<PAGE>
<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999
[ ] 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 0-13881
CITY INVESTING COMPANY LIQUIDATING TRUST
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 13-6859211
(State of organization) (I.R.S. Employer Identification No.)
99 UNIVERSITY PLACE, 7TH FLOOR 10003-4528
NEW YORK, NEW YORK (Zip Code)
(Address of principal executive offices)
</TABLE>
Registrant's telephone number, including area code: (212) 473-1918
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 and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
At March 31, 1999 there were 38,979,372 Trust Units of Beneficial Interest
outstanding.
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CITY INVESTING COMPANY LIQUIDATING TRUST
STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31
(UNAUDITED)
<TABLE>
<CAPTION>
================================================================================
($ IN THOUSANDS, EXCEPT PER UNIT DATA) 1999 1998
================================================================================
<S> <C> <C>
Losses on dispositions of assets, net $ (13) $ (65)
Interest, dividend and other income 786 867
- --------------------------------------------------------------------------------
Total income 773 802
Administrative expenses 86 93
- --------------------------------------------------------------------------------
NET INCOME $ 687 $ 709
- --------------------------------------------------------------------------------
NET INCOME PER UNIT $ 0.02 $ 0.02
================================================================================
OUTSTANDING UNITS 38,979 38,979
================================================================================
</TABLE>
BALANCE SHEETS
<TABLE>
<CAPTION>
================================================================================
(UNAUDITED)
MARCH 31, DECEMBER 31,
($ IN THOUSANDS) 1999 1998
================================================================================
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 16 $ 87
U.S. Treasury Bills 65,595 64,837
Restricted funds 3 3
Investments 609 609
Real estate 4,617 4,617
- --------------------------------------------------------------------------------
TOTAL ASSETS $ 70,840 $ 70,153
================================================================================
LIABILITIES AND TRUST EQUITY
Trust equity $ 70,840 $ 70,153
- --------------------------------------------------------------------------------
TOTAL LIABILITIES AND TRUST EQUITY $ 70,840 $ 70,153
================================================================================
</TABLE>
See accompanying notes to financial statements.
- 1 -
<PAGE>
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31
(UNAUDITED)
<TABLE>
<CAPTION>
===========================================================================================
($ IN THOUSANDS) 1999 1998
===========================================================================================
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 687 $ 709
Adjustments to reconcile net income to net cash
used for operating activities:
Interest income earned on investment in U.S. Treasuries (742) (738)
- -------------------------------------------------------------------------------------------
Net cash used for operating activities (55) (29)
- -------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of U.S. Treasuries 16,393 14,952
Purchases of U.S. Treasuries (16,409) (18,050)
Restricted funds 0 2,965
- -------------------------------------------------------------------------------------------
Net cash used for investing activities (16) (133)
- -------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (71) (162)
Cash and cash equivalents at beginning of year 87 243
- ------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 16 $ 81
===========================================================================================
</TABLE>
STATEMENTS OF CHANGES IN TRUST EQUITY
THREE MONTHS ENDED MARCH 31
(UNAUDITED)
<TABLE>
<CAPTION>
===========================================================================================
($ IN THOUSANDS) 1999 1998
===========================================================================================
<S> <C> <C>
Balance at December 31 $ 70,153 $ 66,989
Net income 687 709
- -------------------------------------------------------------------------------------------
BALANCE AT MARCH 31 $ 70,840 $ 67,698
===========================================================================================
</TABLE>
See accompanying notes to financial statements.
- 2 -
<PAGE>
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
NOTE 1 - ORGANIZATION
The March 31, 1999 financial statements for the City Investing Company
Liquidating Trust (the "Trust") are unaudited and subject to year-end
adjustments. In the opinion of the Trustees, the interim financial statements
reflect all adjustments necessary for a fair presentation of the financial
position and income and expenses of the Trust as prepared on a Federal income
tax basis. Results for interim periods are not necessarily indicative of results
for the full year.
NOTE 2 - BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the basis of
accounting used for Federal income tax purposes. Accordingly, certain revenue
and the related assets are recognized when received rather than when earned; and
certain expenses are recognized when paid rather than when the obligation is
incurred; and assets are reflected at their tax basis.
NOTE 3 - GAINS (LOSSES) ON DISPOSITIONS OF ASSETS
Gains (losses) on dispositions of assets, net, include settlement costs and
legal fees attributable to the disposition of assets incurred in connection with
the defense of litigation against the Trust.
NOTE 4 - TRUST AGREEMENT
In accordance with the Trust Agreement, the Trust has assumed the obligation to
make payments, where required, to discharge certain litigation and other
contingent liabilities of City Investing Company ("City") which existed on
September 25, 1985.
NOTE 5 - INVESTMENT SECURITIES
Investment securities consist of U.S. Treasury Bills with maturities of less
than one year and are carried at cost. The fair value of U.S. Treasuries is
based on quoted market prices. Investment securities consist of the following:
<TABLE>
<CAPTION>
====================================================================================================================
MARCH 31, 1999 DECEMBER 31, 1998
-------------------------------------- ---------------------------------------
CARRYING FAIR CARRYING FAIR
($ IN THOUSANDS) VALUE COST VALUE VALUE COST VALUE
====================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Bills
maturing within
one year $65,595 $65,595 $67,313 $64,837 $64,837 $66,621
====================================================================================================================
</TABLE>
The gross unrealized gains on investment securities, at March 31, 1999 and
December 31, 1998, were $1,718 and $1,784, respectively.
- 3 -
<PAGE>
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
($ IN THOUSANDS)
NOTE 6 - RESTRICTED FUNDS
Restricted funds at March 31, 1999 and December 31, 1998 represent a rent
deposit of $3.
NOTE 7 - INVESTMENTS
Investments are as follows:
<TABLE>
<CAPTION>
=======================================================================
MARCH 31, DECEMBER 31,
($ IN THOUSANDS) 1999 1998
=======================================================================
<S> <C> <C>
Oklahoma Energy Corp. $27 $27
Global Bancorporation 582 582
- -----------------------------------------------------------------------
Total investments $609 $609
=======================================================================
</TABLE>
The Trust holds 3,108,105 shares of Oklahoma Energy Corp., previously known as
Cayman Resources Corporation common stock, which are carried at their tax basis.
At March 31, 1999 and December 31, 1998, the fair market value of the Oklahoma
Energy stock, based on quoted market prices, was $188 and $176, respectively.
The Trust holds 10,000 shares of Global Bancorporation which are carried at
their tax basis. It is currently projected that a final liquidating distribution
will be received by the Trust in respect of those Global Bancorporation shares
in the amount of $20.
NOTE 8 - REAL ESTATE
Prior to January 2, 1990, the Trust held an undivided interest in a July 22,
1983 note received from Texas City Investment Company ("Texas City") in
connection with a sale of land located in Galveston County, Texas. Texas City
failed to fully pay the note in accordance with its terms. On January 2, 1990,
the beneficial owners of the note (including the Trust) foreclosed on the
property securing the note. The Trust now holds an undivided interest in the
property classified as real estate, which is valued at the January 2, 1990 fair
market value. The Trust realized a long term gain of $81 on two 1996 sales of
approximately two per cent of the real estate. The Trust realized a long term
gain of $20 on a sale of approximately one-half of one per cent of the real
estate during the third quarter of 1998.
During 1998, a Geophysical Option Agreement was executed to sell oil and gas
leases on the property. The Agreement provided the Trust with $87 of income. In
April 1999, 212 acres were leased and the Trust received an additional $14.
On October 27, 1998, $47 allocable to the Trust was paid into escrow in
accordance with an Earnest Money Contract. The Contract, which has been amended
twice, currently permits a closing as late as October 23, 1999, at which 37 per
cent of the acreage would be purchased for $2,643 cash allocable to the Trust.
With respect to the remaining acreage, the contract provides for a cash down
payment of approximately $468 allocable to the Trust, and a non-recourse
promissory note of $3,667 allocable to the Trust payable in five annual
installments at 8 percent interest.
- 4 -
<PAGE>
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
($ IN THOUSANDS)
NOTE 9 - LITIGATION AND OTHER CONTINGENT LIABILITIES
In accordance with the Trust Agreement, the Trust has assumed the obligation to
make payments, where required, to discharge certain litigation and other
contingent liabilities of City which existed at September 25, 1985. The Trust
may have a contingent liability with respect to certain issues raised by the
Internal Revenue Service upon audit of tax returns of City Investing Company
filed with respect to periods ending on or before September 25, 1985. One of
these issues is currently pending before the Tax Court of the United States.
These issues, if resolved unfavorably to City, would result in a substantial
liability. As other parties are primarily and jointly responsible for this
contingent liability, the Trust is unable to estimate the ultimate cost, if any,
of its exposure. The Trust also remains subject to possible claims by the United
States Environmental Protection Agency and other third parties.
Lease Commitment. The Trust leases office space on a month-to-month basis with
a monthly rental payment of $2.
NOTE 10 - FUTURE DISTRIBUTIONS OF TRUST ASSETS
The existence of the contingent liabilities referred to in Note 9 may affect the
timing of future distributions of Trust assets.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
It is difficult to compare amounts in comparable periods, as the financial
statements of the Trust are prepared on the basis of accounting used for Federal
income tax purposes; that is, amounts are reflected in the financial statements
when amounts are received or paid.
The Trust recorded net income of $687 ($0.02 per unit) in the quarter ended
March 31, 1999, compared to net income of $709 ($0.02 per unit) in the first
quarter of 1998. The losses on the dispositions of assets, net, reflect losses
of $13 in the first quarter of 1999 and $65 in the first quarter of 1998
attributable to legal fees incurred in connection with the defense of litigation
against the Trust.
Interest, dividend and other income, principally consisting of interest earned
on the investment of cash equivalents and investment securities was $786 in the
first quarter of 1999, compared with $867 in the first quarter of 1998. The
decrease in the 1999 period was due to the decrease in yield on investment
securities compared to the 1998 period. Administrative expenses were $86 and $93
in the first quarters of 1999 and 1998, respectively.
At March 31, 1999, the Trust had cash and cash equivalents and U. S. Treasury
Bills of $65,611. The Trustees believe that such cash resources and investment
securities are sufficient to meet all anticipated liquidity requirements.
- 5 -
<PAGE>
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information contained under Legal Proceedings in the Trust's Annual Report
on Form 10-K for the year ended December 31, 1998 is incorporated by reference
herein. There have been no material developments in such legal proceedings
subsequent to the date of that information.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27 Financial Data Schedule.
(b) Reports on Form 8-K:
The Registrant was not required to file a Current Report on Form 8-K during
the quarter ended March 31, 1999.
SIGNATURES
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.
CITY INVESTING COMPANY LIQUIDATING TRUST
Date: April 20, 1999 By: LESTER J. MANTELL
Trustee
- 6 -
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Financial Statements contained in Item 1 of Form 10-Q for the period ended March
31, 1999 and is qualified in its entirety by reference to such Financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 16
<SECURITIES> 65,595
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 70,840
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 70,840
<TOTAL-LIABILITY-AND-EQUITY> 70,840
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 687
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 687
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
