<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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,
New York, New York 10003-4528
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
Registrant's telephone number, including area code: (212) 473-1918
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Units of Beneficial Interest
(Title of Class)
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 _X_ No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. _X_
At December 31, 1999, there were 38,979,372 Trust Units of Beneficial Interest
outstanding. The aggregate market value of the Trust's Units of Beneficial
Interest held by non-affiliates of the Trust based on the closing price of the
Units on such date of $1.28 per Unit was approximately $49.9 million.
<PAGE>
To Our Unit Holders:
The accompanying financial statements set forth the status of the City Investing
Company Liquidating Trust (the 'Trust') at December 31, 1999. Wrapped around
this report is the February 25, 2000 tax letter, pages A through D, that
provides 1999 Federal income tax information relevant to Unit Holders. Please
remove the outside wrap-around page carefully, as it should be helpful in
calculating your 1999 tax consequences.
The Trust has posted on its web site: http://www.cnvlz.com the financial
statements and the tax letter. Quarterly financial statements for 2000 will be
available on the Trust's world wide web site no later than May 15, August 15,
and November 15.
In February 2000, the Trust sold about 39 percent of the real estate acreage for
approximately $2.4 million cash allocable to the Trust which will result in a
capital gain of approximately $0.6 million. The remaining acreage is contracted
to be sold in May 2000 for approximately $400,000 cash and a non-recourse
promissory note of approximately $3.4 million, allocable to the Trust, payable
in five equal annual installments bearing interest at 8 percent. In
February 2000, the Trust also received $20,000 as the final liquidating
distribution from Global Bancorporation.
During 1999, the Trust's cash and cash equivalents, investment securities and
restricted funds increased by $2,799,000 to $67,726,000. The major assets held
by the Trust are investments in U.S. Treasuries with original maturities within
one year of purchase. The Trustees believe that these resources are sufficient
to meet all anticipated liquidity requirements. The Trust will continue to
retain substantial cash and investment reserves pending the resolution of
certain legal proceedings discussed in the accompanying report.
Since the Trust was created, the Trust's objectives have been and continue to be
maximizing the return to its Unit Holders and completing the liquidation of all
assets and liabilities as efficaciously as possible. We have initiated
discussions with a major property and casualty insurer concerning coverage of
the Trust's exposure to possible claims by the United States Environmental
Protection Agency with respect to certain Superfund Sites. If those claims can
be adequately insured at a reasonable cost, a significant impediment to a final
distribution of Trust assets will have been eliminated.
Cordially,
<TABLE>
<S> <C> <C>
Geo. T. Scharffenberger Eben W. Pyne Lester J. Mantell
Trustee Trustee Trustee
</TABLE>
February 25, 2000
For all information about unit holdings:
UNITS HELD IN STREET NAME, please communicate with your bank or broker.
REGISTERED UNIT HOLDERS, please communicate with ChaseMellon Shareholder
Services, transfer agent for City Investing Company Liquidating Trust,
at:
<TABLE>
<S> <C>
telephone: 1-800-851-9677
write to: ChaseMellon Shareholder Services
P.O. Box 3315, South Hackensack, NJ 07606
world wide web site: http://www.chasemellon.com
</TABLE>
For current FINANCIAL AND TAX INFORMATION, please go to the Trust's:
<TABLE>
<S> <C>
world wide web site: http://www.cnvlz.com
</TABLE>
For all OTHER INFORMATION, please communicate with us at:
<TABLE>
<S> <C>
write to: CITY INVESTING COMPANY LIQUIDATING TRUST
99 University Place, 7th floor, New York, NY 10003-4528
telephone: 212-473-1918
fax: 212-473-3927
e-mail address: [email protected]
</TABLE>
-1-
<PAGE>
ITEM 1. BUSINESS
THE TRUST
On September 25, 1985, pursuant to the Plan of Complete Liquidation and
Dissolution of City Investing Company ('City') approved by stockholders of City
on December 12, 1984, City transferred all its remaining assets and liabilities
('Trust Estate') to the City Investing Company Liquidating Trust (the 'Trust')
to assure compliance with Section 337 of the Internal Revenue Code. The common
stock transfer books of City were permanently closed on September 25, 1985, and
the holders of record of common stock of City as of the close of business on
that date became holders of beneficial interest in the Trust on the basis of one
unit of beneficial interest for each share of common stock of City held on
September 25, 1985. After September 25, 1985, the outstanding certificates that
formerly represented shares of common stock of City are deemed to evidence the
same number of units of beneficial interest in the Trust.
The City Investing Company Liquidating Trust Agreement ('Trust Agreement')
provides that the Trust is organized for the sole purpose of liquidating the
Trust Estate in a manner calculated to conserve and protect the Trust Estate,
and to collect and distribute to the beneficiaries proceeds therefrom in as
prompt and orderly a fashion as possible after the payment of, or provision for,
expenses and liabilities. The Trustees are required to distribute to the
beneficiaries cash or other property comprising a portion of the Trust Estate as
the Trustees may, in their sole discretion, determine may be distributed without
detriment to the ability of the Trust to pay or discharge claims, expenses,
charges, liabilities and obligations. The existence of the contingent
liabilities referred to in Note 7 to the Trusts's Financial Statements will
affect the timing of future distributions of Trust assets, see Item
8 -- Note 7, 'Litigation and Other Contingent Liabliities'.
On July 8, 1999, the Trustees extended the time limit of the Trust's existence
to September 25, 2000 from September 25, 1999 in order to continue the orderly
disposal of assets and the settlement of claims and obligations of the Trust.
ITEM 3. LEGAL PROCEEDINGS
Prior to and after its liquidation, City was named as a party in various
litigations that pursuant to the Trust Agreement were assumed and became the
responsibility of the Trust. For a description of litigation and claims
currently pending or threatened which affect the Trust, see Item 8 -- Note 7,
'Litigation and Other Contingent Liabilities'.
-2-
<PAGE>
PART II
ITEM 5. MARKET PRICE OF UNITS
The Trust's Units of Beneficial Interest ('Units') trade on The NASDAQ stock
exchange and appear daily in the list entitled Small Capitalization Issues,
under the symbol CtyLTr or CNVLZ. Selected contemporaneous trading information
is available on the Internet and can be accessed as follows -
http://www.nasdaq-amex.com. The high and low prices for the Units during 1999
and 1998 were as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1999 1998
- -----------------------------------------------------------------------------------------------------
HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
First Quarter $1.31 $1.28 $1.06 $0.88
Second Quarter 1.41 1.28 1.06 0.91
Third Quarter 1.38 1.28 1.34 0.91
Fourth Quarter 1.31 1.28 1.38 1.06
- -----------------------------------------------------------------------------------------------------
</TABLE>
As of December 31, 1999, there were approximately 13,700 holders of the Trust's
Units of Beneficial Interest. No cash distributions were made in either 1999 or
1998.
The Trust may have a contingent liability with respect to an issue raised by the
Internal Revenue Service upon audit of tax returns of City Investing Company
filed with respect to periods ending on or before September 25, 1985. This
issue, if resolved unfavorably to City Investing Company, would result in a
substantial liability. As other parties are primarily and jointly responsible
for this contingent liability, the Trust is unable to estimate the ultimate
cost, if any, of its exposure. The Trust also may have a contingent liability to
the United States Environmental Protection Agency and other third parties.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
($ IN THOUSANDS, EXCEPT PER UNIT -----------------------------------------------------------------
DATA) 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Losses on dispositions of assets,
net $(105) $(66) $(1,265) $(834) $(645)
Interest, dividend and other
income 3,185 3,535 3,071 4,210 1,597
Net income 2,799 3,164 1,485 2,947 452
Net income per unit 0.07 0.08 0.04 0.08 0.01
Total assets 72,952 70,153 66,989 65,504 62,792
Book value per unit 1.87 1.80 1.72 1.68 1.61
- -----------------------------------------------------------------------------------------------------
</TABLE>
-3-
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Trust recorded net income of $2,799,000 ($0.07 per unit) in 1999 compared
with $3,164,000 ($0.08 per unit) in 1998 and $1,485,000 ($0.04 per unit) in
1997. 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.
In February 2000, the Trust sold about 39 percent of the real estate acreage for
approximately $2.4 million cash allocable to the Trust which will result in a
capital gain of approximately $600,000. With respect to the remaining acreage,
there is a non-refundable escrow of approximately $100,000 allocable to the
Trust. A closing with respect to the remaining acreage is scheduled to occur in
May 2000 for approximately $400,000 cash and a non-recourse promissory note of
approximately $3.4 million, allocable to the Trust, payable in five equal annual
installments bearing interest at 8 percent.
During 1998, a gain on disposition of assets of $20,000 was attributable to the
sale of approximately one-half of one per cent of the Trust's real estate. In
1997, the net losses on the disposition of assets of $1,265,000 consisted
principally of the Continental Casualty Co. settlement of $1,150,000 which was
paid from escrow on December 2, 1997. During the first quarter of 1998, the
Trust received $3,021,000 representing the undisbursed balance of the
Continental Casualty Co. escrow. The remaining losses on the disposition of
assets of $105,000 in 1999, compared to $86,000 in 1998 and $115,000 in 1997
consisted principally of legal fees incurred in connection with the defense of
litigation against the Trust.
In February 2000, the Trust collected a final liquidating distribution of
$20,000 from Global Bancorporation which will result in a long-term capital loss
of $562,000.
Interest, dividend and other income of $3,185,000 in 1999, $3,535,000 in 1998
and $3,071,000 in 1997, was principally derived from interest earned on
investment securities. In 1999, the decrease was due to a reduction in both the
yield on investment securities and other income received from real estate
compared to the 1998 period.
Administrative expenses were $281,000 in 1999, $305,000 in 1998, and $321,000 in
1997. The lower level of administrative expenses in 1999 compared to 1998 and
1997 is primarily due to a reduction in costs of administration of the Trust.
At December 31, 1999, the Trust had cash and cash equivalents, investment
securities and restricted funds of $67,726,000. The Trustees believe that such
cash resources and investment securities are sufficient to meet all anticipated
liquidity requirements.
The Year 2000 Issue is the result of computer programs having been written using
two digit dates rather than four to define an applicable year, which could
result in system failures or miscalculations causing disruptions in the
operations of the Trust and the entities with which the Trust does business. An
evaluation of the Trust's computer systems, software, non-information systems
and entities with which the Trust does business was performed, revealing that
the Trust had no meaningful Year 2000 issues. To date, the Year 2000 Issue has
not had a material adverse effect on the Trust and its operations.
No cash distributions have been made since May 12, 1990. For information
regarding considerations affecting the future distribution of Trust assets, see
Item 8 -- Note 8 to the financial statements herein.
-4-
<PAGE>
ITEM 8. FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT
THE TRUSTEES AND HOLDERS OF UNITS OF BENEFICIAL INTEREST
CITY INVESTING COMPANY LIQUIDATING TRUST:
We have audited the accompanying balance sheets of the City Investing Company
Liquidating Trust (the 'Trust') as of December 31, 1999 and 1998, and the
related statements of operations, cash flows and changes in trust equity for
each of the years in the three-year period ended December 31, 1999. These
financial statements are the responsibility of the Trust's Trustees. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Trustees, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
As described in Note 2 to the financial statements, the Trust's policy is to
prepare its financial statements on the basis of accounting used for Federal
income tax reporting purposes. Accordingly, the accompanying financial
statements are not intended to present financial position, income and expenses,
cash flows and changes in trust equity in conformity with generally accepted
accounting principles.
See Note 7 to the financial statements for a description of litigation and other
contingent liabilities.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of City Investing Company
Liquidating Trust as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1999, on the basis of accounting referred to above.
KPMG LLP
New York, New York
February 25, 2000
-5-
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
($ IN THOUSANDS, EXCEPT PER UNIT DATA) 1999 1998 1997
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Losses on dispositions of assets, net $(105) $(66) $(1,265)
Interest, dividend and other income 3,185 3,535 3,071
- ----------------------------------------------------------------------------------------------------
Total income 3,080 3,469 1,806
Administrative expenses 281 305 321
- ----------------------------------------------------------------------------------------------------
NET INCOME $2,799 $3,164 $1,485
- ----------------------------------------------------------------------------------------------------
NET INCOME PER UNIT $0.07 $0.08 $0.04
- ----------------------------------------------------------------------------------------------------
OUTSTANDING UNITS 38,979 38,979 38,979
- ----------------------------------------------------------------------------------------------------
</TABLE>
BALANCE SHEETS
DECEMBER 31
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
($ IN THOUSANDS) 1999 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $51 $87
Investment securities 67,671 64,837
Restricted funds 4 3
Investments 609 609
Real estate 4,617 4,617
- ----------------------------------------------------------------------------------
TOTAL ASSETS $72,952 $70,153
- ----------------------------------------------------------------------------------
LIABILITIES AND TRUST EQUITY
Trust equity $72,952 $70,153
- ----------------------------------------------------------------------------------
TOTAL LIABILITIES AND TRUST EQUITY $72,952 $70,153
- ----------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
-6-
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
($ IN THOUSANDS) 1999 1998 1997
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,799 $3,164 $1,485
Adjustments to reconcile net income to net cash
used for operating activities:
Gain on sale of real estate -- (20) --
Interest income earned on investment in U.S.
Treasuries (3,086) (3,271) (2,377)
- -------------------------------------------------------------------------------------------------------
Net cash used for operating activities (287) (127) (892)
- -------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of investment securities 84,828 64,210 58,815
Purchases of investment securities (84,576) (67,235) (58,541)
Restricted funds (1) 2,965 783
Proceeds from sale of real estate -- 31 --
- -------------------------------------------------------------------------------------------------------
Net cash provided by (used for) investing
activities 251 (29) 1,057
- -------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash
equivalents (36) (156) 165
Cash and cash equivalents at beginning of year 87 243 78
- -------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $51 $87 $243
- -------------------------------------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CHANGES IN TRUST EQUITY
YEAR ENDED DECEMBER 31
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
($ IN THOUSANDS) 1999 1998 1997
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year $70,153 $66,989 $65,504
Net income 2,799 3,164 1,485
- -----------------------------------------------------------------------------------------------------
BALANCE AT END OF YEAR $72,952 $70,153 $66,989
- -----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
-7-
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION
The City Investing Company Liquidating Trust (the 'Trust') was created on
September 25, 1985, pursuant to an Agreement and Declaration of Trust ('Trust
Agreement') by and between City Investing Company ('City') and the three
trustees of the Trust ('Trustees'). The Trust Agreement is governed by the laws
of the State of Delaware.
On September 25, 1985, pursuant to a Plan of Complete Liquidation and
Dissolution approved by stockholders of City on December 12, 1984, City
transferred all its remaining assets and liabilities ('Trust Estate') to the
Trust to assure compliance with Section 337 of the Internal Revenue Code. The
sole purpose of the Trust is to liquidate the Trust Estate in a manner
calculated to conserve and protect the Trust Estate, and to collect and
distribute to the beneficiaries the income and proceeds therefrom in as prompt
and orderly a fashion as possible after the payment of, or provision for,
expenses and liabilities.
The common stock transfer books of City were permanently closed on
September 25, 1985, and the holders of record of common stock of City as of the
close of business on that date became holders of units of beneficial interest in
the Trust on the basis of one unit of beneficial interest for each share of
common stock of City held on September 25, 1985. After September 25, 1985, the
outstanding certificates that formerly represented shares of common stock of
City are deemed to evidence the same number of units of beneficial interest in
the Trust.
The Trust Agreement, signed on September 25, 1985, set forth a time limit of
three years for the disposition of the Trust's assets and distribution to the
unit holders unless a later termination was required by the Trustees. As a
result of the protracted nature of certain litigation and other claims asserted
against the Trust, on September 7, 1988, April 23, 1990, September 2, 1992,
June 16, 1994, June 27, 1996, July 28, 1998, and July 8, 1999, the Trustees
extended the time limit of the Trust's existence to September 25, 1990,
September 25, 1992, September 25, 1994, September 25, 1996, September 25, 1998,
September 25, 1999, and then to September 25, 2000, respectively.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation: 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; certain expenses are recognized when paid rather than when the
obligation is incurred; and assets are reflected at their tax basis.
Valuation of assets and liabilities: The Trust Equity balance on September 25,
1985 was established at an amount equivalent to the number of units of
beneficial interest outstanding (38,979,372) multiplied by the average of the
high and low trading prices of such units on the first day of trading ($3.1875),
or an aggregate of $124.2 million. The fair market value for Federal income tax
purposes of each asset other than cash and cash equivalents was determined by
that asset's proportionate share of the Trust Equity increased by accounts
payable and decreased by cash and cash equivalents at September 25, 1985. The
proportionate share of each of these assets was determined by the estimated
value of such Trust asset in relation to the estimated value of all of the Trust
assets other than cash and cash equivalents. In determining the estimated value
of Trust assets, the Trustees evaluated, where appropriate, such factors as
City's historical carrying values, expected amounts and dates of realization,
prevailing interest rates, available market prices and restrictions with respect
to disposition.
Income taxes: For Federal income tax purposes, the September 25, 1985 transfer
of assets and liabilities to the Trust and distribution to stockholders of units
in the Trust was treated as a distribution of assets and liabilities by City to
its stockholders and a contribution by the stockholders of such net assets to
the Trust in return for units. The Trust is treated as a grantor trust and not
as a corporation. Accordingly, any income or loss of the Trust will not be
taxable to the Trust but will be taxable to the
-8-
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
unit holders as if the unit holders had themselves realized the income or loss
from their undivided interests in Trust assets.
Gains (losses) on dispositions of assets: Gains (losses) on dispositions of
assets, net, includes settlement costs and legal fees attributable to the
disposition of assets incurred in connection with the defense of litigation
against the Trust.
Net income per unit: Net income per unit is calculated by dividing net income
of the Trust by the number of outstanding Units of Beneficial Interest.
Cash and cash equivalents: The Trust considers all investments in money market
funds as cash equivalents.
NOTE 3 - INVESTMENT SECURITIES
Investment securities at December 31, 1999 and December 31, 1998 consist of U.S.
Treasuries 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 at December 31, consist of the following:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
1999 1998
------------------------- ---------------------------
CARRYING FAIR CARRYING FAIR
($ IN THOUSANDS) VALUE COST VALUE VALUE COST VALUE
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasuries
maturing within one year $67,671 $67,671 $69,245 $64,837 $64,837 $66,621
- ---------------------------------------------------------------------------------------
</TABLE>
The gross unrealized gains on investment securities at December 31, amounted to
the following:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
($ IN THOUSANDS) 1999 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Gross unrealized gains $1,574 $1,784
- ---------------------------------------------------------------------------------------------
</TABLE>
NOTE 4 - RESTRICTED FUNDS
Restricted funds at December 31, 1999 and 1998 represent a rent deposit of
$4,000 and $3,000, respectively.
NOTE 5 - INVESTMENTS
Investments at December 31 are as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
($ IN THOUSANDS) 1999 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Global Bancorporation $582 $582
Oklahoma Energy Corp. 27 27
- ---------------------------------------------------------------------------------------------
Total investments $609 $609
- ---------------------------------------------------------------------------------------------
</TABLE>
The Trust holds 10,000 shares of Global Bancorporation which are carried at
their tax basis. In February 2000, the Trust collected a final liquidating
distribution of $20,000 from Global Bancorporation which will result in a
long-term capital loss of $562,000. The Trust holds 3,108,105 shares of Oklahoma
Energy Corp. (previously known as Cayman Resources Corporation) common stock,
which are carried at their
-9-
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
tax basis. At December 31, 1999 and 1998, the fair value of the Oklahoma Energy
stock, based on quoted market prices, was $124,000 and $176,000 respectively.
NOTE 6 - 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 $81,000 on two 1996 sales of
approximately two per cent of the real estate. The Trust realized a long term
gain of $20,000 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 $87,000 of income.
In April 1999, 212 acres were leased and the Trust received an additional
$14,000.
In February 2000, the Trust sold about 39 percent of the real estate acreage for
approximately $2.4 million cash allocable to the Trust which will result in a
capital gain of approximately $600,000. With respect to the remaining acreage,
there is a non-refundable escrow of approximately $100,000 allocable to the
Trust. A closing with respect to the remaining acreage is scheduled to occur in
May 2000 for approximately $400,000 cash and a non-recourse promissory note of
approximately $3.4 million, allocable to the Trust, payable in five equal annual
installments bearing interest at 8 percent.
NOTE 7 - 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 described below:
Marina Pacifica: Environmental Protection Agency Claim. The U. S. Environmental
Protection Agency ('EPA') has identified Marina Pacifica as a Potentially
Responsible Party ('PRP') under the Comprehensive Environmental Response,
Compensation and Liability Act ('CERCLA') with respect to the Site in Monterey,
California. The Site, a landfill for municipal and industrial waste, was
included on the National Priorities List in May 1986.
Marina Pacifica was a California limited partnership, the general partner of
which was a subsidiary of City Investing Company. Marina Pacifica was in the
business of developing and selling condominiums. Development of one construction
site required the relocation of six oil wells. Drilling muds generated during
the relocation activities were allegedly disposed of at the Site.
The EPA has conducted site control and monitoring activities at the Site since
May 1986. In addition, EPA has conducted a number of removal actions and studies
at the Site to stabilize site conditions and to evaluate the extent of
contamination. EPA identified three initial stages of remedial action for the
Site, the Records of Decision for which were signed in July 1987, November 1987,
September 1988 and amended in September 1990. EPA has estimated the aggregate
costs of the stages of remediation covered by those Records of Decision at $287
million.
In May 1989, a settlement was reached between EPA and a group of PRPs to conduct
remedial activities for the first two stages and to pay past state and federal
response and oversight costs incurred up to June 1, 1988.
-10-
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At that time, EPA listed Marina Pacifica as 53rd of 181 separate PRPs identified
by EPA in terms of volume disposed at the Site. EPA has since entered into a
subsequent settlement with additional PRPs for the same matter. Counsel for
Marina Pacifica notified EPA that Marina Pacifica had been dissolved and that it
would not participate in any settlements.
In September 1990, EPA sent a special notice letter to all PRPs, including
Marina Pacifica, demanding payment of the total costs incurred by the government
since June 1, 1988, which EPA estimated were at least $15.3 million. EPA also
requested a good faith offer to perform or pay for the remedy selected for the
third remedial stage. EPA included an updated list of 269 PRPs of which Marina
Pacifica appeared 57th. Marina Pacifica did not make a counter offer.
In September 1996, the EPA issued a fourth Record of Decision specifying final
remedial measures for the Site. On September 30, 1997, the EPA sent a further
special notice letter to all PRPs, including Marina Pacifica, that requested a
good-faith offer to perform or pay for, among other things, the final remedial
measures covered by the September 1996 Record of Decision. EPA estimates the
costs related to matters covered by this notice letter at $289 million, which
includes the cost of implementation of the final remedial measures, unreimbursed
costs incurred by the government (as of June 30, 1997) and an estimate of future
governmental administrative and enforcement costs. The EPA included an updated
list of 280 PRPs on which Marina Pacifica appeared 84th in volumetric terms.
Marina Pacifica did not make a counter offer, and has not received anything
further from EPA. Based on its volumetric share and other material factors,
counsel would expect actual payments, if any, required of Marina Pacifica to be
a small fraction of the total costs at the Site.
Income Tax Matters. The Trust may have a contingent liability with respect to
an issue raised by the Internal Revenue Service upon audit of income tax returns
of City filed with respect to periods ending on or before September 25, 1985.
This issue is currently pending before the Tax Court of the United States. This
issue, 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.
Other Matters. The Trust also remains subject to possible claims by other third
parties.
Lease Commitment. The Trust entered into a one-year lease of office space that
expires June 30, 2000 with a monthly rental payment of $2,000. Rent expense was
$22,000 in 1999, $17,000 in 1998, and $14,000 in 1997.
NOTE 8 - FUTURE DISTRIBUTIONS OF TRUST ASSETS
The existence of the contingent liabilities referred to in Note 7 will affect
the timing of future distributions of Trust assets.
-11-
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
THE TRUSTEES
The Trustees of the Trust are Geo. T. Scharffenberger, Eben W. Pyne and Lester
J. Mantell. Each Trustee will serve for the term of the Trust subject to his
earlier resignation or removal. There are no family relationships between the
Trustees.
Geo T. Scharffenberger (80) was a director and Chairman of the Board of AmBase
Corporation until January 26, 1993. Mr. Scharffenberger was formerly Chairman
and a director of City and served as City's Chief Executive Officer from 1966
until May 1985.
Eben W. Pyne (82) was a director of AmBase Corporation until January 26, 1993.
Mr. Pyne retired in 1982 as a Senior Vice President of Citibank, N.A. He was
also a director of City.
Lester J. Mantell (62) was an Assistant Vice President -- Tax of AmBase
Corporation from April 1995 to December 1996. He served as the Executive Vice
President, Chief Financial Officer and Treasurer of AmBase Corporation from
October 1994 to January 1995 and as Senior Vice President -- Tax of AmBase
Corporation from April 1993 to October 1994.
ITEM 11. EXECUTIVE COMPENSATION
Pursuant to Section 9.1 of the Trust Agreement, the Trustees, in lieu of
commissions or other compensation fixed by law for Trustees, receive as
compensation for services thereunder the aggregate sum of $36,000 per year to be
allocated equally among the Trustees. Each Trustee is also reimbursed from the
Trust Estate for all expenses reasonably incurred by him in the performance of
his duties pursuant to the Trust Agreement.
There are no plans, pursuant to which cash or non-cash compensation was paid or
distributed during the last fiscal year, or is proposed to be paid or
distributed in the future, to the Trustees, except for amounts that they may
receive as holders of Units of Beneficial Interest.
-12-
<PAGE>
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following are the only persons known to the Trust to own beneficially
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934)
more than five percent of the Trust's Units of Beneficial Interest. The
information provided below was obtained from Amendment No. 5 to Schedule 13D of
Goldman, Sachs & Co., as filed with the Securities and Exchange Commission
('SEC') as of September 11, 1992, from Form 4 of Farallon Capital Management,
L.L.C. filed with the SEC as of February 9, 2000, and from Amendment No. 2 to
Schedule 13G as filed with the SEC by Franklin Mutual Advisers, LLC as of
January 18, 2000.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
UNITS
BENEFICIALLY %
NAMES AND ADDRESSES OF BENEFICIAL OWNERS OWNED OF CLASS
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
GOLDMAN, SACHS & CO. 12,615,564 32.4%
85 Broad Street, New York, NY 10004
FARALLON CAPITAL MANAGEMENT, L.L.C. 11,591,029 29.7%
One Maritime Plaza, Suite 1325, San Francisco, CA 94111
FRANKLIN MUTUAL ADVISERS, LLC 6,383,109 16.4%
51 John F. Kennedy Parkway, Short Hills, NJ 07078
- -----------------------------------------------------------------------------------------
TOTALS 30,589,702 78.5%
- -----------------------------------------------------------------------------------------
</TABLE>
The following table shows the Units of Beneficial Interest of the Trust
beneficially owned by each Trustee and the Trustees as a group as of January 13,
2000.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
UNITS
BENEFICIALLY %
NAMES OF BENEFICIAL OWNERS OWNED OF CLASS
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Eben W. Pyne 1,000 *
Lester J. Mantell -- --
Geo. T. Scharffenberger -- --
Trustees as a group (three) 1,000 *
- -----------------------------------------------------------------------------------------
</TABLE>
* Represents less than one quarter of 1% of the class.
-13-
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
(a) Documents Filed as Part of This Report:
1. Index to Financial Statements:
Independent Auditors' Report................................ 5
Statements of Operations.................................... 6
Balance Sheets.............................................. 6
Statements of Cash Flows.................................... 7
Statements of Changes in Trust Equity....................... 7
Notes to Financial Statements............................... 8
2. Index to Financial Statement Schedules:
Not applicable
3. Exhibits:
2. Plan of Complete Liquidation and Dissolution of City
Investing Company (incorporated by reference to Exhibit 2A
to City Investing Company Form 8-K dated December 12, 1984
and filed on December 21, 1984).
3. Agreement and Declaration of Trust dated September 25, 1985
by and between City Investing Company and Geo. T.
Scharffenberger, Eben W. Pyne and Lester J. Mantell, as
Trustees, together with Schedule I thereto (incorporated by
reference to Registrant's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1985), as amended on
September 7, 1988 (incorporated by reference to Exhibit 6.1
to City Investing Company Liquidating Trust Form 10-Q for
the quarter ended September 30, 1988), as amended on
April 23, 1990 (incorporated by reference to Exhibit 6.1 to
City Investing Company Liquidating Trust Form 10-Q for the
quarter ended September 30, 1990), as amended on
September 2, 1992 (incorporated by reference to Exhibit 6.1
to City Investing Company Liquidating Trust Form 10-Q for
the quarter ended September 30, 1992), as amended on
June 16, 1994 (incorporated by reference to Exhibit 6.1 to
City Investing Company Liquidating Trust Form 10-Q for the
quarter ended September 30, 1994), as amended on June 27,
1996 (incorporated by reference to Exhibit 6.1 to City
Investing Company Liquidating Trust Form 10-Q for the
quarter ended June 30, 1996), as amended on July 28, 1998
(incorporated by reference to Exhibit 6.1 to City Investing
Company Liquidating Trust Form 10-Q for the quarter ended
June 30, 1998), as amended on July 8, 1999 (incorporated by
reference to Exhibit 6.1 to City Investing Company
Liquidating Trust Form 10-Q for the quarter ended June 30,
1999).
3a. Specimen certificate representing Units of Beneficial
Interest in City Investing Company Liquidating Trust
(certificate formerly representing shares of Common Stock of
City Investing Company, showing legends to be placed on
certificates when issued from time to time upon transfer of
Units of Beneficial Interest) (incorporated by reference to
Exhibit 3.4 of City Investing Company Liquidating Trust Form
8-B filed with the Commission on September 25, 1985).
Copies of Exhibits will be provided upon written request to the
Trust.
(b) Form 8-K
The Trust was not required to file a report on Form 8-K during the
quarter ended December 31, 1999.
</TABLE>
-14-
<PAGE>
SIGNATURES:
Pursuant to the requirements of Section 13 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 on this 25th day of February 2000.
CITY INVESTING COMPANY LIQUIDATING TRUST
LESTER J. MANTELL
Trustee
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant on
the 25th day of February 2000.
A majority of the Trustees:
GEO. T. SCHARFFENBERGER
Trustee
EBEN W. PYNE
Trustee
LESTER J. MANTELL
Trustee
-15-
<PAGE>
- --------------------------------------------------------------------------------
CITY INVESTING COMPANY
LIQUIDATING TRUST Fed. I.D. #13-6859211 February 25, 2000
1999 U.S. FEDERAL INCOME TAX INFORMATION
This letter provides information relating to the amount and character of the
income, gain, loss, deductions and basis adjustment ('Tax Items') of the City
Investing Company Liquidating Trust ('Trust') for 1999. You should use this
information in preparing your 1999 U.S. Federal income tax return.
If you (i) acquired Trust Units ('Units') upon liquidation of City Investing
Company, (ii) reported long-term capital gain or loss upon the liquidation, and
(iii) did not dispose of any Units in 1999, you can calculate on the Schedule
your share of the Trust Tax Items by multiplying the Amount per Unit
[Column IA] of each Tax Item by the Number of Units you held [Column IB] and
entering the product under the Taxable Amount [Column IC].
If you (i) disposed of Units in 1999, or (ii) acquired your Units other than
upon the liquidation of City Investing Company, or (iii) did not report
long-term capital gain or loss upon the liquidation, you will probably have
different income tax consequences that cannot readily be calculated by the
Trust. For administrative convenience, you may calculate your share of the Trust
Tax Items by (i) multiplying the Amount per Unit [Column A] of each Tax Item by
the Number of Units you held [Column B] on the first day of each month
applicable to your holding period, (ii) entering the product under the Taxable
Amount [Column C] and (iii) entering the sum of the amounts in Columns IIC
through XIIIC, if any, in Column XIV.
Individual taxpayers may report on Form 1040 the amounts of Tax Items
computed for Federal income tax purposes as follows:
<TABLE>
<S> <C>
Tax Item 1c. Interest Income -- line 1, Schedule B
Tax Item 2. Dividend Income -- line 5, Schedule B
Tax Item 3. Net Long-Term Capital Gain/(Loss) -- line 12, Schedule D,
Column (f)
Tax Item 4. Miscellaneous Income -- line 21
Tax Item 5. Trust Expenses -- line 22, Schedule A, (if you itemize
deductions)
Tax Item 6. Adjustment to Basis -- FOR INFORMATION PURPOSES
</TABLE>
THIS LETTER IS NOT INTENDED TO PROVIDE INCOME TAX ADVICE RELATING TO THE
ACQUISITION, HOLDING AND DISPOSITION OF UNITS, YOU ARE STRONGLY ENCOURAGED TO
DISCUSS THE INCOME TAX CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING OF UNITS
WITH YOUR TAX ADVISOR.
For all information about UNIT HOLDINGS:
UNITS HELD IN STREET NAME, please communicate with your bank or broker.
REGISTERED UNIT HOLDERS, please communicate with ChaseMellon Shareholder
Services, transfer agent for City Investing Company Liquidating Trust,
at:
<TABLE>
<S> <C>
telephone: 1-800-851-9677
write to: ChaseMellon Shareholder Services
P.O. Box 3315
South Hackensack, NJ 07606
web site: http://www.chasemellon.com
</TABLE>
For current FINANCIAL (10K & 10Q) AND TAX INFORMATION, please go to our
world wide web site:
http://www.cnvlz.com
For all OTHER INFORMATION please communicate with us at:
<TABLE>
<S> <C>
write to: CITY INVESTING COMPANY LIQUIDATING TRUST
99 University Place, 7th floor, New York, NY 10003-4528
telephone: 212-473-1918
fax: 212-473-3927
e-mail: [email protected]
</TABLE>
CITY INVESTING COMPANY LIQUIDATING TRUST UNITS TRADE ON THE NASDAQ STOCK MARKET
AND APPEAR
IN THE LIST ENTITLED SMALL CAPITALIZATION ISSUES UNDER THE SYMBOL OF CTYLTR OR
CNVLZ.
-A-
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
<TABLE>
<CAPTION>
I II
TOTAL IF HELD FROM
JANUARY 1 THROUGH
DECEMBER 31 JANUARY
-------------------------------------------------------------------------------------------
A x B = C A x B = C
TAX ITEM:* AMOUNT AMOUNT
PER NO. OF TAXABLE PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT# UNIT x UNITS = AMOUNT[d]
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Interest Income:
a) U. S. Gov't. Obligations 0.079159 x = 0.019029 x =
b) All Other 0.000000 x = 0.000000 x =
c) Total Interest Income (1a+1b) 0.079159 x = 0.019029 x =
2. Dividend Income 0.000061 x = 0.000006 x =
3. Net Long-Term Capital
Gain/(Loss): (0.002697) x = (0.000299) x =
4. Miscellaneous Income 0.002494 x = 0.000627 x =
5. Trust Expenses 0.007215 x = 0.000949 x =
6. Adjustment to Basis Tax Items
(1c+2+3+4-5) 0.071802 x = 0.018414 x =
</TABLE>
<TABLE>
<CAPTION>
III
FEBRUARY
-----------------------------------------------------
A x B = C
TAX ITEM:* AMOUNT
PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d]
-----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Interest Income:
a) U. S. Gov't. Obligations 0.000000 x =
b) All Other 0.000000 x =
c) Total Interest Income (1a+1b) 0.000000 x =
2. Dividend Income 0.000004 x =
3. Net Long-Term Capital
Gain/(Loss): (0.000045) x =
4. Miscellaneous Income 0.000499 x =
5. Trust Expenses 0.000767 x =
6. Adjustment to Basis Tax Items
(1c+2+3+4-5) (0.000309) x =
</TABLE>
<TABLE>
<CAPTION>
VIII IX
JULY AUGUST
-------------------------------------------------------------------------------------------
A x B = C A x B = C
TAX ITEM:* AMOUNT AMOUNT
PER NO. OF TAXABLE PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d] UNIT x UNITS = AMOUNT[d]
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Interest Income:
a) U. S. Gov't. Obligations 0.000000 x = 0.022153 x =
b) All Other 0.000000 x = 0.000000 x =
c) Total Interest Income
(1a+1b) 0.000000 x = 0.022153 x =
2. Dividend Income 0.000003 x = 0.000005 x =
3. Net Long-Term Capital
Gain/(Loss): 0.000000 x = 0.000000 x =
4. Miscellaneous Income 0.000519 x = 0.000099 x =
5. Trust Expenses 0.000461 x = 0.000274 x =
6. Adjustment to Basis
Tax Items (1c+2+3+4-5) 0.000061 x = 0.021983 x =
</TABLE>
<TABLE>
<CAPTION> X
SEPTEMBER
--------------------------------------------------
A x B = C
TAX ITEM:* AMOUNT
PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d]
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Interest Income:
a) U. S. Gov't. Obligations 0.000000 x =
b) All Other 0.000000 x =
c) Total Interest Income
(1a+1b) 0.000000 x =
2. Dividend Income 0.000006 x =
3. Net Long-Term Capital
Gain/(Loss): 0.000000 x =
4. Miscellaneous Income 0.000000 x =
5. Trust Expenses 0.000276 x =
6. Adjustment to Basis
Tax Items (1c+2+3+4-5) (0.000270) x =
</TABLE>
- --------------
* The Trust Tax Items for 1999 have been calculated in accordance with the
letter on the front side of this page, and our letter of November 26, 1985
(reproduced on Page D) providing certain tax information, which are integral
parts hereof and which you should review with your tax advisor before
reporting your share of the Trust Tax Items on your 1999 U.S. Federal income
tax return.
# Taxable Amount [Column IC] is equal to the Amount per Unit [Column IA]
multiplied by No. of Units you held [Column IB] continuously from January 1
through December 31, 1999.
[d] Taxable Amount [Column C] is equal to the Amount per Unit [Column A]
multiplied by No. of Units you held [Column B] on the first day of each
month.
! Taxable Amount [Column XIV] is equal to the sum of the Taxable Amounts in
Columns IIC through XIIIC for each month that you held Trust Units on the
first day.
-B-
<PAGE>
SCHEDULE OF 1999 U.S. FEDERAL TAX ITEMS
<TABLE>
<CAPTION>
IV V
March April
--------------------------------------------------------------------------------------------------------------
A x B = C A x B = C
Amount Amount
per No. of Taxable per No. of Taxable
Unit x Units = Amount[d] Unit x Units = Amount[d]
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.000000 x = 0.020594 x =
0.000000 x = 0.000000 x =
0.000000 x = 0.020594 x =
0.000003 x = 0.000001 x =
0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x =
0.000478 x = 0.000588 x =
(0.000475) x = 0.020007 x =
</TABLE>
<TABLE>
<CAPTION>
VI VII
May June
--------------------------------------------------------------------------------------------------------------
A x B = C A x B = C
Amount Amount
per No. of Taxable per No. of Taxable
Unit x Units = Amount[d] Unit x Units = Amount[d]
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x =
0.000005 x = 0.000004 x =
(0.000416) x = 0.000000 x =
0.000470 x = 0.000194 x =
0.000357 x = 0.000439 x =
(0.000298) x = (0.000241) x =
</TABLE>
<TABLE>
<CAPTION>
XI XII
October November
--------------------------------------------------------------------------------------------------------------
A x B = C A x B = C
Amount Amount
per No. of Taxable per No. of Taxable
Unit x Units = Amount[d] Unit x Units = Amount[d]
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.017383 x = 0.000000 x =
0.000000 x = 0.000000 x =
0.017383 x = 0.000000 x =
0.000009 x = 0.000009 x =
(0.001336) x = (0.000601) x =
0.000086 x = 0.000000 x =
0.002201 x = 0.000196 x =
0.013941 x = (0.000788) x =
</TABLE>
<TABLE>
<CAPTION>
XIII XIV
Total if held on some,
but not all,
December first days of each month
--------------------------------------------------------------------------------------------------
IIC + IIIC + IVC + VC + VIC +
A x B = C VIIC + VIIIC + IXC +
Amount
per No. of Taxable XC + XIC + XIIC + XIIIC
Unit x Units = Amount[d] Taxable Amount!
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
0.000000 x =
0.000000 x =
0.000000 x =
0.000006 x =
0.000000 x =
0.000000 x =
0.000229 x =
(0.000223) x =
</TABLE>
-C-
<PAGE>
- --------------------------------------------------------------------------------
CITY INVESTING COMPANY LIQUIDATING TRUST
RE: TAX INFORMATION
This letter is to advise you of the tax return information to be provided to
you annually as a holder of units ('Units') in the City Investing Company
Liquidating Trust ('Trust'). The Trust, being a 'grantor' trust, will be
disregarded for Federal income tax purposes and you will be treated as having a
direct interest in an allocable portion of each asset and liability of the
Trust. Consequently, an allocable portion of all items of Trust income,
deductions and credits ('Tax Items') must be reported by you on your income tax
return. Your taxable year and accounting method will determine the income tax
treatment of your allocable portion of Tax Items. As soon as practicable after
the end of each year, but no later than April 15 of the following year, you will
be provided with a schedule listing your allocable share of Tax Items for the
year, which will be determined by the number of Units you own in relation to the
total number of outstanding Units. This will enable you to file your federal,
state and local income tax returns. The types of Tax Items which will be
required to be reported by you on your income tax return may include, but are
not limited to interest income, original issue discount income, short-term and
long-term capital gains and losses, dividend income, market discount income,
depreciation, state, local and foreign taxes and deductible expenses incurred by
the Trust.
For purposes of determining gain or loss from the sale or other disposition
of your undivided interest in assets held by the Trust, your holding period and
adjusted basis for your undivided interest in each of the assets held by the
Trust will be determined by your date of acquisition and the price you paid for
your Units. If you received your Units upon the liquidation of City Investing
Company, you will be treated as acquiring your undivided interest in the net
assets of the Trust at a price of $3.1875 per Unit and your holding period for
your undivided interest in the assets held by the Trust will have begun on
September 26, 1985. If you sell your Units, you will be deemed to sell an
undivided interest in each asset of the Trust for an allocable portion of the
sales price for the Units. For example, if you sell your Units, you may be
required to recognize ordinary income with respect to your interest in market
discount obligations held by the Trust. For administrative convenience, gains
and losses from the sale or other disposition by the Trust of assets held by the
Trust, including the collection of installment notes receivable, will be
reported to you by the Trust as if all Unit holders obtained their Units, and,
consequently, their undivided interests in the assets held by the Trust, upon
the liquidation of City Investing Company. Subsequent Unit holders may have
different income tax consequences, but these tax consequences cannot readily be
calculated. For example, with respect to the collection of installment notes
receivable, the Trust will report to you the portion of amounts received which
are reportable as market discount, which will be taxed as ordinary income, on
the basis of an acquisition date of September 25, 1985 and a price per Unit of
$3.1875. For this purpose, it will be assumed that the installment notes
receivable will not be eligible for installment sales reporting tax treatment.
For administrative convenience, certain special rules will apply to the
determination of the effective date of transfers of Units. A transfer will not
be considered effective until the first day of the month following the month in
which the transfer occurs (or, if earlier, the first day following the date on
which the Trust disposes of any asset the basis of which exceeds 5% of the bases
of all the assets held by the Trust on September 25, 1985). Record holders of
Units on the first day of a month or the day after which such a disposition of
assets takes place will be entitled to receive all distributions made on or
after such date and before any subsequent effective date of transfer and will be
treated for tax purposes as the owner of the underlying assets of the Trust for
such period. In accordance with these rules, the Trust will determine for
periods ending at the end of each month (and for periods ending on the day the
Trust disposes of any asset the basis of which exceeds 5% of the bases of all
assets held by the Trust on September 25, 1985) the Tax Items to be included on
the schedule to be provided to you annually. For administrative convenience, Tax
Items will be determined using the cash method of tax accounting.
This letter is not intended to provide income tax advice relating to the
holding of Units. As such, you are strongly encouraged to discuss the income tax
consequences of an investment in Units with your tax advisor.
November 26, 1985
-D-
STATEMENT OF DIFFERENCES
------------------------
The degree symbol shall be expressed as.............................. [d]
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Financial Statements contained in Item 1 of Form 10-K for the period ended
December 31, 1999 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 51
<SECURITIES> 67,671
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 72,952
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 72,952
<TOTAL-LIABILITY-AND-EQUITY> 72,952
<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> 2,799
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,799
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
