (exclusive of the accordion feature discussed in the following paragraph).  Our Facility includes financial covenants that limit, among other things, our ability to incur unsecured and secured indebtedness.  See Note 2 in our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for additional information on these and other restrictions.

Until it was terminated on March 30, 2021, we had a $100 million unsecured revolving credit facility with a syndicate of three banks led by The Bank of New York Mellon, as administrative agent.  The syndicate also included Wells Fargo Bank N.A. and Bank of Montreal (co-syndication agents).  The Facility gave us the option, under certain conditions, to increase the Facility's borrowing capacity up $150 million (subject to lender approval).  The maturity date of the Facility was August 23, 2021. 

On March 30, 2021, we refinanced our existing Facility with the same syndicate of three banks led by The Bank of New York Mellon, as administrative agent, increasing the capacity to $125 million from $100 million, with the ability under certain conditions to additionally increase the capacity to $175 million (subject to lender approval).  The maturity date of the new Facility is March 29, 2024 with a one-year extension at our option.  Borrowings under the Facility can be used for general corporate purposes and the issuance of letters of credit (up to $10 million).  Borrowings will bear interest at our option of Eurodollar rate plus 1.45% to 2.20% or The Bank of New York's Prime Lending Rate plus 0.45% to 1.20% based on consolidated total indebtedness, as defined.  We pay a quarterly commitment fee on the unused commitment amount of 0.15% to 0.25% based on outstanding borrowings during the year. Our ability to borrow under the Facility is subject to our compliance with the covenants and other restrictions on an ongoing basis.  The principal financial covenants limit the level of secured and unsecured indebtedness we can incur, including preferred stock and additionally requires us to maintain certain debt coverage ratios. The Facility includes market standard provisions for determining the benchmark replacement rate for LIBOR. The Company was in compliance with such covenants at July 31, 2021.

At July 31, 2021, we had $5.0 million in borrowings outstanding on our Facility.

Net Cash Flows from:

Operating Activities

Net cash flows provided by operating activities amounted to $54.5 million for the nine months ended July 31, 2021 compared to $46.3 million in the comparable period of fiscal 2020. The net increase in operating cash flows when compared with the corresponding prior period was primarily related to an increase of lease income related to the collection of rents that were deferred in fiscal 2020 and the collection of lease income from tenants that we account for on a cash basis.

Investing Activities

Net cash flows provided for by investing activities amounted to $1.4 million for the nine months ended July 31, 2021 compared to  net cash used by investing activities of $13.6 million in the comparable period of fiscal 2020. The increase in net cash flows generated by investing activities in the nine months ended July 31, 2021 when compared to the corresponding prior period was the result of selling two properties in the first 9 months of fiscal 2021, which generated $13.0 million more in cash flow in fiscal 2021 versus fiscal 2020 and expending $3.6 million less on property improvements in the first nine months of fiscal 2021 when compared with the corresponding prior period.

We regularly make capital investments in our properties for improvements, and pursuant to our obligations for tenant improvements and leasing commissions.

Financing Activities

The $10.9 million decrease in net cash flows used by financing activities for the nine months ended July 31, 2021 when compared to the corresponding prior period was predominantly the result of the redemption of our Series G preferred stock for $75 million in the first nine months of fiscal 2020.  In addition, for the first nine months of fiscal 2021 when compared to corresponding prior period, we paid $4.6 million less in dividends on our Common and Class A Common stock in response to a loss of cash flow caused by the effects of the COVID-19 pandemic.  This decrease was offset by our borrowing $35 million on our Facility in the first six months of fiscal 2020 and repaying $30 million of those draws in the first nine months of fiscal 2021.
25
Results of Operations

The following information summarizes our results of operations for the nine months and three months ended July 31, 2021 and 2020 (amounts in thousands):

   
Nine months ended
         
Change Attributable to
 
 
 
July 31,
   
Increase
         
Property
   
Properties Held In
 
Revenues
 
2021
   
2020
   
(Decrease)
   
% Change
   
Acquisitions/Sales
   
Both Periods (Note 1)
 
Base rents
 
$
74,802
   
$
75,013
   
$
(211
)
   
(0.3
)%
 
$
(125
)
 
$
(86
)
Recoveries from tenants
   
27,043
     
21,166
     
5,877
     
27.8
%
   
(9
)
   
5,886
 
Uncollectable amounts in lease income
   
(1,379
)
   
(3,490
)
   
2,111
     
(60.5
)%
   
-
     
2,111
 
ASC Topic 842 cash basis lease income reversal (including straight-line rent)
   
(3,137
)
   
(2,686
)
   
(451
)
   
16.8
%
   
158
     
(609
)
Lease termination
   
801
     
460
     
341
     
74.1
%
   
-
     
341
 
Other income
   
3,403
     
3,964
     
(561
)
   
(14.2
)%
   
(12
)
   
(549
)
 
                                               
Operating Expenses
                                               
Property operating
   
17,733
     
15,085
     
2,648
     
17.6
%
   
181
     
2,467
 
Property taxes
   
17,785
     
17,615
     
170
     
1.0
%
   
108
     
62
 
Depreciation and amortization
   
21,773
     
21,587
     
186
     
0.9
%
   
218
     
(32
)
General and administrative
   
6,876
     
8,495
     
(1,619
)
   
(19.1
)%
   
n/a
     
n/a
 
 
                                               
Non-Operating Income/Expense
                                               
Interest expense
   
10,062
     
10,123
     
(61
)
   
(0.6
)%
   
-
     
(61
)
Interest, dividends, and other investment income
   
171
     
359
     
(188
)
   
(52.4
)%
   
n/a
     
n/a
 
 
 
   
Three Months Ended
         
Change Attributable to
 
 
 
July 31,
   
Increase
         
Property
   
Properties Held In
 
Revenues
 
2021
   
2020
   
(Decrease)
   
% Change
   
Acquisitions/Sales
   
Both Periods (Note 1)
 
Base rents
 
$
24,790
   
$
24,130
   
$
660
     
2.7
%
 
$
(99
)
 
$
759
 
Recoveries from tenants
   
8,251
     
7,056
     
1,195
     
16.9
%
   
(4
)
   
1,199
 
Uncollectible amounts in lease income
   
-
     
(1,645
)
   
1,645
     
(100.0
)%
   
-
     
1,645
 
ASC Topic 842 cash basis lease income reversal (including straight-line rent)
   
10
     
(2,686
)
   
2,696
     
(100.4
)%
   
158
     
2,538
 
Lease termination income
   
96
     
112
     
(16
)
   
(14.3
)%
   
-
     
(16
)
Other income
   
1,183
     
1,832
     
(649
)
   
(35.4
)%
   
(21
)
   
(628
)
 
                                               
Operating Expenses
                                               
Property operating
   
5,284
     
4,355
     
929
     
21.3
%
   
92
     
837
 
Property taxes
   
6,009
     
5,897
     
112
     
1.9
%
   
84
     
28
 
Depreciation and amortization
   
7,063
     
7,304
     
(241
)
   
(3.3
)%
   
81
     
(322
)
General and administrative
   
2,139
     
2,111
     
28
     
1.3
%
   
n/a
     
n/a
 
 
                                               
Non-Operating Income/Expense
                                               
Interest expense
   
3,329
     
3,475
     
(146
)
   
(4.2
)%
   
-
     
(146
)
Interest, dividends, and other investment income
   
75
     
27
     
48
     
177.8
%
   
n/a
     
n/a
 




Note 1 – Properties held in both periods includes only properties owned for the entire periods of 2021 and 2020 and for interest expense the amount also includes parent company interest expense.  All other properties are included in the property acquisition/sales column.  There are no properties excluded from the analysis.

Base rents decreased by 0.3% to $74.8 million for the nine month period ended July 31, 2021 as compared with $75.0 million in the comparable period of 2020.  Base rents increased by 2.7% to $24.8 million for the three months ended July 31, 2021 as compared with $24.1  million in the comparable period of 2020. The change in base rent and the changes in other income statement line items analyzed in the table above were attributable to:

Property Acquisitions and Properties Sold:

In the first nine months of fiscal 2020, we sold two properties totaling 18,100 square feet.  In the first nine months of fiscal 2021 we sold two properties totaling 105,800 square feet. These properties accounted for all of the revenue and expense changes attributable to property acquisitions and sales in the nine months ended July 31, 2021 when compared with fiscal 2020.

Properties Held in Both Periods:

Revenues

Base Rent
In the nine month period ended July 31, 2021, base rent for properties held in both periods was relatively unchanged when compared with the corresponding prior periods.

In the three month period ended July 31, 2021, base rent for properties held in both period increased by $759,000 when compared with the corresponding prior period as a result of new leasing completed after the third quarter of fiscal 2020 at approximately 6 properties.

In the first nine months of fiscal 2021, we leased or renewed approximately 560,000 square feet (or approximately 12.7% of total GLA).  At July 31, 2021, the Company’s consolidated properties were 91.2% leased (90.4% leased at October 31, 2020).

Tenant Recoveries
In the nine month and three month periods ended July 31, 2021, recoveries from tenants (which represent reimbursements from tenants for operating expenses and property taxes) increased by a net $5.9 million and $1.2 million, respectively, when compared with the corresponding prior period.

The increase in tenant recoveries was the result of having higher common area maintenance expenses in the nine months and three months of fiscal 2021 when compared with the corresponding prior periods related to snow removal and parking lot repairs.  In addition, we completed the 2020 annual reconciliations for both common area maintenance and real estate taxes in the first half of fiscal 2021 and those reconciliations resulted in us billing our tenants more than we had anticipated and accrued for in the prior period, which increased tenant reimbursement income in the first half of fiscal 2021.  In addition, the percentage of common area maintenance and real estate tax costs that we recover from our tenants generally increased in fiscal 2021 when compared with fiscal 2020 as the effects of the pandemic on our tenants businesses is lessening.

Uncollectable Amounts in Lease Income
In the nine month and three month periods ended July 31, 2021, uncollectable amounts in lease income decreased by $2.1 million and $1.6 million, respectively.  In the second quarter of fiscal 2020, we significantly increased our uncollectable amounts in lease income based on our assessment of the collectability of existing non-credit small shop tenants' receivables given the on-set of the COVID-19 pandemic in March 2020.  A number of non-credit small shop tenants' businesses were deemed non-essential by the states where they operate and were forced to close for a portion of the second and third quarters of fiscal 2020.  This placed stress on our small shop tenants and made it difficult for many of them to pay their rents when due.  Our assessment was that any billed but unpaid rents would likely be uncollectable. During the nine months ended July 31, 2021, many of our tenants saw early signs of business improvement as regulatory restrictions were relaxed and individuals began returning to pre-pandemic activities following significant progress made in vaccinating the U.S. public. As a result, the uncollectable amounts in lease income have been declining.

ASC Topic 842 Cash Basis Lease Income Reversals
The Company adopted ASC Topic 842 "Leases" at the beginning of fiscal 2020.  ASC Topic 842 requires amongst other things, that if the collectability of a specific tenant’s future lease payments as contracted are not probable of collection, revenue recognition for that tenant must be converted to cash-basis accounting and be limited to the lesser of the amount billed or collected from that tenant, and in addition, any straight-line rental receivables would need to be reversed in the period that the collectability assessment changed to not probable.  As a result of continuing to analyze our entire tenant base, we have determined that as a result of the COVID-19 pandemic, 89 tenants' future lease payments are no longer probable of collection (10.3% of our approximate 860 tenants). All of these tenants were converted to cash basis after our second quarter of fiscal 2020 and prior to our third quarter of fiscal 2021.  As a result of this assessment we reversed $345,000 more in straight-line rent reversals for cash basis tenants in the nine months ended July 31, 2021 when compared to the prior period.

For the three months ended July 31, 2021 we did not convert any tenants to cash basis, and as a result, we did not reverse any straight-line rent receivables, which created a $910,000 positive variance. In addition, in the three months ended July 31, 2021, we did not have any reductions of lease income for collectability adjustments for cash basis tenants as the amount of collections received from those tenants equaled or exceeded the quarterly billings for tenants accounted for on a cash basis, which created a positive variance of $1.8 million.

Expenses

Property Operating
In the nine month and three month periods ended July 31, 2021, property operating expenses increased by $2.5 million and $ 837,000, respectively, as a result of having higher common area maintenance expenses in the nine months and three months of fiscal 2021 when compared with the corresponding prior periods related to snow removal and parking lot repairs.

Property Taxes
In the nine month and three month periods ended July 31, 2021, property tax expense was relatively unchanged when compared with the corresponding prior period.

Interest
In the nine month and three month periods ended July 31, 2021, interest expense was relatively unchanged when compared with the corresponding prior period.

Depreciation and Amortization
In the nine month period ended July 31, 2021, depreciation and amortization was relatively unchanged when compared with the corresponding prior period. In the three month period ended July 31, 2021, depreciation and amortization decreased by $322,000 when compared with the corresponding prior period as a result of the write-off of tenant improvements for tenants who vacated the portfolio in fiscal 2020.

General and Administrative Expenses
In the nine month period ended July 31, 2021, general and administrative expenses decreased by $1.6 million when compared with the corresponding prior period, predominantly related to a decrease in compensation and benefits expense. The decrease was the result of accelerated vesting of restricted stock grant value upon the death of our former Chairman Emeritus in the second quarter of fiscal 2020.  General and administrative expenses was relatively unchanged for the three month period ended July 31, 2021.


26
Funds from Operations

We consider Funds from Operations (“FFO”) to be an additional measure of our operating performance.  We report FFO in addition to net income applicable to common stockholders and net cash provided by operating activities.  Management has adopted the definition suggested by The National Association of Real Estate Investment Trusts (“NAREIT”) and defines FFO to mean net income (computed in accordance with GAAP) excluding gains or losses from sales of property, plus real estate-related depreciation and amortization and after adjustments for unconsolidated joint ventures.

Management considers FFO to be a meaningful, additional measure of operating performance because it primarily excludes the assumption that the value of our real estate assets diminishes predictably over time and industry analysts have accepted it as a performance measure.  FFO is presented to assist investors in analyzing our performance.  It is helpful as it excludes various items included in net income that are not indicative of our operating performance, such as gains (or losses) from sales of property and depreciation and amortization.  However, FFO:

•
does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); and

•
should not be considered an alternative to net income as an indication of our performance.

FFO as defined by us may not be comparable to similarly titled items reported by other real estate investment trusts due to possible differences in the application of the NAREIT definition used by such REITs.  The table below provides a reconciliation of net income applicable to Common and Class A Common stockholders in accordance with GAAP to FFO for the nine months and three months ended July 31, 2021 and 2020 (amounts in thousands):

Reconciliation of Net Income Available to Common and Class A Common Stockholders To Funds From Operations:
 
Nine months ended
   
Three Months Ended
 
   
July 31,
   
July 31,
 
   
2021
   
2020
   
2021
   
2020
 
Net Income Applicable to Common and Class A Common Stockholders
 
$
$27,475
   
$
$9,446
   
$
$18,375
   
$
$1,576
 
                                 
Real property depreciation
   
17,198
     
16,994
     
5,737
     
5,658
 
Amortization of tenant improvements and allowances
   
3,312
     
3,245
     
960
     
1,170
 
Amortization of deferred leasing costs
   
1,209
     
1,279
     
363
     
451
 
Depreciation and amortization on unconsolidated joint ventures
   
1,126
     
1,122
     
376
     
375
 
(Gain)/loss on sale of property
   
(12,213
)
   
328
     
(11,807
)
   
-
 
                                 
Funds from Operations Applicable to Common and Class A Common Stockholders
 
$
$38,107
   
$
$32,414
   
$
$14,004
   
$
$9,230
 

FFO amounted to $38.1 million in the nine months ended July 31, 2021 compared to $32.4 million in the comparable period of fiscal 2020.  The net increase in FFO is attributable, among other things to:

Increases:
•
An increase in variable lease income (cost recovery income) related to an under-accrual adjustment in recoveries from tenants for real estate taxes and common area maintenance in the first nine months of fiscal 2021 and a general increase in the rate at which we recover costs from our tenants as a result of the reduced impact of the COVID-19 pandemic on our tenants businesses, which resulted in a positive variance in the first nine months of fiscal 2021 when compared to the same period of fiscal 2020.
•
A $341,000 increase in lease termination income in the first nine months of fiscal 2021 when compared with the corresponding prior period as a result of one tenant that occupied multiple spaces in our portfolio ceasing operations and buying out the remaining terms of its leases.
•
A net decrease in general and administrative expenses of $1.6 million, predominantly related to a decrease in compensation and benefits expense in the nine months ended July 31, 2021 when compared to the corresponding prior period.  The decrease was the result of accelerated vesting of restricted stock grant value upon the death of our former Chairman Emeritus in the second quarter of fiscal 2020.
•
A decrease in uncollectable amounts in lease income of $2.1 million.  In the second quarter of fiscal 2020, we significantly increased our uncollectable amounts in lease income based on our assessment of the collectability of existing non-credit small shop tenants' receivables given the onset of the COVID-19 pandemic in March 2020.  A number of non-credit small shop tenants' businesses were deemed non-essential by the states where they operate and were forced to close for a portion of the second and third quarters of fiscal 2020.  This placed stress on our small shop tenants and made it difficult for many of them to pay their rents when due.  Our assessment was that any billed but unpaid rents for such tenants would likely be uncollectable. During the nine month period ended July 31, 2021, many of our tenants saw early signs of business improvement as regulatory restrictions were relaxed and individuals began returning to pre-pandemic activities following significant progress made in vaccinating the U.S. public. As a result, the uncollectable amounts in lease income have been declining. We have even recovered receivables that were previously reserved for.
•
A decrease of $277,000 in net income to noncontrolling interests.  This decrease was caused by our redemption of noncontrolling units in the second half of fiscal 2020 and first nine months of fiscal 2021.  In addition, distributions decreased to noncontrolling unit owners whose distributions per unit were based on the dividend rate of our Class A Common stock, which was significantly reduced in the first half of fiscal 2021 when compared to the corresponding prior period.

Decreases:
•
An increase in the reversals of straight-line rent for tenants accounted for on a cash basis in accordance with ASC Topic 842 in the first nine months of fiscal 2021 when compared with the first nine months of fiscal 2020.

FFO amounted to $14.0 million in the three months ended July 31, 2021 compared to $9.2 million in the comparable period of fiscal 2020.  The net increase in FFO is attributable, among other things to:

Increases:
•
A decrease in uncollectable amounts in lease income of $1.6 million.  In the third quarter of fiscal 2020, we significantly increased our uncollectable amounts in lease income based on our assessment of the collectability of existing non-credit small shop tenants' receivables given the onset of the COVID-19 pandemic in March 2020.  A number of non-credit small shop tenants' businesses were deemed non-essential by the states where they operate and were forced to close for a portion of the second and third quarters of fiscal 2020.  This placed stress on our small shop tenants and made it difficult for many of them to pay their rents when due.  Our assessment was that any billed but unpaid rents for such tenants would likely be uncollectable. During the three months ended July 31, 2021, many of our tenants continued to see signs of business improvement as regulatory restrictions were relaxed and individuals began returning to pre-pandemic activities following significant progress made in vaccinating the U.S. public and the resulting decline in COVID-19 cases for vaccinated persons. As a result, the uncollectable amounts in lease income have been declining. We have even recovered receivables that were previously reserved for.
•
In the three months ended July 31, 2021, we did not have any reductions of lease income for collectability adjustments related to the 89 tenants in our portfolio that we account for on a cash basis in accordance with ASC Topic 842, as the amount of collections equaled or exceeded the quarterly billings for tenants accounted for on a cash basis, which created a $1.8 million positive variance.  In addition, as a result of not converting any tenants to cash basis accounting in the three months ended July 31, 2021, we did not have any write-offs of previously recorded straight-line rent in the three months ended July 31, 2021 and we had $910,000 in write-offs of straight-line rents in the third quarter of fiscal 2020 relating to cash basis tenants.
27
Off-Balance Sheet Arrangements

We have six off-balance sheet investments in real property through unconsolidated joint ventures:

•
a 66.67% equity interest in the Putnam Plaza Shopping Center,

•
an 11.792% equity interest in Midway Shopping Center, L.P.,

•
a 50% equity interest in the Chestnut Ridge Shopping Center,

•
a 50% equity interest in the Gateway Plaza shopping center and the Riverhead Applebee’s Plaza, and

•
a 20% interest in a suburban office building with ground level retail.

These unconsolidated joint ventures are accounted for under the equity method of accounting, as we have the ability to exercise significant influence over, but not control of, the operating and financial decisions of these investments.  Our off-balance sheet arrangements are more fully discussed in Note 4, “Investments in and Advances to Unconsolidated Joint Ventures” in our financial statements in Item 1 of this Quarterly Report on Form 10-Q.  Although we have not guaranteed the debt of these joint ventures, we have agreed to customary environmental indemnifications and nonrecourse carve-outs (e.g. guarantees against fraud, misrepresentation and bankruptcy) on certain loans of the joint ventures.  The below table details information about the outstanding non-recourse mortgage financings on our unconsolidated joint ventures (amounts in thousands):

     
Principal Balance
 
Fixed Interest
   
Joint Venture Description
 
Location
 
Original Balance
 
At July 31, 2021
 
Rate Per Annum
 
Maturity Date
Midway Shopping Center
 
Scarsdale, NY
 
$
32,000
 
$
25,000
   
4.80%
 
Dec-2027
Putnam Plaza Shopping Center
 
Carmel, NY
 
$
18,900
 
$
18,100
   
4.81%
 
Oct-2028
Gateway Plaza
 
Riverhead, NY
 
$
14,000
 
$
11,300
   
4.18%
 
Feb-2024
Applebee's Plaza
 
Riverhead, NY
 
$
2,300
 
$
1,801
   
3.38%
 
Aug-2026

Environmental Matters

Based on management's ongoing review of its properties, management is not aware of any environmental condition with respect to any of our properties that would be reasonably likely to have a material adverse effect on us. There can be no assurance, however, that (a) the discovery of environmental conditions that were previously unknown, (b) changes in law, (c) the conduct of tenants or (d) activities relating to properties in the vicinity of our properties, will not expose us to material liability in the future. Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions may result in significant unanticipated expenditures or may otherwise adversely affect the operations of our tenants, which could adversely affect our financial condition and results of operations.

28
Item 3.  Quantitative and Qualitative Disclosures about Market Risk

We are exposed to interest rate risk primarily through our borrowing activities, which predominantly include fixed-rate mortgage debt and, in limited circumstances, variable rate debt.  As of July 31, 2021, we had total mortgage debt of $292.3 million, of which 100% was fixed-rate, inclusive of variable rate mortgages that have been swapped to fixed interest rates using interest rate swap derivatives contracts.

For our fixed-rate debt, there is inherent rollover risk for borrowings as they mature and are renewed at current market rates.  The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and our future financing requirements.
To reduce our exposure to interest rate risk on variable-rate debt, we use interest rate swap agreements, for example, to convert some of our variable-rate debt to fixed-rate debt.  As of July 31, 2021, we had nine open derivative financial instruments.  These interest rate swaps are cross collateralized with mortgages on properties in Ossining, NY, Yonkers, NY, Orangeburg, NY, Brewster, NY, Stamford, CT, Greenwich CT, Darien, CT and Dumont, NJ.  The Ossining swap expires in October 2024, the Yonkers swap expires in November 2024, the Orangeburg swap expires in October 2024, the Brewster swap expires in June 2029, the Stamford swap expires in July 2027, the Greenwich swaps expire in October 2026, the Darien swap expires in March 2028, and the Dumont, NJ swap expires in August 2027, in each case concurrent with the maturity of the respective mortgages.  All of the aforementioned derivatives contracts are adjusted to fair market value at each reporting period.  We have concluded that all of the aforementioned derivatives contracts are effective cash flow hedges as defined in ASC Topic 815.  We are required to evaluate the effectiveness at inception and at each reporting date.  As a result of the aforementioned derivatives contracts being effective cash flow hedges, all changes in fair market value are recorded directly to stockholders equity in accumulated comprehensive income and have no effect on our earnings.

Under existing guidance, the publication of the LIBOR reference rate was to be discontinued beginning on or around the end of 2021.  However, the ICE Benchmark Administration, in its capacity as administrator of USD LIBOR, has announced that it intends to extend publication of USD LIBOR (other than one-week and two-month tenors) by 18 months to June 2023.  Notwithstanding this possible extension, a joint statement by key regulatory authorities calls on banks to cease entering into new contracts that use USD LIBOR as a reference rate by no later than December 31, 2021.  We have good working relationships with each of the lenders to our notes, who are also the counterparties to our swap contracts.  We understand from our lenders and counterparties that their goal is to have the replacement reference rate under the notes match the replacement rates in the swaps.  If this were achieved, we believe there would be no effect on our financial position or results of operations.  However, because this will be the first time any of the reference rates for our promissory notes or our swap contracts will cease to be published, we cannot be sure how the replacement rate event will conclude.  Until we have more clarity from our lenders and counterparties, we cannot be certain of the impact on the Company. See “We may be adversely affected by changes in LIBOR reporting practices, the method in which LIBOR is determined or the use of alternative reference rates” under Item 1A of our annual report on Form 10-K for more information.
At July 31, 2021, we had $5 million in borrowings outstanding on our Facility, which bears interest at Libor plus 1.45%.  If interest rates were to rise 1%, our interest expense as a result of the variable rate would increase by any amount outstanding multiplied by 1% per annum.
29

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures
The Company's Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report.  Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective.

Changes in Internal Controls
During the quarter ended July 31, 2021, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


30

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, the Company is involved in legal proceedings. There are no material legal proceedings presently pending against the Company.


31
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Following on its initial December 2013 authorization, in June 2017, our Board of Directors re-approved a share repurchase program (“Current Repurchase Program”) for the repurchase of up to 2,000,000 shares, in the aggregate, of Common stock and Class A Common stock in open market transactions.  The Current Repurchase Program was announced on June 9, 2017.  For the three month period ended July 31, 2021, the Company repurchased 20,294 shares of Class A Common stock and 20,294 shares of Common stock under the Current Repurchase Program.

The following table sets forth Class A Common shares repurchased by the Company during the three months ended July 31, 2021:



Period
 
Total Number
of Shares
Purchased
   
Average Price
Per Share
Purchased
   
Total Number
Shares Re-
purchased as
Part of Publicly
Announced
Plan or
Program (a)
   
Maximum
Number of
Shares That
May be
Purchased
Under the Plan
or Program (a)
 
May 1, 2021 – May 31, 2021
   
-
     
-
     
-
     
1,075,409
 
June 1, 2021 – June 30, 2021
   
-
     
-
     
-
     
1,075,409
 
July 1, 2021 – July 31, 2021
   
20,294
   
$
19.00
     
20,294
     
1,034,821
 

The following table sets forth Common shares repurchased by the Company during the three months ended July 31, 2021:



Period
 
Total Number
of Shares
Purchased
   
Average Price
Per Share
Purchased
   
Total Number
Shares Re-
purchased as
Part of Publicly
Announced
Plan or
Program (a)
   
Maximum
Number of
Shares That
May be
Purchased
Under the Plan
or Program (a)
 
May 1, 2021 – May 31, 2021
   
-
     
-
     
-
     
1,075,409
 
June 1, 2021 – June 30, 2021
   
-
     
-
     
-
     
1,075,409
 
July 1, 2021 – July 31, 2021
   
20,294
   
$
16.29
     
20,294
     
1,034,821
 


(a)  See paragraph above regarding the Current Repurchase Program.

In addition, from time to time, we could be deemed to have repurchased shares as a result of shares withheld for tax purposes upon a stock compensation related vesting event.

32

Item 6.  Exhibits

   
   
   
32
   
101.INS
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
   
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
   
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
   
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
   
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
   
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
   
104
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

33
S I G N A T U R E S



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

URSTADT BIDDLE PROPERTIES INC.
 
 
 (Registrant)
 
     
 
By: /s/ Willing L. Biddle
 
 
Willing L. Biddle
 
 
Chief Executive Officer
 
 
(Principal Executive Officer)
 
     
 
By: /s/ John T. Hayes
 
 
John T. Hayes
 
 
Senior Vice President &
 
 
Chief Financial Officer
 
 
(Principal Financial Officer
 
Dated: September 8, 2021
and Principal Accounting Officer
 


34
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