<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, 2003
[ ] 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>
Delaware 13-6859211
(STATE OF ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
853 Broadway, Suite 1607
New York, New York 10003-4703
(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 (the
'Act') 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]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X]
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 June 30,
2003 of $1.91 per unit was approximately $74.5 million.
At December 31, 2003, 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 $1.92 per Unit was approximately $74.8 million.
<Page>
To Our Unit Holders:
The accompanying financial report sets forth the status of the City Investing
Company Liquidating Trust at December 31, 2003. Wrapped around this report is
the January 27, 2004 tax letter, pages A through D, that provides 2003 Federal
income tax information relevant to Unit Holders. Please remove wrap-around pages
A through D carefully, as they should be helpful in calculating your 2003 tax
consequences.
Since the Trust was created, the Trustees' objectives have been and continue to
be to maximize the return to Unit Holders by resolving legal exposures and
reducing to cash the remaining non-liquid assets as efficaciously as possible.
The Trust has posted on its web site: http://www.cnvlz.com the financial report
and the tax letter for the year ended December 31, 2003. The Trust has also
posted on its web site all of the tax letters issued since its inception in
1985. Quarterly financial reports for 2004 should be available on the Trust's
web site no later than May 15, August 15, and November 15, 2004.
During 2003, the United States Court of Appeals for the Second Circuit affirmed
the District Court's dismissal of AmBase Corporation v. City Investing Company
Liquidating Trust, et al. and denied AmBase's petition for rehearing. AmBase
then filed a petition for certiorari with the United States Supreme Court
seeking review of the Court of Appeals decision. The Supreme Court denied this
petition for certiorari on November 17, 2003, bringing an end to this matter.
During 2003, the Trust's cash and cash equivalents and investment securities
increased by $1.4 million to $83.1 million. The major assets held by the Trust
are investments in U.S. Treasury securities. 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 continuing exposures to substantial environmental remediation
expense at certain Superfund sites formerly owned by affiliates of City
Investing Company discussed in the accompanying report. The Trustees will
continue to devote their energies to addressing the unresolved claims and to
realizing the greatest value for the Trust's remaining assets in order to
maximize a final distribution as soon as is prudently possible.
Cordially,
Eben W. Pyne John J. Quirk Lester J. Mantell
Trustee Trustee Trustee
January 27, 2004
For all information about UNIT HOLDINGS:
UNITS HELD IN STREET NAME, PLEASE COMMUNICATE WITH YOUR BANK OR BROKER.
REGISTERED UNIT HOLDERS, PLEASE COMMUNICATE WITH MELLON INVESTOR
SERVICES, transfer agent for City Investing Company Liquidating Trust,
at:
telephone: 1-800-851-9677
write to: Mellon Investor Services, P.O. Box 3315, South
Hackensack, NJ 07606
web site: http://www.melloninvestor.com
For FINANCIAL AND TAX INFORMATION (10-K, 8-K AND 10-Q), please go to the
Trust's:
web site: http://www.cnvlz.com
For all INFORMATION OTHER THAN UNIT HOLDINGS, please communicate with us
at:
write to: CITY INVESTING COMPANY LIQUIDATING TRUST
853 Broadway, Suite 1607, New York, NY 10003-4703
fax: 212-473-3927
e-mail: shr@cnvlz.com
telephone: 212-473-1918
-2-
<Page>
PART I
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 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 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 Trust's Financial Statements will
affect the timing of future distributions of Trust assets, see Item 8 -- Note 7,
'Litigation and Other Contingent Liabilities'.
On June 18, 2003, the Trustees extended the time limit of the Trust's existence
to September 25, 2004 from September 25, 2003 in order to continue the orderly
resolution of legal exposures of the Trust and reducing to cash the remaining
non-liquid assets.
ITEM 3. LEGAL PROCEEDINGS
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 or which have
subsequently arisen. For a description of litigation terminated during the
fourth quarter of 2003 and claims currently pending or threatened that affect
the Trust, see Item 8 -- Note 7, 'Litigation and Other Contingent Liabilities'.
-3-
<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 CITYINVLQ or CNVLZ. Selected contemporaneous trading
information is available on the Internet and can be accessed as follows --
http://www.nasdaq.com. The high and low prices for the Units during 2003 and
2002 were as follows:
<Table>
- --------------------------------------------------------------------------------------------------------
2003 2002
------------------------------- -------------------------------
HIGH LOW HIGH LOW
- --------------------------------------------------------------------------------------------------------
First Quarter $2.50 $1.66 $1.95 $1.73
Second Quarter 2.11 1.54 1.94 1.85
Third Quarter 2.14 1.50 2.00 1.30
Fourth Quarter 2.01 1.82 1.91 1.87
- --------------------------------------------------------------------------------------------------------
</Table>
As of December 31, 2003, there were approximately 12,800 registered holders of
the Trust's Units of Beneficial Interest. No cash distributions were made in
either 2003 or 2002.
The Trust may have a contingent liability to the United States Environmental
Protection Agency and other third parties.
ITEM 6. SELECTED FINANCIAL DATA
<Table>
- --------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
(AMOUNTS IN THOUSANDS, EXCEPT PER ----------------------------------------------------------------
UNIT DATA) 2003 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------------
Losses on dispositions of assets,
net $(141) $(797) $(268) $(38) $(105)
Interest, dividend and other
income 1,457 2,707 5,953 3,711 3,185
Net income 924 1,504 5,337 3,387 2,799
Net income per unit 0.02 0.04 0.14 0.09 0.07
Total assets 84,104 83,180 81,676 76,339 72,952
Book value per unit 2.16 2.13 2.10 1.96 1.87
- --------------------------------------------------------------------------------------------------------
</Table>
-4-
<Page>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Trust recorded net income of $924,000 ($0.02 per unit) in 2003 compared with
$1,504,000 ($0.04 per unit) in 2002 and $5,337,000 ($0.14 per unit) in 2001. 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 39 percent of certain real estate acreage for
$2,410,000 in cash, which resulted in a recognized long-term capital gain, net
of expenses, of $610,000. In May 2000, the Trust sold its remaining real estate
acreage for $478,000 in cash and a non-recourse promissory note of $3,683,000,
payable in five equal annual installments plus interest at 8 percent. The May
2000 sale resulted in a recognized long-term capital gain, net of expenses, of
$171,000 and deferred gain of $1,173,000. The deferred gain of $1,173,000 was
recorded as a reduction to the $3,683,000 mortgage receivable. In June 2001,
2002 and 2003, cash payment installments of $960,000, $907,000 and $850,000,
respectively, were received which resulted in a recognized long-term gain, net
of expenses, of $183,000 in each of the years and net interest income of
$274,000, $222,000 and $177,000, respectively. The deferred gains of $469,000 at
December 31, 2003 and $704,000 at December 31, 2002 are netted against the gross
mortgage receivable of $1,473,000 at December 31, 2003 and $2,210,000 at
December 31, 2002. A one-year extension of the non-recourse promissory note to
pay only interest in 2004 and principal and interest in 2005 and 2006 was
requested by the mortgagee and is expected to be approved by the holders of the
mortgage. It is projected that if the remaining payments are made, the remaining
deferred gain of $469,000 will be subject to expenses estimated to be $102,000.
In 1985, City Investing Company purchased a group annuity contract from The
Prudential Insurance Company of America (Prudential). Upon the 2002
demutualization of Prudential, the Trust received 885 shares of Prudential
Financial Inc. As the Trust had a $0 basis in this asset, all of the $29,000
proceeds received upon the sale of these shares is reported as long-term capital
gain.
Legal fees attributable to issues that relate to periods before the liquidation
of City of $324,000 in 2003, compared to $1,009,000 in 2002 and $451,000 in 2001
are reflected as losses on dispositions of assets.
Interest, dividend and other income of $1,457,000 in 2003, $2,707,000 in 2002
and $5,953,000 in 2001, was principally derived from interest earned on U.S.
Treasury securities. In 2001, the Trust purchased Treasury Notes due to the
cessation of the issuance of one-year Treasury Bills by the U.S. Government. As
the Trust reports on a cash basis, both interest received on Treasury Bills and
semi-annual interest received on Treasury Notes were reported as income in 2001.
In addition, declining interest rates adversely affected interest income
received in 2003 and 2002.
Administrative expenses were $392,000 in 2003, $406,000 in 2002, and $348,000 in
2001. The Trust is a party to a five-year lease of office space (which can be
cancelled as of July 2004 without penalty in the event of the Trust's
liquidation) which requires total remaining lease payments of $94,000, $26,000
of which is due in less than one year, $54,000 within one-three years and
$14,000 within three-five years.
At December 31, 2003, the Trust had cash and cash equivalents and investment
securities of $83,069,000. The Trustees believe that such cash resources and
investment securities are sufficient to meet all anticipated liquidity
requirements.
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, 'Future Distributions of Trust Assets'.
-5-
<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, 2003 and 2002, 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, 2003. 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 auditing standards generally accepted
in the United States of America. 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 accounting principles
generally accepted in the United States of America.
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 assets, liabilities, and trust equity of City
Investing Company Liquidating Trust as of December 31, 2003 and 2002, and its
income and expenses, cash flows and changes in trust equity for each of the
years in the three-year period ended December 31, 2003, on the basis of
accounting described in Note 2.
KPMG LLP
New York, New York
January 27, 2004
-6-
<Page>
CITY INVESTING COMPANY LIQUIDATING TRUST
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31
<Table>
- ---------------------------------------------------------------------------------------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER UNIT DATA) 2003 2002 2001
- ---------------------------------------------------------------------------------------------------
Losses on dispositions of assets, net $(141) $(797) $(268)
Interest, dividend and other income 1,457 2,707 5,953
- ---------------------------------------------------------------------------------------------------
Total income 1,316 1,910 5,685
Administrative expenses 392 406 348
- ---------------------------------------------------------------------------------------------------
NET INCOME $924 $1,504 $5,337
- ---------------------------------------------------------------------------------------------------
NET INCOME PER UNIT $0.02 $0.04 $0.14
- ---------------------------------------------------------------------------------------------------
OUTSTANDING UNITS 38,979 38,979 38,979
- ---------------------------------------------------------------------------------------------------
</Table>
BALANCE SHEETS
DECEMBER 31
<Table>
- -------------------------------------------------------------------------------
($ IN THOUSANDS) 2003 2002
- -------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents $78 $158
Investment securities 82,991 81,485
Restricted funds 4 4
Investments 27 27
Mortgage receivable, net of deferred gain 1,004 1,506
- -------------------------------------------------------------------------------
TOTAL ASSETS $84,104 $83,180
- -------------------------------------------------------------------------------
LIABILITIES AND TRUST EQUITY
Trust equity $84,104 $83,180
- -------------------------------------------------------------------------------
TOTAL LIABILITIES AND TRUST EQUITY $84,104 $83,180
- -------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements.
-7-
<Page>
CITY INVESTING COMPANY LIQUIDATING TRUST
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31
<Table>
- -------------------------------------------------------------------------------------------------------
($ IN THOUSANDS) 2003 2002 2001
- -------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $924 $1,504 $5,337
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on sale of real estate (183) (183) (183)
Gain on sale of securities -- (29) --
Amortization of premium of investment
securities 1,458 2,043 534
- -------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 2,199 3,335 5,688
- -------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities/sales of investment securities 121,277 79,149 73,784
Purchases of investment securities (124,242) (83,228) (79,983)
Proceeds from sale of real estate 685 685 685
Proceeds from sale of securities -- 29 --
Other, net 1 1 (1)
- -------------------------------------------------------------------------------------------------------
Net cash used for investing activities (2,279) (3,364) (5,515)
- -------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash
equivalents (80) (29) 173
Cash and cash equivalents at beginning of
year 158 187 14
- -------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $78 $158 $187
- -------------------------------------------------------------------------------------------------------
</Table>
STATEMENTS OF CHANGES IN TRUST EQUITY
YEAR ENDED DECEMBER 31
<Table>
- -------------------------------------------------------------------------------------------------------
($ IN THOUSANDS) 2003 2002 2001
- -------------------------------------------------------------------------------------------------------
Balance at beginning of year $83,180 $81,676 $76,339
Net income 924 1,504 5,337
- -------------------------------------------------------------------------------------------------------
BALANCE AT END OF YEAR $84,104 $83,180 $81,676
- -------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements.
-8-
<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
individuals then serving as 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, the Trustees extended the time limit of the Trust's existence
a number of times, most recently to September 25, 2004.
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 unit holders as if the unit holders had themselves realized the
income or loss from their undivided interests in Trust assets.
Losses on dispositions of assets: Losses on dispositions of assets, net of
gains, includes legal fees attributable to issues that relate to periods before
the liquidation of City.
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.
-9-
<Page>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Cash and cash equivalents: The Trust considers all investments in money market
funds as cash equivalents.
NOTE 3 - INVESTMENT SECURITIES
Investment securities, all of which mature within one year, consist of U.S.
Treasuries and are carried at original cost, net of premium amortization
recorded at interest collection dates. The fair value of U.S. Treasuries is
based on quoted market prices.
Investment securities at December 31, consist of the following:
<Table>
- ---------------------------------------------------------------------------------------------
2003 2002
---------------------------- -------------------------------
CARRYING AMORTIZED FAIR CARRYING AMORTIZED FAIR
($ IN THOUSANDS) VALUE COST VALUE VALUE COST VALUE
- ---------------------------------------------------------------------------------------------
U.S. Treasuries $82,991 $82,991 $83,053 $81,485 $81,485 $81,886
- ---------------------------------------------------------------------------------------------
<Table>
The gross unrealized gains/(losses) on investment securities at December 31, consist of the
following:
- ---------------------------------------------------------------------------------------------
($ IN THOUSANDS) 2003 2002
- ---------------------------------------------------------------------------------------------
Gross unrealized gains $68 $401
- ---------------------------------------------------------------------------------------------
Gross unrealized (losses) (6) --
- ---------------------------------------------------------------------------------------------
</Table>
NOTE 4 - RESTRICTED FUNDS
Restricted funds at December 31, 2003 and 2002 represent a rent deposit of
$4,000.
NOTE 5 - INVESTMENTS
Investments at December 31 are as follows:
- ---------------------------------------------------------------------------------------------
($ IN THOUSANDS) 2003 2002
- ---------------------------------------------------------------------------------------------
Oklahoma Energy Corp. $27 $27
- ---------------------------------------------------------------------------------------------
</Table>
The Trust holds 310,810 shares of Oklahoma Energy Corp. common stock, which are
carried at their tax basis. At December 31, 2003 and 2002, the fair value of the
Oklahoma Energy stock, based on quoted market prices, was $31 and $9,324,
respectively.
NOTE 6 - REAL ESTATE
In February 2000, the Trust sold 39 percent of certain real estate acreage for
$2,410,000 in cash, which resulted in a recognized long-term capital gain, net
of expenses, of $610,000. In May 2000, the Trust sold its remaining real estate
acreage for $478,000 in cash and a non-recourse promissory note of $3,683,000,
payable in five equal annual installments plus interest at 8 percent. The May
2000 sale resulted in a recognized long-term capital gain, net of expenses, of
$171,000 and deferred gain of $1,173,000. The deferred gain of $1,173,000 was
recorded as a reduction to the $3,683,000 mortgage receivable. In June 2001,
2002 and 2003, cash payment installments of $960,000, $907,000 and $850,000,
respectively, were received which resulted in a recognized long-term gain, net
of expenses, of $183,000 in each of the years and net interest income of
$274,000, $222,000 and $177,000, respectively. The deferred gains of $469,000 at
December 31, 2003 and $704,000 at December 31, 2002 are netted against the gross
mortgage receivable of $1,473,000 at December 31, 2003 and $2,210,000 at
December 31, 2002. A one-year extension of the non-recourse promissory note to
pay only interest in 2004 and principal and interest in 2005 and 2006 was
requested by the mortgagee and is expected to be approved by the holders of the
mortgage. It is projected that if the remaining payments are made, the remaining
deferred gain of $469,000 will be subject to expenses estimated to be $102,000.
-10-
<Page>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 or which have
subsequently arisen. The Trust may have a contingent liability with respect to
certain issues described below:
AmBase Corporation v. City Investing Company Liquidating Trust, et al. (01 Civ.
0771): On January 30, 2001, AmBase Corporation ('AmBase') filed a Complaint in
the United States District Court for the Southern District of New York claiming
that the Trust was primarily liable for certain potential tax liabilities of
City and seeking to recover expenses incurred by AmBase in defending against
those liabilities in the Tax Court of the United States. Although a subsequent
decision by the Tax Court concluding that City was not liable for the taxes in
question has mooted any claim for reimbursement of the tax liability, AmBase's
claim seeking recovery of its expenses remained at issue. A virtually identical
suit by AmBase against the Trust in the Delaware Chancery Court was dismissed on
statute-of-limitations grounds on January 3, 2001. On January 11, 2002, Judge
Stanton granted the Trust's motion to dismiss the New York action on the statute
of limitations grounds. On February 14, 2002, Judge Stanton denied AmBase's
motion for reconsideration. AmBase thereafter appealed Judge Stanton's decision
to the United States Court of Appeals for the Second Circuit which Court
affirmed the District Court's dismissal of this action. AmBase filed a petition
for rehearing with the Court of Appeals which was denied on June 12, 2003.
AmBase then filed a petition for certiorari with the United States Supreme Court
seeking review of the Court of Appeals decision. That petition was denied by the
Supreme Court on November 17, 2003, bringing an end to this matter.
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 Operating
Industries, Inc. Site in Monterey, California ('Site'). 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.
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. Marina Pacifica did not make a counter offer. Counsel for
Marina Pacifica notified EPA that Marina Pacifica had been dissolved and would
be unable to participate in any settlements. 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. 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.
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. Other PRPs have entered into several consent decrees requiring
clean-up work or payments to EPA, including a December 2001 decree that requires
work estimated to cost $340 million. 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 for which it could
still be held liable. Given that City Investing Company had nothing to do with
day-to-day operations of Marina Pacifica or its general partner, the Trust
should not be liable for any clean-up responsibilities of Marina Pacifica.
-11-
<Page>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Admiral Home Appliances Site. Maytag Corporation ('Maytag') has sued Rheem
Manufacturing Company ('Rheem') in the United States District Court for the
District of South Carolina, Aiken Division, (Maytag Corporation v. Rheem
Manufacturing Company v. City Investing Company, et al. Civ. Action
1-01-0137-22), seeking to recover environmental remediation expenses for which
Maytag is liable under the Comprehensive Environmental Response, Compensation
and Liability Act because of ownership by a subsidiary of Maytag of the Admiral
Home Appliances Super Fund Site in Williston, South Carolina (the 'Admiral
Site'). In its Complaint against Rheem, Maytag claimed that Rheem was liable for
a share of the remediation expenses because of Rheem's prior ownership of the
Admiral Site. On October 23, 2001, Rheem filed a Third Party Complaint against
City Investing Company ('City'), alleging that City, as owner of the stock of
first and second-tier subsidiaries which conducted manufacturing operations at
the Admiral Site from 1968 to 1981, was liable to reimburse Rheem for some or
all of Rheem's liability. The Trust was added as a Third Party Defendant in an
amended pleading. On October 23, 2002, the District Court dismissed Rheem's
action against the Trust for lack of personal jurisdiction. Rheem did not
attempt to appeal the District Court's decision within the required time and is
barred from suing City or the Trust in South Carolina, but Rheem is not barred
from attempting to sue City and/or the Trust in other jurisdictions. While the
Trust has been advised by its counsel that the Trust is not liable for
environmental remediation expenses related to the Admiral Site, no assurance can
be given as to the ultimate outcome of the Trust's exposure to this
environmental matter.
Other Matters. The Trust also remains subject to possible claims by other third
parties.
Lease Commitment. The Trust has leased office space at 853 Broadway, Suite 1607,
New York, NY 10003-4703, beginning July 1, 2002. The five-year lease can be
cancelled after two years without penalty in the event of the liquidation of the
Trust. Base annual lease expense beginning July 1, 2002, will be approximately
$24,000 during the first year of the lease, escalating to an estimated $27,000
during the last year of the lease. Annual lease expense was $25,000 in 2003,
$31,000 in 2002, and $32,000 in 2001.
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.
NOTE 9 - QUARTERLY FINANCIAL DATA (UNAUDITED)
The quarterly financial data for 2003 and 2002 are as follows:
- -------------------------------------------------------------------------------------------
THREE MONTHS ENDED:
-------------------------------------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER UNIT MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
DATA) 2003 2003 2003 2003
- -------------------------------------------------------------------------------------------
Total income $404 $623 $225 $64
Administrative expenses 125 73 47 147
- -------------------------------------------------------------------------------------------
NET INCOME/(LOSS) $279 $550 $178 $(83)
- -------------------------------------------------------------------------------------------
NET INCOME/(LOSS) PER UNIT $0.01 $0.01 $0.01 $(0.01)
- -------------------------------------------------------------------------------------------
</Table>
- -------------------------------------------------------------------------------------------
THREE MONTHS ENDED:
-------------------------------------------------
(AMOUNTS IN THOUSANDS, EXCEPT PER UNIT MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
DATA) 2002 2002 2002 2002
- -------------------------------------------------------------------------------------------
Total income $402 $619 $518 $371
Administrative expenses 146 74 54 132
- -------------------------------------------------------------------------------------------
NET INCOME $256 $545 $464 $239
- -------------------------------------------------------------------------------------------
NET INCOME PER UNIT $0.01 $0.01 $0.01 $0.01
- -------------------------------------------------------------------------------------------
</Table>
-12-
<Page>
ITEM 9A. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, the Trust carried out an
evaluation, under the supervision and with the participation of the Trust's
management, including the Trustee who is the functional equivalent of the Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of the Trust's internal disclosure controls and procedures
pursuant to Exchange Act Rule 13a-15. That Rule requires that such controls and
procedures assure that information required to be included in the Trust's
periodic SEC filings is recorded, processed, summarized and reported within the
time periods specified by the rules and forms. Based upon that evaluation, the
Trustees concluded that the Trust's internal disclosure controls and procedures
are effective in assuring that information required to be disclosed by the Trust
in its periodic SEC filings is accurate and communicated to the Trust's
management in order to allow timely decisions regarding required disclosure.
There have not been any significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of such evaluation.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
THE TRUSTEES
The Trustees of the Trust are Eben W. Pyne, John J. Quirk 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.
Eben W. Pyne (86) retired in 1982 as a Senior Vice President of Citibank, N.A.
He was a director of City, AmBase and W.R. Grace and Co.
John J. Quirk (60) is a managing director at Morgan Joseph & Co. Inc. He was a
principal at Churchill Capital, Inc., a private equity firm, from 1998 to 2001.
He was the Chairman and Co-founder of Quirk Carson Peppet Inc. from 1985 to
1998. He served as Senior Vice President and Treasurer of City prior to March
1985.
Lester J. Mantell (66) was an officer of City and AmBase prior to 1997.
The Audit Committee of the Trust consists of Messrs. Pyne and Quirk, neither of
whom has been determined to be an 'audit committee financial expert' within the
meaning of Item 401 (h) (i) of Regulation S-K since neither possesses all the
attributes required for such designation by that regulation.
The Trust has adopted a Code of Ethics that is applicable to the Trustees, one
of whom is the functional equivalent of its principal executive officer and its
principal financial officer, and the Trust's Administrator. See Exhibit
14 -- 'Code of Ethics'.
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 there under 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 one Trustee
may receive as a holder of 1,000 Units of Beneficial Interest.
-13-
<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 Form 4 of Goldman, Sachs & Co., as
filed with the Securities and Exchange Commission ('SEC') as of August 10, 2001,
from Form 4 of Farallon Capital Management, L.L.C. filed with the SEC as of
January 14, 2004, and from Amendment No. 3 to Schedule 13G as filed with the SEC
by Franklin Mutual Advisers, LLC as of January 22, 2002.
<Table>
<Caption>
- -----------------------------------------------------------------------------------------
UNITS
BENEFICIALLY %
NAMES AND ADDRESSES OF BENEFICIAL OWNERS OWNED OF CLASS
- -----------------------------------------------------------------------------------------
GOLDMAN, SACHS & CO. 12,631,464 32.4%
85 Broad Street, New York, NY 10004
FARALLON CAPITAL MANAGEMENT, L.L.C. 12,356,896 31.7%
One Maritime Plaza, Suite 1325, San Francisco, CA 94111
FRANKLIN MUTUAL ADVISERS, LLC 6,529,648 16.8%
51 John F. Kennedy Parkway, Short Hills, NJ 07078
- -----------------------------------------------------------------------------------------
TOTALS 31,518,008 80.9%
- -----------------------------------------------------------------------------------------
</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 7,
2004.
<Table>
<Caption>
- -----------------------------------------------------------------------------------------
UNITS
BENEFICIALLY %
NAMES OF BENEFICIAL OWNERS OWNED OF CLASS
- -----------------------------------------------------------------------------------------
Eben W. Pyne 1,000 *
John J. Quirk -- --
Lester J. Mantell -- --
Trustees as a group (three) 1,000 *
- -----------------------------------------------------------------------------------------
</Table>
* Represents less than one quarter of 1% of the class.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit fees: The aggregate fees paid in each of the last two fiscal years for
professional services rendered by KPMG LLP for the audit of the Trust's annual
financial statements and review of the financial statements included in the
Trust's Forms 10-Q were as follows:
<Table>
<Caption>
2003 2002
---- ----
$43,750 $24,600
</Table>
The Audit Committee of the Trust met in the first quarter of each of the fiscal
years shown above and unanimously approved a proposal by KPMG LLP to provide the
services described above. There were no audit-related, tax, non-audit, review or
attest services provided by KPMG LLP to the Trust during the periods shown.
-14-
<Page>
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
<Table>
<Caption>
Page
----
(a) Documents Filed as Part of This Report:
1. Index to Financial Statements:
Independent Auditors' Report................................ 6
Statements of Operations.................................... 7
Balance Sheets.............................................. 7
Statements of Cash Flows.................................... 8
Statements of Changes in Trust Equity....................... 8
Notes to Financial Statements............................... 9
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), as amended on July 17, 2000 (incorporated by
reference to Exhibit 6.1 to City Investing Company
Liquidating Trust Form 10-Q for the quarter ended June 30,
2000) as amended on July 23, 2001 (incorporated by reference
to Exhibit 6.1 to City Investing Company Liquidating Trust
Form 10-Q for the quarter ended June 30, 2001) as amended on
July 30, 2002 by action of John J. Quirk, Eben W. Pyne and
Lester J. Mantell, as Trustees, (incorporated by reference
to Exhibit 6.1 to City Investing Company Liquidating Trust
Form 10-Q for the quarter ended June 30, 2002) as amended on
June 18, 2003 by action of John J. Quirk, Eben W. Pyne and
Lester J. Mantell, as Trustees, (incorporated by reference
to Exhibit 6.1 to City Investing Company Liquidating Trust
Form 10-Q for the quarter ended June 30, 2003).
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).
</Table>
-15-
<Page>
<Table>
14. Code of Ethics (incorporated by reference to Exhibit 99.3 to
City Investing Company Liquidating Trust Form 10-K for the
fiscal year ended December 31, 2002)
31. Certification Pursuant to Section 302(a) of the
Sarbanes-Oxley Act of 2002.
32. Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
Exhibits 31 and 32 are included in the Form 10-K posted on
our web site: http://www.cnvlz.com.
(b) Form 8-K
The Trust was not required to file a Current Report on Form 8-K during
the quarter ended December 31, 2003.
</Table>
SIGNATURES:
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the registrant has duly caused this report on Form 10-K to be signed on
its behalf by the undersigned, thereunto duly authorized on this 27th day of
January 2004.
CITY INVESTING COMPANY LIQUIDATING TRUST
LESTER J. MANTELL
Trustee
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
on Form 10-K has been signed below by the following persons on behalf of the
Registrant on the 27th day of January 2004.
The Trustees:
EBEN W. PYNE
Trustee
JOHN J. QUIRK
Trustee
LESTER J. MANTELL
Trustee
-16-
<Page>
CITY INVESTING COMPANY LIQUIDATING TRUST Fed. I.D. #13-6859211 January 27, 2004
2003 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 2003. You should use this
information in preparing your 2003 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 2003, 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 2003, 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>
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. Gain on Sale of Real Estate -- With Installment Sale Method
4a. Payments Received During Year -- line 21, Form 6252
4b. Installment sale income -- Qualified 5-Year Gain -- line
24, Form 6252
Tax Item 5. Miscellaneous Income -- line 21
Tax Item 6. Trust Expenses -- line 22, Schedule A, (if you itemize
deductions)
Tax Item 7. Adjustment to Basis -- WITH INSTALLMENT SALE METHOD -- FOR
INFORMATION PURPOSES
Tax Item 8. Adjustment to Basis -- WITHOUT INSTALLMENT SALE
METHOD -- 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 MELLON INVESTOR
SERVICES, transfer agent for City Investing Company Liquidating Trust, at:
<Table>
telephone: 1-800-851-9677
write to: Mellon Investor Services, P.O. Box 3315, South Hackensack,
NJ 07606
web site: http://www.melloninvestor.com
</Table>
For current FINANCIAL AND TAX INFORMATION (10-K, 8-K AND 10-Q), please go to the
Trust's web site:
http://www.cnvlz.com
For all INFORMATION OTHER THAN UNIT HOLDINGS, please communicate with us at:
<Table>
write to: CITY INVESTING COMPANY LIQUIDATING TRUST
853 Broadway, Suite 1607, New York, NY 10003-4703
telephone: 212-473-1918 fax: 212-473-3927 e-mail: shr@cnvlz.com
</Table>
CITY INVESTING COMPANY LIQUIDATING TRUST UNITS TRADE ON THE NASDAQ STOCK MARKET
AND APPEAR DAILY IN THE LIST ENTITLED SMALL CAPITALIZATION ISSUES UNDER THE
SYMBOL CITYINVLQ OR CNVLZ.
-A-
<Page>
CITY INVESTING COMPANY LIQUIDATING TRUST
---------------------------------
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]
---------------------------------------------------------------------
1. Interest Income:
a) U. S. Gov't. Obligations 0.032820 x = 0.000000 x =
b) All Other 0.004535 x = 0.000000 x =
c) Total Interest Income (1a+1b) 0.037355 x = 0.000000 x =
2. Dividend Income 0.000022 x = 0.000003 x =
3. Net Long-Term Capital
Gain/(Loss): (0.008307) x = 0.000000 x =
4. Gain on Sale of Real Estate --
With Installment Sale Method
a) Payments Received During Year 0.018897 x = 0.000000 x =
b) Installment Sale Income
[Qualified 5-Year Gain] 0.004705 x = 0.000000 x =
5. Miscellaneous Income 0.000000 x = 0.000000 x =
6. Trust Expenses 0.010067 x = 0.000482 x =
7. ADJUSTMENT TO BASIS -- WITH
INSTALLMENT SALE METHOD TAX
ITEMS (1C+2+3+4B+5-6) 0.023708 x = (0.000479) x =
8. ADJUSTMENT TO BASIS -- WITHOUT
INSTALLMENT SALE METHOD TAX
ITEMS (1C+2+3+5-6) 0.019003 x = (0.000479) x =
III
FEBRUARY
---------------------------------
A x B = C
TAX ITEM* AMOUNT
- -------- PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d]
---------------------------------
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 0.000002 x =
3. Net Long-Term Capital
Gain/(Loss): 0.000000 x =
4. Gain on Sale of Real Estate --
With Installment Sale Method
a) Payments Received During Year 0.000000 x =
b) Installment Sale Income
[Qualified 5-Year Gain] 0.000000 x =
5. Miscellaneous Income 0.000000 x
6. Trust Expenses 0.001090 x =
7. ADJUSTMENT TO BASIS -- WITH
INSTALLMENT SALE METHOD TAX =
ITEMS (1C+2+3+4B+5-6) (0.001088) x
8. ADJUSTMENT TO BASIS -- WITHOUT
INSTALLMENT SALE METHOD TAX
ITEMS (1C+2+3+5-6) (0.001088) x =
</Table>
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]
---------------------------------------------------------------------
1. Interest Income:
a) U. S. Gov't. Obligations 0.000000 x = 0.000000 x =
b) All Other 0.000000 x = 0.000000 x =
c) Total Interest Income (1a+1b) 0.000000 x = 0.000000 x =
2. Dividend Income 0.000001 x = 0.000001 x =
3. Net Long-Term Capital
Gain/(Loss): 0.000000 x = 0.000000 x =
4. Gain on Sale of Real Estate --
With Installment Sale Method
a) Payments Received During Year 0.000000 x = 0.000000 x =
b) Installment Sale Income
[Qualified 5-Year Gain] 0.000000 x = 0.000000 x =
5. Miscellaneous Income 0.000000 x = 0.000000 x =
6. Trust Expenses 0.000435 x = 0.000513 x =
7. ADJUSTMENT TO BASIS -- WITH
INSTALLMENT SALE METHOD TAX
ITEMS (1C+2+3+4B+5-6) (0.000434) x = (0.000512) x =
8. ADJUSTMENT TO BASIS -- WITHOUT
INSTALLMENT SALE METHOD TAX
ITEMS (1C+2+3+5-6) (0.000434) x = (0.000512) x =
X
SEPTEMBER
---------------------------------
A x B = C
TAX ITEM* AMOUNT
- -------- PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d]
---------------------------------
1. Interest Income:
a) U. S. Gov't. Obligations 0.006774 x =
b) All Other 0.000000 x =
c) Total Interest Income (1a+1b) 0.006774 x =
2. Dividend Income 0.000000 x =
3. Net Long-Term Capital
Gain/(Loss): (0.001001) x =
4. Gain on Sale of Real Estate --
With Installment Sale Method
a) Payments Received During Year 0.000000 x =
b) Installment Sale Income
[Qualified 5-Year Gain] 0.000000 x =
5. Miscellaneous Income 0.000000 x
6. Trust Expenses 0.000252 x =
7. ADJUSTMENT TO BASIS -- WITH
INSTALLMENT SALE METHOD TAX =
ITEMS (1C+2+3+4B+5-6) 0.005521 x
8. ADJUSTMENT TO BASIS -- WITHOUT
INSTALLMENT SALE METHOD TAX
ITEMS (1C+2+3+5-6) 0.005521 x =
</Table>
* The Trust Tax Items for 2003 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 2003 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, 2003.
[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 2003 U.S. FEDERAL TAX ITEMS
IV V VI
MARCH APRIL MAY
-----------------------------------------------------------------------------------------------------------
A x B = C A x B = C A x B = C
AMOUNT AMOUNT AMOUNT
PER NO. OF TAXABLE PER NO. OF TAXABLE PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d] UNIT x UNITS = AMOUNT[d] UNIT x UNITS = AMOUNT[d]
-----------------------------------------------------------------------------------------------------------
0.010412 x = 0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x = 0.004535 x =
0.010412 x = 0.000000 x = 0.004535 x =
0.000001 x = 0.000001 x = 0.000001 x =
(0.000055) x = 0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x = 0.018897 x =
0.000000 x = 0.000000 x = 0.004705 x =
0.000000 x = 0.000000 x = 0.000000 x =
0.001643 x = 0.000621 x = 0.000579 x =
0.008715 x = (0.000620) x = 0.008662 x =
0.008715 x = (0.000620) x = 0.003957 x =
VII
JUNE
----------------------------------
A x B = C
AMOUNT
PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d]
----------------------------------
0.008845 x =
0.000000 x =
0.008845 x =
0.000002 x =
(0.002102) x =
0.000000 x =
0.000000 x =
0.000000 x =
0.000678 x =
0.006067 x =
0.006067 x =
XI XII XIII
OCTOBER NOVEMBER DECEMBER
-------------------------------------------------------------------------------------------------------------
A x B = C A x B = C A x B = C
AMOUNT AMOUNT AMOUNT
PER NO. OF TAXABLE PER NO. OF TAXABLE PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d] UNIT x UNITS = AMOUNT[d] UNIT x UNITS = AMOUNT[d]
-------------------------------------------------------------------------------------------------------------
0.000000 x = 0.000529 x = 0.006260 x =
0.000000 x = 0.000000 x = 0.000000 x =
0.000000 x = 0.000529 x = 0.006260 x =
0.000006 x = 0.000003 x = 0.000001 x =
(0.000060) x = (0.002734) x = (0.002355) x =
0.000000 x = 0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x = 0.000000 x =
0.002744 x = 0.000508 x = 0.000522 x =
(0.002798) x = (0.002710) x = 0.003384 x =
(0.002798) x = (0.002710) x = 0.003384 x =
- -------------------------------
XIV
TOTAL IF HELD ON SOME,
BUT NOT ALL,
FIRST DAYS OF EACH MONTH
- -------------------------------
IIC + IIIC + IVC + VC + VIC +
VIIC + VIIIC + IXC +
XC + XIC + XIIC + XIIIC
TAXABLE AMOUNT!
- -------------------------------
-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]