10-K 1 a39145.txt CITY INVESTING COMPANY LIQUIDATING TRUST ~~CITY INVESTING COMPANY LIQUIDATING TRUST Fed. I.D. #13-6859211 February 4, 2005~~

2004 UNITED STATES 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 2004. You should use this information in preparing your 2004 United States 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 2004, 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 2004, 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 United States Federal income tax purposes as follows: 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

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: telephone: 1-800-839-2608 write to: Mellon Investor Services, P.O. Box 3315, South Hackensack, NJ 07606 web site: http://www.melloninvestor.com 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: 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

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- CITY INVESTING COMPANY LIQUIDATING TRUST

-------------- (*) The Trust Tax Items for 2004 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 2004 United States 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, 2004. (o) 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- 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, 2004 [ ] 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) 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)

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 [x] No [ ] 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, 2004 of $1.97 per unit was approximately $76.8 million. At December 31, 2004, 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 $1.93 per Unit was approximately $75.2 million. To Our Unit Holders: The accompanying financial report sets forth the status of the City Investing Company Liquidating Trust at December 31, 2004. Wrapped around this report is the February 4, 2005 tax letter, pages A through D, that provides 2004 United States 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 2004 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, 2004. The Trust has also posted on its web site all of the tax letters issued since its inception in 1985. Quarterly financial reports for 2005 should be available on the Trust's web site no later than May 5, August 4, and November 4, 2005. In May 2004, Eben W. Pyne resigned his position as Trustee, having served the Trust since its September 25, 1985 inception. Charles R. Carson, investment banker and former Treasurer of City Investing Company from 1978 to 1985, accepted an appointment as successor Trustee. The Trustees are focused on reducing outstanding liabilities, claims and exposures of the Trust to a level that will permit a significant distribution. Certain of these outstanding risks, by their nature, cannot be eliminated within a reasonable time frame. To accelerate the time at which a significant distribution can be made, the Trust has procured and continues to negotiate to obtain insurance against these risks. During 2004, the Trust's cash and cash equivalents and investment securities decreased by $1.4 million to $81.7 million, which was due, in part, to insurance premium expenses for environmental liability coverage for a ten-year period and professional liability coverage through October 25, 2006, in addition to six-year run-off coverage to be effective on the date the Trust is liquidated. The major assets held by the Trust are investments in United States Treasury securities. The Trustees believe that these resources are sufficient to meet all anticipated liquidity requirements. The Trust will continue to retain cash and investment reserves pending the resolution of continuing exposures to environmental remediation expense at certain Superfund sites formerly owned by affiliates of City Investing Company. 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, Charles R. Carson John J. Quirk Lester J. Mantell Trustee Trustee Trustee February 4, 2005 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: 1-800-839-2608 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- 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 8, 'Future Distributions of Trust Assets'. On August 3, 2004, the Trustees extended the time limit of the Trust's existence to September 25, 2005 from September 25, 2004 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 claims that may affect the Trust, see Item 8 -- Note 7, 'Litigation and Other Contingent Liabilities'. -3- 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 2004 and 2003 were as follows:

As of December 31, 2004, there were approximately 12,600 registered holders of the Trust's Units of Beneficial Interest. No cash distributions were made in either 2004 or 2003. The Trust may have a contingent liability to the United States Environmental Protection Agency and other third parties. ITEM 6. SELECTED FINANCIAL DATA

-4- ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Trust recorded a net loss of $1,391,000 ($0.04 per unit) in 2004 compared with net income of $924,000 ($0.02 per unit) in 2003 and $1,504,000 ($0.04 per unit) in 2002. 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, certain amounts are reflected in the financial statements when such amounts are received or paid. In June 2002 and 2003, cash payment installments of $907,000 and $850,000 were received in respect of a prior sale of real estate, which resulted in a recognized long-term gain, net of expenses, of $183,000 in each of the years. A deferred gain of $469,000, subject to expenses estimated to be $102,000 at December 31, 2004 and December 31, 2003, is netted against a gross mortgage receivable of $1,473,000 at December 31, 2004 and December 31, 2003. 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 mortgagor and was approved by the holders of the mortgage. 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 2002 sale of these shares is reported as long-term capital gain. In 2004, the Trust wrote-off as worthless its investment in Oklahoma Energy Corp. As the Trust had a $27,000 basis in this asset, all of the $27,000 loss was recognized upon the recording of these shares as worthless and is reported as long-term capital loss. Legal fees attributable to issues that relate to periods before the liquidation of City and a payment in settlement of litigation exposure aggregating $312,000 in 2004, compared to legal fees of $324,000 in 2003 and $1,009,000 in 2002 are reflected as losses on dispositions of assets and are reported as long-term capital losses. Interest, dividend and other income of $790,000 in 2004, $1,457,000 in 2003 and $2,707,000 in 2002, was principally derived from interest earned on United States Treasury securities. Declining interest rates and shorter holding periods adversely affected interest income received in 2004 and 2003. Net interest income of $110,000 in 2004, $165,000 in 2003 and $222,000 in 2002 was received from the mortgage receivable. Administrative expenses (including legal fees that are attributable to issues arising after the liquidation of City) were $1,842,000 in 2004, $392,000 in 2003, and $406,000 in 2002. In 2004, the increase was due, in part, to insurance premium expenses for environmental liability coverage for a ten-year period and professional liability coverage through October 25, 2006, in addition to six-year run-off coverage to be effective on the date the Trust is liquidated. The Trustees are focused on reducing outstanding liabilities, claims and exposures of the Trust to a level that will permit a significant distribution. Certain of these outstanding risks, by their nature, cannot be eliminated within a reasonable time frame. To accelerate the time at which a significant distribution can be made, the Trust has procured and continues to negotiate to obtain insurance against these risks. The Trust is a party to a five-year lease of office space (which in the event of the Trust's liquidation can be cancelled at any time without penalty) which requires total remaining lease payments of $69,000, $27,000 of which is due in less than one year and $42,000 is due in more than one year and less than three years. At December 31, 2004, the Trust had cash and cash equivalents and investment securities of $81,705,000. 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- REPORTING ON INTERNAL CONTROL OVER FINANCIAL REPORTING MANAGEMENT'S REPORT The management of the City Investing Company Liquidating Trust ('Trust') is responsible for establishing and maintaining adequate internal control over financial reporting. This internal control system has been designed to provide reasonable assurance to the Trustees regarding the preparation and fair presentation of the Trust's published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. The management of the Trust has assessed the effectiveness of the Trust's internal control over financial reporting as of December 31, 2004. To make this assessment, we used the criteria for effective internal control over financial reporting described in Internal Control -- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation of the integrated framework of internal control, the Trustees concluded that the internal control over financial reporting was effective as of December 31, 2004. The Trustee's assessment of the effectiveness of internal control over financial reporting as of December 31, 2004 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included herein. Dated: February 4, 2005 By: /s/ Lester J. Mantell, Trustee -6- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE TRUSTEES AND HOLDERS OF UNITS OF BENEFICIAL INTEREST CITY INVESTING COMPANY LIQUIDATING TRUST: We have audited management's assessment, included in the accompanying Reporting on Internal Control Over Financial Reporting, Management's Report, that City Investing Company Liquidating Trust maintained effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control -- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). City Investing Company Liquidating Trust's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management's assessment and an opinion on the effectiveness of the Trust's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. An entity's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the basis of accounting used for Federal income tax reporting purposes. An entity's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with the basis of accounting used for Federal income tax reporting purposes, and that receipts and expenditures of the entity are being made only in accordance with authorizations of management and Trustees of the entity; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the entity's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, management's assessment that City Investing Company Liquidating Trust maintained effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on criteria established in Internal Control -- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Also, in our opinion, City Investing Company Liquidating Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control -- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the balance sheets of City Investing Company Liquidating Trust as of December 31, 2004 and 2003, 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, 2004, and our report dated February 4, 2005 expressed an unqualified opinion on those financial statements. /s/ KPMG LLP New York, New York February 4, 2005 -7- ITEM 8. FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE TRUSTEES AND HOLDERS OF UNITS OF BENEFICIAL INTEREST CITY INVESTING COMPANY LIQUIDATING TRUST: We have audited the accompanying balance sheets of City Investing Company Liquidating Trust as of December 31, 2004 and 2003, 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, 2004. 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 the standards of the Public Company Accounting Oversight Board (United States). 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. The effects on the financial statements of variances between the basis of accounting used for Federal income tax reporting purposes and accounting principles generally accepted in the United States of America are described in Note 10. Accordingly, the accompanying financial statements are not intended to present financial position, results of operations, 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 financial position of City Investing Company Liquidating Trust as of December 31, 2004 and 2003, and the results of its operations, cash flows and changes in Trust equity for each of the years in the three-year period ended December 31, 2004, in conformity with the basis of accounting used for Federal income tax reporting purposes. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of City Investing Company Liquidating Trust's internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control -- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 4, 2005 expressed an unqualified opinion on management's assessment of, and the effective operation of, internal control over financial reporting. /s/ KPMG LLP New York, New York February 4, 2005 -8- CITY INVESTING COMPANY LIQUIDATING TRUST STATEMENTS OF OPERATIONS YEAR ENDED DECEMBER 31

BALANCE SHEETS DECEMBER 31

See accompanying notes to financial statements. -9- CITY INVESTING COMPANY LIQUIDATING TRUST STATEMENTS OF CASH FLOWS YEAR ENDED DECEMBER 31

STATEMENTS OF CHANGES IN TRUST EQUITY YEAR ENDED DECEMBER 31

See accompanying notes to financial statements. -10- 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, 2005. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES Basis of presentation: The accompanying financial statements have been prepared in accordance with Federal Income Tax Reporting Principles ('FITR'). 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. For information concerning the financial statements prepared on accounting principles generally accepted in the United States of America, reflecting an entity in liquidation, and a reconciliation of the Trust's FITR to accounting principles generally accepted in the United States of America, reflecting an entity in liquidation, see Note 10. 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. For FITR purposes, the fair market value 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. Assets acquired after September 25, 1985, are generally carried at cost. Income taxes: For FITR 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. -11- CITY INVESTING COMPANY LIQUIDATING TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) Losses on dispositions of assets: Losses on dispositions of assets, net of gains, includes expenses attributable to litigation exposures 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. 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 United States Treasuries and are carried at original cost, net of premium amortization recorded at interest collection dates. The fair value of United States Treasuries is based on quoted market prices. Investment securities at December 31, consist of the following:

NOTE 4 - RESTRICTED FUNDS Restricted funds at December 31, 2004 and 2003 represent a rent deposit of $4,000. NOTE 5 - INVESTMENTS Investments at December 31 are as follows:

The Trust held 310,810 shares of Oklahoma Energy Corp. common stock, which were carried at their tax basis. At December 31, 2003, the fair value of the Oklahoma Energy stock, based on the average of quoted market prices, was $31. In 2004, the Trust wrote-off as worthless its investment in Oklahoma Energy Corp. As the Trust had a $27,000 basis in this asset, all of the $27,000 loss was recognized upon the recording of these shares as worthless and is reported as long-term capital loss. NOTE 6 - MORTGAGE RECEIVABLE In February 2000, the Trust sold 39 percent of certain real estate acreage located in Texas City, Texas 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 the remaining Texas City 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 2002 and 2003, cash payment installments of $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 $222,000 and $165,000, respectively. The deferred gains of $469,000 at December 31, 2004 and December 31, 2003 and $704,000 at December 31, -12- CITY INVESTING COMPANY LIQUIDATING TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2002 are netted against the gross mortgage receivable of $1,473,000 at December 31, 2004 and 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 mortgagor and was approved by the holders of the mortgage. In June 2004, net interest income of $110,000 was received. It is projected that the remaining deferred gain of $469,000 will be subject to expenses estimated to be $102,000. NOTE 7 - LITIGATION AND OTHER CONTINGENT LIABILITIES In accordance with the Trust Agreement, the Trust has assumed the obligation, where required, to discharge certain litigation and other contingent liabilities of City Investing Company. As a result, the Trust is subject to possible claims by the United States Environmental Protection Agency and certain other third parties. At the present time, there is no pending or threatened litigation against the Trust in any jurisdiction. 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 (which in the event of the Trust's liquidation can be cancelled at any time without penalty) requires total remaining lease payments of $69,000, $27,000 of which is due in less than one year and $42,000 is due in more than one year and less than three years. Base annual lease expense beginning July 1, 2002, was 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 $26,000 in 2004, $25,000 in 2003, and $31,000 in 2002. NOTE 8 - FUTURE DISTRIBUTIONS OF TRUST ASSETS The Trustees are focused on reducing outstanding liabilities, claims and exposures of the Trust to a level that will permit a significant distribution. Certain of these outstanding risks, by their nature, cannot be eliminated within a reasonable time frame. To accelerate the time at which a significant distribution can be made, the Trust has procured and continues to negotiate to obtain insurance against these risks. Pending resolution of possible claims by the United States Environmental Protection Agency and other third parties, see Note 7 to Financial Statements --Litigation and Other Contingent Liabilities, the Trust is unable to make any dividend payments or liquidation distributions. NOTE 9 - QUARTERLY FINANCIAL DATA (UNAUDITED) The quarterly financial data for 2004 and 2003 are as follows:

-13- CITY INVESTING COMPANY LIQUIDATING TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 10 - DIFFERENCES BETWEEN FEDERAL INCOME TAX REPORTING PRINCIPLES AND ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA, REFLECTING AN ENTITY IN LIQUIDATION These financial statements have been prepared in accordance with Federal Income Tax Reporting Principles ('FITR') which differ in certain respects with those principles and practices that the Trust would have followed had its financial statements been prepared in accordance with accounting principles generally accepted in the United States of America, reflecting an entity in liquidation ('GAAPLIQ'). The material differences between FITR and GAAPLIQ, which are relevant to the Trust's Statements of Operations, Balance Sheets, Statements of Cash Flows and Statements of Changes in Trust Equity are summarized as follows: a. Accounting for Investment Securities For FITR, Investment Securities are carried at original cost, net of premium amortization. This amortization is included in income when interest is collected. For GAAPLIQ, all of the Trust's securities would be reflected at net realizable value; thus, any changes in net realizable value are recognized through income. For FITR, interest income is recorded when collected; for GAAPLIQ, a ratable portion of interest income is recognized at each period end. b. Accounting for Prepaid Expenses For FITR, expenses, other than premium amortization discussed in a. above, are recorded when paid. For GAAPLIQ, the recoverable portion of an expense paid is recognized as an asset. For FITR, no expenses are recorded as prepaid. For GAAPLIQ, a prepaid asset is recognized at each period end for a ratable portion of expenses that relate to subsequent periods. c. Accounting for Mortgage Receivable and Mortgage Interest Receivable Upon the sale of the Texas City Property in the year 2000, a Mortgage Receivable was recorded. For FITR, the income, net of collection expenses, attributable to the five annual installment amounts is recorded when the principal and interest are collected. For GAAPLIQ, the full gain on the sale attributable to the Texas City Property would have been recognized in the year 2000. For GAAPLIQ, a ratable portion of Mortgage Interest Receivable, net of collection expenses, attributable to each period would have been amortized into income at each period end. For GAAPLIQ, the Texas City Mortgage is reflected at net realizable value. d. Accounting for Accrued Liabilities For FITR, accrued liabilities, other than premium amortization, discussed in a. above, are recorded when paid. For GAAPLIQ, accrued liabilities are recognized as a liability in the period the assets are purchased or the services are incurred. e. Accounting for Loss Contingencies For FITR, loss contingencies are recorded when paid. For GAAPLIQ, loss contingencies are recorded when contingencies are reasonably estimable and probable of resulting in a liability. The Trustees currently believe that there are no contingencies that are probable of resulting in a liability to the Trust. -14- CITY INVESTING COMPANY LIQUIDATING TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) f. The effect of the different treatments described above on the Trust's financial statements would be as follows: STATEMENTS OF OPERATIONS ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA, REFLECTING AN ENTITY IN LIQUIDATION YEAR ENDED DECEMBER 31

-15- CITY INVESTING COMPANY LIQUIDATING TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) BALANCE SHEETS ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA, REFLECTING AN ENTITY IN LIQUIDATION DECEMBER 31 --------------------------------------------------------------------------------- ($ IN THOUSANDS) 2004 2003 --------------------------------------------------------------------------------- TOTAL ASSETS PER FEDERAL INCOME TAX REPORTING PRINCIPLES (FITR) $82,713 $84,104 To adjust from FITR to accounting principles generally accepted in the United States of America, reflecting an entity in liquidation (GAAPLIQ): Investment securities 397 61 Prepaid expenses 130 55 Mortgage receivable, net of deferred gain 538 538 --------------------------------------------------------------------------------- TOTAL ASSETS PER GAAPLIQ $83,778 $84,758 --------------------------------------------------------------------------------- TOTAL LIABILITIES PER FEDERAL INCOME TAX REPORTING PRINCIPLES (FITR) $0 $0 To adjust from FITR to GAAPLIQ: Accrued liabilities 332 149 --------------------------------------------------------------------------------- TOTAL LIABILITIES PER GAAPLIQ $332 $149 --------------------------------------------------------------------------------- TRUST EQUITY PER FEDERAL INCOME TAX REPORTING PRINCIPLES (FITR) $82,713 $84,104 --------------------------------------------------------------------------------- To adjust from FITR to GAAPLIQ: Net income/(loss) adjustments from Statements of Operations for GAAPLIQ 234 (335) --------------------------------------------------------------------------------- Adjustments for prior periods for GAAPLIQ 499 840 --------------------------------------------------------------------------------- TRUST EQUITY PER GAAPLIQ $83,446 $84,609 ---------------------------------------------------------------------------------

-16- CITY INVESTING COMPANY LIQUIDATING TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) STATEMENTS OF CASH FLOWS ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA, REFLECTING AN ENTITY IN LIQUIDATION YEAR ENDED DECEMBER 31

-17- CITY INVESTING COMPANY LIQUIDATING TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) STATEMENTS OF CHANGES IN TRUST EQUITY ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA, REFLECTING AN ENTITY IN LIQUIDATION YEAR ENDED DECEMBER 31

-18- 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 Charles R. Carson, John J. Quirk and Lester J. Mantell. Each Trustee will serve for the term of the Trust subject to his earlier resignation or removal. In May 2004, Eben W. Pyne resigned his position as Trustee. There are no family relationships between the Trustees. Charles R. Carson (59) is a Co-founder and Principal of Cronus Partners LLC. He was a Senior Advisor at The Nassau Group, Inc. from 2002-2004. He was a Principal at Churchill Capital, Inc., a private equity firm, from 1998 to 2002. He was a Principal and Co-founder of Quirk Carson Peppet Inc. from 1985 to 1998. He served as Vice President and Treasurer of City prior to March 1985. John J. Quirk (61) 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 (67) was an officer of City and AmBase Corporation prior to 1997. The Audit Committee of the Trust consists of Messrs. Carson 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. See Exhibit 99.4 'Charter of the Audit Committee of the Trustees of City Investing Company Liquidating Trust'. 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 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 former Trustee may receive as a holder of 1,000 Units of Beneficial Interest. -19- 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 28, 2005, and from Amendment No. 3 to Schedule 13G as filed with the SEC by Franklin Mutual Advisers, LLC as of January 22, 2002.

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, 2005.

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: 2004 2003 ---- ---- $55,580 $43,750 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 tax or non-audit fees paid to KPMG LLP by the Trust during the periods shown above. The Trust was billed for audit fees of $96,300 for 2004, which were paid in January 2005. -20- PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

-21- 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). 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 99.4 Charter of the Audit Committee of the Trustees of City Investing Company Liquidating Trust Exhibits 31, 32 and 99.4 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, 2004.

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 4th day of February 2005. 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 4th day of February 2005. The Trustees: CHARLES R. CARSON Trustee JOHN J. QUIRK Trustee LESTER J. MANTELL Trustee -22- [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] SCHEDULE OF 2004 UNITED STATES FEDERAL TAX ITEMS

-C- 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-

CITY INVESTING CO LIQUIDATING TRUST 10-K