[LETTERHEAD OF WIEN & MALKIN LLP]

April 15, 2004

To Members and Participants in 60 East 42nd St. Associates L.L.C.

Federal Identification Number 13-6077181

We enclose the annual report of 60 East 42nd St. Associates L.L.C. ("Associates") for the year 2003. Associates, which is treated as a partnership for income tax purposes, owns the premises at 60 East 42nd Street (the Lincoln Building), and at 301 Madison Avenue, New York City.

The reported income for 2003 was $6,091,606 which was less than distributions of $6,715,786. The difference is treated as a return of capital investment, rather than as taxable income, and results from depreciation of building improvements and amortization of mortgage refinancing costs. Taking into account that a portion of prior distributions constituted a return of capital, the book value on December 31, 2003 of an original cash investment of $10,000 was a deficit balance of $9,653.

Monthly distributions during 2003 totaled $1,046,420, or about 14.9% per annum on the original cash investment of $7,000,000. The distributions were made possible by advances from the lessee against additional rent aggregating $1,053,800.

Additional rent for the lease year ended September 30, 2003 was $7,553,796, or an excess of $6,499,996 over the advances of $1,053,800. Wien & Malkin LLP received $629,930, $200,700 was deducted for advances by Associates for payment of New York State 2004 estimated income tax for non-resident individual investors and payment of annual New York State limited liability company filing fees and the balance of the excess rent of $5,669,366 was distributed to the participants on November 30, 2003. The additional distribution of $5,669,366 represented an annual return of about 81% on the cash investment of $7,000,000, so that total distributions for 2003 were at the rate of about 95.9% per annum.

Schedule K-1 form(s) (Form 1065), containing 2003 tax information, were mailed to the participants on March 23, 2004.

Please retain this letter and the enclosed Schedule K-1 form(s) for the preparation of your income tax returns for the year 2003.

If you have any question about the enclosed material please communicate with our office.

Cordially yours,

WIEN & MALKIN LLP

By: Mark Labell

Encs.

[LETTERHEAD OF J.H. COHN LLP]

INDEPENDENT ACCOUNTANTS' REPORT

To the participants in 60 East 42nd St. Associates L.L.C. (a limited liability company):

We have audited the accompanying balance sheet of 60 East 42nd St. Associates L.L.C. ("Associates") as of December 31, 2003, and the related statements of income, members' deficiency and cash flows for the year then ended. These financial statements are the responsibility of Associates' management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of 60 East 42nd Street Associates L.L.C. as of December 31, 2003, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

New York, N.Y.

February 27, 2004

60 EAST 42ND ST. ASSOCIATES L.L.C.

(A Limited Liability Company)

BALANCE SHEET

DECEMBER 31, 2003

Assets
	Cash and cash equivalents available for operations:
		Cash in banks and a money market fund	$ 446,637
		Distribution account held by Wien & Malkin LLP	87,202
		533,839

Cash segregated for payment of building improvement costs 6,546,242

Real estate at 60 East 42nd Street and
301 Madison Avenue, New York City:
	Buildings		$16,960,000
		Less:Accumulated depreciation	16,960,000	-
	Building improvements and equipment		23,127,711
		Less: Accumulated depreciation	2,789,978	20,337,733
	Land			7,240,000

	Mortgage refinancing costs	1,361,096
	Less: Accumulated amortization	1,141,042	220,054
	Total assets		$34,877,868
Liabilites and member's deficiency
Liabilites:
	First mortgage		$12,020,814
	Second mortgage		27,979,186
	Due to lessee		789,874
	Building and improvement costs payable		734,042
	Accrued expenses		110,734
	Total liabilities		41,634,650
	Commitments and contingencies
	Members' deficiency		(6,756,782)
	Total liabilities and members' deficiency		$34,877,868

See accompanying notes to financial statements.

60 EAST 42ND ST. ASSOCIATES L.L.C.

(A Limited Liability Company)

STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 2003

Income:
	Basic rent income		$2,317,049
	Additional rent income		7,553,796
	Dividend income		316
	Interest income		74,547
	Total income		9,945,708
Expenses:
	Interest on mortgages	$2,367,596
	Supervisory services	661,310
	Amortization of mortgage refinancing costs	264,081
	Professional fees	9,850
	Total expenses		3,302,837
Income before depreciation			6,642,871
Depreciation of building improvements and equipment			551,265
Net income			$6,091,606

See accompanying notes to financial statements.

60 EAST 42ND ST. ASSOCIATES L.L.C.

(A Limited Liability Company)

STATEMENT OF MEMBERS' DEFICIENCY

YEAR ENDED DECEMBER 31, 2003

Members' deficiency, January 1, 2003			$(6,132,602)
	Add, Net income for the year ended
	December 31, 2003		6,091,606
			(40,996)
	Less, Distributions:
	Monthly distributions, January 1,
	2003 through December 31, 2003	$1,046,420
	Distribution on November 30, 2003 of
	balance of additional rent for the
	lease year ended September 30, 2003	5,669,366
			6,715,786
	Members' deficiency,
	December 31, 2003		$(6,756,782)

See accompanying notes to financial statements.

60 EAST 42ND ST. ASSOCIATES L.L.C.

(A Limited Liability Company)

STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2003

Cash flows from operating activities
	Net income	$ 6,091,606
	Adjustments to reconcile net income to net
	cash provided by operating activities:
	Depreciation of building improvements and equipment	551,265
	Amortization of mortgage refinancing costs	264,081
	Net cash provided by operating activities	6,906,952
Cash flows from investing activities
	Purchase of building improvements and equipment	(2,047,470)
	Use of cash segregated for payment of building improvement costs	1,963,858
	Net cash used in investing activities	(83,612)
Cash flows from financing activities
	Change in amounts due to lessee	218,179
	Monthly distributions to participants	(1,046,420)
	Distribution on November 30, 2003 of balance of additional rent for the lease year ended September 30, 2003	(5,669,366)
	Net cash used in financing activities	(6,497,607)
Net change in cash and cash equivalents		325,733
Cash and cash equivalents at beginning of year		208,106
Cash and cash equivalents at end of year		$ 533,839
Supplemental disclosure of cash flows information
Cash paid in 2003 for interest		$ 2,367,596

See accompanying notes to financial statements.

60 EAST 42ND ST. ASSOCIATES L.L.C.

(A Limited Liability Company)

NOTES TO FINANCIAL STATEMENTS

1. Business Activity and Reorganization

60 East 42^nd St. Associates L.L.C. ("Associates") is a limited liability company owning commercial property at 60 East 42^nd Street and 301 Madison Avenue, New York, N.Y. The property, known as the "The Lincoln Building", is net leased to Lincoln Building Associates L.L.C. (the "Lessee").

2. Summary of Significant Accounting Policies

Cash and cash equivalents

Cash and cash equivalents include investments in money market funds and all highly liquid debt instruments purchased with a maturity of three months or less when acquired.

Use of estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Land, buildings, building improvements, equipment and depreciation:

Land, buildings, building improvements and equipment are stated at cost. The buildings, and building improvements costing $1,574,135, have been fully depreciated, using a straight-line method over their estimated useful lives ranging from 20 to 26 years.

In connection with the building improvements program which began in 1999 (see Note 9), costs totaling $21,553,576 at December 31, 2003 have been incurred for new building improvements ($21,423,576) and equipment ($130,000) which have been put into service. Depreciation on these assets is provided primarily using the straight-line method over an estimated useful life of 39 years for building improvements and 7 years for equipment.

Mortgage refinancing costs and amortization:

Mortgage refinancing costs are being amortized ratably over the respective terms of the first and second mortgages (see Note 3), through October 31, 2004.

3. First and Second Mortgages Payable

On October 6, 1994, a first mortgage was placed on the property with Morgan Guaranty Trust Company of New York, as trustee of a pension trust, in the amount of $12,020,814. The first mortgage requires constant equal monthly payments totaling $1,063,842 per annum for interest only, at the rate of 8.85% per annum, and matures on October 31, 2004.

60 EAST 42ND ST. ASSOCIATES L.L.C.

(A Limited Liability Company)

NOTES TO FINANCIAL STATEMENTS (Continued)

3. First and Second Mortgages Payable (concluded)

In connection with the building improvements program referred to in Note 9, a second mortgage loan was placed on the property on March 8, 2000, with Emigrant Savings Bank. The principal amount of the second mortgage note is $27,979,186, with proceeds to be drawn down as payments for the building improvements were needed. By August 15, 2002, Associates had drawn down all funds available against this loan.

The second mortgage called for the first $7,000,000 of loan proceeds advanced through September 30, 2000 to bear interest at the rate of 8.21% per annum through the term of the loan. All loan proceeds advanced after September 30, 2000 initially bore interest at a Floating Rate, defined to be either the prime rate, a U.S. Treasury based rate or a LIBO-based rate, as selected by Associates. On October 1, 2002, in accordance with the terms of the mortgage, the Floating Rate interest on the entire $20,979,186 balance of second mortgage was converted to a fixed rate of 3.39%. Monthly payments for debt service on the entire second mortgage are interest only. The second mortgage also matures on October 31, 2004.

As of December 31, 2003, Associates was holding approximately $6,500,000 of the second mortgage loan proceeds set aside to pay for the Program.

The real estate is pledged as collateral for the first and second mortgages.

4. Rent Income

On January 4, 1982, the Lessee exercised its option to renew the lease for an additional period of 25 years, and the lease period now extends through September 30, 2008. The lease includes an option to renew for one additional period of 25 years through September 30, 2033. See Note 9.

The lease as modified provides for an annual basic rent equal to the sum of the constant annual mortgage charges on all mortgages, plus $24,000. In the event of a mortgage refinancing, unless there is an increase in the mortgage balance, the annual basic rent will be modified and will be equal to the sum of $24,000 plus an amount equal to the revised mortgage charges. In the event that such mortgage refinancing results in an increase in the amount of outstanding principal balance of the mortgage, the basic rent shall be equal to $24,000 plus an amount equal to the product of the new debt service percentage rate under the refinanced mortgage multiplied by the principal balance of the mortgage immediately prior to the refinancing.

The lease, as modified, also provides for additional rent, as follows:

1. Additional rent equal to the first $1,053,800 of the Lessee's net operating income, as defined, in each lease year.

2. Further additional rent equal to 50% of the Lessee's remaining net operating income, as defined, in each lease year.

For the lease year ended September 30, 2003 the Lessee reported additional rent of $7,553,796, based on an operating profit of $12,999,992 subject to additional rent.

60 EAST 42ND ST. ASSOCIATES L.L.C.

(A Limited Liability Company)

NOTES TO FINANCIAL STATEMENTS (Continued)

4. Rent Income (concluded)

Additional rent is billed to and advanced by the Lessee in equal monthly installments of $87,817. While it is not practicable to estimate that portion of additional rent of the lease year ending on the ensuing September 30th which would be allocable to the current three month period ending December 31st, Associates' policy is to include in its income each year the advances of additional rent income received from October 1st to December 31st.

No other additional rent is accrued by Associates for the period between the end of the Lessee's lease year ending September 30th and the end of Associates' fiscal year ending December 31st.

5. Related Party Transactions
1. Rent income

All rent income is received by Associates from the Lessee, a related party. Beneficial interests in the Lessee are held by one or more persons at Wien & Malkin LLP, their family members, and/or trusts, limited liability companies, or similar entities owned for their family members.

2. Supervisory services

Supervisory services are provided to Associates by its supervisor, Wien & Malkin, a related party in which Peter L. Malkin, a member in Associates, has an interest. Beneficial interests in Associates are held by one or more persons at Wien & Malkin, their family members, and/or trusts, limited liability companies or similar entities owned for their family members.

Transactions in 2003 with Wien & Malkin were as follows:

Basic supervisory fee $ 24,000

Additional supervisory fee 637,310

$661,310

6. Income Taxes

Net income is computed without regard to income tax expense since Associates does not pay a tax on its income; instead, any such taxes are paid by the participants in their individual capacities.

7. Concentration of Credit Risk

Associates maintains cash balances in two banks, including cash segregated for payment of building improvement costs, and in a distribution account held by Wien & Malkin LLP. In addition, it maintains cash in a Fidelity money market fund (U.S. Treasury Portfolio). The bank balances are insured by the Federal Deposit Insurance Corporation up to $100,000 each, and at December 31, 2003 approximately $6,592,000 was not insured. The distribution account held by Wien & Malkin and the money market fund are not insured. The funds held in the distribution account were paid to the participants on January 1, 2004.

60 EAST 42ND ST. ASSOCIATES L.L.C.

(A Limited Liability Company)

NOTES TO FINANCIAL STATEMENTS (Continued)

8. Contingencies

Wien & Malkin and Peter L. Malkin, a member in Associates, have been engaged in a dispute proceeding with Helmsley-Spear, Inc. commenced in 1997 concerning the management, leasing and supervision of the property subject to the net lease, in which Wien & Malkin and Mr. Malkin have sought an order removing Helmsley-Spear. In this connection, certain costs for legal and professional fees and other expenses have been paid and incurred by Wien & Malkin and Mr. Malkin, and additional costs are expected to be incurred. Wien & Malkin and Mr. Malkin have represented that such costs will be recovered only to the extent that (a) a competent tribunal authorizes payment or (b) an investor voluntarily agrees that his or her proportionate share be paid. Accordingly, Associates' allocable share of such costs is as yet undetermined, and Associates has not provided for the expense and related liability with respect to such costs in these financial statements.

The original action was commenced in June 1997 and was referred to arbitration. The March 30, 2001 decision of the arbitrators, which was confirmed by the court, (i) reaffirms the right of the investors in the Lessee to vote to terminate Helmsley-Spear without cause, (ii) dismisses Helmsley-Spear's claims against Wien & Malkin and Peter L. Malkin, and (iii) rejects the termination of Helmsley-Spear for cause. The parts of the decision under appeal were initially affirmed by the Appellate Division, and the New York Court of Appeals declined to review such ruling. On October 6, 2003, the United States Supreme Court granted Wien & Malkin's petition, vacated the judgement of the Appellate Division and remanded the case to the New York court for further consideration of the issues raised by Wien & Malkin's appeal.

In January 1998, Irving Schneider, who is one of the controlling principals of Helmsley-Spear and has no record or beneficial interest in Associates or the Lessee, brought litigation against Associates' supervisor, Wien & Malkin and Peter L. Malkin (or his affiliate), claiming misconduct and seeking damages and disqualification from performing services for the Lessee. In March 2002, the court dismissed Mr. Schneider's claims. Mr. Schneider has appealed this dismissal. Wien & Malkin and Mr. Malkin are defending against these claims.

At the Lessee's May 20, 2002 special meeting, a vote of the investors was conducted on proposals for the removal without cause of Helmsley-Spear as managing and leasing agent and its replacement by one or a combination of designated independent firms (Cushman & Wakefield, CB Richard Elllis, and Newmark Realty), including payment by the Lessee of the expenses for the preparation of the solicitation statement, the solicitation of votes, and the implementation of the new program. On May 21, 2002, the proponents of the proposals, Peter L. Malkin and Wien & Malkin, filed a court application to determine and confirm all investors' votes for removal without cause and replacement and to set the final date for Helmsley-Spear's termination. Helmsley-Spear filed objections, and on September 10, 2002 the court confirmed such votes and ruled that Helmsley-Spear has been discharged and must effect an orderly transition and departure within 60 days. Helmsley-Spear's September 27, 2002 motion in the Appellate Division to stay the Court's ruling pending an appeal was denied on October 31, 2002. Helmsley-Spear's appeal was rejected by the Appellate Division in its February 20, 2003 decision, which affirmed the Court's confirmation of the votes and Helmsley-Spear's termination. In August 2003 the Appellate Division granted Helmsley-Spear's application for rehearing and issued a new opinion confirming the termination of Helmsley-Spear at the property. In January 2004, the Appellate Division denied Helmsley-Spear's application for further rehearing. As of November 20, 2002, Helmsley-Spear is no longer the managing and leasing agent and has been replaced by Newmark & Company. Helmsley-Spear continues to pursue its appeal.

60 EAST 42ND ST. ASSOCIATES L.L.C.

(A Limited Liability Company)

NOTES TO FINANCIAL STATEMENTS (Continued)

8. Contingencies (concluded)

In accordance with the Lessee's May 20, 2002 vote, the expenses for the preparation of the solicitation statement, the solicitation of votes and the implementation of the new program are being paid by the Lessee. Such payments have totaled $278,094 to December 31, 2003, including $75,000 to Wien & Malkin plus disbursements of $1,824.

9. Building Improvements Program and Agreement to Extend Lease

In 1999 the participants of Associates and the Lessee consented to a building improvements program (the "Program") estimated to cost approximately $22,800,000 and expected to take two to three years to complete. In 2000 the participants of the Lessee approved an increase to the Program from $22,800,000 to approximately $28,000,000 under substantially the same conditions as had previously been approved. The increased amount had previously been authorized by the participants of Associates.

The Lessee is financing the Program and billing Associates for the costs incurred. The Program (1) grants the ownership of the improvements to Associates and acknowledges its intention to finance them through an increase in the fee mortgage (Note 3), and (2) allows for the increased mortgage charges to be paid by Associates from an equivalent increase in the basic rent paid by the Lessee to Associates. Since any overage rent will be decreased by one-half of that amount, the net effect of the lease modification is to have Associates and the Lessee share the costs of the Program equally, assuming overage rent continues to be earned.

The 1999 consent authorized the members of 60 East 42nd St. Associates L.L.C. who act as agents for the participant investors (the "Agents") to give additional extension rights to the Lessee beyond the September 30, 2033 expiration date (Note 4) to September 30, 2083 upon completion of the Program, and to later date(s) for consideration and upon such terms as the Agents deem appropriate for the benefit of Associates.